Current through Register Vol. 56, No. 6, March 18, 2024
(a) The analyst shall provide a value estimate that identifies a range of raw land value a developer is willing to pay per unit of development in the receiving zone, and discusses how the estimate was determined, including a demonstration that at least the following factors have been taken into consideration:
1. The infrastructure needs in the proposed receiving zone identified in the Capital Improvement Program and Utility Service Plan developed pursuant to 40:55D-140 and the effect of said needs on development potential in the receiving zone. The discussion shall, at a minimum, include:
i. The availability and need for infrastructure; and
ii. The cost of providing needed infrastructure, including consideration of who will bear the cost of providing said infrastructure;
2. The costs associated with demolition, reconstruction or reuse of the existing built environment, if the receiving zone includes areas that could be redeveloped or brownfields;
3. The effect of including the number of affordable housing units proposed in the draft development transfer element in the receiving area;
4. The costs associated with any impact fees that the municipality has established pursuant to statute in the receiving zone; and
5. The costs associated with the site plan, subdivision, and TDR credit utilization processes set forth in the municipality's development transfer plan element, if said costs are deemed to be above and beyond typical costs associated with attaining development approvals.
(b) An analysis of sending zone transferable development rights and receiving zone TDR credit values shall include at least the following:
1. A range of values realistically attainable for the sale of transferable development rights at the current time and market conditions;
2. An estimated range of transferable development right values, which is derived from the difference between the base zoning market value and the market value restricted and reported as a per unit of development value. If available, past comparable sales may also be used in determining a range of transferable development right values;
3. An estimated range of TDR credit values based on either a conversion of the above per unit of development right value and the transfer ratio or past comparable sales of credits.
4. A discussion of the rights represented by the value estimates and resultant changes in the authorized density and use of the unrestricted versus the restricted property;
5. A discussion of the market conditions that would cause deviation from the estimated average TDR credit value; and
6. A summary of major points, which support the transferable development rights and TDR credit value ranges.
(c) Given the analyses of the receiving and sending zones conducted pursuant to 5:86-2.6 and 2.7, the report shall address the viability of the transfer of development rights program and shall include, but not be limited to, the following:
1. An opinion as to whether the receiving zone can accommodate the number of TDR credits that will be generated based on the number of transferable development rights allocated in the sending zone and the transfer ratio;
2. An opinion as to whether existing or anticipated future market demand supports the proposed use and density in the receiving zone;
3. An opinion as to whether the market in the receiving zone can bear a value for the TDR credits that "is likely to" provide most sending zone property owners with the market value of the transferable development rights;
4. An opinion as to whether the purchase of all of the TDR credits that will be generated from the sending zone is economically feasible given the past, current and anticipated future market demand for the density and use proposed in the receiving zone;
5. An opinion of whether the estimated range of transferable development right and TDR credit values, taking into consideration any fees associated with the transfer process set forth in the municipality's development transfer plan element, are reasonably likely to result in participation by sending area landowners;
6. An opinion as to whether the transfer ratio, set forth in the municipality's development transfer element, supports both the sending and receiving zones, including:
i. Consideration of what land value a TDR credit represents in the sending zone;
ii. Consideration of the varying uses and densities that can be achieved by using TDR credits in the receiving zone; and
iii. If the transfer of development rights program includes multiple municipalities, differences in land values among the participating municipalities shall be reflected in the transfer ratio set forth in the municipality's development transfer element and shall be a consideration in the market analysis report; and
7. An analysis of whether the proposed sending and receiving zones are of an adequate size and distribution of ownership to prevent either zone from having an unfair market advantage.
(d) For a transfer of development rights program to be deemed viable, the results of the real estate market analysis shall ensure that there is a reasonable basis for concluding that the proposed system will succeed in transferring development potential from the sending zone to the receiving zone. If said conclusion cannot be made, the community shall investigate modifications to the transfer of development rights program so that will be successful in transferring development potential.
