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 adoption of rules.
B.
Pursuant to N.J.S.A. 52:27D-329.2 and the Statewide Nonresidential
Development Fee Act, N.J.S.A. 40:55D-8.1 through 40:55D-8.7, the New
Jersey Department of Community Affairs 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 COAH or a court of competent jurisdiction
and have a COAH-approved spending plan may retain fees collected from
nonresidential development.
C.
This article establishes standards for the collection, maintenance, and expenditure of development fees pursuant to COAH's regulations and in accordance with P.L. 2008, c. 46, Sections 8 and 32 through 38. Fees collected pursuant to this chapter shall be used for the sole purpose of providing low- and moderate-income housing as set forth in § 193-15. This chapter shall be interpreted within the framework of COAH's rules on development fees, N.J.A.C. 5:97-8.
A.
Imposed fees.
(1)
Within any zoning district, residential developers, except for developers
of the types of development specifically exempted below, shall pay
a fee of 1.5% of the equalized assessed value for residential development,
provided that no increased density is permitted.
(2)
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 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.
(3)
Example. If an approval allows four units to be constructed on a
site that was zoned for two units, the fees could equal 1.5% 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.
B.
Eligible exactions, ineligible exactions and exemptions for residential
development.
(1)
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.
(2)
Developments that have received preliminary or final site plan approval
prior to the date of the first adoption of the Berlin municipal development
fee ordinance shall be exempt from development fees, unless the developer
seeks a substantial change in the approval. 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. The
fee percentage shall be vested on the date that the building permit
is issued.
(3)
Development fees shall be imposed and collected when an existing
structure undergoes a change to a more intense use, is demolished
and replaced, or is expanded, if the expansion is otherwise not exempt
from the payment of a development fee. The development fee shall be
calculated on the increase in the equalized assessed value of the
improved structure.
(4)
Nonprofit organizations which have received tax-exempt status pursuant
to Section 501(c)(3) of the Internal Revenue Code, providing current
evidence of that status is submitted to the Borough Clerk, together
with a certification that services of the organization are provided
at reduced rates to those who establish an inability to pay at established,
existing charges, shall be exempted from paying a development fee.
(5)
Federal, state, county, local governments and agencies of the same
shall be exempted from paying a residential development fee.
(6)
Residential dwellings destroyed due to fire, flood, or natural disaster
and rebuilt by their owners shall be exempt from paying a development
fee.
A.
Imposed fees.
(1)
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.
(2)
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.
(3)
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, that is, 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.
B.
Eligible exactions, ineligible exactions and exemptions for nonresidential
development.
(1)
The nonresidential portion of a mixed-use inclusionary or market
rate development shall be subject to the development fee of 2.5%,
unless otherwise exempted below.
(2)
The fee of 2.5% shall not apply to an increase in equalized assessed
value resulting from alterations, change in use within existing footprint,
reconstruction, renovations and repairs.
(3)
Any exemption claimed by a developer of nonresidential development
shall be substantiated 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."
Nonresidential development exempt from the development fee (exempted
categorically, not exempted by statutory moratorium) include the following:
(a)
State, county and local government buildings;
(b)
Houses of worship and ancillary structures and buildings exempt
from real property taxation;
(c)
Nonresidential development that is an amenity made available
to the public, including but not limited to recreational facilities,
community centers, and senior centers, which are developed in conjunction
with or funded by a nonresidential developer; and
(d)
Nonresidential construction resulting from a relocation of or
an on-site improvement to a nonprofit hospital or skilled nursing
facility.
(4)
A developer of a nonresidential development exempted from the nonresidential
development fee pursuant to P.L. 2008, c. 46, shall be subject to
the fee at such time as 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 for occupancy of the nonresidential development,
whichever is later.
(5)
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 Borough of Berlin as a lien against the
real property of the owner.
A.
Upon the granting of a preliminary, final or other applicable approval,
for a development, the applicable approving authority shall direct
the combined Planning Board Secretary to notify the construction official
responsible for the issuance of a building permit.
B.
For nonresidential developments only, the developer shall also be
provided with a copy of Form N-RDF, "State of New Jersey Non-Residential
Development Certification/Exemption Form," 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.
C.
The construction official responsible for the issuance of a building
permit shall notify the Municipal Tax Assessor of the issuance of
the first building permit for a development which is subject to a
development fee.
D.
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.
E.
The construction official responsible for the issuance of a final
certificate of occupancy shall notify the Municipal Tax Assessor of
any and all requests for the scheduling of a final inspection on property
which is subject to a development fee.
F.
Within 10 business days of a request for the scheduling of a final
inspection, the Municipal Tax Assessor shall confirm or modify the
previously estimated equalized assessed value of the improvements
in the development, calculate the development fee, and thereafter
notify the developer of the amount of the fee.
G.
Should the Borough of Berlin 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).
H.
Fifty percent of the total estimated 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 the issuance of the building permit and that
determined at the issuance of the certificate of occupancy.
A.
Appeal of development fees. 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
Borough of Berlin. 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 Borough of
Berlin. 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.
A.
Establishment of fund. There is hereby created a separate, interest-bearing
housing trust fund to be maintained by the Chief Financial Officer
of the Borough of Berlin for the purpose of depositing development
fees collected from residential and nonresidential developers and
proceeds from the sale of units with extinguished controls.
B.
General provisions.
(1)
The following 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;
(e)
Recapture funds;
(f)
Proceeds from the sale of affordable units; and
(g)
Any other funds collected in connection with Berlin's housing
program.
(2)
The Mayor and Council, in the name of the fund, shall have the right
to apply for and receive grants from any source to further the purposes
of the fund.
C.
Within seven days of the opening of the trust fund account or change
to a different bank, the Borough of Berlin shall provide COAH with
written authorization, in the form of a three-party escrow agreement
between the municipality, the bank of deposit and any bank in successor,
and COAH to direct the disbursement of the funds as provided for in
N.J.A.C. 5:97-8.13(b).
D.
All interest accrued in the housing trust fund shall only be used
on eligible affordable housing activities approved by the COAH. Funds
shall not be expended to reimburse the Borough of Berlin for past
housing activities.
E.
Use of funds. The expenditure of all funds shall conform to a spending
plan approved by the Court and COAH. Funds deposited in the housing
trust fund may be used for any activity approved as part of the spending
plan to address the municipality'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 as otherwise specified in the approved spending plan.
(1)
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.
(2)
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.
(3)
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.
(4)
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.
F.
Administrative expenditures. 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.
G.
Monitoring requirements. Berlin Borough 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 Berlin's
housing program, as well as to the expenditure of revenues and implementation
of the plan approved by the Court. All monitoring reports shall be
completed on forms designed by COAH.
H.
Collection coterminous with certification. The ability for the Borough
of Berlin to impose, collect and expend development fees shall expire
with its substantive certification or judgment of repose unless the
Borough of Berlin has filed an adopted Housing Element and Fair Share
Plan with COAH or the Court, has petitioned for substantive certification
or judgment of repose, and has received the Court's and COAH's
approval of its development fee ordinance. If the Borough of Berlin
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 N.J.S.A. 52:27D-320.
The Borough of Berlin 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 Borough of Berlin retroactively impose
a development fee on such a development. The Borough of Berlin shall
not expend development fees after the expiration of its substantive
certification or judgment of repose.
I.
The Borough of Berlin 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.
