Township of Montclair, NJ Development Fees

Within all zoning districts, residential developers, except for developers of the types of development specifically exempted below and developers of developments that include affordable housing, shall pay a fee of 1.5% of the equalized assessed value for all new residential development, provided no increased density is permitted. Development fees shall also be imposed and collected when an additional dwelling unit is added to an existing residential structure; in such cases, the fee shall be calculated based on the increase in the equalized assessed value of the property due to the additional dwelling unit.

When an increase in residential density is permitted pursuant to a "d" variance granted under N.J.S.A. 40:55D-70d(5), developers shall be required to pay a "bonus" development fee of 6% of the equalized assessed value for each additional unit that may be realized, except that this provision shall not be applicable to a development that will include affordable housing. 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.

Eligible exactions, ineligible exactions and exemptions for residential development.

Affordable housing developments and/or developments where the developer has made a payment in lieu of on-site construction of affordable units, if permitted by ordinance or by agreement with the Township of Montclair, shall be exempt from development fees.

In all cases, the applicable fee percentage shall be determined based upon the Development Fee Ordinance in effect on the date that preliminary or preliminary and final site plan approval is granted, or, where site plan approval is not applicable, the date the construction permit is issued.

Improvements or additions to existing one- and two-family dwellings on individual lots shall not be required to pay a development fee, but a development fee shall be charged for any new dwelling constructed as a replacement for a previously existing dwelling on the same lot that was or will be demolished, unless the owner resided in the previous dwelling for a period of one year or more prior to obtaining a demolition permit. Where a development fee is charged for a replacement dwelling, the development fee shall be calculated on the increase in the equalized assessed value of the new structure as compared to the previous structure.

(4)

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.

§ 202-43 Nonresidential development fees.

[Amended 11-27-2018 by Ord. No. O-18-043]

Imposition of fees.

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.

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.

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, and such calculation shall be made 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.

Eligible exactions, ineligible exactions and exemptions for nonresidential development.

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.

The 2.5% development fee shall not apply to an increase in equalized assessed value resulting from alterations, change in use within existing footprint, reconstruction, renovations and repairs.

Nonresidential developments shall be exempt from the payment of nonresidential development fees in accordance with the exemptions required pursuant to the Statewide Nonresidential Development Fee Act (N.J.S.A. 40:55D-8.1 through 8.7), as specified in the Form N-RDF, "State of New Jersey Non-Residential Development Certification/Exemption." 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 Statewide Non-Residential Development Fee Act shall be subject to the fee 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 Montclair as a lien against the real property of the owner.

§ 202-44 Collection procedures.

[Amended 11-27-2018 by Ord. No. O-18-043]

Upon the granting of a preliminary, final or other applicable approval for a development, the approving authority or entity shall notify or direct its staff to notify the construction official responsible for the issuance of a construction permit.

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 Form N-RDF. The tax assessor shall verify exemptions and prepare estimated and final assessments as per the instructions provided in Form N-RDF.

The construction official responsible for the issuance of a construction permit shall notify the Township tax assessor of the issuance of the first construction permit for a development which is subject to a development fee.

Within 90 days of receipt of that notice, the Township tax assessor, based on the plans filed, shall provide an estimate of the equalized assessed value of the development.

The construction official responsible for the issuance of a final certificate of occupancy shall notify the Township tax assessor of any and all requests for the scheduling of a final inspection on property which is subject to a development fee.

Within 10 business days of a request for the scheduling of a final inspection, the Township tax 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.

Should Montclair Township 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 § 37 of P.L. 2008, c. 46 (N.J.S.A. 40:55D-8.6).

Except as provided in § 202-43A(3) hereinabove, 50% of the initially calculated development fee shall be collected at the time of issuance of the construction permit. The remaining portion shall be collected at the time of 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 the construction permit and that determined at the time of issuance of the certificate of occupancy.

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 Township of Montclair. 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.

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 Montclair. 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.

§ 202-45 Affordable Housing Trust Fund.

[Amended 11-27-2018 by Ord. No. O-18-043]

There is hereby created a separate, interest-bearing affordable 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.

The following additional funds shall be deposited in the Affordable Housing Trust Fund and shall at all times be identifiable by source and amount.

Payments in lieu of on-site construction of a fraction of an affordable unit, where permitted by ordinance or by agreement with the Township of Montclair;

Developer-contributed funds to make 10% of the adaptable entrances in a townhouse or other multistory attached development accessible;

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 Montclair's affordable housing program.

In the event of a failure by the Township of Montclair to comply with trust fund monitoring and reporting requirements or to submit accurate monitoring reports, 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 expenditure 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 practicable, be utilized for affordable housing programs within the Township of Montclair, or, if not practicable, 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 to 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 or impose such other remedies as may be reasonable and appropriate to the circumstances.

All interest accrued in the affordable housing trust fund shall only be used to fund eligible affordable housing activities approved by the Court.

§ 202-46 Use of funds.

[Amended 11-27-2018 by Ord. No. O-18-043]

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 Montclair's affordable housing program 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, housing rehabilitation, new construction of affordable housing units and related costs, accessory apartments, a market to affordable program, 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; and/or any other activity as permitted by the Court and specified in the approved spending plan.

Funds shall not be expended to reimburse the Township of Montclair for past housing activities.

At least 30% of all development fees collected and interest earned on such fees shall be used to provide affordability assistance to very-low-, 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 very-low-income households earning 30% or less of median income for Housing Region 2, in which the Township of Montclair is located.

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. The specific programs to be used for affordability assistance shall be identified and described within the spending plan.

Affordability assistance to households earning 30% or less of median income by household size 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 specific programs to be used for very-low-income affordability assistance shall be identified and described within the spending plan.

Payments in lieu of constructing affordable units on site, if permitted by ordinance or by agreement with the Township of Montclair, and funds from the sale of units with extinguished controls shall be exempt from the affordability assistance requirement.

The Township of Montclair 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.

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, prepare a Housing Element and Fair Share Plan, and/or administer an affirmative marketing program or rehabilitation program.

In the case of a rehabilitation program, the administrative costs of the rehabilitation program shall be included as part of the 20% of collected development fees that may be expended on administration.