Prior Ordinance history includes portions of Ordinance Nos.
99-14, 06-30 and 11-28.
[Ord. #18-22]
This ordinance shall be known and may be cited the Development
Fee Ordinance of City of Ocean City.
[Ord. #18-22]
a.
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 (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.
Pursuant to P.L.2008, c.46 section 8 (C. 52:27D-329.2) and the Statewide
Non-Residential Development Fee Act (C. 40:55D-8.1 through 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 non-residential development.
c.
This ordinance establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's regulations
and in accordance P.L.2008, c.46, Sections 8 and 32-38. Fees collected
pursuant to this ordinance 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.
[Ord. #18-22]
[Ord. #18-22]
The following terms, as used in this ordinance, shall have the
following meanings:
Means 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 (100%) affordable
development.
Means the New Jersey Council on Affordable Housing established
under the Act which has primary jurisdiction for the administration
of housing obligations in accordance with sound regional planning
consideration in the State.
Means money paid by a developer for the improvement of property
as permitted in N.J.A.C. 5:97-8.3.
Means 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.
Means 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 (C.54:1-35a through C.54:1-35c).
Means 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
service.
[Ord. #18-22]
a.
Imposed Fees.
1.
Within the City of Ocean City residential developers, except for
developers of the types of development specifically exempted below,
shall pay a fee of one and one-half percent (1.5%) of the equalized
assessed value for residential development provided no increased density
is permitted.
2.
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 is required
to pay a development fee of six percent 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 one and
one-half percent (1.5%) of the equalized assessed value on the first
two units; and the specified higher percentage up to six percent (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.
Eligible Exactions, Ineligible Exactions and Exemptions for Residential
Development.
1.
Affordable housing developments, developments where the developer
is providing for the construction of affordable units elsewhere in
the municipality, developments where the developer has made a payment
in lieu of on-site construction of affordable units, nonprofit institutions
and other tax-exempt entities shall be exempt from development fees.
2.
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 and/or building 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.
Development fees shall be imposed and collected when an existing
structure, other than a detached single-family dwelling, is constructed,
demolished and replaced, or 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.
Existing detached single-family dwellings that are reconstructed,
renovated or expanded shall be exempt from development fees.
5.
Developers of existing lots that result in the construction of a
detached single-family home shall be exempt from paying a development
fee provided the single-family home is not the result of a subdivision.
If the single-family home is the result of a subdivision, a development
fee shall apply to all single-family homes which are a net increase
over the number of homes on the site prior to the subdivision.
6.
For the demolition of an existing residential structure with a replacement
of two or more residential structures, the development fee shall be
calculated by subtracting the equalized assessed value at the time
of the structure demolition from the equalized assessed value of the
new residential replacements.
7.
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.
[Ord. #18-22]
a.
Imposed Fees.
1.
Within all zoning districts, non-residential developers, except for
developers of the types of development specifically exempted, shall
pay a fee equal to two and one-half percent (2.5%) of the equalized
assessed value of the land and improvements, for all new non-residential
construction on an unimproved lot or lots.
2.
Non-residential developers, except for developers of the types of
development specifically exempted, shall also pay a fee equal to two
and one-half percent (2.5%) of the increase in equalized assessed
value resulting from any additions to existing structures to be used
for non-residential purposes.
3.
Development fees shall be imposed and collected when an existing
structure is demolished and replaced. The development fee of two and
one-half percent (2.5%) shall be calculated on the difference between
the equalized assessed value of the pre-existing 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 non-residential development fee shall be
zero.
b.
Eligible Exactions, Ineligible Exactions and Exemptions for Non-Residential
Development.
1.
The non-residential portion of a mixed-use inclusionary or market
rate development shall be subject to the two and one-half percent
(2.5%) development fee, unless otherwise exempted below.
2.
The two and one-half percent (2.5%) 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 developments shall be exempt from the payment of
non-residential 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.
4.
A developer of a non-residential development exempted from the non-residential
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 non-residential development fee, in that event,
within three (3) years after that event or after the issuance of the
final certificate of occupancy of the non-residential development,
whichever is later.
5.
If a property which was exempted from the collection of a non-residential
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 non-residential development fees under these circumstances
may be enforceable by the City of Ocean City as a lien against the
real property of the owner.
[Ord. #18-22]
a.
Upon the granting of a preliminary, final or other applicable approval
for a development, the applicable approving authority shall direct
its staff to notify the Construction Official responsible for the
issuance of a building permit.
b.
For non-residential 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 non-residential development shall complete
Form N-RDF as per the instructions provided. The Construction Official
shall verify the information submitted by the non-residential developer
as per the instructions provided in the 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.
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.
Within ninety (90) days of receipt of that notice, the municipal
tax assessor, based on the plans filed, shall provide an estimate
of the equalized assessed value of the development.
e.
The Construction Official responsible for the issuance of a final
certificate of occupancy notifies the local assessor of any and all
requests for the scheduling of a final inspection on property which
is subject to a development fee.
f.
Within ten (10) 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.
g.
Should the City of Ocean City fail to determine or notify the developer of the amount of the development fee within ten (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.
The developer shall pay one hundred percent (100%) of the calculated
development fee amount prior to the municipal issuance of a final
certificate of occupancy for the subject property.
i.
Appeal of Development Fees.
1.
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 Ocean City. 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 ninety (90) days after the date
of such determination. Interest earned on amounts escrowed shall be
credited to the prevailing party.
2.
A developer may challenge non-residential 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 forty-five (45) days of receipt of the challenge, collected
fees shall be placed in an interest-bearing escrow account by the
City of Ocean City. 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
ninety (90) days after the date of such determination. Interest earned
on amounts escrowed shall be credited to the prevailing party.
[Ord. #18-22]
a.
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 non-residential
developers and proceeds from the sale of units with extinguished controls.
b.
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.
Payments in lieu of on-site construction of affordable units;
2.
Developer contributed funds to make ten percent (10%) of the adaptable
entrances in a townhouse or other multistory attached development
accessible;
3.
Rental income from municipally operated units;
4.
Repayments from affordable housing program loans;
5.
Recapture funds;
6.
Proceeds from the sale of affordable units; and
7.
Any other funds collected in connection with the City of Ocean City's
affordable housing program.
c.
Within seven (7) days from the opening of the trust fund account,
the City of Ocean City provided COAH with written authorization, in
the form of a three-party escrow agreement between the municipality,
the bank and COAH to permit COAH to direct the disbursement of the
funds as provided for in N.J.A.C. 5:97-8.13(b).
d.
All interest accrued in the housing trust fund shall only be used
on eligible affordable housing activities approved by COAH.
[Ord. #18-22]
a.
The expenditure of all funds shall conform to a spending plan approved
by the Court. Funds deposited in the housing trust fund may be used
for any activity approved by the Court to address the City of Ocean
City'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 apartments, market to affordable,
conversion of existing non-residential 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
by the Court and specified in the approved spending plan.
b.
Funds shall not be expended to reimburse the City of Ocean City for
past housing activities.
c.
At least thirty percent (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 thirty percent (30%) or less
of median income by region.
1.
Affordability assistance programs may include down payment assistance,
security deposit assistance, low interest loans, rental assistance,
assistance with homeowner's association or condominium fees and special
assessments, and assistance with emergency repairs.
2.
Affordability assistance to households earning thirty percent (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 thirty percent (30%) or less
of median income.
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.
The City of Ocean City 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.
e.
No more than twenty percent (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 twenty
percent (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 Court'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.
[Ord. #18-22]
The City of Ocean City shall provide annual reporting of Affordable
Housing Trust Fund activity to the State of New Jersey, Department
of Community Affairs, the 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 non-residential
developers, payments in lieu of constructing affordable units on site(if
permitted by Ordinance or by an Agreement with the City), funds from
the sale of units with extinguished controls, barrier free escrow
funds, rental income from owned affordable housing units, repayments
from affordable housing program loans, and any other funds collected
in connection with Ocean City's affordable housing programs, as well
as an accounting of the expenditures of revenues and implementation
of the Spending Plan approved by the Court.
[Ord. #18-22]
The ability of the City of Ocean City to impose, collect and
expend development fees shall expire with its Judgement of Compliance
unless the City of Ocean City has filed an adopted Housing Element
and Fair Share Plan with the Court or a designated State administrative
agency, has petitioned for a Judgement of Compliance from the Court
and has received approval of its development fee ordinance. If the
City of Ocean City fails to renew its ability to impose and collect
development fees prior to the expiration of the Judgement 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 section 20 of P.L.1985, c.222 (N.J.S.A. 52:27D-320). The City of
Ocean City shall not impose a residential development fee on a development
that receives preliminary or final site plan approval after the expiration
of its Judgement of Compliance, nor shall the City of Ocean City retroactively
impose a development fee on such a development. The City of Ocean
City shall not expend development fees after the expiration of its
Judgement of Compliance.
