[Added 9-5-2007 by Ord. No. 1912-07]
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, N.J.S.A. 52:27D-301 et seq., and the State Constitution, subject to the imposition of rules by COAH. The purpose of this article is to establish standards for the collection, maintenance and expenditure of development fees pursuant to COAH's adopted rules. Fees collected pursuant to this article shall be used for the sole purpose of providing low- and moderate-income housing. This section shall be interpreted within the framework of COAH's rules on development fees.
As used in this article, the following terms shall have the meanings indicated:
- The New Jersey Council on Affordable Housing.
- DEVELOPMENT FEES
- Money paid by an individual, person, partnership, association, company or corporation related to the improvement of property as permitted in COAH's rules and as required by this article.
- EQUALIZED ASSESSED VALUE (EAV)
- The value of a property determined by the Municipal Tax Assessor through a process designed to ensure that all property in the municipality is assessed at the same assessment ratio or ratios required by law. Estimates at the time of issuance of a building permit may be obtained utilizing estimates for construction cost. Final equalized assessed value will be determined at project completion by the Municipal Tax Assessor.
- JUDGMENT OF REPOSE
- A judgment issued by the Superior Court approving a municipality's plan to satisfy its fair share obligation.
- SUBSTANTIVE CERTIFICATION
- A determination by COAH approving a municipality's housing element and fair share plan in accordance with the provisions of the Fair Housing Act (N.J.S.A. 52:27D-301 et seq.) and the rules and criteria as set forth herein.
Residential development fees. Residential development shall be subject to an affordable housing development fee as follows:
One-half of 1% of the equalized assessed value (EAV), or the coverage amount on the home owner warranty document for a for-sale unit or the appraised value on the document utilized for construction financing for a rental unit, of each new residential dwelling unit, provided no increased density is permitted.
If a "d" variance for an increase in density is granted pursuant to N.J.S.A. 40:55D-70.d.(5) in any zoning district in the Borough of Hawthorne, then the additional residential units realized above what is permitted by right under the existing zoning will incur a bonus development fee of 6% of the EAV rather than the development fee of 1/2 of 1%. If the zoning on a site has changed during the two-year period preceding the filing of the "d" variance application, the 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 "d" variance application. The development fee may be based on the EAV or on the coverage amount on the home owner warranty document for each additional for-sale unit or on appraised value on the document utilized for construction financing for a rental unit.
Developers of sites zoned for inclusionary development in the Borough's R-6 Affordable Housing Zone shall be required to make a payment to the Hawthorne Housing Trust Fund in lieu of the on-site construction of low- and moderate-income housing units, in accordance with the settlement agreement approved by Superior Court on April 18, 2004.
Nonresidential development fees. Nonresidential development shall be subject to an affordable housing development fee as follows:
One percent of the equalized assessed value (EAV), or the appraised value on the document utilized for construction financing, for all new nonresidential development.
One percent of the increase in equalized assessed value (EAV) due to expansion, full or partial demolition and reconstruction, improvement, and/or alteration of any nonresidential building.
If a "d" variance increasing the permitted floor area is granted pursuant to N.J.S.A. 40:55D-70.d.(4), then the additional floor area realized greater than that which is permitted by right under the existing zoning will incur a bonus development fee of 6% of the EAV rather than the development fee of 1%. If the zoning on a site has changed during the two-year period preceding the filing of the "d" variance application, the floor area permitted by right for the purposes of calculating the bonus development fee shall be the maximum amount of floor area permitted by right during the two-year period preceding the filing of the "d" variance application.
Developers of low- and moderate-income units shall be exempt from paying development fees.
Developers of new nonresidential structures, except as excluded herein, and new residential structures, shall pay a development fee in the manner prescribed herein.
Developers that expand an existing nonresidential structure and expand a residential structure where it results in additional dwelling units shall pay a development fee. The development fee shall be calculated based on the increase in the equalized assessed value of the improved structure.
Developers that have received preliminary or final approval prior to the effective date of this article shall be exempt from paying a development fee unless the developer seeks a substantial change in the approval. Examples of a substantial change include a substantial alteration in site layout, development density, or types of uses within the development.
Developers of any church, library, school, college, governmental facility, hospital for humans, or nursing home shall be exempt from paying a development fee.
Developers shall pay 50% of the calculated development fee to the Borough of Hawthorne at the issuance of building permits. The development fee shall be estimated by the Tax Assessor prior to the issuance of building permits.
Developers shall pay the remaining fee to the Borough of Hawthorne at the issuance of certificates of occupancy. At the issuance of certificates of occupancy, the Tax Assessor shall calculate the equalized assessed value and the appropriate development fee. The developer shall be responsible for paying the difference between the fee calculated at the certificate of occupancy and the amount paid at building permit.
There is hereby created an interest-bearing housing trust fund in such bank as may be selected for the purpose of receiving development fees from residential and nonresidential developers, which fund shall be maintained in a separate account at a financial institution designated by the Chief Financial Officer who shall be responsible for the administration of the housing trust fund and authorization for any expenditures. All development fees paid by developers pursuant to this article shall be deposited in this fund. No money shall be expended from the housing trust fund unless the expenditure conforms to a spending plan approved by Superior Court or COAH.
If the Superior Court or COAH determines that the Borough of Hawthorne is not in conformance with COAH's rules on development fees, the Superior Court or COAH is authorized to direct the manner in which all development fees collected pursuant to this article shall be expended. Such authorization is pursuant to this article, COAH's rules on development fees, and the written authorization from the governing body to the financial institution that is the depository for the Borough housing trust fund. The Borough shall execute an escrow agreement with COAH and the financial institution where the housing trust fund is maintained to enable COAH to monitor disbursement of collected development fees and direct the expenditure of development fees, after proper notice, hearing and Court or COAH approval, if the imposition, collection, and/or expenditure of fees does not conform with this article, COAH rules, or the Court or COAH-approved spending plan.
Money deposited in the Hawthorne Housing Trust Fund may be used for any activity approved by COAH or by, when applicable, a Court of competent jurisdiction, addressing the Borough of Hawthorne's low- and moderate-income housing obligation. Such activities may include, but are not necessarily limited to, housing rehabilitation, new construction, regional contribution agreements, the purchase of land for low- and moderate-income housing, extensions and/or improvements of roads and infrastructure to low- and moderate-income housing sites, assistance designed to render units more affordable to low- and moderate-income households and administrative costs necessary to implement the Borough of Hawthorne's Housing Element and Fair Share Plan. The expenditure of all money shall conform to a spending plan approved by COAH or, when applicable, by a Court of competent jurisdiction.
At least 30% of the fees collected shall be devoted to render units more affordable unless exempt as per N.J.A.C. 5:93-8-16(c). Such exemptions include fees used to fund the Borough of Hawthorne's rehabilitation program, a regional contribution agreement (RCA), or a new construction project. Examples of activities that render units more affordable include, but are not limited to, down payment and closing cost assistance, low interest loans and rental assistance.
No more than 20% of the fees collected shall be expended on administration, including, but not limited to, salaries and benefits for municipal employees or consultant fees necessary to develop or implement: a rehabilitation program; a new construction program; a regional contribution agreement, an affirmative marketing program, other costs necessary to develop, revise or implement the Borough of Hawthorne's Housing Element and Fair Share Plan. Administrative funds may be used for income qualification of households, monitoring the turnover of sale and rental units, compliance with COAH monitoring requirements, and review of regional affirmative marketing plans for specific inclusionary developments in Hawthorne. Development fees shall not be used to defray the costs of existing municipal staff. Development fee administrative costs are calculated and may be expended at the end of each year or upon receipt of the fees.
Development fee revenues shall not be expended to reimburse the Borough of Hawthorne for housing activities that preceded its judgment of repose from the Superior Court.
The Borough shall complete and return to COAH all monitoring forms related to the collection of development fees, expenditures or revenues and implementation of the spending plan certified by COAH. Quarterly financial reports and annual program implementation and auditing reports shall be completed by the Borough on forms designed by COAH.
This article shall expire if:
The Court vacates the Borough of Hawthorne's judgment of repose or revokes this article;
The Borough of Hawthorne's judgment of repose expires prior to the Borough of Hawthorne filing an adopted housing element with COAH, petitioning for substantive certification, or receiving COAH's approval of this article;
COAH dismisses or denies the Borough of Hawthorne's petition for substantive certification; or
If the Borough of Hawthorne is under COAH's jurisdiction and has a certified housing element and fair share plan, COAH revokes substantive certification or this article.
In the event that any of the conditions set forth in Subsection B below occur, COAH shall be authorized, on behalf of the Borough, to direct the manner in which all development fees collected pursuant to this article shall be expended. Should any such condition occur, such revenues shall immediately become available for expenditure at the direction of COAH upon the Borough Clerk's receipt of written notification from COAH that such a condition has occurred. In furtherance of the foregoing, the Borough shall, in establishing a bank account pursuant to § 540-187 of this article, ensure that the Borough has provided whatever express written authorization which may be required by the bank to permit COAH to direct disbursement of such revenues from the account following the delivery to the bank of the aforementioned written notification provided by COAH to the Borough Clerk.
Occurrence of the following may result in COAH taking an action pursuant to Subsection A above: failure to submit a spending plan within the time limits imposed by COAH; failure to meet deadlines for information required by COAH in its review of this article, the Borough's housing element or spending plan; failure to address COAH's conditions for approval of a plan to spend development fees within the deadlines imposed by COAH; failure to address COAH'S condition for substantive certification within the deadlines imposed by COAH; failure to submit accurate monitoring reports within the time limits imposed by COAH; failure to implement the spending plan for development fees within the time limits imposed by COAH, or within reasonable extensions granted by COAH; expenditure of development fees on activities not permitted by COAH;