[Added 11-1-2000 by Ord. No. 00-20-1228; amended 11-5-2008 by Ord. No. 08-22-1364; 4-20-2011 by Ord. No. 11-05-1407; 9-5-2018 by Ord. No. 18-16-1528]
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 (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 court of competent jurisdiction and have a COAH- or
court-approved spending plan may retain fees collected from nonresidential
developments.
C.
This article establishes standards for the collection, maintenance,
and expenditures of development fees pursuant to P.L. 2008, c. 46,
Sections 8 and 32 through 38 (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 8.7).
Fees collected pursuant to this article shall be used for the sole
purpose of providing low- and moderate-income housing in accordance
with a Court-approved spending plan.
D.
This article shall not be effective until approved by the Court.
Cresskill shall not spend development fees until the Court has approved
a plan for spending such fees.
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 100% affordable development.
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.
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. 5:97-8.3.[1]
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.
[1]
Editor's Note: N.J.A.C. 5:97-8.3 expired on 6-2-2015, in accordance
with N.J.S.A. 52:14B-5.1b.
A.
Imposed fees.
(1)
Within the zoning districts allowing residential development,
residential developers, 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.
(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 of 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 1/2%
of the equalized 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 that the 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 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 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.
(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 not otherwise exempt
from the development fee requirement. The development fee shall be
calculated on the increase in the equalized assessed value of the
improved structure.[1]
[1]
Editor's Note: Former Subsection B(4), which immediately followed
this subsection, regarding development fees for single-family residential
structures, was repealed 5-3-2023 by Ord. No. 23-09-1610.
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 1/2% of the equalized assessed value
of land and improvements for all new nonresidential construction on
an improved lot or lots.
(2)
Nonresidential developers, except for developers of the types
of development specifically exempted, shall also pay a fee equal to
2 1/2% 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 1/2%
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 of 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 1/2%
unless otherwise exempted below.
(2)
The fee of 2 1/2% shall not apply to an increase in equalized
assessed value resulting from alterations, changes in use within 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 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 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 Borough of Cresskill as a lien against the
real property of the owner.
(6)
Developers of municipal buildings and houses of worship shall
be exempt from paying a development fee.
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 Borough of Cresskill 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 development fee shall be collected at the time
of issuance of the building permit. The remaining portion shall be
collected at the issuance of 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. 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 Cresskill. Appeals from a determination of the Board of
Taxation 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 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 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 Borough of
Cresskill's affordable housing program. In the event of a failure
by the Borough of Cresskill to comply with trust fund monitoring and
reporting requirements or to submit accurate monitoring reports; or
a failure to comply with the conditions of the judgement of compliance
or a revocation of the judgement of compliance; or a failure to implement
the approved spending plan and to expend funds within the applicable
required time period as set forth in In re Tp of Monroe, 442 N.J.
Super. 565 (Law Div. 2015) (aff'd 442 N.J. Super. 563); or the expenditures
of funds on activities not approved by the Court; or for other good
cause demonstrating the unapproved use(s) of funds, the Court may
authorize the State of New Jersey, Department of Community Affairs,
Division of Local Government Services (LGS), to direct the manner
in which the funds in the Affordable Housing Trust Fund shall be expended,
provided that all such funds shall, to the extent practical, be utilized
for affordable housing programs within the Borough of Cresskill, or,
if not practical, then within the county or the housing region. Any
party may bring a motion before the Superior Court presenting evidence
of such condition(s), and the Court may, after considering the evidence
and providing the municipality a reasonable opportunity to respond
and/or remedy the noncompliant condition(s), and upon a finding of
continuing and deliberate noncompliance, determine to authorize LGS
to direct the expenditure of funds in the Trust Fund. The Court may
also impose such other remedies as may be reasonable and appropriate
to the circumstances.
C.
All interest accrued in the Housing Trust Fund shall only be used
on eligible affordable 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 Borough of Cresskill'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 by the Court and specified in the
approved spending plan.
B.
Funds shall not be expended to reimburse the Borough of Cresskill
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 affordable 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 less than 30%
of median income by region 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.
The use of development fees in this manner may entitle the Borough
of Cresskill to bonus credits pursuant to N.J.A.C. 5:97-3.7.[1]
[1]
Editor's Note: N.J.A.C. 5:97-3.7 expired on 6-2-2015, in accordance
with N.J.S.A. 52:14B-5.1b.
(3)
Payments in lieu of constructing affordable units on site and
funds from the sale of units with extinguishing controls shall be
exempt from the affordability assistance requirement.
D.
The Borough of Cresskill 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.[2]
[2]
Editor's Note: N.J.A.C. 5:96-18 expired on 6-2-2015, in accordance
with N.J.S.A. 52:14B-5.1b.
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 monitoring requirements. Legal or other fees related
to litigation opposing affordable housing sites or objecting to COAH
regulations and/or actions are not eligible use of the Affordable
Housing Trust Fund.
The Borough of Cresskill shall provide annual reporting of Affordable
Housing Trust Fund activity to the State of New Jersey, Department
of Community Affairs, Council on Affordable Housing or Local Government
Services, or other entity designated by the State of New Jersey, with
a copy provided to Fair Share Housing Center and posted on the municipal
website, using forms developed for this purpose by the New Jersey
Department of Community Affairs, Council on Affordable Housing or
Local Government Services. The reporting shall include an accounting
of all Affordable Housing Trust Fund activity, including the sources
and amount of funds collected and the amounts and purposes for which
any funds have been expended. Such reporting shall include an accounting
of development fees collected from residential and nonresidential
developers, payments in lieu of constructing affordable housing units
on site (if permitted by ordinance or by agreement with Cresskill),
funds from the sale of units with extinguishing controls, barrier-free
escrow funds, rental income from Borough owned affordable housing
units, repayments from affordable housing program loans, and any other
funds collected in connection with Cresskill's affordable housing
programs, as well as an accounting of the expenditures of revenues
and implementation of the spending plan approved by the Court.
The ability for the Borough of Cresskill to impose, collect
and expend development fees shall expire with its repose period covered
by its judgement of compliance, unless Cresskill has filed an adopted
Housing Element and Fair Share Plan with the Court or, with a designated
state administrative agency, has petitioned for a judgement of compliance
from the Court or for substantive certification or its equivalent
from a state administrative agency authorized to approve and administer
municipal affordable housing compliance, and has received approval
of its Development Fee Ordinance from the entity that will be reviewing
and approving the Housing Element and Fair Share Plan. If the Borough
of Cresskill fails to renew its ability to impose and collect development
fees prior to the expiration of its judgement of compliance, it may
be subject to forfeiture of any or all funds remaining within its
municipal Affordable Housing 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 Borough of Cresskill shall not impose a residential development
on a development that receives preliminary or final site plan approval
after the expiration of its judgement of compliance, nor shall Cresskill
retroactively impose a development fee on such a development. The
Borough of Cresskill shall not expend development fees after the expiration
of its judgement of compliance.