[Added 9-17-2008 by Ord. No. 29-08]
[Amended 12-17-2008 by Ord. No. 41-08; 12-14-2011 by Ord. No. 16-11]
A. Purpose.
(1) 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.
(2) Pursuant to P.L. 2008, c. 46, Section 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 40:55D-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.
(3) This section establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's regulations
and in accordance P.L. 2008, c. 46, Sections 8 and 32 to 38. Fees
collected pursuant to this section shall be used for the sole purpose
of providing low- and moderate-income housing. This section shall
be interpreted within the framework of COAH's rules on development
fees, codified at N.J.A.C. 5:97-8.
B. Basic requirements.
(1) This section shall not be effective until approved by COAH pursuant
to N.J.A.C. 5:96-5.1.
(2) The Township of Morris shall not spend development fees until COAH
has approved a plan for spending such fees in conformance with N.J.A.C.
5:97-8.10 and 5:96-5.3.
C. Definitions. The following terms, as used in this section, shall
have the following meanings:
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.C. 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 54:1-35c).
GREEN BUILDING STRATEGIES
Those strategies that minimize the impact of development
on the environment and enhance the health, safety and well-being of
residents by producing durable, low-maintenance, resource-efficient
housing while making optimum use of existing infrastructure and community
services.
D. Residential development fees.
(1) Imposed fees.
(a)
Within all zone districts, developers of residential housing,
except for developers of the types of development specifically exempted
below, shall pay a fee of 1 1/2% of the equalized assessed value
for residential development, provided that 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
shall be required to pay a development fee of a maximum 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 base 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. Example: If an approval
allows four units to be constructed on a site that was zoned for two
units, the fees shall equal 1 1/2% of the equalized assessed
value on the first two units and 6% of the equalized assessed value
for the two additional units, provided that zoning on the site has
not changed during the two-year period preceding the filing of such
a variance application.
(2) Eligible exactions, ineligible exactions and exemptions for residential
development.
(a)
Affordable housing developments, developments where the developer
is providing for the construction of affordable units elsewhere in
the municipality, and developments where the developer has made a
payment in lieu of on-site construction of affordable units shall
be exempt from development fees.
(b)
Developments that have received preliminary or final site plan
approval prior to the adoption of a municipal development fee ordinance
shall be exempt from development fees, unless the developer seeks
a substantial change in the approval or the developer has accepted
responsibility to pay a development fee. Where a site plan approval
does not apply, a zoning and/or building permit shall be synonymous
with preliminary or final site plan approval for this purpose. A development
fee shall be based on the percentage that applies on the date that
a building permit is issued, regardless of the time of collection
of the fee.
(c)
Owner-occupied residential structures demolished and replaced
as a result of a fire, flood, or natural disaster shall be exempt
from paying a development fee.
(d)
Development fees shall be imposed and collected when an existing
structure undergoes a change to a more intense use. The development
fee shall be calculated on the increase in the equalized assessed
value of the improved structure.
(e)
Provided that no change in use has occurred, a developer of
a residential unit built on a lot previously occupied by a residential
unit which was demolished pursuant to a validly issued demolition
permit shall be exempt from the development fee.
(f)
A developer of an addition to an existing residential unit shall
be exempt from the development fee.
E. Nonresidential development fees.
(1) Imposed fees.
(a)
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.
(b)
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.
(c)
Development fees shall be imposed and collected when an existing
structure is demolished and replaced. The development fee of 2.5%
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 the 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.
(2) Eligible exactions, ineligible exactions and exemptions for nonresidential
development.
(a)
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.
(b)
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.
(c)
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. Any exemption claimed by a developer shall be substantiated
by that developer.
(d)
A developer of a nonresidential development exempted from the
nonresidential development fee pursuant to P.L. 2008, c. 46, shall
be subject to it at such time the basis for the exemption 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.
(e)
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 Township of Morris as a lien against the
real property of the owner.
F. Collection procedures.
(1) 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 responsible for the
issuance of a building permit.
(2) 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 the Form N-RDF. The Tax Assessor
shall verify exemptions and prepare estimated and final assessments
as per the instructions provided in Form N-RDF.
(3) The Construction Official responsible for the issuance of a building
permit shall notify the local Tax Assessor of the issuance of the
first building permit for a development which is subject to a development
fee.
(4) Within 90 days of receipt of that notice, the Municipal Tax Assessor,
based on the plans filed, shall provide an estimate of the equalized
assessed value of the development.
(5) 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.
(6) 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.
(7) Should the Township of Morris 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).
(8) 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 paying the difference between the fee calculated
at building permit and that determined at issuance of certificate
of occupancy.
(9) Appeal of development fees.
(a)
A developer may challenge residential development fees imposed
by filing a challenge with the County Board of Taxation. Pending a
review and determination by the Board, collected fees shall be placed
in an interest-bearing escrow account by the Township of Morris. Appeals
from a determination of the Board may be made to the Tax Court in
accordance with the provisions of the State Uniform Tax 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.
(b)
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 Township of
Morris. Appeals from a determination of the Director may be made to
the Tax Court in accordance with the provisions of the State Uniform
Tax 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.
G. Affordable housing trust fund.
(1) There is hereby created a separate, interest-bearing housing trust
fund to be maintained by the Township Finance Director for the purpose
of depositing development fees collected from residential and nonresidential
developers and proceeds from the sale of units with extinguished controls.
(2) The following additional funds shall be deposited in the affordable
housing trust fund and shall at all times be identifiable by source
and amount:
(a)
Payments in lieu of on-site construction of affordable units;
(b)
Developer-contributed funds to make 10% of the adaptable entrances
in a townhouse or other multistory attached development accessible;
(c)
Rental income from municipally operated units;
(d)
Repayments from affordable housing program loans;
(f)
Proceeds from the sale of affordable units; and
(g)
Any other funds collected in connection with the Township of
Morris's affordable housing program.
(3) Within seven days from the opening of the trust fund account, the
Township of Morris shall provide COAH with written authorization,
in the form of a three-party escrow agreement between the municipality,
the bank, and COAH, to permit COAH to direct the disbursement of the
funds as provided for in N.J.A.C. 5:97-8.13(b).
(4) All interest accrued in the housing trust fund shall only be used
on eligible affordable housing activities approved by COAH.
H. Use of funds.
(1) The expenditure of all funds shall conform to a spending plan approved
by COAH. Funds deposited in the housing trust fund may be used for
any activity approved by COAH to address the Township of Morris'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
5:97-8.9 and specified in the approved spending plan.
(2) Funds shall not be expended to reimburse the Township of Morris for
past housing activities.
(3) 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.
(a)
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.
(b)
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.
(c)
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.
(4) The Township of Morris 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.
(5) 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 COAH's monitoring requirements. 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.
I. Monitoring. The Township of Morris shall complete and return to COAH
all monitoring forms included in monitoring requirements related to
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
of Morris's housing program, as well as to the expenditure of revenues
and implementation of the plan certified by COAH. All monitoring reports
shall be completed on forms designed by COAH.
J. Ongoing collection of fees. The ability for the Township of Morris
to impose, collect and expend development fees shall expire with its
substantive certification unless the Township of Morris 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 Township of Morris fails to
renew its ability to impose and collect development fees prior to
the expiration of substantive certification, 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 of Morris shall
not impose a residential development fee on a development that receives
preliminary or final site plan approval after the expiration of its
substantive certification or judgment of compliance, nor shall the
Township of Morris retroactively impose a development fee on such
a development. The Township of Morris shall not expend development
fees after the expiration of its substantive certification or judgment
of compliance.
K. This section is intended to be interpreted and applied consistent
with the Statewide Non-Residential Development Fee Act (N.J.S.A. 40:55D-8.1
et seq.). In the event of any inconsistency, this section shall be
read so as to comply with the Act.