Borough of River Edge, NJ Affordable Housing Development Fees

In accordance with N.J.A.C. 5:97-8.3(c) of COAH's Substantive Rules, all new development of principal and accessory residential buildings within the Borough of River Edge, not exempt from the collection of development fees in accordance with the provisions specified in Subsection C of this section hereinbelow, shall pay a fee to River Edge Borough equal to 1.5% of the equalized assessed value of the residential construction, provided no increased density is permitted.

Notwithstanding the provisions of Subsection A hereinabove, if a "d" variance is granted pursuant to N.J.S.A. 40:55D-70d(5) for more residential units than otherwise permitted by right under the existing zoning, then the additional residential units realized as a result of the "d" variance approval shall pay a bonus development fee to River Edge Borough equal to 6.0% of the equalized assessed value of the residential development, rather than the 1.5% development fee otherwise required for the residential units permitted by right.

(a)

However, if the zoning of a site has changed during the immediate two years prior to the filing of the "d" variance application, then the base density for the purposes of calculating the bonus development fee shall be the highest density permitted by right during the two year time period. 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.

Eligible exactions, ineligible exactions and exemptions for residential development.

All affordable housing developments and developments where the developer has made a payment in lieu of constructing affordable units shall be exempt from paying development fees. All other forms of new construction shall be subject to development fees.

Developments that have received preliminary or final site plan approval prior to the adoption of a 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 construction permit shall be synonymous with preliminary or final site plan approval for this purpose. The fee percentage shall be vested on the date that building permits are issued.

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 to add one or more additional dwelling units, if the expansion is not otherwise exempt from the development fee requirement. It is the intention of this chapter that expansions to residential structures which do not add dwelling units are exempt from development fees. The development fee shall be calculated on the increase in the equalized assessed value of the improved structure.

No development fee shall be collected for a demolition and replacement of a residential building resulting from a natural disaster and LEED certified green buildings shall be exempt from paying a development fee.

No development fee shall be collected for the construction of an "accessory structure" which is not a "building" as these terms are defined in the River Edge Borough Land Development Ordinance.[1]

[1]

Editor's Note: See Ch. 49, Land Use Procedures.

§ 50-27 Nonresidential development.

Imposed fees.

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 land and improvements, for all new nonresidential construction on an unimproved lot or lots.

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.

Development fees also shall be imposed and collected when an existing structure is demolished and replaced. The development fee of 2 1/2% shall be calculated on the difference between the equalized assessed value of the preexisting 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 nonresidential development fee shall be zero.

Eligible exactions, ineligible exactions and exemptions for nonresidential development.

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.

The 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.

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 Nonresidential Development Certification/Exemption" Form, and listed below. Any exemption claimed by a developer shall be substantiated by that developer.

(a)

All nonresidential construction of buildings or structures on property used by houses of worship, and property used for educational purposes which is tax-exempt pursuant to N.J.S.A. 54:4-3.6, provided that the property continues to maintain its tax-exempt status under that statute for a period of at least three years from the date of the certificate of occupancy;

(b)

Parking lots and parking structures, regardless of whether the parking lot or parking structure is constructed in conjunction with a nonresidential development or as a stand-alone nonresidential development;

(c)

Any nonresidential development which is an amenity to be made available to the public, including, but not limited to, recreational facilities, community centers and senior centers as defined in Ssection 35 of P.L.2008, c.46 (N.J.S.A. 40:55D-8.4), which are developed in conjunction with or funded by a nonresidential developer;

(d)

Projects determined by the New Jersey Transit Corporation to be consistent with a transit village plan developed by a transit village designated by the New Jersey State Department of Transportation.

A developer of a nonresidential development exempted from the nonresidential development fee above shall be subject to it at such time the basis for the exemption set forth in this subsection 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.

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 Borough of River Edge as a lien against the real property of the owner.

§ 50-28 Collection procedures.

The Borough of River Edge shall collect development fees for affordable housing in accordance with the following:

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 or designated municipal official responsible for the issuance of a building permit.

For nonresidential developments only, the developer shall also be provided with a copy of Form N-RDF, "State of New Jersey Nonresidential 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.

The Borough Construction Official responsible for the issuance of a building permit shall notify the Borough Tax Assessor of the issuance of the first building permit for a development which is subject to a development fee.

Within 90 days of receipt of that notice, the Borough Tax Assessor, based on the plans filed, shall provide an estimate of the equalized assessed value of the development. The equalized assessed value and the required development fee shall be estimated by the Borough Tax Assessor prior to the issuance of the construction permit, with the understanding that the estimate of the equalized assessed value is not intended to establish the equalized assessed value for tax purposes.

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.

Within 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.

Should the Borough of River Edge 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).

Fifty percent of the development fee shall be collected at the time of issuance of the building permit. The remaining portion shall be collected at the issuance of the certificate of occupancy. The developer shall be responsible for payment the difference between the fee calculated at building permit and that determined as issuance of certificate of occupancy.

Developers shall pay the remainder of the development fee to River Edge Borough at the time of the issuance of a certificate of occupancy.

Upon tender of the remaining development fee, provided the developer is in full compliance with all other applicable laws, the Borough shall issue a final certificate of occupancy for the subject property.

Regardless of the time of collection of the development fee, the fee shall be based upon the percentage that applies on the date that the construction permit is issued.

The Construction Code Official shall forward all collected development fees to River Edge Borough's Chief Financial Officer who shall deposit such fees into the established Housing Trust Fund.

Appeal of development fees.

A developer may challenge the development fees imposed by filing a challenge with the Director of the Division of Taxation for nonresidential development and with the County Board of Taxation for residential development. Pending a review and determination by the Director or Board, as the case may be, 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 Borough. Appeals from a determination of the Director or Board, as the case may be, 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. Accrued interest earned on escrowed amounts to be returned shall also be returned to the developer.

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 Borough of River Edge. 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.

§ 50-29 Affordable Housing Trust Fund.

All collected development fees and any proceeds from the sale of units with extinguished controls shall be deposited by the Chief Financial Officer of the Borough of River Edge into a separate designated interest-bearing Housing Trust Fund, which shall be maintained by the Borough Chief Financial Officer.

No money shall be expended from the Housing Trust Fund unless the expenditure conforms to the spending plan which has been approved by COAH or courts.

The following additional funds shall be deposited in the Affordable Housing Trust Fund and shall at all times be identifiable by source and amount:

Recapture funds;

Proceeds from the sale of affordable units;

Rental income from municipally operated units;

Payments in lieu of on-site construction of affordable units;

Affordable housing enforcement fines and application fees;

(6)

Developer contributed funds for barrier free affordable housing pursuant to N.J.A.C. 5:97-8.5;

(7)

Repayments from affordable housing program loans; and

(8)

Any other funds collected in connection with the Borough's affordable housing program.

Within seven days from the opening of the trust fund account, the Borough of River Edge shall provide COAH or court with written authorization, in the form of a three-party escrow agreement between the municipality, the bank, and COAH or court to permit COAH or the court to direct the disbursement of the funds as provided for in N.J.A.C. 5:97-8.13(b).

All interest accrued in the Housing Trust Fund shall only be used on eligible affordable housing activities approved by COAH.

§ 50-30 Use of funds.

Funds deposited in the Housing Trust Fund may be used for any housing activity as itemized in the spending plan and approved by COAH to address the Borough's fair share obligation and may be set up as a grant or revolving loan program. Such activities include, but are not limited to:

A rehabilitation program;

New construction of affordable housing units and related development costs; in the case of inclusionary developments, eligible costs shall be prorated based on the proportion of affordable housing units included in the development;

Accessory apartment, market to affordable, or regional affordable housing partnership programs;

Financial assistance designed to increase affordability;

Conversion of existing nonresidential buildings to create new affordable units;

(6)

Acquisition and/or improvement of land to be used for affordable housing;

(7)

Purchase of existing market rate or affordable housing for the purpose of maintaining or implementing affordability controls, such as in the event of a foreclosure;

(8)

Extensions or improvements of roads and infrastructure directly serving affordable housing sites; in the case of inclusionary developments, costs shall be prorated based on the proportion of affordable housing units included in the development;

(9)

Green building strategies designed to be cost-saving for low and moderate-income households, either for new construction that is not funded by other sources, or as part of necessary maintenance or repair of existing units, in accordance with accepted federal or state standards or such guidance as may be provided by the New Jersey State Department of Community Affairs or the New Jersey Housing and Mortgage Finance Agency;

(10)

Maintenance and repair of affordable housing units;

(11)

Repayment of municipal bonds issued to finance low- and moderate-income housing activity;

(12)

To defray the costs of structural parking; in the case of inclusionary developments, eligible costs shall be prorated based on the proportion of affordable housing units included in the development;

(13)

Administration necessary for implementation of the Housing Plan Element and Fair Share Plan, in accordance with Subsection G below; and

(14)

Any other activity as specified in the approved spending plan and as permitted pursuant to N.J.A.C. 5:97-8.7 through 8.9.

The Borough also may request authorization for expenditure of Housing Trust Funds on emergent affordable housing mechanisms not included in the Borough's Fair Share Plan in the form of an amendment to the spending plan. In addition to the amendment to the spending plan, the Borough shall submit the following:

A resolution to COAH or court that includes a certification that the affordable housing opportunity addresses COAH's or court's criteria set forth in N.J.A.C. 5:97-6 and information regarding the proposed mechanism in a format to be provided by COAH or court; and

An amendment to its Fair Share Plan to include the mechanism at the earlier of two years after COAH's or court's approval of the spending plan amendment or the next planned amendment to the Fair Share Plan resulting from the plan evaluation review pursuant to N.J.A.C. 5:96-10.

Funds shall not be expended to reimburse the Borough of River Edge for past housing activities.

Payments in lieu of constructing affordable housing units on residential and mixed-use sites shall only be used to fund eligible affordable housing activities within the Borough.

At least 30% of all development fees collected and interest earned shall be devoted to providing affordability assistance to low- and moderate-income households in affordable units included in the Housing Element and Fair Share Plan, provided and in accordance with the following:

One-third of the affordability assistance portion of development fees collected shall be used to provide affordability assistance to very-low-income households.

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.

Affordability assistance for very-low-income households may include buying down the cost of low- or moderate-income units in the third round Borough's Fair Share Plan to make them affordable to very-low-income households (earning 30% or less of median income). The use of development fees in this manner may entitle the Borough to bonus credits pursuant to N.J.A.C. 5:97-3.7.

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.

The Borough of River Edge 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, subject to COAH's approval.

No more than 20% of development fee revenues collected in any given year from the development fees may be expended on administration, including, but not limited to, the salaries and benefits for River Edge Borough employees or consultant fees necessary to develop or implement a new affordable housing 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, preserving existing affordable housing, and compliance with COAH's monitoring requirements.