New Jersey Proposes to Address Global Warming Through Green Building

January 8, 2009
Client Alert Newsletter Forecast 2009

Green building mandates and incentives are among the recommendations included in New Jersey's December 15, 2008 draft Global Warming Response Act Recommendation Report ("Report"). The actions outlined in the Report aim at enabling the State to first reduce emissions to 1990 levels by 2020 and to subsequently reduce emissions to 80 percent below 2006 levels by 2050. New Jersey has proposed to (1) require new construction to adhere to green building guidelines; (2) use tax policies and other financial incentives to encourage green building; and (3) provide municipalities with greater flexibility to establish local "green" standards (state law currently preempts municipalities from imposing green building standards that exceed State codes and standards).

On January 6, 2009, the State held a stakeholder meeting seeking to gain additional information regarding current incentives and disincentives to green building in New Jersey and beyond, an appropriate balance between green building mandates and incentives, and the implications of a green building mandate for affordable housing. Stakeholders present at the meeting included representatives of various State departments, builder and developer interests, environmental groups, and others. The state aims to incorporate recommendations from the public meeting in its final Report, projected for release in March 2009.

With respect to green building mandates, New Jersey, in collaboration with the Rutgers Center for Green Building, is developing publicly available, web-based, voluntary green building guidelines that are to be completed by late 2010. It is anticipated that the guidelines will address energy conservation, standards for sustainable site planning, water efficiency, conservation of materials and resources, and indoor environmental quality. Once the guidelines are established, the Report proposes that the New Jersey Department of Community Affairs ("NJDCA") will seek statutory authorization to incorporate them into the state's building codes and standards—effectively requiring new construction to meet green standards.

The Report proposes that the Legislature, State Treasurer, New Jersey Department of Environmental Protection, New Jersey Board of Public Utilities, and NJCA should work together to develop legislative options for tax and other financial incentives to promote green building and address increased "first costs." Non-financial incentives for green building raised at the stakeholder meeting include density bonuses and streamlined permitting processes. Stakeholders suggested that inefficiencies in existing buildings would be better addressed through incentives than through mandates.

Anyone planning to build or renovate in New Jersey in 2009 and beyond should carefully consider how green building mandates or incentives may benefit or impact their planned projects.