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10 DECEMBER 2021
MURPHY VETOES BILL TO ALLOW
THIRD-PARTY CODE INSPECTIONS
NAIOP New Jersey CEO Michael McGuinness said he was “deeply disappointed” with Murphy’s decision.
“It is both puzzling and troubling that our Governor and his advisers would blatantly disregard the problems that currently exist
with the state’s inspection review process, in part due to the shrinking base of local and state government inspectors, many of whom are retiring,” McGuinness wrote in a statement. “Even though this bill was unanimously passed by the Legislature, was successfully tested as a pilot program during the COVID health emergency shutdown last year and being able to get timely inspections from municipal agencies is more difficult than ever due to limited hours, the Governor has chosen to totally disregard these realities.
“Rather, he chose to kick the
can further down the road by authorizing DCA to undertake a two-year study of how to improve efficiencies. Seriously? This issue has persisted for years and delays and project interruptions have cost towns and the state badly needed tax revenues. A4850 is a carefully thought-out option that would have streamlined the inspection process as well as create much needed capacity, enhancing job creation and economic growth.”
Homebuilding industry advocates also reiterated the need for a solution.
“While we are disappointed to see the conditional veto particularly after working on this reform for many years, we will continue to work with the state’s policymakers to bring meaningful relief to
the homeowners, remodelers, homebuilders and developers who regularly endure delays in the
code inspection process,” said Jeff Kolakowski, CEO of the New Jersey Builders Association. “These delays only add unnecessary costs to our state’s housing stock and impedes the homebuilding industry’s ability to deliver diverse and affordable housing options.”
Proponents have said the framework could follow in the footsteps of the highly successful Licensed Site Remediation Professionals program, which has helped lighten the state’s backlog of environmental cleanup cases over the past decade using private- sector consultants. To that end, McGuinness noted recently that A4850 would play a similar role
by “(ensuring) accountability
and public safety, while relieving government burdens and allowing economic development to proceed more efficiently as we continue
to recover from the devastating impacts of the pandemic.”
In his message to lawmakers, Murphy said he was “certain (it) was not the intent of the bill’s sponsors” to marginalize smaller applicants, but argued that “granting private entities broad discretion to conduct construction inspections when local agencies do not
meet their deadlines creates an appearance of bias in favor of those who can afford private inspections.” He also cited concerns that DCA and local agencies — which would retain substantial oversight and final decision-making authority over code inspections — are not equipped to manage a network of private-sector agents.
“(The) resources required to license, authorize and oversee private entities would be considerable, drawing attention from DCA’s and local agencies’
core work and making it even more difficult for local agencies to meet their deadlines,” Murphy wrote. “On top of that, private entities would be taking from local agencies not only much-needed operating revenue, but also experienced code officials, at a time when these officials are in high demand.”
A bill that would streamline construction code inspections
in New Jersey using third-party, private-sector consultants is
all but dead for now, following
a conditional veto by Gov. Phil Murphy that shelved the proposal in favor of a two-year study by state officials.
The legislation, A4850, calls for allowing local code enforcement agencies to conduct expedited reviews in exchange for a fee, while creating a network of licensed agents who could step in if a municipality cannot complete an inspection within three business days of a building owner’s request. The state Legislature unanimously approved the bill in early June,
but Murphy on Nov. 8 returned it to lawmakers with a series of changes, including the removal of the language that would have established the new program.
In doing so, the governor cited concerns that “allowing expedited inspections in exchange for an additional fee could create a two- track system that moves smaller developers and homeowners to the back of the line in favor of those who can pay a premium.” He instead called for the state Department
of Community Affairs to conduct
a study of the proposal and other ways to expedite code inspections,
the findings of which would be due in 24 months.
“While I share with my partners
in the Legislature the desire for residential and commercial real estate development to proceed without unnecessary delay, I have substantial reservations about the proposed method for achieving that goal,” Murphy wrote in a conditional veto message to the General Assembly. “As we work
to build a stronger and fairer New Jersey, it is paramount that we preserve the components of our construction code that make it one of the strongest in the country and continue to ensure that the system works for everyone.”
Passage of the bill has been a
top priority for industry groups, including NAIOP New Jersey
and the New Jersey Builders Association, which see it as a
key step toward streamlining development and easing the burden on overextended, understaffed and aging code officials. The legislation would also codify what was essentially a pilot program last year, when DCA permitted engineers
and other licensed professionals
to certify inspections in towns that had shut down during the COVID-19 emergency and were not performing construction inspections.
Gov. Phil Murphy speaks in late September during an event in Berkeley Heights, where Fiserv Inc. plans to add nearly 2,000 jobs to its existing New Jersey workforce.
Photo by Edwin Torres/Courtesy: Governor’s Office