[Amended 10-10-2019 by Ord. No. 19-19]
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 § 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 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
nonresidential development.
C. In Readoption of N.J.A.C. 5:96 and 5:97
by COAH, 221 N.J. 1 (2015) ("Mount Laurel IV"), the Supreme Court
remanded COAH's duties to the Superior Court. As a result, affordable
housing development fee collections and expenditures from municipal
affordable housing trust funds to implement municipal Third Round
Fair Share Plans through July 7, 2025 are under the Court's jurisdiction
and are subject to approval by the Court.
D. This article establishes standards for
the collection, maintenance, and expenditure of development fees pursuant
to COAH's regulations and in accordance P.L. 2008, c.46, §§
8 and 32-38. Fees collected pursuant to this article shall be used
for the sole purpose of providing low- and moderate-income housing.
This article shall be interpreted within the framework of COAH's rules
on development fees, codified at N.J.A.C. 5:97-8.
As used in this article, the following terms shall have the
meanings indicated:
AFFORDABLE HOUSING DEVELOPMENT
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
development.
COAH or THE COUNCIL
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.
DEVELOPER
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.
DEVELOPMENT FEE
Money paid by a developer for the improvement of property
as permitted in N.J.A.0 5:97-8.3.
EQUALIZED ASSESSED VALUE
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 N.J.S.A. 54:1-35c).
SUBSTANTIVE CERTIFICATION
A determination by COAH approving a municipality's housing
element and fair-share plan in accordance with the provision of the
Fair Housing Act (N.J.S.A. 52:27D-301 et seq.) and the rules and criteria
as set forth herein.
The following development types are exempt from development
fees:
A. Nonprofit and public education buildings.
C. Public amenities (recreational, community, or senior centers).
D. Parking lots and structures.
E. Nonprofit hospital relocation or improvement.
F. State, county and local government buildings.
G. Transit hubs, transit villages, and light-rail hubs.
H. Commercial farm buildings and Use Group U structures.
I. Developments with a general development plan approval, or executed
developer's or redeveloper's agreement, prior to July 17, 2008, with
a fee or affordable housing requirement the equivalent of at least
1% of equalized assessed value.
[Amended 10-10-2019 by Ord. No. 19-19]
A. The Township shall not spend development
fees until COAH or a court of competent jurisdiction 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. Thereafter, the expenditure of all funds shall
conform to the spending plan approved by COAH or a court of competent
jurisdiction. Funds deposited in the housing trust fund may be used
for any activity approved by COAH or a court of competent jurisdiction
to address the Township'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 8.9 and specified in the approved
spending plan.
B. Funds shall not be expended to reimburse
the Township for past housing activities.
C. 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) 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) 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) 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 Township 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 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 monitoring requirements
as set forth in the court-approved settlement agreement with Fair
Share Housing Center dated February 27, 2018. 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.
[Amended 10-10-2019 by Ord. No. 19-19]
On or about February 27 of each year
through 2025, the Township shall provide annual reporting of trust
fund activity to the DCA, COAH, or NJLGS, 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. This reporting shall include
an accounting of all housing trust fund activity, including 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 the Township's housing
program, as well as to the expenditure of revenues and implementation
of the plan approved by COAH or a court of competent jurisdiction.
All monitoring reports shall be completed on forms designed by COAH
or other entity designated by the State of New Jersey.
[Amended 10-10-2019 by Ord. No. 19-19]
The ability for the Township to impose,
collect and expend development fees shall expire with its court-issued
judgment of compliance and repose unless the Township has filed an
adopted Housing Element and Fair Share Plan with COAH, a court of
competent jurisdiction or other entity designated by the State of
New Jersey; has petitioned for substantive certification or filed
a declaratory judgment action; and has received COAH's or a court
of competent jurisdiction's approval of its Development Fee Ordinance.
If the Township 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 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 Township
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; nor shall the Township retroactively
impose a development fee on such a development. The Township shall
not expend development fees after the expiration of its judgment of
compliance.