[Adopted 4-14-1997 by Ord. No. 97-8]
A.
Statement of purpose. The purpose of this section is
to establish the eligibility standards, administrative procedures and other
requirements for the Township's Accessory Apartment Program for lower
income, senior citizen households.
B.
Funding. The Township Committee shall provide at least
$10,000 per unit to subsidize the creation of the accessory apartment, with
the funding provided through municipal appropriation or some other source.
C.
Eligibility standards.
(1)
An accessory apartment shall be occupied by a low- or
moderate-income household meeting the income eligibility standards established
by the Council on Affordable Housing (COAH). In addition, the accessory apartment
shall be occupied by a senior citizen (62 years of age or older) household
or shall be located on a lot owned by a senior citizen household.
(2)
No more than four accessory apartments shall be created
under this provision.
(3)
Rents for accessory apartments, including an allowance
for utilities, shall be established so as not to exceed 30% of the gross monthly
income of the appropriate household size. In addition, rents shall be calculated
on the basis of 44% of median income for low-income households and 71% of
median income for moderate-income households in order to meet COAH's
standard that rents of accessory apartments will average 57.5% of median income,
including utilities [N.J.A.C. 5:93-5.9(a)3]. The maximum rents shall be based
on the following criteria relating to the number of bedrooms and the size
of households:
(a)
Efficiency units shall be affordable to one-person households.
(b)
One-bedroom units shall be affordable to one-and-one-half
person households.
(c)
Two-bedroom units shall be affordable to three-person
households.
(d)
Three-bedroom units shall be affordable to four-and-one-half
person households.
(4)
The proposed accessory apartment shall comply with the zoning standards governing accessory apartments found in Chapter 90, Land Use and Development.
(5)
All owners of accessory apartments created under this
program shall enter into an agreement with the Township, and a deed restriction
and lien shall be filed stipulating that the owner agrees to comply with this
article and COAH's rules for the specified terms outlined herein.
D.
Staff and affirmative marketing. The Accessory Apartment
Program shall be administered under the direction of the Affordable Housing
Board and with the utilization of the Housing Officer, Zoning Officer, Building
Inspector, Township Attorney and other consultants, as needed. The program
shall be affirmatively marketed in accordance with the Township's Affirmative
Marketing Plan.
E.
Application and forms.
(1)
The Housing Officer, or such other person as the Township
Committee may designate, shall develop appropriate forms for program implementation
as follows:
(a)
Application form, which shall cover all general data,
such as owner's and applicant's name; occupancy status; age of owner
and proposed occupants; present rent (if applicable); number of persons in
household; location and number of units, including number of bedrooms; income
level and sources of income for proposed occupants; a description of the work
to be done; and a plot plan and construction plan.
(b)
Income verification forms, which shall be signed by the
applicant so that the Housing Officer may mail them to the employer for verification.
If unemployed, the applicant shall supply such other evidence as will reasonably
establish the income level, such as social security statements, tax returns,
dividend statements, etc. The Housing Officer shall keep all financial disclosures
made by an applicant confidential. In making recommendations to the Township
Committee, the income need not be disclosed in public session, except by means
so as to establish that the income level is below the applicable low- or moderate-income
levels established by the Council on Affordable Housing. For vacant units
where an owner-applicant may apply for and receive an accessory apartment
loan pursuant to this article, the owner shall agree to provide all necessary
documents and a verification as outlined in this section, for prospective
occupants, so as to adequately demonstrate compliance with all local and state
regulations cited herein. An "owner-applicant" is a person who owns a housing
unit proposed for an accessory apartment and is applying to create a rental
unit.
(2)
Affordability controls shall be clearly identified in
the application package and shall be in conformance with this article and
N.J.A.C. 5:93-9. A sample deed restriction and/or loan agreement shall be
supplied to the applicant.
(3)
Supporting documents shall be submitted evidencing proof
of ownership.
F.
Application procedures.
(1)
Filing of application. All interested applicants may
obtain an application package from the Housing Officer or Housing Consultant,
and questions as to income eligibility or administrative procedures may be
directed to these parties. Assistance regarding unit eligibility, accessory
apartment standards, scope of work and obtaining cost estimates will be provided
by the Housing Officer and Housing Consultant. All completed applications
shall be presented to the Housing Officer.
(2)
Housing Officer's review. The Housing Officer shall,
within 10 business days, review the application to determine its completeness
and the income level of the applicant. If the applicant's income exceeds
the eligibility standards, the applicant will be so notified and a confirming
letter shall be kept in the file. If the application is complete and the stated
income level is eligible, the Housing Officer shall transmit a copy of the
package to the Zoning Officer for review. Thereafter, the Housing Officer
shall verify the income with the applicant's employer on the forms provided.
Once verified, the Housing Officer shall notify the Zoning Officer. For vacant
units, the owner need not be income eligible, but he or she shall provide
adequate documentation at the time of occupancy that the sales price or rental
rate is affordable as defined in this article and that the prospective occupants
are income eligible.
(3)
Zoning Officer's review. The Zoning Officer shall review the application package and, within 10 business days of receipt of the same, shall (with the Building Inspector) arrange for an inspection of the property. For proposed accessory apartments, the Zoning Officer and Building Inspector shall review the proposed plot plan and construction plan for conformance with the standards in Subsection C and Chapter 90, Land Use and Development. The applicant shall submit a cost estimate for the proposed scope of work for review by the Building Inspector. If the Inspector and Zoning Officer find that the proposed accessory apartment complies with the standards of Subsection C and Chapter 90 and that the estimate is within 10% of the Building Inspector's independent estimate, then the Housing Officer shall prepare a recommendation for funding to be sent to the Township Clerk for inclusion on the Township Committee's agenda. If the standards of Subsection C and Chapter 90 are not met, then the Zoning Officer and Building Inspector shall prepare a report for the applicant and Township Committee identifying the standards which are not satisfied.
(4)
Township Committee authorization. Recommendations for funding shall be sent by the Housing Officer to the Township Clerk for inclusion on the agenda of the Township Committee. If all program criteria have been met, the Committee shall approve the funding of the improvements from the funds reserved for the program and shall authorize the Township Attorney to prepare an accessory apartment loan agreement and deed restriction so as to ensure that a lien position may be held the Township. The work may then be authorized by the Building Inspector and Zoning Officer as provided in Subsection G(6). The recommendation for funding shall include all capital costs and an estimate of the soft costs/administrative expenses to be budgeted (such as the inspection costs, attorney's fees and processing expenses incurred by the Township Clerk). On average, for any two-year period, each accessory apartment will require at least $10,000.
(5)
Inspections. The Building Inspector shall periodically
inspect the premises during construction. Payments will be made to the contractor
at 50% performance (40% of the cost) and upon completion (the balance due).
Change orders shall require approval by the Township Committee if additional
funding is required beyond the contract amount. Otherwise, applicant and Inspector
concurrence shall be the only necessary authorization. Upon completion, the
Inspector shall issue a completion report to the Township Clerk stating that
the work has been undertaken in conformance with this program, this article
and the applicable codes and that the unit complies with the relevant accessory
apartment standards for new accessory apartments.
G.
Affordability controls.
(1)
General requirements.
(a)
In accordance with N.J.A.C. 5:93-9, all units assisted
under this article shall be subject to resale and rent affordability control
for the periods outlined herein. Should the terms as authorized by N.J.A.C.
5:93-9 be amended as provided by law, then this article may be amended and
the Township Committee may, at their discretion, take such steps as necessary
to amend any loan agreement or deed restriction, with the consent of the owner.
(b)
At the time an application for a unit(s) is approved by the Township Committee, each household in occupancy must be income eligible as set forth in Subsection C, whether an owner-applicant or a renter-applicant. Owners of vacant units must agree to rent the unit to an income eligible low- or moderate-income household when the accessory apartment is completed. In approving accessory apartments in vacant units, the Township Committee shall attempt to assure that at least 50% of such vacant units are reserved for low-income households.
(c)
The owner shall provide a certification verifying that
the proposed rent level complies with this article and COAH rules.
(2)
Period of control.
(a)
The four accessory apartments shall be subject to affordability
controls for a term of at least 30 years from the date a completion report
is filed by the Building Inspector with the Township Clerk, in accordance
with N.J.A.C. 5:93-5.9(d), in order for the Township to receive a rental bonus
credit, as provided in N.J.A.C. 5:935.14. The Township can reduce the period
of affordability controls from at least 30 years to at least 10 years for
good cause.
(b)
Vacant accessory apartments, for which no tenant is available
at the time of filing the completion report, shall be subject to the same
conditions of the loan agreement concerning income eligibility of the proposed
renter household as are outlined in this article.
(3)
Accessory apartment loan agreements. At such time as
the Township Committee approves an application for assistance (funding) under
this article, it shall be with the condition that the amount of funding for
capital costs paid to the applicant shall be the subject of an accessory apartment
loan agreement, whereby the owner agrees to be bound by this article and the
following terms:
(a)
General terms. The accessory apartment loan shall be for the full amount of funds borrowed by the applicant, whether from Township funds or other funding sources as may be available through this program, to cover the cost of creating the accessory apartment. The loan shall stipulate that interest shall accrue on the principal in the amount of 1% per annum. Payments on principal and accrued interest shall only be due upon sale or refinancing of the unit(s), except as outlined below in Subsection G(3)(b) and (c).
(b)
Specific terms for accessory apartments.
[1]
Owners of renter-occupied accessory apartments shall agree to rent the unit to an income eligible household for a full thirty-year or ten-year term, as the case may be. If during the thirty-year or ten-year term the lot is sold and the accessory apartment is rented to a non-income eligible household, the loan and all accrued interest [determined as specified in Subsection G(3)(c)] shall be repaid in full as a condition of the sale. For units with a ten-year loan agreement, the loan shall be repaid in full at the end of the ten-year period together with accrued interest, except that if the owner agrees to continue renting to income eligible households, the payment may be deferred. In said event, a new agreement shall be executed stipulating these conditions.
[2]
For units with a thirty-year loan agreement, the loan
shall be forgiven in full at the end of the thirty-year period. After 10 years,
no additional interest shall accrue, and commencing after the 11th year, 5%
of the principal and previously accrued interest shall be forgiven each year.
(c)
Premature termination. In cases where the accessory apartment
loan agreement must be terminated prematurely due to court action, bankruptcy
or good cause, as may be established by rules and regulations of an appropriate
federal or state agency, before the expiration of the time period in the agreement
required by this article or COAH regulations, as revised, the amount of the
loan principal is to be paid in full together with accrued interest determined
as follows:
[1]
For a ten-year loan terminated in its first year, simple
interest at a rate per annum equal to the prime rate at Citibank of New York,
plus 2%. For a ten-year loan terminated thereafter, the rate per annum for
the entire period will be the first year's rate reduced by 10% for each
full year that the loan has been outstanding until after nine full years when
the rate shall be 1%.
[2]
For a thirty-year loan terminated in its first year,
simple interest at a rate per annum equal to the prime rate at Citibank of
New York, plus 2%. For a thirty-year loan terminated thereafter, the rate
per annum for the entire period will be the first year's rate reduced
by 3.3% for each full year that the loan has been outstanding until after
29 full years when the rate shall be 1%.
(4)
Noneviction policy. Notwithstanding the above, nothing
herein shall require the relocation or eviction of a household lawfully occupying
a unit due to a rise in income above the restricted income limits.
(5)
Establishment of income limits. The income limits which
shall govern this article shall be those promulgated by the Council on Affordable
Housing.
(6)
Agreement in escrow. At such time as the application for funding is approved, the Township Attorney shall, within 14 days, prepare and arrange the execution of the deferred loan agreement. A copy shall be given to the owner, Housing Officer, Building Inspector and Township Clerk. Upon receipt of a copy of the agreement, the Building Inspector shall authorize the work. The original shall be held by the Attorney in escrow, pending the filing of the completion report, at which time the same shall be recorded with the Register of Deeds. A copy of the recorded agreement shall be sent to the above-listed parties and shall contain the date of expiration of the controls in accordance with the above provisions contained in Subsection G(3).
