Implementation of the Cluster Amendmentto the Municipal Land Use Law

Philip B. Caton, PP, FAICP

Foundation of Zoning OrdinanceRiggs v. Township of Long Beach,

109 N.J. at 611, 538A.2D 808

… a land use ordinance or amendment thereto must advance one of the fifteen [now sixteen] general purposes of the MLUL as specified in N.J.S.A. 40: 55D-2.

MLUL Purpose of the act (N.J.S.A. 40:55 D-2)

40:55D-2. It is the intent and purpose of this act:

p. To enable municipalities the flexibility to offer alternatives to traditional development, through the use of equitable and effective planning tools including clustering, transferring development rights, and lot-size averaging in order to concentrate development in areas where growth can best be accommodated and maximized while preserving agricultural lands, open space and historic sites.

MLUL Power to Zone (N.J.S.A. 40:55D-62A)

40:55D-62. Power to zone. a. The governing body may adopt or amend a zoning ordinance relating to the nature and extent of the uses of land and of buildings and structures thereon. Such ordinance shall be adopted after the planning board has adopted the land use plan element of a master plan, and all of the provisions of such zoning ordinance or any amendment or revision thereto shall either be substantially consistent with the land use plan element and the housing plan element of the master plan or designed to effectuate such plan elements;

MLUL Master Plan Contents(N.J.S.A. 40:55 D – 28)

40:55D – 28b. The master plan shall generally comprise….

(2) A land use plan element (b) showing the existing and proposed location, extent and intensity of development of land to be used in the future for varying types of residential, commercial, industrial, agricultural, recreational, open space, educational and other public and private purposes including any provisions for cluster development; and stating the relationship thereof to the existing and any proposed zone plan and zoning ordinance;

What Must a Municipality Do to Utilize this Tool?

1. Review Master Plan for opportunities to utilize non-contiguous cluster;

2. If applicable, consult stakeholders and prepare a preliminary approach considering infrastructure, environmental features and (generally) development economics;

3. Fine tune and present to the public at a Master Plan hearing to amend (at a minimum) the Goals & Objectives and the Land Use Plan Element;

4. Amend zoning ordinance to implement Master Plan: development economics are key here – density bonuses may be required.

Alternative Approaches to Noncontiguous Cluster Ordinances

• Allow noncontiguous clustering as a permitted use throughout a certain zoning district(s);

• Allow noncontiguous clustering as a permitted use only on parcels which meet specified characteristics for growth or preservation; or

• Allow noncontiguous clustering as a permitted use only on parcels which are specifically identified (prioritized?) in the Master Plan for growth or preservation.

Economic Issues

James E. Hartling

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Based on growth forecasts, is there sufficient demand to justify the proposed cluster development?

Will the noncontiguous cluster option be more or less profitable than conventional development? What is the relative value of land under base development

(conventional zoning) versus relative value of land under the non-contiguous cluster development?

Do the preserved properties offer any value to the developer (such as privately owned preserved farmland)?

Two key economic issues:

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How many new housing units are supportable given growth forecasts and recent development trends??

Does the proposed growth area development make sense given these forecasts? Example: Woodland Township, Burlington County:

DVRPC Growth Forecast 2010-2040: 18 people

• Is there market demand for the type of development?

Adequacy of demand:

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Is a proposed growth area lot comparable in value to a preservation area lot?

If not, what level of bonus or additional development is necessary to encourage cluster development? What additional development is excessive?

Example: Land value of 2 acre SFH lot is usually equal to land for 2.7 to 3.3 townhomes

Relative value of land component of development:

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Preserved farmland is usually more valuable than preserved open space

Example: Assume 6 acre zoning in Preservation Area; residual farming value might be $5,000 per acre or $30,000 per lot.

Residual preservation area land value:

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Assuming there is market demand for the noncontiguous cluster development, is the:

value of land for cluster development + value of preserved land

equal to or greater than

value of land for conventional development?

Summary of economic questions:

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Development on Septicand

Farmland Preservation

Rural Setting:

(3 Acre Lots)

(6 Acre Lots)

(3 Acre Lots)

(6 Acre Lots)

(3 Acre Lots)

(6 Acre Lots)

(3 Acre Lots)

(6 Acre Lots)

• Compare value of :– 24 3-acre lots and 50 6-acre lots vs.– 74 1+acre lots

• Note: Value of a 1 acre lot is somewhat less than a 3 acre or 6 acre lot, so a 10% to 20% bonus may be necessary in such a case

• How long to absorb 74 units? Can the developer afford to buy conservation easement well in advance of use?

• Conversely, if easement is purchased parallel to use, how long will preservation area owners wait?

Economic Issues: Rural Setting

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Rural Setting #2:

Hamlet Development (With Sewers)and

Forest Preservation

Clarke Caton Hintz Photo

(5 Acre Lots)

(3 du/Acre Lots)

• Compare value of :– 106 5-acre lots plus 158 .3-acre lots, vs.– 264 .2-acre lots

• Value of .2 acre lot is much less valuable than a 5 acre lot.

• Density bonus for 106 Forest Protection Units may need to be 100% to 150%--100 to 150 more units– This means the town would need to allow two to 3 townhouse/small

lot SFR units to be built in the hamlet for every 5-acre lot preserved.

Economic Issues: Rural Setting #2

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Infill Setting:

Abandoned Strip Mall Redevelopmentand

Park Creation/Flood Management

DVRPC Photo

DVRPC Photo

• Compare value of:– 45 home lots in recreation/riparian vs.– Ability to build an additional 196,000 sq ft commercial

development.

• Land component of commercial development valued at perhaps $20 to $30 per developable SF

• Each 1-acre home lot in the recreation/riparian area is worth about $85,000 - $125,000

• Conversion of 1 acre residential lot to commercial at 4,356 SF is on target.

Economic Issues: Infill Setting

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Is the municipal noncontiguous cluster program designed so that: The growth area has needed water/wastewater

infrastructure The permitting process is affordable and predictable (and

there is community support) There is market demand for the proposed cluster

development A developer will find the noncontiguous cluster scenario

at least as profitable as conventional development

Implementation Issues: Summary

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