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Permitting builders to keep plans active

Developers say 2-year extension needed to counter slow recovery

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Timothy J. Touhey, CEO, the New Jersey Builders Association.
Timothy J. Touhey, CEO, the New Jersey Builders Association.

With the construction market continuing its slow thaw, the state's homebuilders are rallying behind a bill to keep the current permits valid for another two years.

The effort, which would keep current permits approved through Dec. 31, 2014, faces resistance from both local governments and environmental groups, but has drawn a broad coalition of bipartisan sponsors.

Builders argue it would be economically devastating to allow long-established permits to expire when the current law phases out Dec. 31. Dominick L. Paragano, founder of D.L. Paragano Homes and president of the New Jersey Builders Association, said builders face enough challenges without having to redo permit applications.

"It's no secret that the homebuilding industry has been hit particularly hard by this economic crisis," Paragano said at the Assembly Housing and Local Government Committee meeting on Jan. 30. "I wish (we) would have been on the road to recovery by now, but the reality is we still face significant barriers and have a lot of work to do to build a robust and healthy housing market."

Paragano emphasized that all of the permits have already passed environmental muster, but this argument is rejected by environmental groups, who said that wetland borders and other environmental standards change over time.

Builders also have argued the extension is needed for financing projects, with permits that took years to secure in jeopardy. The effort also was backed by the New Jersey chapter of commercial real estate and development association NAIOP and the International Council of Shopping Centers.

Michael F. Cerra, senior legislative analyst for the New Jersey League of Municipalities, opposed parts of the bill, saying it could more accurately be described as an expansion, rather than an extension, of the original 2008 Permit Extension Act. That's because the new bill defines certain areas — including parts of the Highlands — as "extension areas" where the permits will be extended. Environmentalists and planning advocates said these areas may include environmentally sensitive land that was excluded from the 2008 law.

Jeff Tittel, director of the New Jersey chapter of the Sierra Club, called that expansion a "Dracula clause" that would bring expired projects in the Highlands back to life.

"In a state like New Jersey, where we've had six major floods in two years, and we realize we have to do more for flooding," the bill could lead to projects that aggravate downstream flooding, Tittel said.

New Jersey Highlands Coalition senior policy analyst Elliott Ruga said half of the Highlands would see permit extensions, affecting areas that are environmentally sensitive. He said the permits should be limited to designated growth centers in the region.

But Timothy J. Touhey, CEO of the builder's association, rejected the argument that the new bill extends permits in areas that weren't already targeted for growth.

"There is nothing in the act in 2008 or this current act that went anywhere near the preservation areas of the Highlands," Touhey said.

While there's been some positive momentum in the economy, "we have not yet experienced recovery" in construction, Touhey said, and the industry remains under threat without the permit extensions.

The final shape of the bill remained unclear last week, with some bill supporters saying they hope changes can be made that will address environmental concerns.

E-mail to: akitchenman@njbiz.com
On Twitter: @Kitchenman

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