[Added 10-17-2017 by Ord.
No. 15-2017]
A.Â
In Holmdel Builder's Association v. Holmdel City, 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 adoption of Rules
by the Council on Affordable Housing (COAH).
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 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
COAH, and that are now before a court of competent jurisdiction and
have a court-approved spending plan, may retain fees collected from
nonresidential development.
C.Â
This article establishes standards for the collection, maintenance,
and expenditure of development fees that are consistent with COAH's
regulations and policies developed in response to P.L. 2008, c. 46,
Sections 8 and 32 through 38 (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).
Fees collected pursuant to this article 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 article, 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
housing 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 by applicable COAH regulations.
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.Â
Imposition of fees.
(1)Â
Within the City of Northfield, all residential developers, except
for developers of the types of developments specifically exempted
below and developers of developments that include affordable housing,
shall pay a fee of 1.5% of the equalized assessed value for all new
residential development, provided no increased density is permitted.
Development fees shall also be imposed and collected when an additional
dwelling unit is added to an existing residential structure; in such
cases, the fee shall be calculated based on the increase in the equalized
assessed value of the property due to the additional dwelling unit.
(2)Â
When an increase in residential density is permitted pursuant
to a "d" variance granted under N.J.S.A. 40:55D-70d(5), developers
shall be required to pay a "bonus" development fee of 6% of the equalized
assessed value for each additional unit that may be realized, except
that this provision shall not be applicable to a development that
will include affordable housing. 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.
B.Â
Eligible exactions, ineligible exactions and exemptions for residential
developments.
(1)Â
Affordable housing developments, developments where the developer
is providing for the construction of affordable units elsewhere in
the municipality, and/or developments where the developer has made
a payment in lieu of on-site construction of affordable units, if
permitted by ordinance or by agreement with the City of Northfield,
shall be exempt from the payment of development fees.
(2)Â
Developments that have received preliminary or final site plan
approval prior to the adoption of Northfield's first adopted Development
Fee Ordinance shall be exempt from the payment of development fees,
unless the developer seeks a substantial change in the original approval.
Where site plan approval is not applicable, the issuance of a building
permit shall be synonymous with preliminary or final site plan approval
for the purpose of determining the right to an exemption. In all cases,
the applicable fee percentage shall be determined based upon the Development
Fee Ordinance in effect 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
Homes demolished and replaced within the same footprint as a
result of a natural disaster (such as a fire or flood) shall be exempt
from the payment of a development fee. In all other cases, the development
fee shall be calculated on the increase in the equalized assessed
value of the replacement structure.
A.Â
Imposition of fees.
(1)Â
Within all zoning districts, nonresidential developers, except
for developers of the types of developments specifically exempted
below, 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 or lots.
(2)Â
Within all zoning districts, nonresidential developers, except
for developers of the types of developments specifically exempted
below, shall also pay a fee equal to 2.5% of the increase in equalized
assessed value resulting from any additions to existing structures
to be used for nonresidential purposes.
(3)Â
Development fees 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 improvements and the equalized assessed
value of the newly improved structure, i.e., land and improvements,
and such calculation shall be made at the time a 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.
B.Â
Eligible exactions, ineligible exactions and exemptions for nonresidential
development.
(1)Â
The nonresidential portion of a mixed-use inclusionary or market-rate
development shall be subject to a development fee of 2.5%, unless
otherwise exempted below.
(2)Â
The development fee of 2.5% shall not apply to an increase in
equalized assessed value resulting from alterations, change in use
within the existing footprint, reconstruction, renovations and repairs.
(3)Â
Nonresidential developments shall be exempt from the payment
of nonresidential development fees in accordance with the exemptions
required pursuant to the Statewide Non-Residential Development Fee
Act (N.J.S.A. 40:55D-8.1 through 40:55D-8.7), as specified in Form
N-RDF, "State of New Jersey Non-Residential Development Certification/Exemption."
Any exemption claimed by a developer shall be substantiated by that
developer.
(4)Â
A developer of a nonresidential development exempted from the
nonresidential development fee pursuant to the Statewide Non-Residential
Development Fee Act shall be subject to the fee at such time as 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 for the nonresidential development, whichever is later.
(5)Â
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 City of Northfield 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 or entity shall
direct its staff to notify the zoning officer official responsible
for coordinating with the State Construction Office responsible for
the issuance of a building permit.
B.Â
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," to be completed as per the instructions
provided. The developer of a nonresidential development shall complete
Form N-RDF as per the instructions provided. The Construction Official
shall verify the information submitted by the nonresidential developer
as per the instructions provided in 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 such notification, the City 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 shall notify the City Tax Assessor of any
and all requests for the scheduling of a final inspection on a 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 City Tax Assessor shall confirm or modify the previously
estimated equalized assessed value of the improvements associated
with the development; calculate the development fee; and thereafter
notify the developer of the amount of the fee.
G.Â
Should the City of Northfield 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 initially calculated development fee shall be
collected at the time of issuance of the building permit. The remaining
portion shall be collected at the time of issuance of the certificate
of occupancy. The developer shall be responsible for paying the difference
between the fee calculated at the time of issuance of the building
permit and that determined at the time of issuance of the 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. Such a challenge
must be made within 45 days from the issuance of the certificate of
occupancy. Pending a review and determination by the Board, collected
fees shall be placed in an interest-bearing escrow account by the
City of Northfield. 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 nonresidential 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 of Northfield.
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 affordable housing
trust fund to be maintained by the Chief Financial Officer of the
City of Northfield for the purpose of depositing development fees
collected from residential and nonresidential 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
or of a fraction of an affordable unit, where permitted by ordinance
or by agreement with the City of Northfield;
(2)Â
Funds contributed by developers to make 10% of the adaptable
entrances in a townhouse or other multistory attached dwelling unit
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 Northfield's affordable
housing program.
C.Â
In the event of a failure by the City of Northfield 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 and repose or a revocation of the judgment
of compliance and repose; 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); 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 City of Northfield, 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.
D.Â
Interest accrued in the Affordable Housing Trust Fund shall only
be used to fund eligible affordable housing activities approved by
the Court.
A.Â
The expenditure of all funds shall conform to a spending plan approved
by the Court. Funds deposited in the Affordable Housing Trust Fund
may be used for any activity approved by the Court to address the
City of Northfield'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; housing rehabilitation;
new construction of affordable housing units and related costs; accessory
apartments; a market to affordable program; regional housing partnership
programs; conversion of existing nonresidential 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 the Housing Element and Fair Share Plan; and/or any other activity
permitted by the Court and specified in the approved spending plan.
B.Â
Funds shall not be expended to reimburse the City of Northfield for
past housing activities.
C.Â
At least 30% of all development fees collected and interest earned
on such fees 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 the median income
for Housing Region 6, in which the City of Northfield is located.
(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. The specific programs
to be used for affordability assistance shall be identified and described
within the spending plan.
(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. The specific programs
to be used for very-low-income affordability assistance shall be identified
and described within the spending plan.
(3)Â
Payments in lieu of constructing affordable housing units on
site, if permitted by ordinance or by agreement with the City of Northfield,
and funds from the sale of units with extinguished controls shall
be exempt from the affordability assistance requirement.
D.Â
The City of Northfield may contract with a private or public entity
to administer any part of its Housing Element and Fair Share Plan,
including its programs for affordability assistance.
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 consultants' fees
necessary to develop or implement a new construction program, prepare
a Housing Element and Fair Share Plan, and/or administer an affirmative
marketing program or a rehabilitation program.
(1)Â
In the case of a rehabilitation program, the administrative
costs of the rehabilitation program shall be included as part of the
20% of collected development fees that may be expended on administration.
(2)Â
Administrative funds may be used for income qualification of
households, monitoring the turnover of sale and rental units, and
compliance with relevant monitoring requirements. Legal or other fees
related to litigation opposing affordable housing sites or related
to securing or appealing a judgment from the Court are not eligible
uses of the Affordable Housing Trust Fund.
The City of Northfield 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 sources
and amounts of funds collected and the amounts and purposes for which
any funds have been expended. Such reporting shall include an accounting
of development fees collected from residential and nonresidential
developers, payments in lieu of constructing affordable units on site
(if permitted by ordinance or by agreement with the City), funds from
the sale of units with extinguished controls, barrier-free escrow
funds, rental income from City-owned affordable housing units, repayments
from affordable housing program loans, and any other funds collected
in connection with Northfield's affordable housing programs, as well
as an accounting of the expenditures of revenues and implementation
of the spending plan approved by the Court.
A.Â
The ability for the City of Northfield to impose, collect and expend
development fees shall expire with the expiration of the repose period
covered by its impending judgment of compliance and repose unless
the City of Northfield 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 and repose 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.Â
If the City of Northfield fails to renew its ability to impose and
collect development fees prior to the expiration of its judgment of
compliance and repose, 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.Â
The City of Northfield 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 and repose,
nor shall the City of Northfield retroactively impose a development
fee on such a development. The City of Northfield also shall not expend
any of its collected development fees after the expiration of its
judgment of compliance and repose.