Developers Could Have to Foot the Bill for Mass Transit Upgrades

Measure aligns with state policies to steer new developments to areas with existing infrastructure
Credit: Chicago Transit Authority via Flickr
Critics of a measure that would allow municipalities to require developers to pay for mass transit improvements say it could stifle development where growth is most needed and negatively affect affordable housing costs.

Should developers pay for mass transit improvements near projects where they build?

They already are asked sometimes to pay for upgrades to wastewater treatment plants, roads, and storm drainage facilities under current law.

Under a bill (S-368) that cleared the Senate Community and Urban Affairs Committee yesterday, municipalities would be allowed to require developers to foot the cost of transit improvements needed for a development.

The legislation, sponsored by Sen. Joseph Cryan (D-Union), is aligned with state policies that aim to steer new developments to areas where infrastructure already is in place to accommodate growth. In the past, that has been generally recognized as urban areas, which typically are where mass transit stations for rail and bus are most prominently located.

“This legislation is important because it will make sure developers pay their fair share of mass transit costs associated with new developments,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “Developers should be required to help offset the burden that their developments put on mass transit.’’

But lobbyists for developers opposed the bill, saying the legislation could stifle development in areas where the state most wants to see growth and could impede putting affordable housing where it might be most appropriate.

“This does impact affordability,’’ said Jeff Kolakowski, chief operating officer of the New Jersey Builders Association. “It is putting an extra fee on where we should build.’’

Impact on affordable housing costs

Sen. Declan O’Scanlon (R-Monmouth) agreed, saying he worried the bill would increase the cost of housing, affecting affordable housing throughout the state.

Commercial real estate interests also urged the committee to hold the bill, saying they would like to see a more comprehensive approach to fixing NJ Transit. Anthony Pizzutillo, representing NAIOP (National Association of Industrial and Office Properties), noted the organization would like to see the state agency using capital funds to pay for operation and maintenance expenses.

Sen. Troy Singleton (D-Burlington), chairman of the committee, defended the bill as permissive — only allowing communities to adopt fees that would require developers to pay for mass transit upgrades.

But Kolakowski argued otherwise, calling it a mandate by giving municipalities the option of adopting a new fee structure to increase costs to builders. He also argued there are many unanswered questions on how the fee would be calculated.