A.
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.
B.
Pursuant to P.L. 2008, c. 46, Section 8 (N.J.S.A. 52:27D-329.2) and
the Statewide Nonresidential Development Fee Act (N.J.S.A. 40:55D-8.1
through 40:55D-8.7), COAH was authorized to adopt and promulgate regulations
necessary for the establishment, implementation, review, monitoring
and enforcement of municipal affordable housing trust funds and corresponding
spending plans. Municipalities that were under the jurisdiction of
the Council and are now under the jurisdiction of a court of competent
jurisdiction ("Court") and have a Court approved Spending Plan may
retain fees collected from nonresidential development.
C.
The purpose of this chapter is to establish standards for the collection,
maintenance and expenditure of development fees pursuant to COAH's
regulations and in accordance with P.L. 2008, c. 46, Sections 8 and
32 through 38. Fees collected pursuant to this chapter shall be used
for the sole purpose of providing low- and moderate-income housing
in accordance with a Court approved Spending Plan.
The following terms, as used in this section, shall have the
following meanings:
A development included in the Housing Plan Element and Fair
Share Plan, and includes, but is not limited to, an inclusionary development,
a municipal construction project or a 100% affordable development.
The New Jersey Council on Affordable Housing established
under the Fair Housing Act.
The legal or beneficial owner or owners of a lot or of any
land proposed to be included in a proposed development, including
the holder of an option or contract to purchase or other person having
an enforceable proprietary interest in such land.
Money paid by a developer for the improvement of property
as permitted in N.J.A.C. 5:97-8.3.
The assessed value of a property divided by the current average
ratio of assessed to true value for the municipality in which the
property is situated, as determined in accordance with Sections 1,
5 and 6 of P.L. 1973, c. 123 (N.J.S.A. 54:1-35a through 54:1-35c).
Those strategies that minimize the impact of development
on the environment and enhance the health, safety and well-being of
residents by producing durable, low-maintenance, resource-efficient
housing while making optimum use of existing infrastructure and community
services.
A.
All new development of principal and accessory residential buildings within the Township of Allamuchy not exempt from the collection of development fees in accordance with the provisions specified in § 72-25C of this article hereinbelow shall pay a fee to Allamuchy Township equal to 1.5% of the equalized assessed value of the residential construction, provided no increased density is permitted.
B.
Notwithstanding the provisions of Subsection A hereinabove, if a "d" variance is granted pursuant to N.J.S.A. 40:55D-70d(5) for more residential units than otherwise permitted by right under the existing zoning, then the additional residential units realized as a result of the "d" variance approval shall pay a bonus development fee to Allamuchy Township equal to 6.0% of the equalized assessed value of the residential development, rather than the 1.5% development fee otherwise required for the residential units permitted by right.
(1)
However, if the zoning of a site has changed during the immediate
two years prior to the filing of the "d" variance application, then
the base density for the purposes of calculating the bonus development
fee shall be the highest density permitted by right during the two-year
time period.
C.
Eligible exactions, ineligible exactions and exemptions for residential
development.
(1)
All affordable housing developments, developments where the developer
is providing for the construction of affordable units elsewhere in
the municipality, and developments where the developer has made a
payment in lieu of on-site construction of affordable units shall
be exempt from paying development fees. All other forms of new construction
shall be subject to development fees.
(2)
Developments that have received preliminary or final site plan approval
prior to April 19, 1999, shall be exempt from development fees, unless
the developer seeks a substantial change in the approval. Where a
site plan approval does not apply, a zoning and/or construction permit
shall be synonymous with preliminary or final site plan approval for
this purpose. The fee percentage shall be vested on the date that
building permits are issued.
(3)
In addition to the construction of new principal and/or accessory
buildings, development fees shall be imposed and collected for the
construction of additions or expansions to existing buildings, for
the change or conversion of an existing building to accommodate a
more intense use, and/or for the demolition and replacement of an
existing building, provided that:
A.
All new nonresidential development within the Township of Allamuchy
not exempt from the collection of development fees in accordance with
the provisions specified in § 72-26(C) of this chapter hereinbelow
shall pay a fee equal to 2.5% of the equalized assessed value of the
land and improvements for all new nonresidential construction on an
unimproved lot(s) or equal to 2.5% of the increase in equalized assessed
value resulting from any additions to existing structures to be used
for nonresidential purposes.
B.
Development fees also shall be imposed and collected when an existing
structure is demolished and replaced. The development fee of 2.5%
shall be calculated on the difference between the equalized assessed
value of the preexisting land and improvement and the equalized assessed
value of the newly improved structure, i.e., land and improvement,
at the time final certificate of occupancy is issued. If the calculation
required under this section results in a negative number, the nonresidential
development fee shall be zero.
C.
Eligible exactions, ineligible exactions and exemptions for nonresidential
development.
(1)
The nonresidential portion of a mixed-use inclusionary or market
rate development shall be subject to the 2.5% development fee, unless
otherwise exempted below.
(2)
The 2.5% fee shall not apply to an increase in equalized assessed
value resulting from alterations, change in use within existing footprint,
reconstruction, renovations and repairs.
(3)
Nonresidential projects that have received a certificate of occupancy
or general development plan approval or have entered into a developer's
agreement or a redevelopment agreement, all prior to July 17, 2008
(the effective date of P.L. 2008, c. 46), shall be exempt from the
payment of nonresidential development fees, provided that an affordable
housing fee of at least 1% of the equalized assessed value of the
improvements is included in the development plan, developer's
agreement or redevelopment agreement.
(4)
Nonresidential developments shall be exempt from the payment of nonresidential
development fees in accordance with the exemptions required pursuant
to P.L. 2008, c. 46, as specified in the Form N-RDF, State of New
Jersey Nonresidential Development Certification/Exemption Form, as
may be amended, and listed below. Any exemption claimed by a developer
shall be substantiated by that developer.
(a)
All nonresidential construction of buildings or structures on
property used by houses of worship and property used for educational
purposes which is tax-exempt pursuant to N.J.S.A. 54:4-3.6, provided
that the property continues to maintain its tax-exempt status under
that statute for a period of at least three years from the date of
the certificate of occupancy;
(b)
Parking lots and parking structures, regardless of whether the
parking lot or parking structure is constructed in conjunction with
a nonresidential development or as a stand-alone nonresidential development;
(c)
Any nonresidential development which is an amenity to be made
available to the public, including, but not limited to, recreational
facilities, community centers and senior centers, as defined in Section
35 of P.L. 2008, c. 46 (N.J.S.A. 40:55D-8.4), which are developed
in conjunction with or funded by a nonresidential developer;
(d)
Nonresidential construction resulting from a relocation of or
an on-site improvement to a nonprofit hospital or a nursing home facility;
(e)
Projects that are located within a specifically delineated urban
transit hub, as defined pursuant to Section 2 of P.L. 2007, c. 346
(N.J.S.A. 34:1B-208);
(f)
Projects that are located within an eligible municipality, as
defined under Section 2 of P.L. 2007, c. 346 (N.J.S.A. 34:1B-208),
when a majority of the project is located within a one-half-mile radius
of the midpoint of a platform area for a light rail system;
(g)
Projects determined by the New Jersey Transit Corporation to
be consistent with a transit village plan developed by a transit village
designated by the New Jersey State Department of Transportation; and
(h)
Commercial farm or Use Group U buildings and structures.
(5)
A developer of a nonresidential development exempted from the nonresidential
development fee pursuant to P.L. 2008, c. 46 shall be subject to it
at such time the basis for the exemption no longer applies and shall
make the payment of the nonresidential development fee, in that event,
within three years after that event or after the issuance of the final
certificate of occupancy of the nonresidential development, whichever
is later.
(6)
If a property which was exempted from the collection of a nonresidential
development fee thereafter ceases to be exempt from property taxation,
the owner of the property shall remit the fees required pursuant to
this section within 45 days of the termination of the property tax
exemption. Unpaid nonresidential development fees under these circumstances
may be enforceable by Allamuchy Township as a lien against the real
property of the owner.
Allamuchy Township shall collect development fees for affordable
housing in accordance with the following:
A.
The Land Use Board Secretary of Allamuchy Township shall notify the
Allamuchy Township Construction Code Official whenever either a preliminary
or final approval is granted to any development which is subject to
the collection of a development fee.
B.
For nonresidential developments only, the developer shall also be
provided with a copy of Form N-RDF, State of New Jersey Nonresidential
Development Certification/Exemption, which is to be completed by the
developer as per the instructions provided.
(1)
The Township Construction Official shall verify the information submitted
by the nonresidential developer as per the instructions provided in
the Form N-RDF.
(2)
The Township Tax Assessor shall verify exemptions and prepare estimated
and final assessments as per the instructions provided in Form N-RDF.
C.
The Township Construction Official responsible for the issuance of
a building permit shall notify the Township Tax Assessor of the issuance
of the first building permit for a development which is subject to
a development fee.
D.
Within 90 days of receipt of that notice, the Township Tax Assessor,
based on the plans filed, shall provide an estimate of the equalized
assessed value of the development. The equalized assessed value and
the required development fee shall be estimated by the Township Tax
Assessor prior to the issuance of the construction permit, with the
understanding that the estimate of the equalized assessed value is
not intended to establish the equalized assessed value for tax purposes.
E.
Developers shall pay 50% of the required development fee to Allamuchy
Township at the time of the issuance of the construction permit.
F.
Developers shall pay the remainder of the development fee to Allamuchy
Township at the time of the issuance of a certificate of occupancy.
(1)
The Township Construction Official responsible for the issuance of
a final certificate of occupancy notifies the Township Tax Assessor
of any and all requests for the scheduling of a final inspection on
property which is subject to a development fee.
(2)
Within 10 business days of a request for the scheduling of a final
inspection, the Township Tax Assessor shall confirm or modify the
previously estimated equalized assessed value of the improvements
of the development, calculate the development fee, and thereafter
notify the developer of the amount of the fee.
(3)
The equalized assessed value and the required development fee shall
be reestimated by the Township Tax Assessor prior to the issuance
of the certificate of occupancy, again with the understanding that
the estimate of the equalized assessed value is not intended to establish
the equalized assessed value for tax purposes. The developer shall
be responsible for paying the difference between the development fee
calculated at the time of the issuance of the certificate of occupancy
and the amount paid at the time of the issuance of the construction
permit.
(4)
Should the Township fail to determine or notify the developer of
the amount of the development fee within 10 business days of the request
for final inspection, the developer may estimate the amount due and
pay that estimated amount consistent with the dispute process set
forth in subsection b of Section 37 of P.L. 2008, c. 46 (N.J.S.A.
40:55D-8.6).
(5)
Upon tender of the remaining development fee, provided the developer
is in full compliance with all other applicable laws, the Township
shall issue a final certificate of occupancy for the subject property.
G.
Regardless of the time of collection of the development fee, the
fee shall be based upon the percentage that applies on the date that
the construction permit is issued.
H.
The Construction Code Official shall forward all collected development
fees to Allamuchy Township's Chief Financial Officer, who shall
deposit such fees into the established Housing Trust Fund.
I.
A developer may challenge the development fees imposed by filing
a challenge with the Director of the Division of Taxation for nonresidential
development and with the County Board of Taxation for residential
development.
(1)
Pending a review and determination by the Director or Board, as the
case may be, which shall be made within 45 days of receipt of the
challenge, collected fees shall be placed in an interest-bearing escrow
account by the Township.
(2)
Appeals from a determination of the Director or Board, as the case
may be, may be made to the tax court in accordance with the provisions
of the State Uniform Tax Procedure Law, N.J.S.A. 54:48-1 et seq.,
within 90 days after the date of such determination.
(3)
Accrued interest earned on escrowed amounts to be returned shall
also be returned to the developer.
A.
All collected development fees and any proceeds from the sale of
units with extinguished controls shall be deposited by the Chief Financial
Officer of the Township of Allamuchy into a separate designated interest-bearing
housing trust fund, which shall be maintained by the Township Chief
Financial Officer.
B.
No money shall be expended from the Housing Trust Fund unless the
expenditure conforms to the Spending Plan which has been approved
by the Court; and
C.
Additionally, the following sources of funding shall be deposited
in the Housing Trust Fund and shall at all times be identifiable by
source and amount:
(1)
Recapture funds;
(2)
Proceeds from the sale of affordable units;
(3)
Rental income from municipally operated units;
(4)
Payments in lieu of on-site construction of affordable units;
(5)
Affordable housing enforcement fines and application fees;
(6)
Developer-contributed funds for barrier-free affordable housing pursuant
to N.J.A.C. 5:97-8.5;
(7)
Repayments from affordable housing program loans; and
(8)
Any other funds collected in connection with the Township's
affordable housing program.
D.
In the event of a failure by the Township of Allamuchy to comply
with trust fund monitoring and reporting requirements or to submit
accurate monitoring reports; or a failure to comply with the conditions
of the Judgment of Compliance or a revocation of the Judgment of Compliance;
or a failure to implement the approved Spending Plan and to expend
funds within the applicable required time period as set forth in In
re Tp. of Monroe, 442 N.J. Super. 565 (Law Div. 2015) (aff'd
442 N.J. Super. 563); or the expenditure of funds on activities not
approved by the Court; or for other good cause demonstrating the unapproved
use(s) of funds, the Court may authorize the State of New Jersey,
Department of Community Affairs, Division of Local Government Services
("LGS"), to direct the manner in which the funds in the Affordable
Housing Trust Fund shall be expended, provided that all such funds
shall, to the extent practicable, be utilized for affordable housing
programs within the Township of Allamuchy, or, if not practicable,
then within the County or the Housing Region. Any party may bring
a motion before the Superior Court presenting evidence of such condition(s),
and the Court may, after considering the evidence and providing the
municipality a reasonable opportunity to respond and/or to remedy
the noncompliant condition(s), and upon a finding of continuing and
deliberate noncompliance, determine to authorize LGS to direct the
expenditure of funds in the Trust Fund. The Court may also impose
such other remedies as may be reasonable and appropriate to the circumstances.
E.
All interest accrued in the Housing Trust Fund shall only be used
on eligible affordable housing activities approved by the Court.
A.
Funds deposited in the Housing Trust Fund may be used for any housing
activity as itemized in the spending plan and approved by the Court
to address the Township's fair share obligation and may be set
up as a grant or revolving loan program. Such activities include,
but are not limited to:
(1)
A rehabilitation program;
(2)
New construction of affordable housing units and related development
costs; in the case of inclusionary developments, eligible costs shall
be prorated based on the proportion of affordable housing units included
in the development;
(3)
Accessory apartment, market to affordable, or regional affordable
housing partnership programs;
(4)
Financial assistance designed to increase affordability;
(5)
Conversion of existing nonresidential buildings to create new affordable
units;
(6)
Acquisition and/or improvement of land to be used for affordable
housing;
(7)
Purchase of existing market rate or affordable housing for the purpose
of maintaining or implementing affordability controls, such as in
the event of a foreclosure;
(8)
Extensions or improvements of roads and infrastructure directly serving
affordable housing sites; in the case of inclusionary developments,
costs shall be prorated based on the proportion of affordable housing
units included in the development;
(9)
Green building strategies designed to be cost-saving for low- and
moderate-income households, either for new construction that is not
funded by other sources or as part of necessary maintenance or repair
of existing units, in accordance with accepted federal or state standards
or such guidance as may be provided by the New Jersey State Department
of Community Affairs or the New Jersey Housing and Mortgage Finance
Agency;
(10)
Maintenance and repair of affordable housing units;
(11)
Repayment of municipal bonds issued to finance low- and moderate-income
housing activity;
(12)
To defray the costs of structural parking; in the case of inclusionary
developments, eligible costs shall be prorated based on the proportion
of affordable housing units included in the development;
(13)
Administration necessary for implementation of the Housing Plan Element and Fair Share Plan, in accordance with Subsection G below; and
(14)
Any other activity as specified in the approved spending plan
and as permitted pursuant to N.J.A.C. 5:97-8.7 through 5:97-8.9.
B.
The Township also may request authorization for expenditure of housing
trust funds on emergent affordable housing mechanisms not included
in the Township's Fair Share Plan in the form of an amendment
to the spending plan. In addition to the amendment to the spending
plan, the Township shall submit the following:
(1)
A resolution to the Court that includes a certification that the
affordable housing opportunity addresses COAH's criteria set
forth in N.J.A.C. 5:97-6 and information regarding the proposed mechanism
in a format to be approved by the Court; and
(2)
An amendment to its Fair Share Plan to include the mechanism at the
earlier of two years after the Court's approval of the spending
plan amendment or the next planned amendment to the Fair Share Plan
resulting from the plan evaluation review pursuant to N.J.A.C. 5:96-10.
C.
Funds shall not be expended to reimburse the Township of Allamuchy
for past housing activities.
D.
Payments in lieu of constructing affordable housing units on residential
and mixed-use sites shall only be used to fund eligible affordable
housing activities within the Township.
E.
At least 30% of all development fees collected and interest earned
shall be devoted to provide affordability assistance to low- and moderate-income
households in affordable units included in the Housing Element and
Fair Share Plan provided and in accordance with the following:
(1)
One-third of the affordability assistance portion of development
fees collected shall be used to provide affordability assistance to
very-low-income households.
(2)
Affordability assistance programs may include down payment assistance,
security deposit assistance, low-interest loans, rental assistance,
assistance with homeowners' association or condominium fees and
special assessments, and assistance with emergency repairs.
(3)
Affordability assistance for very-low-income households may include
buying down the cost of low- or moderate-income units in the Third
Round Municipal Fair Share Plan to make them affordable to very-low-income
households (earning 30% or less of median income). The use of development
fees in this manner may entitle the Township to bonus credits pursuant
to N.J.A.C. 5:97-3.7.
(4)
Payments in lieu of constructing affordable units on site and funds
from the sale of units with extinguished controls shall be exempt
from the affordability assistance requirement.
F.
The Township of Allamuchy may contract with a private or public entity
to administer any part of its Housing Plan Element and Fair Share
Plan, including the requirement for affordability assistance, in accordance
with N.J.A.C. 5:96-18, subject to the Court's approval.
G.
No more than 20% of development fee revenues collected in any given
year from the development fees may be expended on administration,
including, but not limited to, the salaries and benefits for Allamuchy
Township employees or consultant fees necessary to develop or implement
a new affordable housing program, a housing element and fair share
plan, and/or an affirmative marketing program.
(1)
Administrative funds may be used for income qualification of households,
monitoring the turnover of sale and rental units, preserving existing
affordable housing, and compliance with COAH's monitoring requirements.
(2)
Legal or other fees related to litigation opposing affordable housing
sites or objecting to COAH's regulations and/or action are not
eligible uses of the Housing Trust Fund.
The Allamuchy Township Municipal Housing Liaison shall provide
annual reporting of Affordable Housing Trust Fund activity to the
State of New Jersey, Department of Community Affairs, Council on Affordable
Housing or Local Government Services, 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 New Jersey Department of Community Affairs,
Council on Affordable Housing or Local Government Services. The reporting
shall include an accounting of all Affordable Housing Trust Fund activity,
including the source and amount of funds collected, the amount and
purpose for which any funds have been expended, and the status of
the spending plan regarding the remaining balance pursuant to N.J.A.C.
5:97-8.10(a)8. Such reporting shall include an accounting of development
fees from residential and nonresidential developers, payments in lieu
of constructing affordable units on site (if permitted by ordinance
or agreement with the Township), funds from the sale of units with
extinguished controls, barrier-free escrow funds, recapture funds,
proceeds from the sale of affordable units, rental income, repayments
from affordable housing program loans, enforcement fines and application
fees, and any other funds collected in connection with the Township's
housing program and the expenditure of revenues and implementation
of the spending plan approved by the Court.
A.
The ability for the Township of Allamuchy to impose, collect and
expend development fees shall expire with the expiration of the repose
period covered by its Judgment of Compliance unless the Township of
Allamuchy has first filed an adopted Housing Element and Fair Share
Plan with the Court or with a designated state administrative agency,
has petitioned for a Judgment of Compliance from the Court or for
substantive certification or its equivalent from a state administrative
agency authorized to approve and administer municipal affordable housing
compliance and has received approval of its Development Fee Ordinance
from the entity that will be reviewing and approving the Housing Element
and Fair Share Plan.
B.
If the Township of Allamuchy fails to renew its ability to impose
and collect development fees prior to the date of expiration of its
Judgment of Compliance, it may be subject to forfeiture of any or
all funds remaining within its Affordable Housing 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).
C.
The Township of Allamuchy shall not impose a residential development
fee on a development that receives preliminary or final site plan
approval after the expiration of its Judgment of Compliance, nor shall
the Township of Allamuchy retroactively impose a development fee on
such a development. The Township of Allamuchy shall not expend collected
development fees after the expiration of its Judgment of Compliance.
