[HISTORY: Adopted by the Township Council
of the Township of Little Falls 5-20-2019 by Ord. No. 1355. Amendments noted where
applicable.[1]]
[1]
Editor’s Note: This ordinance also superseded former
Ch. 57, Development Fees, adopted 9-10-2007 by Ord. No. 1025 and amended
in its entirety 3-27-2017 by Ord. No. 1279.
A.
In Holmdel Builder's Ass'n 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.
B.
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 was 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 a court of competent jurisdiction and have an approved
spending plan may retain fees collected from nonresidential development.
C.
This chapter 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. This chapter
shall be interpreted within the framework of COAH's prior round
rules on development fees, codified at N.J.A.C. 5:93-8[1] and 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).
[1]
Editor's Note: New Jersey Administrative Code Title 5,
Chapter 93, Substantive Rules of the New Jersey Council on Affordable
Housing for the Period Beginning June 6, 1994, expired 10-16-2016.
The following terms, as used in this chapter, 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 100% affordable development.
The New Jersey Council on Affordable Housing established
under the Fair Housing Act.
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.
Money paid by a developer for the improvement of property
as permitted in N.J.A.C. 5:93-8.
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).
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.
A.
Imposed fees.
(1)
Within all zoning district(s), residential developers, except for
developers of the types of development specifically exempted below,
shall pay a fee of 1.5% the equalized assessed value for residential
development, provided 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 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 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.
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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 the specified
higher percentage up to 6% of the equalized assessed value for the
two additional units, provided zoning on the site has not changed
during the two-year period preceding the filing of such a variance
application.
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(3)
Eligible exactions, ineligible exactions, and exemptions for residential
development.
(a)
Affordable housing developments 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. 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.
(c)
Development fees shall be imposed and collected when an existing
structure undergoes a change to a more intense use, is demolished
and replaced. The development fee shall be calculated on the increase
in the equalized assessed value of the improved or replaced structure
as compared to the previous structure. Improvements to and expansions
of existing residential structures which increase the living space
by less than 20% and/or the volume of the existing structure by less
than 20% shall be exempt from paying a development fee.
(d)
Homes replaced as a result of a natural disaster (such as a
fire or flood) shall be exempt from the payment of a development fee.
A.
Imposed fees.
(1)
Within all zoning districts, nonresidential developers, except for
developers of the types of development specifically exempted below,
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 below, 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, i.e., made an improvement,
at the time 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 2.5% development fee, unless
otherwise exempted below.
(2)
The 2.5% fee shall not apply to an increase in equalized assessed
value resulting from alterations, change in use within the existing
footprint, reconstruction, renovations and repairs.
(3)
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 Non-Residential Development Certification/Exemption" form.
Any exemption claimed by a developer shall be substantiated by that
developer.
(4)
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.
(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 Township of Little Falls 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
its staff 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," 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 local 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 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.
F.
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.
G.
Should the Township of Little Falls 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.
Except as provided in § 57-5A(3) above, 50% 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.
I.
Appeal of development fees.
(1)
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 Little Falls.
Appeals from a determination of the Board may be made to the tax court
in accordance with the provisions of the State Tax Uniform 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.
(2)
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
Little Falls. Appeals from a determination of the Director may be
made to the tax court in accordance with the provisions of the State
Tax Uniform 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.
There is hereby created a separate, interest-bearing housing trust
fund to be maintained by the Township of Little Falls Chief Financial
Officer for the purpose of depositing development fees collected from
residential and nonresidential developers and proceeds from the sale
of units with extinguished controls.
B.
The following additional funds shall be deposited in the Affordable
Housing Trust Fund and shall at all times be identifiable by source
and amount:
(1)
Payments in lieu of on-site construction of affordable units;
(2)
Developer-contributed funds to make 10% of the adaptable entrances
in a townhouse or other multistory attached development accessible;
(3)
Rental income from municipally operated units;
(4)
Repayments from affordable housing program loans;
(5)
Recapture funds;
(6)
Proceeds from the sale of affordable units; and
(7)
Any other funds collected in connection with the Township of Little
Falls' affordable housing program.
C.
Within seven days from the opening of the trust fund account, the
Township of Little Falls shall provide the State of New Jersey, Department
of Community Affairs, Division of Local Government Services, with
written authorization, in the form of a three-party escrow agreement
between the municipality, the bank, and NJDCA-LGS to permit NJDCA-LGS
to direct the disbursement of the funds as provided for in N.J.A.C.
5:93-8.15, 5:93-8.18 and 5:93-8.19. This requirement shall be deemed
to have been satisfied by a previously executed three-party escrow
agreement with COAH, provided the bank remains the same as in the
original agreement.
D.
All interest accrued in the housing trust fund shall only be used
on eligible housing activities approved by the court.
A.
The expenditure of all funds shall conform to a spending plan approved
by the court. Funds deposited in the housing trust fund may be used
for any activity approved by the court to address the Township of
Little Falls' 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. 5:93-8.16
and specified in the approved spending plan.
B.
Funds shall not be expended to reimburse the Township of Little Falls
for past housing activities.
C.
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.
(1)
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.
(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 municipal Fair Share Plan to make them affordable to
households earning 30% or less of median income.
(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 Township of Little Falls 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.
E.
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 the reporting and monitoring requirements that have
been approved by the court. Legal or other fees related to litigation
opposing affordable housing sites or objecting to or appealing court's
approval of Little Falls' Housing Element and Fair Share Plan
are not eligible uses of the Affordable Housing Trust Fund.
On an annual basis commencing with the first anniversary of
the entry of the order granting a Final Judgment of Compliance and
Repose to Little Falls, the Township of Little Falls shall report
all activity in connection with its Affordable Housing Trust Fund
to the New Jersey Department of Community Affairs [either the Division
of Local Government Services or the Council on Affordable Housing
(COAH), whichever entity is designated by the State of New Jersey],
with a copy provided to Fair Share Housing Center and to the Intervenors/Defendants
IMO the Application of the Township of Little Falls for a Final Judgment
of Compliance and Repose of its Obligations Under the Fair Housing
Act and Approval of its Amended Spending Plan, Docket No. PAS-L-2348-15,
and with a posting of same on the municipal website, using forms previously
developed for this purpose by COAH. The reporting shall include all
sources and amounts collected/earned and the amounts and purposes
for which funds have been expended.
A.
The ability for the Township of Little Falls to impose, collect and
expend development fees shall expire with its Judgment of Compliance
and Repose unless the Township of Little Falls has filed an adopted
Housing Element and Fair Share Plan with the court or with COAH or
its successor agency designated by the State of New Jersey, has petitioned
for a Judgment of Compliance and Repose or substantive certification,
and has received the court's or COAH's approval of its development
fee ordinance. If the Township of Little Falls fails to renew its
ability to impose and collect development fees prior to the expiration
of its Judgment of Compliance and Repose, 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 Little Falls shall not
impose a residential development fee on a development that receives
preliminary or final site plan approval after the expiration of its
Judgment of Compliance and Repose, nor shall the Township of Little
Falls retroactively impose a development fee on such a development.
The Township of Little Falls shall not expend development fees after
the expiration of its Judgment of Compliance and Repose.
B.
It is the intent of the Township Council to incorporate the additions,
amendments and/or supplements contained in this chapter into the Code.
C.
If any section, paragraph, subdivision, clause, sentence, phrase
or provision of this chapter is declared unconstitutional or invalid
by a court of competent jurisdiction, such decision shall not affect
the remaining portions of this chapter.
D.
A copy of this chapter shall be available for public inspection at
the offices of the Township Clerk.
E.
This chapter shall take effect after 20 days of its final passage
by the Township Council, upon approval by the Mayor and publication
as required by law.
