[HISTORY: Adopted by the City Council of the City of Hoboken 8-7-2019 by Ord. No. B-174. Amendments noted where applicable.]
GENERAL REFERENCES
Affordable housing — See Ch. 65A.
[Amended 4-22-2026 by Ord. No. J-24]
A. 
This chapter establishes standards for the collection, maintenance, and expenditure of development fees that are consistent with the amended Fair Housing Act (P.L. 2024, c. 2), N.J.A.C. 5:99, and the Statewide Non-residential Development Fee Act (N.J.S.A. 40:55D-8.1 through 40:55D-8.7). Fees collected pursuant to this chapter shall be used for the sole purpose of providing very-low-, low- and moderate-income housing in accordance with a Court-approved spending plan.
[Amended 4-22-2026 by Ord. No. J-24]
A. 
The City of Hoboken previously adopted a development fee ordinance, which established the Municipal Affordable Housing Trust Fund.
B. 
The City of Hoboken shall not spend development fees until the Superior Court has approved a plan for spending such fees.
[Amended 2-1-2023 by Ord. No. B-531; 4-22-2026 by Ord. No. J-24]
The following terms, as used in this chapter, 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 100% affordable development. This includes developments with affordable units on-site, off-site, or provided as a payment in-lieu of construction only if such a payment-in-lieu option has been previously approved by the Program or Superior Court as part of the HEFSP. Payments in lieu of construction were invalidated per P.L. 2024, c. 2.
COAH or THE COUNCIL
The New Jersey Council on Affordable Housing established in, but not of, DCA pursuant to the Act and that was abolished effective March 20, 2024, pursuant to Section 3 at P.L. 2024, c. 2 (N.J.S.A. 52:27D-304.1).
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 residential and non-residential property as permitted pursuant to N.J.S.A. 52:27D-329.2 and 40:55D-8.1 through 40:55D-8.7 and N.J.A.C. 5:99-3.
DIVISION
The Division of Local Planning Services within the Department of Community Affairs.
EQUALIZED ASSESSED VALUE or EAV
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). Estimates at the time of building permit may be obtained by the Tax Assessor using construction cost estimates. Final EAV shall be determined at project completion by the Municipal Assessor.
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.
IMPROVEMENT
A development on a building or structure or unimproved land that includes new construction, expansion of an existing building or structure, increase in residential density, or change in use.
[Amended 2-1-2023 by Ord. No. B-531; 4-22-2026 by Ord. No. J-24]
A. 
Imposed fees.
(1) 
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 of the improvements for all new residential construction on an unimproved lot or lots for residential development, provided no increased density is permitted.
(2) 
Residential developers, except for developers of the types of development specifically exempted below, shall also pay a fee equal to 1.5% of the increase in equalized assessed value resulting from any expansions to existing structures to be used for residential purposes. The fee for a development including both interior renovation and expansion shall be multiplied by the ratio of new construction expansion to the total square footage of the completed development. (Example: a 2,000 square foot residential property is expanded by 1,000 square feet. The expansion is 33% of the total property. Assuming a $1,000,000 increase in equalized assessed value including interior renovation and expansion, the development fee is: $1,000,000 x 33% x 1.5% or $4,950.)
(3) 
Development fees shall be imposed and collected when an existing structure undergoes an increase in residential density or is demolished and replaced. The development fee shall be calculated on the difference between the equalized assessed value of the pre-existing improvement and the equalized assessed value of the newly improved structure.
(4) 
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.
[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.]
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 either on site or elsewhere in the municipality, and 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 municipality and if approved by a municipality prior to the statutory elimination of payments in-lieu on March 20, 2024, per P.L. 2024, c. 2, 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, such as a change in use or increase in residential density. Where a site plan approval does not apply, a zoning permit shall be synonymous with preliminary or final site plan approval for the purpose of determining the right to an exemption. In all cases, the applicable fee percentage shall be determined based upon the development fee ordinance in effect on the date that the construction permit is issued.
(3) 
Residential structures demolished and replaced as a result of a fire or natural disaster shall be exempt from paying a development fee.
(4) 
The 1.5% fee shall not apply to an increase in equalized assessed value resulting exclusively from alterations, change in use within existing footprint, renovations or repairs.
[Amended 2-1-2023 by Ord. No. B-531; 4-22-2026 by Ord. No. J-24]
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 improvements for all new nonresidential construction on an unimproved lot or lots.
(2) 
Within all zoning districts, 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 pre-existing improvements and the equalized assessed value of the newly improved structure. 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) 
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 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) 
The 2.5% fee shall not apply to an increase in equalized assessed value resulting exclusively from alterations, change in use within existing footprint, renovations or repairs.
(4) 
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.
(5) 
A developer of a nonresidential development exempted from the nonresidential development fee pursuant to the Statewide Non-residential Development Fee Act,[1] 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.
[1]
Editor's Note: See N.J.S.A. 40:55D-8.1 through 40:55D-8.7.
(6) 
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 City of Hoboken as a lien against the real property of the owner.
[Amended 2-1-2023 by Ord. No. B-531; 4-22-2026 by Ord. No. J-24]
A. 
The official responsible for the issuance of a preliminary or final site plan approval or a zoning permit shall notify the local Tax Assessor of the issuance of the approval or permit for a development which is subject to a development fee, and shall direct the developer to complete Section A, and Section B if applicable, of the City of Hoboken's development fee certification/exemption application.
B. 
Within 90 days of receipt of that application, the Municipal Tax Assessor, based on the plans filed, shall provide an estimate of the change in equalized assessed value due to the development, and the amount of development fee due prior to issuance of building permits.
C. 
The construction official responsible for the issuance of a final certificate of occupancy shall notify the local Assessor of any and all requests for the scheduling of a final inspection on property which is subject to a development fee.
D. 
Within 30 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.
E. 
Should the City of Hoboken fail to determine or notify the developer of the amount of the development fee within 30 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).
F. 
Fifty percent of the development fee shall be collected prior to or at the time of issuance of the building permit. The remaining portion shall be collected prior to 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 building permit and that determined at the time of issuance of the certificate of occupancy.
G. 
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 City of Hoboken. 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 City of Hoboken. 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.
[Amended 4-22-2026 by Ord. No. J-24]
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 shall at all times be identifiable by source and amount:
(1) 
Payments in lieu of on-site construction of affordable units, where previously permitted by ordinance or by agreement with the municipality and if approved by a municipality prior to the statutory elimination of payments in-lieu on March 20, 2024, per P.L. 2024, c. 2;
(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 City of Hoboken's affordable housing program.
C. 
The City of Hoboken shall provide the Division with written authorization, in the form of a three-party escrow agreement between the municipality, the bank linked to the Cash Management Fund, and the Division to permit the Division to direct the disbursement of the funds as provided for in N.J.A.C. 5:97-8.13(b).[1]
[1]
Editor's Note: In accordance with N.J.S.A. 52:14B-5.1b, Chapter 97, Substantive Rules of the New Jersey Council on Affordable Housing for the Period Beginning June 2, 2008, expired on June 2, 2015. See: 43 N.J.R. 1203(a).
D. 
Occurrence of any of the following deficiencies may result in the Division requiring the forfeiture of all or a portion of the funds in the municipal Affordable Housing Trust Fund:
(1) 
Failure to meet deadlines for information required by the Division in its review of a development fee ordinance;
(2) 
Failure to commit or expend development fees within four years of the date of collection in accordance with N.J.A.C. 5:99-5.5;
(3) 
Failure to comply with the requirements of the Statewide Non-residential Development Fee Act[2] and N.J.A.C. 5:99-3;
[2]
Editor's Note: See N.J.S.A. 40:55D-8.1 through 40:55D-8.7.
(4) 
Failure to submit accurate monitoring reports pursuant to this chapter within the time limits imposed by the Act, this chapter, and/or the Division;
(5) 
Expenditure of funds on activities not approved by the Superior Court or otherwise permitted by law;
(6) 
Revocation of compliance certification or a judgment of compliance and repose;
(7) 
Failure of a Municipal Housing Liaison or Administrative Agent to comply with the requirements set forth at N.J.A.C. 5:99-6, 5:99-7, and 5:99-8;
(8) 
Other good cause demonstrating that municipal affordable housing funds are not being used for an approved purpose.
E. 
All interest accrued in the housing trust fund shall only be used on eligible affordable housing activities approved by the Superior Court.
[Amended 4-22-2026 by Ord. No. J-24]
A. 
The expenditure of all funds shall conform to a spending plan approved by the Superior Court of New Jersey. Funds deposited in the housing trust fund may be used for any activity approved by the Superior Court to address the City of Hoboken'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 permitted by the Superior Court and specified in the approved spending plan.
B. 
Funds shall not be expended to reimburse the City of Hoboken for past housing activities that occurred prior to the authorization of the City of Hoboken to collect development fees.
C. 
At least a portion of all development fees collected and interest earned 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. A portion of the development fees 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, infrastructure assistance, and assistance with emergency repairs. The specific programs to be used for affordability assistance shall be identified and described within the spending plan.
(2) 
Affordability assistance to households earning 30% or less of median income may include producing very-low-income units or 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 City of Hoboken 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.[1]
[1]
Editor's Note: In accordance with N.J.S.A. 52:14B-5.1b, Chapter 96, Procedural Rules of the New Jersey Council on Affordable Housing for the Period Beginning on June 2, 2008, expired on June 2, 2015. See: 43 N.J.R. 1203(a).
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 administer an affirmative marketing program and for compliance with the Superior Court and the program, including the costs to the municipality of resolving a challenge.
[Amended 4-22-2026 by Ord. No. J-24]
On or before February 15 of each year, the City of Hoboken shall provide annual electronic data reporting of trust fund activity for the previous year from January 1 to December 31 through the AHMS Reporting System. This reporting shall include an accounting of all affordable housing trust fund activity, including the sources and amounts of all 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 non-residential developers, previously eligible payments in lieu of constructing affordable units on site (if permitted by ordinance or by agreement with the City prior to the March 20, 2024, statutory elimination per P.L. 2024, c. 4), funds from the sale of units with extinguished controls, barrier-free escrow funds, rental income from municipally owned affordable housing units, repayments from affordable housing program loans, interest and any other funds collected in connection with municipal housing programs, as well as an accounting of the expenditures of revenues and implementation of the Spending Plan approved by the Court.
[Amended 4-22-2026 by Ord. No. J-24]
A. 
The ability for the City of Hoboken to impose, collect and expend development fees shall continue so long as the municipality retains authorization from the Court in the form of compliance certification or the good faith effort to obtain it.
B. 
If the City of Hoboken fails to renew its ability to impose and collect development fees prior to the expiration of a judgment of compliance, 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).
[Added 4-22-2026 by Ord. No. J-24]
A. 
Requests to expend affordable housing trust funds on emergent affordable housing opportunities not included in the municipal fair share plan shall be made to the Division and shall be in the form of a governing body resolution. Any request shall be consistent with N.J.A.C. 5:99-4.1.