[HISTORY: Adopted by the Township Committee of the Township of Holland 1-18-2005 by Ord. No. 2005-2; amended in its entirety 11-7-2018 by Ord. No. 2018-11. Subsequent amendments noted where applicable.]
GENERAL REFERENCES
Holland Township Community Development Committee — See Ch. 14.
Affordable housing — See Ch. 42.
Uniform construction codes — See Ch. 63.
Development fees — See Ch. 66.
Land use — See Ch. 100.
Certificates of occupancy — See Ch. 115.
A. 
It is the purpose of this program to help meet Holland Township's fair-share housing obligation through the subsidization of up to 10 voluntary conversions of existing single-family dwellings or accessory buildings in the Township to accommodate accessory apartments for occupancy by low- or moderate-income households.
B. 
This chapter applies to the creation of subsidized accessory apartments in the R-5 Residential District of the Township of Holland. Additional regulations governing the creation of accessory apartments in this zone are contained in Chapter 100, Land Use.
A. 
At the time of initial occupancy of the unit and for at least 10 years thereafter, the accessory apartment shall be rented only to a household which is a very-low-, low- or moderate-income household meeting the income eligibility standards established by COAH as set forth in any agreement or deed restriction.
B. 
Rents of accessory apartments, including an allowance for utilities, shall be affordable to very-low-, low- or moderate-income households as per COAH and UHAC regulations.
C. 
There shall be a recorded deed or declaration of covenants and restrictions applied to the property upon which the accessory apartment is located running with the land and limiting its subsequent rental or sale of the unit and the accessory apartment.
D. 
The appropriate utility authority must certify that there is water and sewer infrastructure with sufficient capacity to serve the proposed accessory apartment. Where the proposed location is served by an individual well and/or septic system, the additional capacity necessitated by the new unit must meet the appropriate NJDEP standards.
E. 
The Township accessory apartment program shall not restrict the number of bedrooms in any accessory apartment.
F. 
No accessory apartment created as a result of this chapter or these regulations shall exceed the gross floor area of the existing principal dwelling on the lot.
G. 
Municipal building permit fees shall be waived in all cases involving affordable accessory apartment development under this section. An annual license and inspection fee, if required, shall be paid by unit owners.
H. 
The maximum number of creditable accessory apartments shall be equal to no more than 10% or an amount equal to 10% of the Township's fair share obligation, whichever is greater. (Additional units may be approved by COAH or a court of competent jurisdiction if the municipality has demonstrated successful completion of its accessory apartment program.)
I. 
Accessory apartments are permitted in existing principal or accessory buildings on lots in all zones and according to the applicable area, yard and bulk requirements.
J. 
Accessory apartments shall comply with all applicable statutes and regulations of the State of New Jersey, in addition to all building codes.
K. 
The accessory apartment shall have living and sleeping space, cooking facilities, a kitchen sink and complete sanitary facilities for the exclusive use of its occupants.
L. 
The accessory apartments shall consist of not less than two rooms, one of which shall be a bathroom containing a flush toilet, wash basin and bathroom tub or shower.
M. 
All rooms shall be accessible from within the apartment.
N. 
The accessory apartment shall be separate from the primary residence and private and secure from all attached units.
O. 
The apartment shall have direct access to the outdoors or directly to a hall from which there is direct access to the outdoors without passing through any other units, and the accessory apartment shall comply with all requirements of the applicable building codes.
P. 
If the apartment is located on the second or third floor, there shall be at least two means of access to the outdoors, available at all times, as approved by the Construction Official. Exterior stairways for the accessory apartment shall be located at the rear or side of the structure.
Q. 
No apartment shall be located above the third floor.
R. 
At least one off-street parking space per bedroom shall be provided for each apartment, situated in the side yard or rear yard only.
S. 
An accessory building in which a supplementary apartment is built may not be used for any other purpose, except for the storage of vehicles and equipment normally used on residential or agricultural lots or the operation of a residential or agricultural workshop, provided that large quantities of toxic or hazardous materials are not stored in the building.
T. 
If the accessory apartment will be served by a sanitary disposal system such shall be approved by the Board of Health.
Definitions pertaining to affordable housing not found below are the same as those definitions defined in Chapter 42, Affordable Housing:
APPLICANT
The person or persons applying for funds to create an accessory apartment in accordance with the provisions of this chapter.
INSPECTION OFFICER
A qualified inspector hired, appointed or contracted by the Administrative Agent to perform the duties described in this chapter.
SUBSIDIZED ACCESSORY APARTMENT
A portion of a single-family dwelling or an existing accessory building which has been converted through the use of public funds to create an additional dwelling unit which shall be deed restricted for occupancy by and affordability to a qualified affordable household for a period of at least 10 years as part of the Township's affordable housing program.
UTILITY ALLOWANCE
An allowance for utilities that is consistent with the personal benefit expense allowance for utilities as defined by HUD (or a similar allowance approved by COAH).
Only owners of existing dwelling units within the Township of Holland are eligible to apply for the accessory apartments program. Eligibility is further determined by the following criteria:
A. 
The owner must agree to rent the accessory apartment unit only to an affordable household. Proof of each prospective tenant's income qualifications shall be required by the Administrative Agent.
B. 
Any existing code deficiencies in the portion of the building to be devoted to the accessory apartment unit shall be corrected, and the unit shall be brought up to code standard. The standard for evaluating any rehabilitation activity on an existing dwelling unit shall be N.J.A.C. 5:23-2.4 and 5:23-2.5. The evaluation shall be undertaken and certified by the Inspection Officer.
C. 
The owner of the accessory apartment shall agree, by written contract, to comply with all of the requirements of Chapter 42, Affordable Housing of the Code of the Township of Holland.
A. 
Affirmative marketing plan.
(1) 
The accessory apartments created shall be affirmatively marketed in accordance with the Township's affirmative marketing plan.
(2) 
Notification of the availability of funds for the creation of accessory apartments shall be accomplished through the circulation of flyers describing the accessory apartments program, to be enclosed with the annual property tax bills; periodic press releases issued to the official newspaper to promote interest in the program; and making information and application packets available to interested owners upon request and free of charge.
B. 
Administrative agent. The Township Committee shall designate an Administrative Agent whose duties with respect to the accessory apartments program may include all or some of the following:
(1) 
Preparing an accessory apartments program manual consisting of the following:
(a) 
Procedures for program marketing;
(b) 
Criteria for determining eligibility of properties;
(c) 
The amount of money currently available for accessory apartment conversions or additions;
(d) 
Procedures for application intake;
(e) 
Procedures for review and approval of work, including interim inspections of work; and
(f) 
The length and terms of affordability controls.
(2) 
Preparing information packets to be distributed to interested owners.
(3) 
Developing the necessary application forms to be used by owners interested in applying for participation in the accessory apartments program. The application form shall clearly state that any owner who utilizes the provisions of this program shall agree to place a deed restriction and a lien on his or her property. In addition, the application form shall require proof of ownership, insurance and other general information on the property in question. The content of the forms shall be approved by the Township Committee prior to their distribution to potential applicants.
(4) 
Determining the eligibility of each property based on the requirements of the program.
(5) 
Providing assistance to each applicant in completing application forms, submitting required documentation, and obtaining contractors' estimates.
(6) 
Monitoring the progress of each accessory apartment project and coordinating contractor proposals, inspections and payments under the terms of the program.
(7) 
Monitoring and oversight of the deed restrictions placed on properties that are participating in the accessory apartments program.
(8) 
Preparing and presenting annual monitoring reports to the Township Committee to assist in the Township's submission of annual monitoring reports.
(9) 
Maintaining confidential files on each program applicant. The files shall be used in responding to monitoring requirements and to protect the municipality against charges of irregularity. The files shall include:
(a) 
The name of each applicant;
(b) 
If the applicant is not approved, the reasons for the disapproval; and
(c) 
If the applicant is approved:
[1] 
The initial inspection report of the Inspection Officer;
[2] 
Bids submitted by contractors;
[3] 
The final owner/contractor agreement;
[4] 
The owner/Township contract;
[5] 
Progress reports and interim inspection reports;
[6] 
A copy of the final inspection report; and
[7] 
A copy of the lien.
C. 
Inspection Officer. The Administrative Agent shall designate a qualified Inspection Officer who will report to the Administrative Agent. The duties of the Inspection Officer include:
(1) 
The initial inspection of the property to determine the condition of the existing dwelling.
(2) 
A determination of whether or not the proposed improvements and the estimated cost of the improvements needed to create the accessory apartment will meet the parameters of the accessory apartments program. The Inspection Officer's report on the nature and cost of the improvements shall be made in writing to the Administrative Agent.
(3) 
Interim and final inspections of work in progress and the issuance of a certificate of occupancy for the new dwelling unit. The certification shall bear the date of the inspection and shall be submitted in a written report to the Administrative Agent.
D. 
Funding.
(1) 
The Township shall include in its annual budget sufficient funds to cover the costs of the accessory apartments program. The money expended on the accessory apartments program shall be exempt from the limitations on final appropriations imposed pursuant to P.L. 1976, c. 68 (N.J.S.A. 40A:4-45.1 et seq.).
(2) 
The Township Committee shall appropriate money in its annual budget to provide ten-year forgivable loans to fund the creation of up to 10 accessory apartments in the amount of $20,000 per moderate-income unit and $25,000 per low-income unit.
(3) 
A minimum of $20,000 shall be provided for each moderate-income unit and $25,000 for each low-income accessory apartment unit to be created.
E. 
General procedures for application, review, and approval.
(1) 
Interested owners will be able to secure information and application packets from the Administrative Agent and from the Township Clerk.
(2) 
Interested owners will submit a completed application form to the Administrative Agent. The Administrative Agent will be available to assist the owner in the completion of the application form.
(3) 
Interested owners who submit applications for the accessory apartments program shall not be required to pay application fees.
(4) 
Property owners wishing to apply to create an accessory apartment shall submit to the administrative entity:
(a) 
A sketch of floor plan(s) showing the location, size and relationship of both the accessory apartment and the primary dwelling within the building or in another structure;
(b) 
Rough elevations showing the modifications of any exterior building facade to which changes are proposed; and
(c) 
A site development sketch showing the location of the existing dwelling and other existing buildings; all property lines; proposed addition, if any, along with the minimum building setback lines; the required parking spaces for both dwelling units; and any man-made conditions which might affect construction.
(5) 
The Administrative Agent will review the application for completeness and, if the application is complete, determine that the applicant has signed a binding contract stating his or her willingness to rent the accessory apartment unit to a qualified affordable household.
(6) 
The Inspection Officer will then inspect the property to rule on whether the structure which will contain the accessory apartment unit meets applicable code requirements. The Inspection Officer's determination will be submitted in writing to the Administrative Agent.
(7) 
If the Inspection Officer issues a satisfactory report, the Administrative Agent will forward a copy of the application to the Township Committee for its approval. The Administrative Agent shall be available to discuss the application with the Township Committee at the time of its consideration.
A. 
If the Township Committee approves the application, it shall simultaneously authorize the transfer of the required amount of the forgivable loan to a trust account to be administered by the Township Clerk.
B. 
The project may begin as soon as the applicant and the Administrative Agent have, in the presence of the Township Attorney, signed all of the necessary agreements. The Township Attorney shall arrange for the filing of the lien and deed restriction with the property deed.
C. 
The Township Committee shall only deny an application for an accessory apartment subsidy if the project will not be in conformance with COAH's requirements, the Township's Land Use Ordinance, or this chapter. All denials shall be in writing with the reasons therefor clearly stated.
D. 
If any construction is required, the Inspection Officer will inspect the unit after the work is completed and determine that the work has been completed in accordance with the approved work plan. If the work is incomplete, the payment to the homeowner shall be withheld until the work is completed to the satisfaction of the Inspection Officer and in accordance with the owner/contractor agreement.
A. 
Liens on property. An owner who receives financial assistance under the provisions of the subsidized accessory apartments program shall be required to place a lien on his or her property. The following requirements shall apply to such liens:
(1) 
The Township shall be specified as the lienholder.
(2) 
The lien shall specify that the value of the lien equals the amount of the monetary benefits received by the applicant under the accessory apartments program.
(3) 
A record of the lien will be kept on the property tax record, in the County Clerk's files, in the Administrative Agent's records, with the deed and with the insurance policy, as required by this program.
(4) 
The owner shall notify the Administrative Agent, in writing, of the intent to sell a property that has benefitted from the accessory apartments program, if the accessory apartment is still under the restrictions required by this program.
(5) 
Each time the unit is rerented, the owner must contact the Administrative Agent and verify that the unit will continue to be occupied by a qualified affordable household and that the rent charged meets the affordability guidelines of the program.
(6) 
All properties shall be checked for liens, and any suspected violations of the program shall be reported to the Administrative Agent for further investigation.
(7) 
At the termination of the affordability controls, the loan shall be forgiven.
B. 
Length of affordability. Owners who utilize the provisions of the accessory apartments program shall accept a deed restriction on the property. The deed restriction shall state that only an affordable household, as determined by the Administrative Agent, shall occupy the accessory apartment unit. The deed restriction shall be recorded, and a copy of the recorded deed shall be forwarded to the Administrative Agent. The deed restriction shall go into effect as soon as a certificate of occupancy has been issued and shall apply for 10 years. Sale of the property shall not affect the length or terms of the deed restriction.
C. 
Pricing. The Administrative Agent and owner(s) of a deed-restricted accessory apartment unit must follow the rental guidelines set forth below:
(1) 
Gross rents, including a utility allowance consistent with the utility allowance approved by HUD for use in New Jersey, shall be set so as not to exceed 30% of the gross monthly income for the appropriate household size and income level. Maximum rents for each household size and income level shall be calculated based on the regional weighted average of the current uncapped Section 8 income limits published by HUD.
(2) 
The following criteria shall be used to calculate applicable rents for the accessory apartment units:
(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.
(3) 
The rent level of each subsidized accessory apartment shall be affordable to an appropriately sized household, as set forth in Subsection C(2) above, earning not more than 50% of the regional median income for that size household. The Administrative Agent shall establish the maximum rent level for each subsidized accessory apartment based upon these criteria.
D. 
Annual indexed increases. The rents of the accessory apartment units may be increased annually in accordance with N.J.A.C. 5:93-9.15.
The provisions of this chapter notwithstanding, the accessory apartments program will comply with all of the regulations of the Council on Affordable Housing and with the requirements of the Chapter 42, Affordable Housing. When references to the New Jersey Administrative Code (N.J.A.C.) made herein are superseded, the successor correlative regulations are intended to be referred to.