[HISTORY: Adopted by the Mayor and Council
of the Borough of North Arlington as indicated in article histories.
Amendments noted where applicable.]
[Adopted 4-19-2006 by Ord. No. 1958]
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, 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. This article establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's rules. 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.
The Borough of North Arlington shall not spend
development fees until COAH has approved a plan for spending such
fees and has received third-round substantive certification from COAH
or a judgment of compliance.
The following terms, as used in this article,
shall have the following meanings:
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.
The New Jersey Council on Affordable Housing.
Funds paid by an individual, person, partnership, association,
company or corporation for the improvement of property as permitted
in COAH's rules.
The value of a property determined by the municipal Tax Assessor
through a process designed to ensure that all property in the municipality
is assessed at the same assessment ratio or ratios required by law.
Estimates at the time of issuance of a building permit may be obtained
utilizing estimates for construction cost. Final equalized assessed
value will be determined at project completion by the municipal Tax
Assessor.
A.
Residential developers shall pay a fee of 1% of the
equalized assessed value for residential development, provided no
increased density is permitted.
B.
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 may be required to pay a development fee of 6% 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 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.
A.
Nonresidential developers shall pay a fee of 2% of
the equalized assessed value for nonresidential development.
B.
If an increase in floor area ratio is approved pursuant
to N.J.S.A. 40:55D-70d(4), then the additional floor area realized
(above what is permitted by right under the existing zoning) will
incur a bonus development fee of 6% of the equalized assessed value
for nonresidential development. However, if the zoning on a site has
changed during the two-year period preceding the filing of such a
variance application, the base floor area for the purposes of calculating
the bonus development fee shall be the highest floor area permitted
by right during the two-year period preceding the filing of the variance
application.
A.
Affordable housing developments shall be exempt from
development fees. All other forms of new construction shall be subject
to development fees, except as provided below.
B.
Developments that have received preliminary or final
approval prior to the imposition of a municipal development fee shall
be exempt from development fees unless the developer seeks a substantial
change in the approval.
C.
Developers of retail, office or single-family lots
shall be exempt from paying a development fee.
Fifty percent of the development fee will be
collected at the time of issuance of the building permit. The remaining
portion will be collected at the issuance of the certificate of occupancy.
The developer shall be responsible for paying the difference between
the fee calculated at the time of issuance of a building permit and
that determined at issuance of the certificate of occupancy.
Imposed and collected development fees that
are challenged shall be placed in an interest-bearing escrow account
by the Borough of North Arlington. If all or a portion of the contested
fees are returned to the developer, the accrued interest on the returned
amount shall also be returned.
A.
There is hereby created a separate, interest-bearing
housing trust fund in an official depository for the Borough for the
purpose of depositing development fees collected from residential
and nonresidential developers and proceeds from the sale of units
with extinguished controls. All development fees paid by developers
pursuant to this article shall be deposited into this fund.
B.
Within seven days from the opening of the trust fund
account, the Borough of North Arlington shall provide COAH with written
authorization, in the form of a three-party escrow agreement between
the municipality, the official depository, and COAH, to permit COAH
to direct the disbursement of the funds as provided in N.J.A.C. 5:94-6.16(b).
C.
No funds shall be expended from the Affordable Housing
Trust Fund unless the expenditure conforms to a spending plan approved
by COAH. All interest accrued in the housing trust fund shall only
be used on eligible affordable housing activities approved by COAH.
A.
Funds deposited in the housing trust fund may be used
for any activity approved by COAH to address the municipal fair share.
Such activities include, but are not limited to: rehabilitation, new
construction, RCAs subject to the provisions of N.J.A.C. 5:94-4.4(d),
ECHO housing, purchase of land for affordable housing, improvement
of land to be used for affordable housing, purchase of housing, extensions
or improvements of roads and infrastructure to affordable housing
sites, financial assistance designed to increase affordability, or
administration necessary for implementation of the Housing Element
and Fair Share Plan. The expenditure of all funds shall conform to
a spending plan approved by COAH.
B.
Funds shall not be expended to reimburse the Borough
of North Arlington for past housing activities.
C.
After subtracting development fees collected to finance
an RCA, a rehabilitation program or a new construction project that
are necessary to address the Borough of North Arlington affordable
housing obligation, at least 30% of the balance remaining 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,
and rental assistance.
(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 third-round municipal Fair Share Plan
to make them affordable to households earning 30% or less of median
income. The use of development fees in this manner shall entitle the
Borough of North Arlington to bonus credits pursuant to N.J.A.C. 5:94-4.22.
(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 Borough of North Arlington 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. 5:94-7.
E.
No more than 20% of the revenues collected from development
fees each year, exclusive of the fees used to fund an RCA, shall 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 COAH's monitoring requirements. Development fee administrative
costs are calculated and may be expended at the end of each year or
upon receipt of the fees.
The Borough of North Arlington shall complete
and return to COAH all monitoring forms included in the annual monitoring
report related to the collection of development fees from residential
and nonresidential developers, payments in lieu of constructing affordable
units on site, and funds from the sale of units with extinguished
controls, and the expenditure of revenues and implementation of the
plan certified by COAH. All monitoring reports shall be completed
on forms designed by COAH.
The ability of the Borough of North Arlington
to impose, collect and expend development fees shall expire with its
substantive certification or judgment of compliance unless the Borough
of North Arlington has filed an adopted Housing Element and Fair Share
Plan with COAH, has petitioned for substantive certification, and
has received COAH's approval of its development fee ordinance. If
the Borough of North Arlington fails to renew its ability to impose
and collect development fees prior to the date of expiration of substantive
certification or judgment of compliance, it may resume the imposition
and collection of development fees only by complying with the requirements
of N.J.A.C. 5:94-6. The Borough of North Arlington shall not impose
a development fee on a development that receives preliminary or final
approval after the expiration of its substantive certification or
judgment of compliance, nor will the Borough of North Arlington retroactively
impose a development fee on such a development. The Borough of North
Arlington will not expend development fees after the expiration of
its substantive certification or judgment of compliance.
