This past summer, the New Jersey Department of Environmental Protection ("NJDEP") proposed significant regulatory changes to address climate change which could add significant costs to development in coastal areas. The rule, which was proposed on August 5, 2024 and more than 1,000 pages in length, attempts to address the impacts of climate change such as sea-level rise, extreme weather, and chronic flooding, specifically focused on coastal and tidal flooding. This rulemaking is the culmination of NJDEP rulemakings dealing with climate change under the Murphy Administration's New Jersey Protection Against Climate Threats (NJ PACT) initiative. If enacted, the proposed coastal flooding rules could add significant costs to new and modified buildings in coastal areas.
NJ PACT
By way of background, Gov. Phil Murphy initiated NJ PACT when he issued Executive Order No. 100 on January 27, 2020. Since then, NJDEP has engaged in two primary programs addressing climate change. First, the Climate Pollution Reduction program resulted in a variety of rulemaking initiatives aimed at reducing in emissions of climate pollutants. The other regulatory program called Resilient Environments and Landscapes (REAL) is an effort to modify NJDEP land use resource protection rules to build resilience to sea-level rise, extreme weather, chronic flooding, and other impacts of climate change. It is the REAL program which the proposed regulation addresses.
REAL
The proposed rule is the second of two sets of rules which address flooding through NJDEP's resource regulatory programs. The first rule proposal addressed impacts of inland flooding, monikered the "Inland Flood Rule," and was adopted on December 5, 2022. In sum, the Inland Flood Rule raised design flood elevations by two feet for construction occurring within fluvial (non-tidal) flood hazard areas. The final rule also addressed stormwater best management practices to manage runoff for future storms.
The current proposal addresses the second prong of the REAL program, which deals with coastal flooding (the "Coastal Flood Rule"). The Coastal Flood Rule proposal addresses a much broader suite of regulatory programs. While almost a dozen rules would be impacted by the rule proposal, the majority of the proposal impacts NJDEP programs governing land use regulated areas within the state, including areas regulated under the Flood Hazard Area Control Act ("FHACA"); the stormwater rules; the Coastal Zone Management ("CZM") rules, which regulate those areas under the jurisdiction of the Coastal Area Facilities Review Act (CAFRA), the Waterfront Development Act and the Coastal Wetlands Act; and the freshwater wetlands regulations. The most significant impact of REAL is that it establishes a new projected impact for flooding that anticipates the impacts of climate change in the year 2100. This level, designated as the Climate Adjusted Flood Elevation ("CAFÉ") adds five feet to the FEMA 100-year flood map. REAL adjusts the tidal flood hazard areas regulated under the FHACA to CAFÉ and imposes requirements on structures and buildings that may be in impacted by these expanded flood zones as part of FHACA permitting. In sum, REAL would require "flood proofing" up to a higher level and, in some cases, may require elevation. The impact of the requirements imposed by REAL would become more stringent depending on the type of structure, particularly if the structure is a building that has "human occupancy" if the structure is "critical infrastructure."
REAL also establishes a regulatory requirement for a Inundation Risk Zone ("IRZ"), which is land NJDEP predicts will be under water permanently or twice a day with high tide if there is a five-foot sea level rise, which NJDEP predicts will occur by 2100. Development in the IRZ is subject to additional procedural requirements that may lead to additional building requirements. Proposed projects in the IRZ are regulated under the FHACA Rules and would be considered a new special area of regulation in the CZM rules. In essence, applicants in the IRZ would be required to conduct a risk assessment, called an Inundation Risk Assessment, demonstrate the use of all reasonable measures to avoid or substantially reduce the potential for adverse impacts on public safety, health and welfare, and the environment, and include a narrative assessment based upon the risk assessment in a deed notice. The IRZ requirements would apply to residential buildings, critical buildings, or critical infrastructure, unless the activities are repair and maintenance activities that do not alter height, footprint, or increase habitable areas, infrastructure (excluding buildings) that is critical for emergency response and recovery during and after a flood, or that poses a risk to public health, safety, and welfare should it be damaged or unable to perform its intended functions after a flood.
In addition to these significant regulatory reforms, REAL amends the Freshwater Wetlands Act rules to require applicants for "major developments" to demonstrate compliance with stormwater management rules for any project impacting wetlands or transition areas (as opposed to actually being in the area). The proposed expansion of the definition of "major development" would include the reconstruction of one quarter acre or more of regulated motor vehicle surface or regulated impervious surface. REAL requires applicants to prove wetland impacts are necessary regardless of whether the project satisfies other criteria in the rules. Further clarification is required as to how a project "impacts" wetlands or transition areas.
The proposed rules have already drawn a significant amount of commentary during the three public hearings that were held in September. The major representatives of the business community, and, in particular, residential and commercial builders have been extremely vocal in their objection to the rule. In addition to criticizing the science behind REAL concluding that sea level rise will be five feet, these builders have argued that the costs to either flood proof in limited circumstances, or to raise properties above five feet will likely be prohibitive, effectively preventing development. At the same time, the environmental advocacy groups have generally been supportive of the of the proposed rules to address frequent flooding. It is clear that if the rules are adopted, there may be significant costs associated with meeting these rules. It is highly recommended that if your company is intending on developing in coastal areas that it analyzes the potential project in light of the requirements that may be imposed upon the project if the proposed REAL rule is adopted.
Comments may be submitted to NJDEP on or before November 3, 2024.
John G. Valeri Jr., Chair of CSG Law/s Environmental Law Group, has more than 30 years of experience providing advice to clients regarding environmental law and litigation matters. He can be reached at [email protected] or 973-530-2030.
