[Adopted 8-3-1998 by Ord. No. 98-8; amended
in its entirety 12-29-2008 by Ord. No. 2008-10]
A.
In Holmdel Builder's Ass'n v. Holmdel Borough, 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) adoption of rules.
B.
Pursuant to P.L. 2008, c. 46, § 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 40:55D-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.
The purpose of this article is to establish standards
for the collection, maintenance and expenditure of development fees
pursuant to COAH's rules and in accordance with P.L. 2008, c. 46,
§§ 8 and 32 through 38. Fees collected pursuant to
this article 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.
A.
The ability to impose, collect and spend development
fees is predicated on the Borough of Pennington's participation in
COAH's substantive certification process.
B.
The Borough of Pennington shall not spend development
fees until COAH has approved a plan for spending such fees in conformance
with N.J.A.C. 5:97-8.10 and N.J.A.C. 5:96-5.3.
C.
This ordinance shall not be effective until COAH has
approved and the Borough has adopted this article pursuant to N.J.A.C.
5:96-5.1.
D.
The meaning of any word or term, when used in this
article, shall be consistent with the definitions set forth in N.J.A.C.
5:96-1.3, 5:97-1.4, and P.L. 2008, c. 46 (N.J.S.A. 40:55D-8.1 through
40:55D-8.7).
A.
In accordance with N.J.A.C. 5:97-8.3(c) of COAH's "Substantive Rules," all new development of principal and accessory residential buildings within the Borough of Pennington, not exempt from the collection of development fees in accordance with the provisions specified in § 98-3C of this article hereinbelow, shall pay a fee to Pennington Borough equal to 1.5% of the equalized assessed value of the residential construction, provided no increased density is permitted.
B.
Notwithstanding the provisions of § 98-3A 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 Pennington Borough equal to 6% of the equalized assessed value of the residential development, rather than the one-and-one-half-percent 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 and developments
where the developer has made a payment in lieu of constructing affordable
units shall be exempt from paying development fees. All other forms
of new construction shall be subject to development fees, except for
developments that are subject to and comply with any growth share
affordable housing requirements provisions of the Code of Pennington
Borough.
(2)
Developments that have received preliminary or final
site plan approval prior to August 5, 1998, 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 Borough of Pennington, not exempt from the collection of development fees in accordance with the provisions specified in § 98-4C of this article hereinbelow, shall pay a fee to Pennington Borough 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 two-and-one-half-percent
development fee, unless otherwise exempted below.
(2)
The two-and-one-half-percent 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)
Non-residential 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 Non-Residential Development Certification/Exemption"
Form 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 § 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 § 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 § 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 farms and Use Group "U" buildings
and structures.
(5)
A developer of a nonresidential development exempted
from the nonresidential development fee above shall be subject to
it at such time the basis for the exemption set forth in this subsection
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 the Borough of Pennington
as a lien against the real property of the owner.
The Pennington Borough shall collect development
fees for affordable housing in accordance with the following:
A.
The Planning Board Secretary of Pennington Borough
shall notify the Pennington Borough 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
Non-Residential Development Certification/Exemption," which is to
be completed by the developer as per the instructions provided.
(1)
The Borough Construction Official shall verify the
information submitted by the nonresidential developer as per the instructions
provided in the Form N-RDF.
(2)
The Borough Tax Assessor shall verify exemptions and
prepare estimated and final assessments as per the instructions provided
in Form N-RDF.
C.
The Borough Construction Official responsible for
the issuance of a building permit shall notify the Borough 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 Borough
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 Borough 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 Pennington Borough at the time of the issuance of the construction
permit.
F.
Developers shall pay the remainder of the development
fee to Pennington Borough at the time of the issuance of a certificate
of occupancy.
(1)
The Borough Construction Official responsible for
the issuance of a final certificate of occupancy notifies the Borough
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 Borough 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 re-estimated by the Borough 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 Borough 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 § 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 Borough 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 Pennington Borough'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 Borough.
(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 Tax Uniform 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 Borough of Pennington into a separate
designated interest-bearing Housing Trust Fund, which shall be maintained
by the Borough Chief Financial Officer.
(1)
No money shall be expended from the Housing Trust
Fund unless the expenditure conforms to the spending plan which has
been approved by COAH; and
(2)
In establishing the Housing Trust Fund, the Borough
Council shall provide COAH with written authorization in the form
of a three-party escrow agreement between the Borough, COAH and the
bank in order to permit COAH to direct the disbursement of development
fee funds as provided in N.J.A.C. 5:97-8.13(b) of the "Substantive
Rules" of COAH. This authorization shall be submitted to COAH within
seven days from the opening of the Housing Trust Fund.
B.
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 Borough's
affordable housing program.
C.
All interest accrued in the Housing Trust Fund shall
only be used on eligible affordable housing activities approved by
COAH.
A.
Funds deposited in the Housing Trust Fund may be used
for any housing activity as itemized in the spending plan and approved
by COAH to address the Borough'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 § 98-8G 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 Borough also may request authorization for expenditure
of Housing Trust Funds on emergent affordable housing mechanisms not
included in the Borough's Fair Share Plan in the form of an amendment
to the spending plan. In addition to the amendment to the spending
plan, the Borough shall submit the following:
(1)
A resolution to COAH 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 provided by COAH; and
(2)
An amendment to its Fair Share Plan to include the
mechanism at the earlier of two years after COAH'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 Borough
of Pennington 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 Borough.
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 Borough's 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 Borough
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 Borough of Pennington 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 COAH'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 Pennington
Borough 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)
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.
(2)
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.
(3)
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 Pennington Borough Municipal Housing Liaison
shall coordinate with the appropriate municipal officials the completion
and return to COAH of all monitoring forms included in the annual
monitoring report related to the collection of development fees from
residential and nonresidential developers, payments in lieu of constructing
affordable units on site, 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 Borough's housing
program, and the expenditure of revenues and implementation of the
plan certified by COAH.
A.
At minimum, the monitoring shall include an accounting
of any Housing Trust Fund activity, identifying 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.
B.
All monitoring reports shall be completed on forms
designed by COAH.
The ability for the Borough of Pennington to
impose, collect and expend development fees shall expire with its
substantive certification unless Pennington Borough has filed an adopted
Housing Element and Fair Share Plan with COAH, has petitioned for
substantive certification, and has received COAH's approval of its
development fee ordinance.
A.
If the Borough of Pennington fails to renew its ability
to impose and collect development fees prior to the date of expiration
of substantive certification, it may be subject to forfeiture of any
or all funds remaining within its municipal trust fund.
B.
Any funds so forfeited shall be deposited into the
New Jersey Affordable Housing Trust Fund established pursuant to § 20
of P.L.1985, c. 222 (N.J.S.A. 52:27D-320).
C.
The Borough of Pennington 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,
nor shall the Borough of Pennington retroactively impose a development
fee on such a development.
D.
The Borough of Pennington shall not expend development
fees after the expiration of its substantive certification or judgment
of compliance.
