In Woolwich, one of the fastest-growing towns in the Northeast, new subdivisions have increasingly gobbled up the rural landscape.

To cut down on the sprawl, local leaders recently approved a plan to cluster future development in two high-density areas. Developers seeking to build in those areas must pay to preserve surrounding farmland.

Officials were able to make that move - passing the cost of open-space preservation from taxpayers to developers - under a state measure hailed as innovative when it was first enacted.

But five years later, Woolwich is the only town in the state to take advantage of the law.

Towns looking to adopt it, from North Hanover to Hopewell, face what state officials and other observers say are unwieldy and expensive requirements created by the legislation.

The state is also struggling to offer the level of assistance many towns need to get the programs off the ground. The New Jersey Office of Smart Growth is down to half the number of planners it had a few years ago, and its grant funding for municipalities has been cut.

The state "didn't provide as much help as a number of towns needed," said Bill Harrison, a land-use lawyer who helped write the law. "There was a good effort in the beginning, and there wasn't the follow-through."

The state has doled out hundreds of thousands of dollars in grant money for the program, and at least eight towns, from Burlington to Ocean Counties and beyond, are working to get one started. But its lack of wide success has been a disappointment to some.

"In a time when the funding for land acquisition is severely limited, this has always presented an alternative, so it's a sad commentary on the situation, the fact that it's sort of languishing," said Carlos Rodrigues, who formerly addressed statewide planning issues in the Office of Smart Growth.

The traditional method of paying to preserve land with public money is straining. The Garden State Preservation Trust, which has spent millions on land conservation and other projects, allocated its last dollar to acquire open space this month.

"Is it an acceptable pace because of the complexity of the process? Yes," said Ben Spinelli, executive director of the Office of Smart Growth. "Is it an acceptable pace compared to how quickly we need to be able to alter the development patterns in the state? The answer is no."

The legislation was enacted March 29, 2004, during Gov. Jim McGreevey's push for "smart growth" in the nation's most densely populated state. It gave towns the authority to adopt a program known as Transfer of Development Rights, in which a municipality establishes high-density "growth" locations and developers who want to build there pay to preserve specially designated areas.

Advocates considered it an innovative solution to challenges that include the rising cost of government land acquisitions and the strains on the environment and roads that often accompany development.

And by then, New Jersey had shown it could work: Lumberton and Chesterfield launched successful programs in the 1990s as part of a Burlington County pilot project, and the system was preserving the environmentally sensitive Pinelands.

To adopt the program, towns have to designate growth and preservation areas, prepare an estimate of economic and population growth over the next decade, and adopt utility-service and capital-improvement plans for the growth area. They must also conduct a real estate market analysis of the value of the "development rights" being transferred. Those rights are calculated in the form of credits that the town allocates to landowners in the preservation area.

Towns ultimately need approval from the state Planning Commission. The process can cost a town $200,000 to $400,000, according to Courtenay Mercer, former director of planning for the Office of Smart Growth who worked on the program.

The state could amend the legislation to encourage more municipalities to consider the program by offering incentives that send more tax money back to the participating towns, added Mercer, who is president of the New Jersey chapter of the American Planning Association.

The expense is "definitely a concern," said North Hanover Mayor Jim Durr, whose town has received a state grant to explore the idea. "Our town is very small, and we have limited resources."

New Jersey, a leader in supporting the concept, sets a higher bar for towns to adopt the program than other states do, according to Rick Pruetz, a California-based planning consultant who studies Transfer of Development Rights programs nationally.

In Pennsylvania, where fast-growing Limerick in Montgomery County recently started looking into the idea, the process is simpler.

"A municipality can go ahead and undertake this without there being significant interaction with anybody on the state level, or, for that matter, on the county level," said Wesley Horner, a senior adviser at the Brandywine Conservancy who has made presentations on Transfer of Development Rights to Pennsylvania towns.

Regardless of outside requirements, the process of drafting studies and convincing landowners that the plan will be fair and workable typically takes years.

Even so, New Jersey officials are in preliminary discussions about how they can draw more towns into the fold by slimming down the regulations.

"I really don't think we have to put the towns through quite the level of high-powered, very expensive, high-level analysis that the [statute] currently requires," said Susan Craft, executive director of the state Agriculture Development Committee, noting a provision causing a program to automatically deconstruct if it doesn't work.

Woolwich, until recently a sleepy community with few development pressures, has seen its population triple over the last decade to 9,000.

With the aim of preserving its remaining rural areas, Woolwich has planned out a major growth center along its Route 322 corridor, and a second, smaller center across town on Auburn Road. The latter will neighbor the 4,500-unit Weatherby housing development, whose approval in the late 1990s came at the start of the township's boom.

"Unlike other communities, we're basically saying to a developer, 'This is where we want to grow,' " said Mayor Joe Chila. "We want to grow where there's a mixture of housing units with businesses mixed in with the town center."

The township has allocated development credits to about 4,000 acres of farmland slated for preservation. No credits have been sold yet, though developers are interested in building, officials said. That's not unusual: In Chesterfield's nationally recognized program, it took almost three years for an exchange of credits to occur.

Adopting such plans can be a stretch for many towns, requiring political courage, a long-term commitment, and the understanding that an up-front investment in money and time can lead to millions in savings later, experts say.

But the state, while struggling with limited resources, should also be more proactive, said Craft.

"If we make the barriers too high, fewer [towns] will be able to implement, and that's not the goal," she said. "The goal is for more to implement."

Contact staff writer Maya Rao
at 856-779-3220 or mrao@phillynews.com.