Ongoing warehouse boom prompts renewed calls for broader regulation

New Jersey’s home rule is a problem, argue advocates. They say developments should be overseen by state or regional authorities
Credit: (AP Photo/Julie Jacobson)
File photo: Amazon’s 1 million-square-foot warehouse under construction on Staten Island, New York, January 2018

After new data showed New Jersey’s warehouse boom continues unabated, advocates renewed calls for state or regional control over where they can be built and for limits on local authority of the process.

Opponents of the current surge in warehouse construction say it can only be controlled by handing more authority to county, regional or statewide bodies. They can set policies that recognize that the impact from such buildings spreads beyond the individual towns that currently decide whether a warehouse can be built and under what, if any, limitations.

Municipalities, many of them cash-strapped, are lured by the prospect of more property-tax revenue that comes with the giant buildings, and those considerations often outweigh community concerns about more truck traffic, declining air quality or consumption of New Jersey’s scarce open space, critics say.

Without broader oversight, the critics predict local roads will be choked with truck traffic, farms and forests will be developed and the state’s remaining rural corners will be industrialized.

But shifting power to state or regional authorities is a heavy lift, said Jim Gilbert, a former chairman of the State Planning Commission, because that body does not have control over warehouse siting and because any attempt to weaken municipal power will meet strong resistance from defenders of New Jersey’s home-rule tradition.

Worshipping home rule

“As soon as you start talking about comprehensive regional planning, the towns go crazy because they don’t understand that it’s really fundamentally in their interests,” said Gilbert, who advocates for broader authority over warehousing. “Home rule is a religion in New Jersey.”

The State Planning Commission could be given power to decide on warehouse projects if state officials, including Gov. Phil Murphy, make a powerful case to the public of the need for comprehensive land-use management for warehouses and other major users of land, like solar fields, he said.

Gilbert said a shift of power could be achieved through an amendment to the State Planning Act to give the commission power over specific issues like warehouses or solar panels. Or a governor could issue executive orders directing cabinet members such as the heads of the transportation and environment departments to implement the State Plan, which would give them power over the planning process.

The State Plan, last updated in 2001, establishes state objectives in areas including land use, housing, economic development and conservation, but does not give the commission authority over local planning issues.

“You need a powerful governor who really gets it and is determined to solve it but the determination has to include the diplomatic skills to explain it,” Gilbert said. He predicted that Murphy would be up to the task if he chose to take it on, but acknowledged that it’s a formidable challenge.

“How do you tell Murphy when he’s day-to-day worrying about COVID-19 that he should take on a hornet’s nest like this?” he asked.

No one’s talking

Murphy’s office did not respond to a request for comment on whether he favors broader oversight of warehouse-planning authority. Mike McGuinness, chief executive of the New Jersey branch of NAIOP, a commercial real estate trade group that represents developers, also did not respond to a request for comment.

In the Legislature, a bill co-sponsored by Senate President Stephen Sweeney (D-Gloucester) and Sen. Troy Singleton (D-Burlington) would require the buy-in of municipalities that adjoin one where a warehouse project is proposed. Disputes would be resolved by county- or state-planning officials.

Under other proposals submitted by the nonprofit New Jersey Future, in response to the bill, the State Planning Commission would be given more authority over warehouse siting. The recommendations, submitted in June, would amend the bill to require the commission to develop a statewide warehouse plan that would guide development to the most appropriate sites, with a preference for already developed land.

The current version of the bill was approved by the Senate Budget and Appropriations Committee in May but is not expected to be considered again until the Legislature returns after the November election.

The New Jersey Future document, obtained by NJ Spotlight News, says the statewide plan should set criteria for sites that are most suitable for warehouse development, including existing land use, proximity to ports and highways, impacts on the natural environment and open space, and social justice concerns. Those guidelines would be adopted by local planners in deciding whether to approve a warehouse application.

The commission would evaluate any warehouse proposal over a certain size to determine whether it is consistent with the plan. And it would ensure that warehouse projects that could be sited near ports or rail yards are not displaced by other industries that could just as easily move elsewhere.

The proposal would give the commission power to determine whether a local ordinance was consistent with the statewide plan, and to “invalidate an ordinance or approval if it determines it is inconsistent with the plan,” the document says.

The New Jersey League of Municipalities did not respond to requests for comment.

Any solution to rampant warehouse development needs to recognize the industry’s importance to New Jersey’s economy, argued Tim Evans, director of research at New Jersey Future.

One out of eight workers statewide is employed by the transportation and warehousing or wholesale-trade sectors, the highest proportion of any state’s workforce, Evans said. “We’re not really the pharmaceutical state any more or the telecommunications state, we are now the goods-movement state,” he said.

Given its statewide importance, the warehouse industry should have statewide attention, but any decision to give more authority to the State Planning Commission should be made in light of the views of all sides, he said.

“If they are writing a statewide warehousing plan, we’d want them to be doing it with input from various interest groups,” Evans said. “We want to hear from the environmental groups who are opposed, but we also want to hear from the industry about how important it is to the economy.”

In July, a survey from the commercial real estate advisory firm Newmark reported that warehouse rents rose to a record and vacancies slumped in northern and central Jersey during the second quarter. It was the latest evidence of strong demand from developers, driven by logistics companies who are hungry for space to store a mountain of goods ordered online.

The same survey found 14 million square feet of industrial space was under construction in the latest quarter, up from 8.4 million in the first three months of the year. Warehousing makes up about three-quarters of overall industrial space.

The boom has spawned lawsuits by community groups in some towns against local planners for giving the green light to warehouse projects and has resulted in the withdrawal of at least one development plan. But mostly the industry has been welcomed by towns eager for new revenue.

Myopic focus

“I don’t think that our local officials are going to look beyond the ends of their noses as far as property-tax impacts,” said Micah Rasmussen, a Rider University professor who led a successful campaign against a warehouse project in Upper Freehold earlier this year.

“We’ve all struggled with municipal budgets for a long time, so when you have the ability to add this kind of money to your budgets, and get out from under the crush, it is absolutely understandable that they would grab at the chance. But you are making a deal with the devil,” Rasmussen said.

Warehouse developers need access to ports, population centers and open space, and they will target any community that checks all those boxes, Rasmussen said.

Most developers, he said, avoid building on previously used land because they may have to deal with requirements like environmental cleanup, and they typically shun existing warehouses because those buildings will often lack modern amenities such as the 50-foot ceilings demanded by logistics companies.

That usually leads them to greenfield sites where construction is a lot easier but which may represent a buffer against creeping urbanization for local communities.

Since the projects have impacts well beyond the town that approved them, they should be subject to statewide or at least regional control, Rasmussen argued.

“We are changing the face of big wide swaths of New Jersey,” he said. “We are changing the texture of these communities, and we’re doing it without any statewide or regional planning or forethought, and the only question that’s being asked in these communities is, are you attracted to the amount of money that this warehouse is going to bring in?”

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