With the continuing strain on residential development projects, some developers may seek relief in the form of a recent New Jersey law, which allows for the conversion of age-restricted projects to non age-restricted projects.  A recent opinion from the Law Division may serve as a helpful tool to developers seeking to take advantage of the law.

Heritage at Towne Lake, LLC v. Planning Board of Sayreville interprets and applies N.J.S.A. 45:45:22A-46.3 (the “Conversion Statute”), which regulates the conversion of age restricted units to non-age restricted units in development projects.  In this case, the Sayreville Planning Board (the “Board”) denied a developer’s application to convert a one hundred eighty-four (184) unit, age restricted community to a non-age restricted community, containing the same number of units, but configured differently.

Pursuant to the Conversion Statute, the approving board has broad discretion to require the applicant to prove that the conversion can be granted  without substantial determinant  to the public good and will not substantially impair the intent and purpose of the zone plan and zoning ordinance.  The Conversion Statute establishes a set of criteria that applicants must prove, which include: (1) that the site meets RSIS standards; (2) recreation improvements and other amenities are revised, as needed, to meet the needs of the converted development; (3) water and sewer systems are adequately designed;  and (4) sufficient parking is available to accommodate the converted development.

In addition to arguing that the applicant failed to meet the burden of proof as to the conditions of the Conversion Statute, the Board claimed that approving the conversion application would create a density violation.  Since the applicant received a density bonus for age-restricted development, if the conversion were approved, the Board argued that the project would require a (d) variance for density pursuant to N.J.S.A. 40:55D-70d(5).  The court dismissed this argument, citing the plain meaning of the Conversion Statute, which states:

“No application for an amended approval seeking the authority to construct a converted development shall be considered a “use variance” or other “d variance” application pursuant to subsection d.  of section 57 of P.L.  1975, c 291 (C:4055D-70).”

The court ultimately concluded that the applicant had met its burden of proof and that the denial of the conversion application by the board was unreasonable.  The court remanded the matter back to the Board an ordered that the conversion be approved subject to the conversion of the originally proposed bocce courts to a “tot lot” for children. 

The Conversion Statute remains an attractive option for distressed, age-restricted development projects, provided the projects and the application for conversion can meet the statutory requirements, including a 20% set aside for affordable housing.    The publication of this decision helps shed light on the conversion process and eliminate confusion as to its application.