[Adopted 11-8-2010 by Ord. No. 2010-16[1]]
[1]
Editor’s Note: This ordinance also repealed former Art.
XX, Mandatory Development Fees, adopted 5-10-2004 by Ord. No. 2004-14,
as amended.
A.Â
In Holmdel Builder's 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 (the Act), 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.Â
Pursuant to P.L. 2008, c. 46, Section 8 (N.J.S.A. 52:27D-329.2),
and the Statewide Non-Residential Development Fee Act (N.J.S.A. 40:55D-8.1
through 8.7), COAH is 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 are under the jurisdiction of
the Council or court of competent jurisdiction and have a COAH-approved
spending plan may retain fees collected from nonresidential development.
C.Â
This ordinance establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's regulations
and in accordance P.L. 2008, c. 46, Sections 8 and 32-38. Fees collected
pursuant to this ordinance shall be used for the sole purpose of providing
low- and moderate-income housing. This ordinance shall be interpreted
within the framework of COAH's rules on development fees, codified
at N.J.A.C. 5:97-8.
The following terms, as used in this ordinance, shall have the
following meanings:
A development included in the Housing Element and Fair Share
Plan, and includes, but is not limited to, an inclusionary development,
a municipal construction project or a one-hundred-percent affordable
development.
The New Jersey Council on Affordable Housing, established
under the Act, which has primary jurisdiction for the administration
of housing obligations in accordance with sound regional planning
consideration in the state.
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 N.J.S.A.
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.Â
Imposed fees:
(1)Â
Within all residential zoning districts, residential developers,
except for developers of the types of development specifically exempted
below, shall pay a fee of 1Â 1/2% of the equalized assessed value
for residential development provided no increased density is permitted.
(2)Â
When an increase in residential density pursuant to N.J.S.A.
40:55D-70d(5) (known as a "d" variance) has been permitted, developers
shall be required to pay a development fee of 6% of the equalized
assessed value for each additional unit that may be realized. However,
if the zoning on a site has changed during the two-year period preceding
the filing of such a variance application, the base density for the
purposes of calculating the bonus development fee shall be the highest
density permitted by right during the two-year period preceding the
filing of the variance application. Example: If an approval allows
four units to be constructed on a site that was zoned for two units,
the fees could equal 1% of the equalized assessed value on the first
two units; and the specified higher percentage up to 6% of the equalized
assessed value for the two additional units, provided zoning on the
site has not changed during the two-year period preceding the filing
of such a variance application.
B.Â
Eligible exactions, ineligible exactions and exemptions for residential
development:
(1)Â
Affordable housing developments and developments where the developer
has made a payment in lieu of on-site construction of affordable units
shall be exempt from development fees.
(2)Â
Developments that have received preliminary or final site plan
approval prior to the adoption of a municipal development fee ordinance
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 building permit shall be synonymous with
preliminary or final site plan approval for this purpose. The fee
percentage shall be vested on the date that the building permit is
issued.
(3)Â
Development fees shall be imposed and collected when an existing
structure undergoes a change to a more intense use, is demolished
and replaced, or is expanded, if the expansion is not otherwise exempt
from the development fee requirement. The development fee shall be
calculated on the increase in the equalized assessed value of the
improved structure.
(4)Â
Developers of residential structures demolished and replaced
as a result of fire damage, flood or similar natural disaster, shall
be exempt from paying a development fee.
A.Â
Imposed fees:
(1)Â
Within all zoning districts, non-residential developers, except
for developers of the types of development specifically exempted,
shall pay a fee equal to 2Â 1/2% of the equalized assessed value
of the land and improvements, for all new non-residential construction
on an unimproved lot or lots.
(2)Â
Non-residential developers, except for developers of the types
of development specifically exempted, shall also pay a fee equal to
2Â 1/2% of the increase in equalized assessed value resulting
from any additions to existing structures to be used for non-residential
purposes.
(3)Â
Development fees shall be imposed and collected when an existing
structure is demolished and replaced. The development fee of 2Â 1/2%
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 non-residential
development fee shall be zero.
B.Â
Eligible exactions, ineligible exactions and exemptions for non-residential
development:
(1)Â
The non-residential portion of a mixed-use inclusionary or market-rate
development shall be subject to the development fee of 2Â 1/2%,
unless otherwise exempted below.
(2)Â
The fee of 2Â 1/2% shall not apply to an increase in equalized
assessed value resulting from alterations, change in use within existing
footprint, reconstruction, renovations and repairs.
(3)Â
Non-residential developments shall be exempt from the payment
of non-residential 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 Non-Residential Development Certification/Exemption"
form. Any exemption claimed by a developer shall be substantiated
by that developer.
(4)Â
A developer of a non-residential development exempted from the
non-residential development fee pursuant to P.L. 2008, c. 46, shall
be subject to it at such time the basis for exemption no longer applies,
and shall make the payment of the non-residential development fee,
in that event, within three years after that event or after the issuance
of the final certificate of occupancy of the non-residential development,
whichever is later.
(5)Â
If a property which was exempted from the collection of a non-residential
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 non-residential development fees under these circumstances
may be enforceable by the City as a lien against the real property
of the owner.
A.Â
Upon the granting of a preliminary, final or other applicable approval,
for a development, the applicable approving authority shall direct
its staff to notify the construction official responsible for the
issuance of a building permit. For nonresidential developments, the
developer shall also be provided with a copy of Form N-RDF, "State
of New Jersey Non-Residential Development Certification/Exemption,"
and complete as per the instructions provided.
B.Â
For non-residential developments only, the developer shall also be
provided with a copy of Form N-RDF, "State of New Jersey Non-Residential
Development Certification/Exemption," to be completed as per the instructions
provided. The developer of a non-residential development shall complete
Form N-RDF as per the instructions provided. The construction official
shall verify the information submitted by the non-residential developer
as per the instructions provided in the Form N-RDF. The tax assessor
shall verify exemptions and prepare estimated and final assessments
as per the instructions provided in Form N-RDF.
C.Â
The construction official responsible for the issuance of a building
permit shall notify the local tax assessor of the issuance of the
first building permit for a development which is subject to a development
fee.
D.Â
Within 90 days of receipt of that notice, the municipal tax assessor,
based on the plans filed, shall provide an estimate of the equalized
assessed value of the development.
E.Â
The construction official responsible for the issuance of a final
certificate of occupancy notifies the local assessor of any and all
requests for the scheduling of a final inspection on property which
is subject to a development fee.
F.Â
Within 10 business days of a request for the scheduling of a final
inspection, the municipal 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.
G.Â
Should the City 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).
H.Â
Fifty percent of the development fee shall be collected at the time
of issuance of the building permit. The remaining portion shall be
collected at the issuance of the certificate of occupancy. The developer
shall be responsible for paying the difference between the fee calculated
at building permit and that determined at issuance of certificate
of occupancy.
I.Â
Appeal of development fees.
(1)Â
A developer may challenge residential development fees imposed
by filing a challenge with the County Board of Taxation. Pending a
review and determination by the Board, collected fees shall be placed
in an interest-bearing escrow account by the City. Appeals from a
determination of the Board may be made to the Tax Court in accordance
with the provisions of the State Tax Uniform Procedure Law, N.J.S.A.
54:48-1 et seq., within 90 days after the date of such determination.
Interest earned on amounts escrowed shall be credited to the prevailing
party.
(2)Â
A developer may challenge non-residential development fees imposed
by filing a challenge with the Director of the Division of Taxation.
Pending a review and determination by the Director, 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 City. Appeals
from a determination of the Director may be made to the tax court
in accordance with the provisions of the State Tax Uniform Procedure
Law, N.J.S.A. 54:48-1 et seq., within 90 days after the date of such
determination. Interest earned on amounts escrowed shall be credited
to the prevailing party.
A.Â
There is hereby created a separate, interest-bearing housing trust
fund to be maintained by the Chief Financial Officer of the City for
the purpose of depositing development fees collected from residential
and non-residential developers and proceeds from the sale of units
with extinguished controls.
B.Â
The following additional funds shall be deposited in the affordable
housing trust fund and shall at all times be identifiable by source
and amount:
(1)Â
Payments in lieu of on-site construction of affordable units;
(2)Â
Developer-contributed funds to make 10% of the adaptable entrances
in a townhouse or other multistory attached development accessible;
(3)Â
Rental income from municipally operated units;
(4)Â
Repayments from affordable housing program loans;
(5)Â
Recapture funds;
(6)Â
Proceeds from the sale of affordable units; and
(7)Â
Any other funds collected in connection with the City's affordable
housing program.
C.Â
Within seven days from the opening of the trust fund account, the
City shall provide COAH with written authorization, in the form of
a three-party escrow agreement between the municipality, the bank,
and COAH, to permit COAH to direct the disbursement of the funds as
provided for in N.J.A.C. 5:97-8.13(b).
D.Â
All interest accrued in the housing trust fund shall only be used
on eligible affordable housing activities approved by COAH.
A.Â
The expenditure of all funds shall conform to a spending plan approved
by COAH. Funds deposited in the housing trust fund may be used for
any activity approved by COAH to address the City's fair share obligation
and may be set up as a grant or revolving loan program. Such activities
include, but are not limited to, preservation or purchase of housing
for the purpose of maintaining or implementing affordability controls,
rehabilitation, new construction of affordable housing units and related
costs, accessory apartment, market to affordable, or regional housing
partnership programs, conversion of existing non-residential buildings
to create new affordable units, green building strategies designed
to be cost saving and in accordance with accepted national or state
standards, purchase of land for affordable housing, improvement of
land to be used for affordable housing, extensions or improvements
of roads and infrastructure to affordable housing sites, financial
assistance designed to increase affordability, administration necessary
for implementation of Housing Element and Fair Share Plan, or any
other activity as permitted pursuant to N.J.A.C. 5:97-8.7 through
8.9 and specified in the approved spending plan.
B.Â
Funds shall not be expended to reimburse the City for past housing
activities.
C.Â
At least 30% of all development fees collected and interest earned
shall be used to provide affordability assistance to low- and moderate-income
households in affordable units included in the municipal Fair Share
Plan. One-third of the affordability assistance portion of development
fees collected shall be used to provide affordability assistance to
those households earning 30% or less of median income by region.
(1)Â
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.
(2)Â
Affordability assistance to households earning 30% or less of
median income may include buying down the cost of low or moderate
income units in the municipal Fair Share Plan to make them affordable
to households earning 30% or less of median income.
(3)Â
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.
D.Â
The City may contract with a private or public entity to administer
any part of its Housing Element and Fair Share Plan, including the
requirement for affordability assistance, in accordance with N.J.A.C.
5:96-18.
E.Â
No more than 20% of all revenues collected from development fees
may be expended on administration, including, but not limited to,
salaries and benefits for municipal employees or consultant fees necessary
to develop or implement a new construction program, a Housing Element
and Fair Share Plan, and/or an affirmative marketing program. In the
case of a rehabilitation program, no more than 20% of the revenues
collected from development fees shall be expended for such administrative
expenses. Administrative funds may be used for income qualification
of households, monitoring the turnover of sale and rental units, and
compliance with COAH's monitoring requirements. Legal or other fees
related to litigation opposing affordable housing sites or objecting
to the Council's regulations and/or action are not eligible uses of
the affordable housing trust fund.
The City shall complete and return to COAH all monitoring forms
included in monitoring requirements related to the collection of development
fees from residential and non-residential 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 the City's housing program,
as well as to the expenditure of revenues and implementation of the
plan certified by COAH or approved by the court. All monitoring reports
shall be completed on forms designed by COAH.
The ability for the City to impose, collect and expend development
fees shall expire with its substantive certification from COAH or
judgment of compliance from the court (as the case may be) unless
the City has filed an adopted Housing Element and Fair Share Plan
with COAH, has petitioned for substantive certification or the entry
of a judgment of compliance from the court, and has received COAH's
approval of its development fee ordinance. If the City fails to renew
its ability to impose and collect development fees prior to the expiration
of substantive certification or its judgment of compliance, 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). The City
shall not impose a residential development fee on a development that
receives preliminary or final site plan approval after the expiration
of its substantive certification or judgment of compliance, nor shall
the City retroactively impose a development fee on such a development.
The City shall not expend development fees after the expiration of
its substantive certification or judgment of compliance.