Preparing for the Future: How New NJDEP Flood Rules Would Impact Development and Resilience

The New Jersey Department of Environmental Protection (NJDEP) recently proposed the “Resilient Environments and Landscapes (REAL) Rule,” a landmark regulatory shift designed to address the rising risks posed by sea-level rise and flooding. As climate change intensifies and sea levels continue to rise, the NJDEP aims to enhance flood resilience by establishing stricter construction standards in flood-prone areas. This article will break down the primary components of this proposed rule change, its economic and structural impacts, and the criticisms surrounding it, offering a comprehensive understanding of how it could reshape New Jersey’s waterfronts and inland flood zones if adopted.

Overview of the REAL Rule

The REAL Rule represents a significant update to New Jersey’s flood protection regulations, adding five feet to the base flood elevation standard set by FEMA. This adjustment is designed to account for projected sea-level rise by the year 2100, based on a Rutgers University study published in 2019.  The rule proposes a new Inundation Risk Zone (IRZ) to identify areas that could be especially vulnerable to future flooding due to anticipated sea-level changes. This rule is expected to take effect in August 2025, providing a buffer period for those seeking approvals under the current regulations.

The core change is the increase of flood elevation standards by five feet above FEMA’s base flood elevation, essentially creating a “Climate Adjusted Flood Elevation” (CAFE). CAFE is further bolstered by adding an extra one foot of freeboard, a measure intended to create a greater margin of safety. The NJDEP asserts that these changes will foster long-term resilience, helping communities adapt proactively to the growing flood risks anticipated in the coming decades.

Key Regulatory Changes

1. Climate Adjusted Flood Elevation (CAFE): The new flood elevation standard, CAFE, requires base flood elevation plus five feet, along with an additional one foot of freeboard. This adjustment aims to protect structures from future flooding risks but sets a much higher standard than many current regulatory thresholds.
2. Substantial Improvement Rule: The REAL Rule also expands the scope of what is considered a “substantial improvement.” For structures in the floodplain, any renovation or improvement project that exceeds 50% of the property’s assessed improvement value will now be required to adhere to the new flood elevation standards. This means that even significant renovation, not just new construction, must account for heightened flood resilience.
3. Inundation Risk Zone (IRZ): In areas designated as the Inundation Risk Zone (IRZ), development will be severely restricted. Impervious surface coverage within the IRZ will be limited to just 3%, a threshold that essentially prohibits most construction projects and limits or eliminates redevelopment options. This limitation will not only impact barrier islands and waterfront areas, where development may become impossible under the new standards, but it will also affect areas inland adjacent to waterways.
4. Disclosure Requirements: Under the new rules, property deeds will need to include statements about potential flooding risks. This disclosure mandate will affect property values, as buyers would be made explicitly aware of the potential for future flooding, possibly impacting real estate demand and pricing in the new IRZ areas.

The Rutgers Study: A Basis for Action

The proposed regulations stem from findings in a 2019 Rutgers University study that predicted a five-foot sea-level rise by 2100, with a 17% likelihood of a combination of factors, including sea-level rise, land subsidence, and arctic ice melt, driving this increase. Although the study was not initially designed as a regulatory guideline, NJDEP has utilized its findings to inform the REAL Rule. This has led to some controversy, as other studies project lower sea-level rises by 2100, highlighting the uncertain nature of future climate conditions.

Economic and Structural Impacts

The REAL Rule could bring about considerable economic and structural implications for New Jersey:

• Limited Development in the IRZ: With only 3% impervious surface coverage allowed in IRZ areas, significant development will be virtually impossible, particularly in high-risk zones like barrier islands. This limitation will affect not only residential and commercial projects but also essential infrastructure projects such as roads and public utilities, which may need elevation upgrades to meet the new standards. The restriction could stifle growth and limit opportunities for property improvements in these zones.
• Higher Infrastructure Costs: Raising the elevation of critical infrastructure like roads and utilities to comply with the CAFE standards will likely require substantial financial investment. Municipalities and developers may face increased project costs, which could be passed on to residents in the form of higher taxes or service fees.
• Constraints on Redevelopment: The REAL Rule places restrictions on substantial improvements, meaning existing properties within the floodplain may face constraints on renovation or expansion projects. For property owners, this could limit flexibility in upgrading properties or adapting them to changing market demands, especially if they are within the IRZ.
• Tax Revenue Implications: Restrictions on development and redevelopment could affect local tax bases, particularly in areas that previously benefited from high property values along the waterfront. As properties face new regulatory constraints and possible value depreciation due to flooding disclosures, municipalities may see a reduction in property tax revenues, which could impact public services and infrastructure budgets.

Criticism of the REAL Rule

Despite its intentions to promote resilience, the REAL Rule has faced criticism on several fronts:

1. Overestimation of Sea-Level Rise: Critics argue that NJDEP’s use of the five-foot projection for sea-level rise is excessive, given that other studies suggest lower, less certain increases by 2100. The decision to implement these substantial elevation requirements immediately has been challenged as premature, especially when more conservative estimates of sea-level rise are available.
2. Reliance on a Single Study: The rule’s reliance on the 2019 Rutgers study has raised concerns. Although the study was comprehensive, it was not originally intended as a regulatory basis, and it represents just one possible scenario among various sea-level rise projections. Some stakeholders believe that adopting regulations based on this single study ignores other valid data points that suggest a lower risk, calling for a more balanced approach.
3. Economic Feasibility: The cost of compliance with the new standards could pose a burden for property owners, especially those in flood-prone areas who wish to make necessary improvements or undertake new projects. Additionally, small businesses and local governments may struggle to cover the increased infrastructure costs, which could delay or prevent critical upgrades and impact economic activity in affected regions.

Final Thoughts and Contact Information

The REAL Rule marks a bold attempt by NJDEP to prepare for future flooding risks and support resilience in vulnerable areas of New Jersey. However, with the significant economic, structural, and regulatory shifts it introduces, stakeholders in both the public and private sectors should carefully evaluate its potential impact. Property owners, developers, and municipal officials are encouraged to assess the REAL Rule’s implications for their communities and consider submitting permit applications before the rule is formally adopted to qualify for legacy approval under the current regulations.

For those wishing to voice their concerns or seek additional information, they can contact the Governor’s Office at 609-282-6000. Engaging in this process allows residents and stakeholders to contribute to shaping flood resilience policies that balance both environmental protection and economic feasibility.