August 11, 2023
Potential Chilling Effect Of New Inland Flood Protection Rule and Disclosure Law
By Ryan E. Gallagher, Heidi S. Minuskin, and Ashley M. Fay
It is undeniable that residents of New Jersey have been suffering the devastating impacts of more frequent, intense and increasingly more destructive precipitation events. In fact, flooding is NJ’s number one natural disaster, and approximately 16% of the State lies within a flood hazard area. Through legislative action, NJ has begun to address the issue, but what will be the unintended consequences?
After many drafts and comments to the proposal, on July 17, 2023, New Jersey adopted the final Inland Flood Protection Rule (“IFPR”), which, among other things, updates nearly thirty-year-old rainfall data to account for the uptick in precipitation induced by climate change and updates NJ’s flood mapping to reflect current and future conditions. The IFPR also adopts amendments to New Jersey’s Stormwater Management Rules, N.J.A.C. 7:8 (“SWM”) and New Jersey’s Flood Hazard Area Control Act, N.J.A.C. 7:13 (“FHACA”) to strengthen community responses to increasing and intense precipitation events beyond what was previously predicted.
Notably, the adopted FHACA amendment raises the NJ DEP 100-year design flood elevation (DFE) by two feet and the FEMA DFE to a total of three feet above FEMA’s current 100-year flood elevation. As for the adopted SWM amendments, Best Management Practices (BMPs) for major development must now account for both current and future precipitation totals for two-, ten-, and 100-year storms. It is important to note that the IFPR only applies to new, reconstructed or improved structures – it does not apply to existing developments so long as the structures are not expanded significantly beyond their existing footprints. Under the amended SWM and FHACA rules, applications that were deemed complete for certain types of approvals prior to rule adoption are not subject to the new standards. For example, if a project requires a permit or authorizations for development of freshwater wetlands, and the application was complete and submitted to the NJDEP prior to July 17, 2023, then the entire project is not subject to the new standards provided that the application includes a stormwater management review component. There are also few exemptions to the rules, as well as legacy application (or grandfathering) provisions.
A summary of the key IFPR changes:
- Removes use of Rational and Modified Rational methods for stormwater calculations;
- Requires applicants to demonstrate compliance for the management of precipitation runoff for current and future values;
- New Design Flood Elevation (DFE) raises fluvial (non-tidal) flood elevation mapped by DEP by two feet;
- Requires use of future projected precipitation when calculating flood elevations; and
- Ensures that DEP’s Flood Hazard Area permits conform to NJ Uniform Construction Code standards and meet or exceed minimum FEMA National Flood Insurance Program requirements.
Developers and those in the construction industry have stated that the effect of the foregoing will result in higher construction costs, delays in construction and the permitting process, changes in the value of property, compliance challenges and more.
Municipalities have one year to update floodplain and land use ordinances and one year to complete updated delineation of any flood hazard area. However, right now, all active and/or anticipated projects within the newly adopted flood hazard area are required to comply immediately regardless of whether municipalities have completed their updates. This will have a ripple effect by causing delays to certain projects subject to the IFPR while the municipality is making the appropriate updates.
In conjunction with the IFPR, on July 3, 2023, Governor Murphy signed the new Flood Disclosure Law, setting forth new flood risk disclosure requirements for sellers of property and landlords. Pursuant to the new Flood Disclosure Law, sellers of property and landlords are required to disclose information to prospective purchasers and tenants regarding the property’s status in a flood zone (i.e. within a FEMA Special or Moderate Risk Flood Hazard Area), any knowledge of flood risks, historic flooding at the property, and history of receipt of any federal flood assistance funds. These new requirements do not extend to the new NJ DEP delineated floodplains under the IFPR. The Department of Consumer Affairs is expected to provide notification forms and guidance to assist with Flood Disclosure Law compliance in the near future. Requirements will go into effect 90 days after applicable guidance is published.
It is critical that property owners and developers, as well as others in the construction industry, understand these new standards to ensure compliance, as these rules, in conjunction with Environmental Justice and Flood Insurance, will impact the permitting process, the development and/or sale/leasing of real property and the operations of businesses.
If you have any questions or seek guidance, please reach out to Ryan E. Gallagher, Esq. at RG@spsk.com, Heidi S. Minuskin, Esq. at HSM@spsk.com or Ashely M. Fay, Esq. at AMF@spsk.com.
DISCLAIMER: This Alert is designed to keep you aware of recent developments in the law. It is not intended to be legal advice, which can only be given after the attorney understands the facts of a particular matter and the goals of the client.