Proposed Environmental Regulations May Impact the Bottom Line

On Mar 13, 2025

By Lisa Goulian Twiste, Contributing Writer

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With actions based on good intentions, pending NJDEP rules could nonetheless affect real estate deals and complicate water system testing.

New Jersey’s environmental engineering field has long been a study in cross purposes, as lawmakers, state officials, and other stakeholders try to strike a balance between keeping residents healthy and safe, and the reality of what it takes to keep businesses and markets flourishing for long-term economic growth. 

Two of the issues currently spurring debate are a pending New Jersey Department of Environmental Protection (NJDEP) mandatory disclosure rule that says prospective buyers of real estate must notify the NJDEP and the property owner if they discover previously unidentified hazardous substances; and a collection of new bills regulating the use, detection, and research of PFAS compounds – or “forever plastics” – found in the state’s water supply. 

Adding to the uproar are questions about the new Trump administration’s plans to ease or stop environmental regulations from being implemented and how that may impact New Jersey policy and the business landscape. Before Trump declared a federal funding freeze in late January, Mindy Sayres, PG, LSRP, senior vice president/district office manager, GZA Northern New Jersey in Fairfield, told New Jersey Business Magazine, “Environmental and resiliency projects that were fully funded under the Biden administration through the Inflation Reduction Act and other programs and have received their funding are underway and would be expected to continue. It’s too soon to identify the specific impacts a new administration’s changes to EPA staffing, budget, and policies will have.” 

Ray Cantor, chief government affairs officer at the New Jersey Business & Industry Association (NJBIA), believes that while the Trump is expected to seek a major overhaul of green energy policies, it may be difficult to reverse decades of New Jersey environmental initiatives, especially with the GOP’s slim majorities in both the House and Senate. 

“New Jersey’s environmental standards are at least as strict as the federal government’s – if not more – from an air, water, and land perspective, and I don’t think what the Trump administration does will impact any of that,” Cantor says. “What you very well may see is a pull-back on some of the climate and possibly environmental justice policies that have dominated both the Biden and Murphy administrations, such as whether or not windmills get built, and from an environmental justice perspective, where the money flows. It comes down to what the Trump administration can and can’t legally do, and that will play out over time.”

New Property Contamination Rules Could Disrupt Real Estate Market

Weighing heavily on the commercial real estate industry is the NJDEP’s proposed mandatory disclosure of property contamination, which expands on the Site Remediation Reform Act of 2009 and obligates buyers to report newly discovered discharges to both the seller and the NJDEP during pre-closing due diligence on a property. Made aware of this contamination, the owner would be responsible for cleaning it up before the deal is even solidified.

According to Cantor, owners often don’t want to know this information unless they’re sure the property is going to sell at a certain price. Once the sale happens, there’s money on the table and contamination gets cleaned up, but he believes this new rule could create economic uncertainties between buyers and sellers that could chill the real estate market.

“We realize certain properties that are known to be contaminated should get cleaned up right away, but ultimately, a vibrant real estate market where property is transferred will result in more properties being sold, redeveloped, and cleaned up,” he says. “The current system works, and we should not be stuck on ideological or philosophical disclosure rules.”

GZA is often asked by clients considering buying a property to help evaluate the site’s potential environmental concerns. This is done by conducting a preliminary assessment and, if necessary, a site investigation, which Sayres says can help the buyer make educated decisions about the property and provide potential negotiating leverage during the transaction. But while current regulations only require the reporting of Immediate Environmental Concerns (IECs) – or contamination that poses an immediate threat to the environment or public health and safety – the proposed rule requires reporting of any site discharge to the NJDEP. 

“Sellers may become very reluctant to allow anyone onto their property to inspect or evaluate the site before purchase, meaning buyers may be forced to assume higher levels of risk in their transactions or walk away from the deal altogether,” she says.

Robert E. Schwarzkopf, CHMM, LSRP, director of site remediation services at Najarian Associates in Eatontown, acknowledges the proposed rule might lead sellers to hold on to property rather than run the risk of a buyer identifying/reporting contamination during due diligence – thus hindering real estate deals. “However, a motivated seller will ultimately need to investigate and remediate contamination identified on their property, regardless of when, or by whom, a release is reported,” he says. “With the new rule, sellers may become more proactive so that they are prepared to remediate at the time they list their property.”

Increasingly Tough Regulations on ‘Forever Plastics’

In 2019, the NJDEP started hinting at stricter regulatory standards for allowed levels of plastics in drinking water, and by 2021, had enacted a maximum contaminant level of 14 parts per trillion – the strictest limit in the country at the time. This was done ahead of the EPA’s 2024 ruling that designated two PFAS compounds as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Many believe, however, that improved technology on detection has led to impossible-to-meet standards. 

Caryn Barnes, LSRP, PG, senior principal at Parsippany-based Langan, says that while state and federal standards for PFAS are crucial for the protection of public health and the environment, there is significant uncertainty in regulations and policy investigating and remediating these compounds. For example, there are a handful of PFAS standards for soil, groundwater, and drinking water, but none for surface water, sediments, or air, and not all compounds in the analytical suite have standards.

“The level of regulation is an additional challenge because these compounds are being regulated at the parts per trillion (ppt) level, and one ppt is the equivalent of one second in 32,000 years. This makes the accuracy of analytical testing a challenge,” she says. “The prevalence of PFAS in our world, combined with these low regulatory limits, creates difficulty in determining or distinguishing sources from regional or anthropogenic conditions. Cross-contamination and comingled impacts further complicate the investigation, and because PFAS compounds typically do not degrade, it is difficult to project how far impacts will migrate.”

NJBIA’s Cantor warns against regulations that are disproportionate to the risk posed by PFAS, as resources also must go toward cleaning sites and drinking water, fixing old pipes and other pressing matters. “We have hundreds of millions of dollars of need in our water systems, and now we’re adding another expensive item and not giving due consideration to the risk versus the reward. We need to have a broader conversation on what a risk really is,” he says. “I’m questioning whether those low standards are worth the cost involved. It’s not free: At the end of the day, we all pay.”

To access more business news, visit NJB News Now.

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