United States: Cluster Development Law Offers New Opportunities For Flexible Planned Development

On August 7, 2013, Governor Christie signed into law a bill implementing numerous changes to the Municipal Land Use Law with the stated purpose of:

Enabling municipalities the flexibility to offer alternatives to traditional development through the use of equitable and effective planning tools, including clustering, transferring development rights and lot size averaging in order to concentrate development in areas where growth can best be accommodated and maximized while preserving agricultural lands, open space and historic sites.

N.J.S.A. 40:55D-2(p).

The bill was promoted by New Jersey Future and supported by a diverse coalition.

Planned Development in New Jersey

The cluster development bill is the latest in a long history of planned development innovations. In 1967, the Municipal Planned Unit Development Act (P.L. 1967, c.61) was enacted in large part to respond to the call by University of Pennsylvania Professor Krasnowiecki for land use tools to encourage creativity and flexibility in development patterns. The Municipal Planned Unit Development Act encouraged municipalities to provide relief from conventional zoning by mutual agreement between the property owner and the board, including flexible provisions to allow greater density in one section in return for an offset in another section or the preservation of open space. It also created a first stage approval, known as "tentative approval" for planned developments, allowing full scale engineering to occur at the later final approval stage.

The Municipal Land Use Law, effective 1976, continued the State's tradition of supporting planned development options. The law created a series of planned development categories, including residential clusters, planned unit development or "PUD", and mixed uses of residential clusters and commercial or industrial uses. Zoning and subdivision ordinances were permitted to contain standards encouraging and promoting flexibility and economy in layout and design, N.J.S.A. 40:55D- 39, -65; provisions authorizing a first stage concept approval (general development plan approval), N.J.S.A. 40:55D-45.1 to -45.8; and provisions governing the amount, location and methods for preserving common open space within the development, N.J.S.A. 40:55D-43.

New Cluster Development Bill

The recently passed cluster development bill, P.L. 2013, c. 106 (August 7, 2013), expands the options for flexible planned development. The new options are intended to allow municipalities to use clustering techniques, either through planned development ordinances or other provisions of the zoning ordinance, to encourage smaller scale projects providing for both cluster development and land preservation of agricultural, historic or open space land. In order to take advantage of the new cluster approach, municipalities will need to adopt a land use plan element addressing cluster development along with implementing zoning. Among the innovations of the new law are:

  • Nonresidential development may also be clustered;
  • Greater density may be provided in return for common open space, public open space or permanent preservation of historic or agricultural land;
  • Cluster development should not be mandatory, but rather should be designed to foster mutual agreement between the applicant and the board on density and land preservation;
  • Previously questioned zoning techniques are now expressly authorized, including the provision of bonus density or intensity; smaller scale cluster development; minimum and/or maximum lot sizes; lot size averaging; minimum improvable lot area; and minimum and/ or maximum floor areas;
  • Preservation restrictions are described.

The Next Steps

Implementing the Legislature's goals in the Cluster Development Act will require municipalities to be open to options which provide greater flexibility and less mandates for subdivision and site plans. It will also require the State to consider how reasonable densities in cluster developments can be achieved given the overriding concern about sewage disposal. Vacant land within approved sewer service areas is becoming rare, so cluster development may have to be served by septic systems. Current DEP standards for septic system density are dictating large lots, making cluster development densities unlikely without further innovations.

The approach taken in the Pinelands Area has been to implement a pilot program to test advance septic system technologies, followed by DEP issuance of a General Permit for the approved technologies (Permit No. 02- 3487-4SG, issued 1/29/13). A similar approach is needed for the rest of the State to make cluster development a viable option.


1 Krasnowiecki, Planned Unit Development Unit: A Challenge to Established Theory and Practice of Land Use Control, 114 U.Pa. L. Rev. 47 (1965).

Dimensions Newsletter, New Jersey Builders Association, November 2013.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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