In Holmdel Builders' Association v. Holmdel Township, 121
N.J. 550 (1990), the New Jersey Supreme Court determined that mandatory
development fees are authorized by the Fair Housing Act of 1985, N.J.S.A.
52:27d-301 et seq., and the State Constitution, subject to the Council
on Affordable Housing's (COAH's) adoption of rules. This
article establishes the standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's rules.
Fees collected pursuant to this article shall be used for the sole
purpose of providing low- and moderate-income housing. This article
shall be interpreted within the framework of COAH's rules on
development fees.
The Township of Verona shall not spend development fees until
the Superior Court (Court) has approved a plan for spending such fees
and the Township of Verona has received third round substantive certification
from COAH or a judgment of compliance from the Court.
On the anniversary of the Judgement of Compliance and Repose
for every year through 2025, Verona shall provide annual reporting
of trust fund activity to the New Jersey Department of Community Affairs
("DCA"), COAH, or Local Government Services ("LGS"), or other entity
designated by the State of New Jersey, with a copy provided to Fair
Share Housing Center and posted on the municipal website, using forms
developed for this purpose by the DCA, COAH, or LGS. This reporting
shall include an accounting of all housing trust fund activity, including
the collection of development fees from nonresidential developers,
payments in lieu of constructing affordable units on site, funds from
the sale of units with extinguished controls, barrier-free escrow
funds, rental income, repayments from affordable housing program loans,
and any other funds collected in connection with Verona's housing
program, as well as to the expenditure of revenues and implementation
of the plan approved by the Court.
The ability for the Township of Verona to impose, collect and
expend development fees shall expire with its Judgment of Compliance
and Repose, unless the Township of Verona has filed an adopted housing
element and fair share plan with the Court or other appropriate jurisdiction,
has petitioned for declaratory judgment or substantive certification,
and has received the Court's approval of its development fee
ordinance. If the Township of Verona fails to renew its ability to
impose and collect development fees prior to the expiration of its
Judgment of Compliance and Repose or substantive certification, it
may be subject to forfeiture of any or all funds remaining within
its municipal trust fund. Any funds so forfeited shall be deposited
into the New Jersey Affordable Housing Trust Fund established pursuant
to Section 20 of P.L. 1985, c. 222 (N.J.S.A. 52:27D-320).