[HISTORY: Adopted by the City Council of the City of Hoboken 8-7-2019 by Ord. No. B-174. Amendments noted where applicable.]
GENERAL REFERENCES
Affordable housing — See Ch. 65A.
A.Â
In Holmdel Builders 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, § 8 (N.J.S.A. 52:27D-329.2)
and the Statewide Nonresidential 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
a court of competent jurisdiction and have a court-approved spending
plan may retain fees collected from nonresidential development.
C.Â
Pursuant to the Executive Reorganization Act of 1969, P.L. 1969,
c. 203 (N.J.S.A. 52:14C-1 et seq.), the governor abolished COAH and
transferred all functions, powers, and duties to the Commissioner
of the Department of Community Affairs, effective August 29, 2011.
Any and all references to COAH shall mean the Department of Community
Affairs (the Department) or the Superior Court.
D.Â
This chapter establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to the Department's regulations
and in accordance P.L. 2008, c. 46, §§ 8 and 32 through
38. Fees collected pursuant to this chapter shall be used for the
sole purpose of providing low- and moderate- income housing. This
chapter shall be interpreted within the framework of the Department's
rules on development fees, codified at N.J.A.C. 5:97-8.[1]
A.Â
This chapter shall not be effective until approved by the Superior
Court pursuant to N.J.A.C. 5:96-5.1.[1]
[1]
Editor's Note: In accordance with N.J.S.A. 52:14B-5.1b, Chapter
96, Procedural Rules of the New Jersey Council on Affordable Housing
for the Period Beginning on June 2, 2008, expired on June 2, 2015.
See: 43 N.J.R. 1203(a).
B.Â
The City of Hoboken shall not spend development fees until the Superior
Court 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.[2]
[2]
Editor's Note: In accordance with N.J.S.A. 52:14B-5.1b, Chapter 96, Procedural Rules of the New Jersey Council on Affordable Housing for the Period Beginning on June 2, 2008, and Chapter 97, Substantive Rules of the New Jersey Council on Affordable Housing for the Period Beginning June 2, 2008, expired on June 2, 2015. See: 43 N.J.R. 1203(a).
The following terms, as used in this chapter, 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 100% affordable development.
The New Jersey Council on Affordable Housing established
under the Fair Housing Act which previously had primary jurisdiction
for the administration of housing obligations in accordance with sound
regional planning consideration in the state. Pursuant to the Executive
Reorganization Act of 1969, P.L. 1969, c. 203 (N.J.S.A. 52:14C-1 et
seq.), the governor abolished the Council and transferred all functions,
powers, and duties to the Commissioner of the Department of Community
Affairs, effective August 29, 2011. As such, any and all references
to COAH shall mean the Court.
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.[1]
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 §§ 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 development on a building or structure or unimproved land
that includes new construction, expansion of an existing building
or structure, increase in residential density, or change in use.
[Added 2-1-2023 by Ord.
No. B-531]
[Amended 2-1-2023 by Ord. No. B-531]
A.Â
Imposed fees.
(1)Â
Residential developers, except for developers of the types of development
specifically exempted below, shall pay a fee of 1.5% of the equalized
assessed value of the improvements for all new residential construction
on an unimproved lot or lots for residential development, provided
no increased density is permitted.
(2)Â
Residential developers, except for developers of the types of development
specifically exempted below, shall also pay a fee equal to 1.5% of
the increase in equalized assessed value resulting from any expansions
to existing structures to be used for residential purposes. The fee
for a development including both interior renovation and expansion
shall be multiplied by the ratio of new construction expansion to
the total square footage of the completed development. (Example: a
2,000 square foot residential property is expanded by 1,000 square
feet. The expansion is 33% of the total property. Assuming a $1,000,000
increase in equalized assessed value including interior renovation
and expansion, the development fee is: $1,000,000 x 33% x 1.5% or
$4,950.)
(3)Â
Development fees shall be imposed and collected when an existing
structure undergoes an increase in residential density or is demolished
and replaced. The development fee shall be calculated on the difference
between the equalized assessed value of the pre-existing improvement
and the equalized assessed value of the newly improved structure.
(4)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 may 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 1.5%
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, developments where the developer
is providing for the construction of affordable units either on site
or elsewhere in the municipality, 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, such as a change in use or increase in residential
density. Where a site plan approval does not apply, a zoning 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
Owner-occupied residential structures demolished and replaced as
a result of a fire, flood, or natural disaster shall be exempt from
paying a development fee.
(4)Â
The 1.5% fee shall not apply to an increase in equalized assessed
value resulting exclusively from alterations, change in use within
existing footprint, renovations or repairs.
A.Â
Imposed fees.
(1)Â
Within all zoning districts, nonresidential developers, except for
developers of the types of development specifically exempted, shall
pay a fee equal to 2.5% of the equalized assessed value of the improvements
for all new nonresidential construction on an unimproved lot or lots.
[Amended 2-1-2023 by Ord. No. B-531]
(2)Â
Nonresidential developers, except for developers of the types of
development specifically exempted, 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 pre-existing improvements and the equalized assessed
value of the newly improved structure. If the calculation required
under this section results in a negative number, the nonresidential
development fee shall be zero.
[Amended 2-1-2023 by Ord. No. B-531]
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 the 2.5% development fee, unless
otherwise exempted below.
(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 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.
[Added 2-1-2023 by Ord.
No. B-531[1]]
[1]
Editor's Note: This ordinance also redesignated former
Subsection B(2) through (5) as Subsection B(3) through (6), respectively.
(3)Â
The 2.5% fee shall not apply to an increase in equalized assessed
value resulting exclusively from alterations, change in use within
existing footprint, renovations or repairs.
[Amended 2-1-2023 by Ord. No. B-531]
(4)Â
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.
Any exemption claimed by a developer shall be substantiated by that
developer.
(5)Â
A developer of a nonresidential development exempted from the nonresidential
development fee pursuant to P.L. 2008, c. 46, shall be subject to
it at such time 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 of the nonresidential development,
whichever is later.
(6)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 City of Hoboken as a lien against the real property
of the owner.
[Amended 2-1-2023 by Ord. No. B-531]
A.Â
The official responsible for the issuance of a preliminary or final
site plan approval or a zoning permit shall notify the local Tax Assessor
of the issuance of the approval or permit for a development which
is subject to a development fee, and shall direct the developer to
complete Section A, and Section B if applicable, of the City of Hoboken's
development fee certification/exemption application.
B.Â
Within 90 days of receipt of that application, the Municipal Tax
Assessor, based on the plans filed, shall provide an estimate of the
equalized assessed value of the development.
C.Â
The construction official responsible for the issuance of a final
certificate of occupancy shall notify the local Assessor of any and
all requests for the scheduling of a final inspection on property
which is subject to a development fee.
D.Â
Within 30 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.
E.Â
Should the City of Hoboken fail to determine or notify the developer
of the amount of the development fee within 30 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).
F.Â
Fifty percent of the development fee shall be collected prior to
issuance of the building permit. The remaining portion shall be collected
prior to 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.
G.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 of Hoboken. 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 Hoboken.
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 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;
(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 of Hoboken's
affordable housing program.
C.Â
Within seven days from the opening of the trust fund account, the
City of Hoboken shall provide the Department with written authorization,
in the form of a three-party escrow agreement between the municipality,
the bank linked to the Cash Management Fund, and the Department to
permit the Department to direct the disbursement of the funds as provided
for in N.J.A.C. 5:97-8.13(b).[1]
D.Â
All interest accrued in the housing trust fund shall only be used
on eligible affordable housing activities approved by the Superior
Court.
A.Â
The expenditure of all funds shall conform to a spending plan approved
by the Superior Court of New Jersey. Funds deposited in the housing
trust fund may be used for any activity approved by the Superior Court
to address the City of Hoboken'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 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, or any other activity as permitted
pursuant to N.J.A.C. 5:97-8.7 through N.J.A.C. 5:97-8.9[1] and specified in the approved spending plan.
B.Â
Funds shall not be expended to reimburse the City of Hoboken 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 of Hoboken 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.[2]
[2]
Editor's Note: In accordance with N.J.S.A. 52:14B-5.1b, Chapter
96, Procedural Rules of the New Jersey Council on Affordable Housing
for the Period Beginning on June 2, 2008, expired on June 2, 2015.
See: 43 N.J.R. 1203(a).
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 the Department'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.
A.Â
The City of Hoboken shall complete and return to the Fair Share Housing
Center (FSHC) and the Department all monitoring forms included in
monitoring requirements 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, rental income,
repayments from affordable housing program loans, and any other funds
collected in connection with City of Hoboken's housing program, as
well as to the expenditure of revenues and implementation of the plan
approved by the Superior Court. All monitoring reports shall be completed
on forms designed by the Department or any designated agency.
A.Â
The ability for the City of Hoboken to impose, collect and expend
development fees shall expire with its judgment of compliance unless
the City of Hoboken has filed an adopted Housing Element and Fair
Share Plan with the Court, and has received the Superior Court's approval
of its development fee ordinance. If the City of Hoboken fails to
renew its ability to impose and collect development fees prior to
the expiration of a 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 § 20 of P.L.
1985, c. 222 (N.J.S.A. 52:27D-320). The City of Hoboken 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 of Hoboken retroactively impose a development fee on such a development.
The City of Hoboken shall not expend development fees after the expiration
of its judgment of compliance.