The New Jersey Pinelands, roughly one million acres in size, encompasses the south-eastern quarter of the State of New Jersey. The region is characterized by pine and oak forests, cedar and hardwood swamps, pitch pine lowlands, marshes, and bogs. The Pinelands is also home to the Pine Barrens tree frog, over 12,000 acres of “pygmy forest”, (stands of dwarf pine and oak), 850 plant species, and more than 350 species of birds, reptiles, amphibians, and mammals.
The Pinelands region generates roughly one quarter of New Jersey’s agricultural income, particularly cranberries and blueberries. It is also underlain by one of the largest and least polluted aquifers in the northeastern United States. In addition, it serves as an outdoor recreational area for the nearby New York City and Philadelphia metro areas, which are both just a one- to three-hour drive away.
The threat of encroaching development caused the U.S. Congress in 1978 to designate the New Jersey Pinelands as the first National Reserve and authorized the creation of a regional planning commission tasked with adopting a regional plan within 18 months. In 1979, the State of New Jersey adopted the Pinelands Protection Act which documented the goals of protecting the environment, safeguarding water quality, promoting compatible recreation/agricultural uses and nurturing appropriate development in the Pinelands. This act also endorsed the Pinelands Commission, which includes one representative from each of the seven counties in the region plus seven members appointed by the Governor of New Jersey and one member appointed by the U.S. Secretary of the Interior.
The Pinelands Comprehensive Plan, adopted in 1980, designated a 368,000-acre inner Preservation Area containing the most sensitive environmental resources. This is surrounded by a 566,000-acre Protection Area which had already experienced some development before 1980. The plan further identifies nine management areas.
The Pinelands Comprehensive Plan called for public acquisition of 100,000 acres using a combination of federal and state funds. However, the plan also relies on regulatory protection including a comprehensive TDR program requiring plan and code amendments from all of the local jurisdictions in the region.
Sending Areas – In the Pinelands TDR program, sending areas are located within the Preservation Area District, Agricultural Production Area, and Special Agricultural Production Area. Jurisdictions were required to adopt land-use regulations that promote preservation in these three areas. Codes were required to maximize open space protection using clustering provisions. Development could only be allowed by conditional use permit (CUP) here instead of as a matter of right.
Low density development can be approved by CUP in sending areas. But private owners are also motivated to preserve their land with a TDR transfer ratio allowing four development rights to be used at receiving sites in growth areas for every Pineland Development Credit (PDC) transferred from a sending area. In other words, the Plan offers four development rights at the receiving site for every Pinelands Development Credit (PDC) transferred from a sending site. The plan assigned 5,625 PDCs to the preservation areas which, at the four-to-one ratio, equates to 22,500 development rights in the Regional Growth Areas.
The plan establishes the number of PDCs available to a sending site based on development potential and environmental sensitivity. The Preservation District allocates one PDC per 39 acres of uplands, 0.2 PDCs per 39 acres of wetlands, two PDCs per 39 acres of land approved for mining but undisturbed, but no PDCs to land already mined. The Agricultural Production and Special Agricultural Production Areas allocate two PDCs per 39 acres for uplands, lands in active berry agriculture, wetlands in active field agriculture as of 1979 and uplands approved for mining but not yet disturbed, 0.2 PDCs per 39 acres for other wetlands, and no PDCs to uplands already mined.
The TDR program was initially facilitated by the Burlington County Conservation Easement and Pinelands Development Credit Exchange, essentially a TDR bank established by Burlington County, one of the seven counties within the Pinelands, using a $1.5-million county bond. The Exchange purchases PDCs as a buyer of last resort from sending sites in Burlington County but will sell its PDC holdings for use on receiving sites anywhere in the Pinelands.
In the early 1980s, the Exchange bought and sold PDCs at $10,000 each, which had the effect of establishing the price of PDCs in private transactions. In 1987, the State of New Jersey created the New Jersey Pinelands Development Credit Bank (NJPDCB) with $5 million from the state general fund. The NJPDCB acts as a “buyer of last resort” for PDC sellers unable to find a buyer. In an effort to keep bank purchases from interfering with the private PDC market, the NJPDCB cannot pay more than 80 percent of market value for PDCs. The NJPDCB must be re-authorized to buy PDCs every two years. The sale of PBCs from the NJPDCB cannot hamper private sales. Its PBCs are sold at auction. As required by the State of New Jersey, the minimum bid was initially set at $10,000 per PBC or $2,500 for development right. At the first auction, in 1990, the highest bid was more than twice that amount: $5,560 per development right (or $22,240 per PDC). The minimum bid can be reset as needed by State of New Jersey.
The NJPDCB can also award PDCs at no cost to projects that fill a compelling public need if the bank board finds that the conveyance is essential for the project to proceed and that the conveyance will not significantly impact the private PDC market.
The majority of PDC transactions occur on the private market. Between 1983 and 2020, 3,899 development rights were purchased by private parties while banks purchased 2,594 rights, or roughly 40 percent of the total of 6,493 rights.
In addition to buying and selling development rights and providing credit guarantees, the Pinelands Development Credit Bank:
- Guarantees loans secured by PDCs as collateral;
- Facilitates all PDC transactions; Issues PDC Certificates;
- Reissues Certificates when PDC ownership changes;
- Maintains the Registry of all PDC transactions;
- Uses the Registry to help PDC buyers find PDC sellers;
- Maintains a list of developers who want to buy PDCs;
- and Prepares an annual report of all PDC transactions.
Receiving Areas – Receiving areas are located in the Regional Growth Area, outside of the Core. The plan establishes Regional Growth Areas in 22 municipalities as suitable for and capable of accepting up to 46,200 transferred units. This is more than twice the number of units that would be generated by the severing of all credits allocated to the sending areas: 22,500.
The plans and codes for each jurisdiction with a Regional Growth Area designation establish the baselines and maximum densities for the receiving zones tasked with accommodating transferred PDCs. The PDCs can be used to boost single-family, multiple-family or any other kind of residential density. To assure developers of greater certainty in the use of PDC, the Regional Plan requires each jurisdiction to grant transferred density by right and not through a discretionary process.
In TDR programs, developers can sometimes circumvent compliance using rezonings, planned unit developments, and other processes that gain bonus density without the need to buy TDRs. To prevent this practice, all jurisdictions with receiving areas in the New Jersey Pinelands must require PDCs whenever they approve increased density or allow units in areas previously zoned for non-residential uses. In addition, the Pinelands Commission monitors local zoning codes and procedures for stringent development standards placed on applications for higher density which could have the effect of discouraging developers from buying development rights.
Program Evaluation and Modification – The Pinelands Commission has regularly studied its TDR program. has been routinely analyzed and adjusted. In the 1980s, various issues hampered program success. 1) Transferred density was prohibited on land served only by septic systems. 2) Transfers were resisted by strong “no-growth” sentiments in some jurisdictions with receiving areas. 3) In some receiving areas, increased density was hindered by environmental constraints and/or height, setbacks, and other development regulations that effectively discouraged transfers. 4) Duplicative regulations and disputes between local governments and the Pinelands Commission delayed transfers. 5) Landowners and developers perceived the transfer process to be complex and time-consuming even though developers who employed the TDR option were typically interested in using it again.
In 1988, the Pinelands Commission instituted improved marketing, increased public education, streamlined approval processes, and establishment of the Pinelands Development Credit Bank. Adoption of the Pinelands Infrastructure Trust Bond Act helped finance roughly $50 million in sewer infrastructure in the Regional Growth Area, greatly facilitating the ability to increase density in the receiving areas. A decade later, New Jersey appropriated $3 million to buy and retire PDCs. In 2001, the state appropriated another $20 million to continue this Special Development Credit Purchase Program.
Carbon Sequestration – In 2006, New Jersey lawmakers mandated that the state reduce GHG emissions (using 2006 as a base year) 80 percent by the year 2050. In addition to emission reductions, New Jersey is planning to meet that target by using the carbon sequestration provided by forests and other natural sinks to offset gross emissions. According to the state’s 80×50 Report, released in 2020, four of the five pathways to sequestration in New Jersey require land conservation: reforestation, proactive forest management, conservation of agricultural lands, and natural land preservation. (The fifth pathway is salt marsh and seagrass restoration/enhancement.) The 80×50 Report stresses the need to reduce the loss of upland forests, cropland, grassland, and wetlands in order for these pathways to be successful. The report includes the Pinelands Development Credit program in a list of twelve initiatives that are instrumental to open land preservation (New Jersey 2020). As shown in the Statewide Greenhouse Gas Inventory available in 2021, the New Jersey Department of Environmental Protection projects forests and other carbon sinks to offset over half of GHG emissions in the year 2050 under its green scenario (New Jersey 2021).
Outcome – In its 2020 Annual Report, the Pinelands Development Credit Bank reported that the program had preserved 55,392 acres, representing a private sector investment of $54,9 million. Of this total, 24,301 acres, or almost 44 percent were preserved in the Preservation Area District with the remainder in the Agricultural Production Area and the Special Agricultural Production Area.
New Jersey. 2020. New Jersey’s Global Warming Response Act 80×50 Report: Evaluating Our Progress and Identifying Pathways to Reduce Emissions 80% by 2050. Accessed 2-12-21 at nj-gwra-80×50-report-2020.pdf.
New Jersey. 2021. Statewide Greenhouse Gas Inventory. Accessed 2-12-21 at NJDEP-Air Quality, Energy & Sustainability.