[Added 7-5-2017 by Ord.
No. 2017-5]
This article shall take effect upon approval by the Superior
Court of the State of New Jersey or appropriate state regulatory agency
of the State of New Jersey.
A.
The New Jersey Supreme Court, in Holmdel Builders Ass'n v. Holmdel
Twp., 121 N.J. 550 (1990), determined that mandatory development fees
are both statutorily and constitutionally permissible. The Court further
anticipated that COAH would promulgate appropriate development fee
rules specifying, among other things, the standards for these development
fees. The purpose of this article is to provide such rules pursuant
to N.J.A.C. 5:94 et seq.
B.
The Borough Council finds and declares that the creation and preservation
of affordable housing in the Borough serves the public interest. Maintaining
and improving a stock of sound affordable housing requires affirmative
steps by local government working cooperatively with public bodies
at all levels and with the private sector. The purpose of this article
is to create in the Borough of Penns Grove a trust fund from payment
of development fees to assist in the marshaling of public and private
moneys dedicated to affordable housing projects and programs.
As used in this article, the following terms shall have the
meanings indicated:
Any housing unit with an acquisition price or rent level
not exceeding the maximum resale or rent level for low- and moderate-income
housing as set forth in N.J.A.C. 5:94 et seq.
The New Jersey Council on Affordable Housing, established
under the Fair Housing Act of 1985, and which has primary jurisdiction
for the administration of low- and moderate-income housing obligation
in accordance with sound regional planning considerations in the state.
Money paid by an individual, person, partnership, association,
company, or corporation for the improvement of property as permitted
in N.J.A.C. 5:94 et seq.
The value of a property determined by the Borough Tax Assessor
through a process designed to ensure that all property in the Borough
is assessed at the same assessment ratio or ratios required by law.
Estimates at the time of building permit may be obtained by the Tax
Assessor utilizing estimates for construction cost. Final equalized
assessed value will be determined at project completion by the Tax
Assessor.
A determination by COAH approving the Borough's Housing
Element and Fair Share Plan in accordance with the provisions of the
Fair Housing Act and the rules and criteria as set forth therein.
A grant of substantive certification shall be valid for a period of
10 years in accordance with the terms and conditions contained therein.
A.
Residential development.
(1)
Residential development fees shall be 1.5% of the equalized
assessed value for residential development, within the R-1, R-2, R-3,
COS, M-1 and M-2 Districts, which is not exempt from the provisions
of this subsection as set forth in this article, provided that no
increase in density is permitted.
(2)
If a "d" variance is granted by the Borough Planning Board pursuant
to N.J.S.A. 40:55D-70d(5), then the additional residential units realized
(above what is permitted by right under the existing zoning) will
incur a bonus development fee of 6% rather than the development fee
of 1.5%. However, if the zoning on a site has changed during the two-year
period preceding the filing of the "d" 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 years
preceding the filing with the Borough Planning Board of the "d" variance
application.
B.
Nonresidential development.
(1)
Nonresidential development fees shall be 2.5% of the equalized
assessed value for nonresidential development, within all zoning districts,
which is not exempt from the provisions of this subsection as set
forth in this article.
(2)
If a "d" variance is granted by the Borough Planning Board pursuant
to N.J.S.A. 40:55D-70d(4), then the additional floor area ratio (FAR)
realized (above what is permitted by right under the existing zoning)
will incur a bonus development fee of 6% rather than the development
fee of 2.5%. However, if the zoning on a site has changed during the
two-year period preceding the filing of the "d" 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
years preceding the filing with the Borough Planning Board of the
"d" variance application.
A.
Except as provided in § 450-113A(2) above, developers of low- and moderate-income units shall be exempt from development fees.
B.
Development fees may only be collected for any residential structure
which requires the installation of a new foundation (excluding foundations
required for an addition to or renovation of an existing residential
structure or a foundation required for an accessory structure to an
existing residential structure).
C.
All forms of new nonresidential construction shall be subject to
development fees; provided, however, that development fees may only
be collected for improvements which add usable or rentable footage
to an existing nonresidential structure. In the event that a development
fee is collected for a nonresidential structure and thereafter usable
or rentable footage is obtained through modification of said structure,
a development fee may be collected for the additional usable or rentable
footage based upon the increase in the equalized assessed value of
the improved structure.
D.
Developments that have received preliminary or final approval prior
to the adoption and final publication of this article shall be exempt
from development fees unless the developer seeks a substantial change
in the approval.
E.
The Borough exempts the following types of development from imposition
of development fees:
The Borough shall collect 50% of the fee on any specific development
prior to and as a condition of the issuance of the building permit
therefor. The remaining portion shall be collected prior to and as
a condition of the issuance of the certificate of occupancy. Once
the final equalized assessed value of a particular development has
been determined by the Tax Assessor, and such final equalized assessed
value is greater than the estimated equalized assessed value, the
developer shall, within 10 business days from receipt of notification
from the Borough, pay to the Borough the difference between the development
fees required to be paid by the developer once such final equalized
assessed value has been determined and the estimated development fees
actually paid by the developer. The failure of the developer to make
timely payments of the aforesaid deficiency shall entitle the Borough
to file, without notice to the developer, a lien against the subject
development. In the event that the Borough shall file such lien, the
Borough may add to the aforesaid deficiency amount reasonable attorney
fees to file and discharge such lien, together with any and all costs
incurred to file and discharge said lien. In the event that the estimated
equalized assessed value proves to have been too high, the Borough
shall promptly refund the difference between the estimated development
fees actually paid by the developer and the development fees required
to be paid by the developer once such final equalized assessed value
has been determined.
Imposed and collected development fees that are challenged shall
be placed in an interest-bearing escrow account by the Chief Financial
Officer of the Borough. If all or a portion of the contested fees
are returned to the developer, the accrued interest on the returned
amount shall also be returned.
All development fees shall be deposited with the Chief Financial
Officer of the Borough in a separate designated interest-bearing housing
trust fund. The development fees placed in the housing trust fund
shall be deemed "dedicated revenues" as such term is defined in N.J.S.A.
40A:4-36. In establishing the housing trust fund, the Borough shall
provide written authorization, in the form of a three-party escrow
agreement between the Borough, the bank and COAH, to permit COAH to
direct the disbursement of the funds as provided for in N.J.A.C. 5:94-6.16(b).
This three-party escrow agreement shall be submitted to COAH within
seven days from the opening of the trust fund account. All interest
accrued in the housing trust fund shall only be used on eligible affordable
housing activities approved by COAH.
A.
The Borough shall use revenues collected from development fees for
any activity approved by COAH for addressing the Borough's fair
share obligation. Such activities include, but are not limited to,
rehabilitation, new construction, regional contribution agreements,
purchase of new land for low- and moderate-income housing, improvement
of land to be used for low- and moderate-income housing, extension
and/or improvement of roads and infrastructure to low- and moderate-income
housing sites, assistance designed to render units to be more affordable
and administration of the implementation of the Housing Element and
Fair Share Plan. The expenditure of all money shall conform to a spending
plan approved by COAH.
B.
Funds shall not be expended to reimburse the Borough for past housing
activities.
C.
After subtracting development fees collected to finance a regional
contribution agreement, a rehabilitation program or a new construction
project that are necessary to address the municipality's affordable
housing obligation, at least 30% of the balance remaining shall be
used to provide affordability assistance to low- and moderate-income
households in affordable units included in a 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)
Affordability assistance programs may include down payment assistance,
security deposit assistance, low-interest loans, and rental assistance.
(2)
Affordability assistance to households earning 30% or less of
median income may include buying down the cost of low-income units
in a municipal Fair Share Plan to make them affordable to households
earning 30% or less of median income. The use of development fees
in this manner shall entitle a municipality to bonus credits pursuant
to N.J.A.C. 5:94-4.22.
(3)
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.
No more than 20% of the revenues collected from development fees
shall be expended on administration, including but not limited to
salaries and benefits for Borough employees or consultant fees necessary
to develop or implement a rehabilitation program, a new construction
program, a regional contribution agreement, a housing element and
fair share plan, and an affirmative marketing program. 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. Development fees shall not be used to defray
the costs of existing staff.
The Borough shall complete and return to COAH all monitoring forms related to the collection of development fees, expenditures of revenues, and implementation of the spending plan (discussed in § 450-120 below) certified by COAH. Financial reports, annual program implementation, and monitoring reports shall be completed by the Borough on forms designed by COAH.
The Borough shall submit to COAH a spending plan for the development
fees collected by it prior to the expiration of its substantive certification
period. Plans to spend development fees shall consist of the following
information:
A.
A projection of revenues anticipated from imposing fees on development,
based on historic activity;
B.
A description of the administrative mechanism that the Borough will
use to collect and distribute revenues;
C.
A description of the anticipated use of all development fees;
D.
A schedule for the creation or rehabilitation of housing units;
E.
In the event that the Borough envisions being responsible for public
sector or nonprofit construction of housing, a pro form statement
of the anticipated costs and revenues associated with the development;
F.
The manner through which the Borough will address any expected or
unexpected shortfall if the anticipated revenues from development
fees are not sufficient to implement the plan;
G.
A description of the funds anticipated; and
H.
A schedule for spending.
A.
In the event that any of the conditions set forth in Subsection B of this section occur, COAH shall be authorized, on behalf of the Borough, to direct the manner in which all development fees collected pursuant to § 450-117 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.
B.
Occurrence of the following may result in COAH taking an action pursuant to Subsection A of this section:
(1)
Failure to submit a spending plan pursuant to § 450-120 above within the time limits imposed by COAH;
(2)
Failure to meet deadlines for information required by COAH in
its review of the Borough's Housing Element and Fair Share Plan,
or its spending plan;
(3)
Failure to proceed through COAH's administrative process
toward substantive certification in a timely manner;
(4)
Failure to address COAH's conditions for approval of a
plan to spend development fees within the deadlines imposed by COAH;
(5)
Failure to address COAH's conditions for substantive certification
within the deadlines imposed by COAH;
(6)
Failure to submit accurate monitoring reports within the time
limits imposed by COAH;
(7)
Failure to implement the spending plan for development fees
within the time limits imposed by COAH, or within reasonable extensions
granted by COAH;
(8)
Expenditure of development fees on activities not permitted
by COAH;
(9)
Revocation of the Borough's substantive certification;
or
(10)
Other good cause demonstrating that the revenues are not being
used for the intended purpose.
The ability of the Borough of Penns Grove to impose, collect
and expend development fees shall expire with the expiration of its
substantive certification unless the Borough has filed a revised and
adopted Housing Element and Fair Share Plan, has petitioned for substantive
certification for the succeeding round, and has received COAH's
approval of a revised development fee ordinance prior to the expiration.
If the Borough fails to act before the expiration of its substantive
certification, the Borough may only resume the imposition and collection
of development fees by filing a revised and adopted Housing Element
and Fair Share Plan, petitioning for substantive certification for
the succeeding round and after receiving COAH's approval of a
revised development fee ordinance. The Borough of Penns Grove shall
not impose a development fee on a development that receives preliminary
or final approval after the expiration of its substantive certification,
nor shall the Borough retroactively impose a development fee on such
a development. The Borough of Penns Grove shall not expend development
fees after the expiration of its substantive certification.
