FAA Rejects Housing Plan at Cape May County Airport

The Federal Aviation Administration (FAA) has formally rejected a proposal from Cape May County, N.J., to develop housing on a portion of its airport property. The decision reinforces long-standing federal policy that prohibits residential development on land that is part of a federally obligated airport, citing potential conflicts with aviation operations and grant assurances.

Regulatory Obligations Preclude Housing

The denial, confirmed in a January 16 email to county officials, underscores the legal commitments tied to federal funding. According to the FAA, it would “not approve of the residential use of airport property and/or the disposal of airport property for the purpose of enabling residential use.” This position is based on regulations governing the Airport Improvement Program (AIP), which provides federal grants for airport development. Airports that accept AIP funds must agree to legally binding grant assurances, which restrict the use of airport property to aeronautical or compatible non-aeronautical purposes. The FAA considers residential development an incompatible land use.

This regulatory action comes at a critical time for Cape May County Airport (WWD), as the county government is in the process of severing its long-term lease with the Delaware River and Bay Authority (DRBA), the current operator. The county notified the DRBA in 2024 of its intent not to renew the contract. Ending the lease could require the county to repay as much as $30 million, according to DRBA estimates reported locally.

Balancing Local Needs and Federal Rules

County officials had reportedly considered using approximately 33 acres of the 996-acre airport property to construct around 300 housing units. The plan was intended to address a local need for affordable housing for working families. Cape May County Administrator Kevin Lare stated that officials remain committed to finding housing solutions and would explore options that align with statutes and regulations.

While residential development is prohibited, airports often pursue other non-aeronautical revenue streams with FAA approval. Cape May County Airport is already home to the Cape May County Tech Village, an office park designed to diversify the local economy beyond tourism. This type of commercial development is generally considered a compatible use of airport land.

The airport remains a key regional facility, handling 40,075 aircraft operations in the 12-month period ending December 31, 2022, according to FAA data. As the county moves to regain direct control of the airport, it will need to navigate federal land use policies while managing its operational future and financial obligations.

For global airline trends and commercial aviation news, turn to flying.flights. From aircraft production to supply chains, commercial aviation manufacturing news is covered at flying.flights/manufacturing.