NJ Supreme Court: Towns Can't Require Developers to Set Aside Open Space

On June 25, 2009, the New Jersey Supreme Court unanimously upheld an appellate court ruling which declared that municipalities do not have the right to require developers to set aside land for open space or recreational facilities, or to require payments “in lieu” of such set asides, as a condition of development approvals.  N.J. Shore Builders Association v. Tp. of Jackson, et als, __N.J.__, Docket No. A51/A52-08 (2009).  Read the opinion here.

The Court ruled in favor of two builders’ associations in consolidated appeals challenging ordinances in Jackson Township and Egg Harbor Township which imposed these types of requirements upon developers.  The decision confirmed that towns must exercise their powers relating to zoning and land use in manners that strictly conform to the provisions of New Jersey’s Municipal Land Use Law (MLUL).  Because the MLUL does not include a provision which permits the set-asides to be required as a condition of approval, the Court recognized that such  requirements were unlawful, beyond the powers granted to municipalities, and would amount to a unconsitutional taking of the developer’s property, without compensation.

Accordingly, while the Court recognized that preservation of open space is a laudable goal for municipal governments and other government agencies in New Jersey, that goal may not be achieved by requiring property owners to dedicate their lands without receiving just compensation for the property in question.  This decision does not limit the government’s power of eminent domain — it merely reinforces the constitutional guarantee of just compensation.