[Added 10-9-2019 by Ord.
No. 22-2019]
A.
In Holmdel Builder's Ass'n v. Township of Holmdel, 121 N.J. 550 (1990),
the New Jersey Supreme Court determined that mandatory development
fees are authorized by the Fair Housing Act of 1985, N.J.S.A. 52:27D-301
et seq., and the State Constitution, subject to the Council On Affordable
Housing's (COAH) adoption of rules.
B.
Pursuant to P.L. 2008, c. 46, § 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 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
the Council or 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 rules and in
accordance P.L. 2008, c. 46, §§ 8 and 32 through 38.[1] Fees collected pursuant to this article shall be used
for the sole purpose of providing very-low, low- and moderate-income
housing. This article shall be interpreted within the framework of
COAH's rules on development fees, codified at N.J.A.C. 5:97-8.[2]
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 a 100% affordable development.
The New Jersey Council on Affordable Housing and/or its successors
and assigns pursuant to applicable laws.
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 by applicable COAH regulations.
The assessed value of a property divided by the current average
ratio of assessed to true value for the Borough in which the property
is situated, as determined in accordance with §§ 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.
Imposition of fees.
(1)
Within the Borough of Eatontown, all 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 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.
(2)
When an increase in residential density pursuant to a "d" variance
is granted under N.J.S.A. 40:55D-70d(5) (known as a "d" variance),
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 filing of
the "d" variance application. Example: If an approval allows four
units to be constructed on a site that was zoned for two units, the
development fees will equal 1.5% of the equalized assessed value on
the first two units; and 6% of the equalized assessed value for the
two non-age-restricted 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 and developments where the developer
is providing for the construction of affordable units elsewhere in
the Borough, if permitted by ordinance or by agreement with the Borough
of Eatontown, shall be exempt from development fees.
(2)
Developments that have received preliminary or final site plan
approval prior to the adoption of the first development fee ordinance
shall be exempt from development fees, unless the developer seeks
a substantial change in the approval. Where a site plan approval is
not applicable, the issuance of a zoning and/or building permit shall
be synonymous with preliminary or final site plan approval for the
purpose of determining the right to exemption. In all cases, the applicable
fee percentage shall be determined based upon the development fee
ordinance in effect on the date that building permit is issued.
(3)
In addition to the construction of new principal and/or accessory
buildings, development fees shall be imposed and collected when an
existing structure is demolished and replaced, 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 new structure, Furthermore:
(a)
No development fee shall be collected for a demolition and replacement
of a residential building resulting from a natural disaster.
(b)
No development fee shall be collected for the construction of
an accessory structure which is not a building, as these terms are
defined in the Eatontown Borough Land Use Regulations Ordinance.
(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 Municipal Clerk,
together with a certification that services of the organization are
provided at reduced rates to those who establish an inability to pay
existing charges, shall be exempted from paying a development fee.
(5)
Federal, state, county, and local governments shall be exempted
from paying a development fee.
A.
Imposition of 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 increase in equalized assessed
value of the land and 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)
Eligible exactions, ineligible exactions and exemptions for
nonresidential development:
(a)
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.
(b)
The 2.5% fee shall not apply to an increase in equalized assessed
value resulting from alterations, change in use within existing footprint,
reconstruction, renovations and repairs.
(c)
Nonresidential projects that have received a certificate of
occupancy or general development plan approval or have entered into
a developer's agreement or a redevelopment agreement, all prior to
July 17, 2008 (the effective date of P.L. 2008, c. 46), shall be exempt
from the payment of nonresidential development fees, provided that
an affordable housing fee of at least 1% of the equalized assessed
value of the improvements is included in the development plan, developer's
agreement or redevelopment agreement.
(d)
Nonresidential developments shall be exempt from the payment
of nonresidential development fees in accordance with the exemptions
required as specified in the Form N-RDF, State of New Jersey Non-Residential
Development Fee Certification/Exemption. Any exemption claimed by
a developer shall be substantiated by that developer.
(e)
A developer of a nonresidential development exempted from the
nonresidential Borough development fee 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.
(f)
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 Eatontown Borough as a lien against the real
property of the owner.
The Borough of Eatontown shall collect development fees for
affordable housing in accordance with the following:
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 Borough Construction Code Official responsible
for the issuance of a building permit of the applicable approval.
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 Fee Certification/Exemption, to be completed by the developer
as per the instructions provided. The Borough Construction Official
shall verify the information submitted by the nonresidential developer
as per the instructions provided in the Form N-RDF. The Borough Tax
Assessor shall verify exemptions and prepare estimated and final assessments
as per the instructions provided in Form N-RDF.
C.
The Borough Construction Official responsible for the issuance of
a building permit shall notify the Borough Tax Assessor of the issuance
of the first building permit for a development that is subject to
a development fee.
D.
Within 90 days of receipt of that notice, the Borough 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 Borough Tax Assessor of
any and all requests for the scheduling of a final inspection on a
property that is subject to a development fee.
F.
Within 10 business days of a request for the scheduling of a final
inspection, the Borough 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.
G.
Should the Borough 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).
H.
Fifty percent of the initially calculated development fee shall be
collected at the time of the issuance of the building permit. The
remaining portion shall be tendered to Eatontown Borough at the time
of the issuance of a certificate of occupancy. The developer shall
be responsible for paying any difference between the fee calculated
at the issuance of the building permit and the fee determined at issuance
of the certificate of occupancy.
I.
Upon tender of the remaining development fee, provided the developer
is in full compliance with all other applicable laws and regulations,
the Borough shall issue a final certificate of occupancy for the subject
property.
J.
Regardless of the time of collection of the development fee, the
fee shall be based upon the percentage that applies on the date that
the construction permit is issued.
K.
The Construction Code Official shall forward all collected development
fees to Eatontown Borough's Chief Financial Officer, who shall deposit
such fees into the established Housing Trust Fund.
A.
A developer may challenge residential development fees imposed due
to a disagreement as to the equalized assessed value of the property
by filing a challenge with the County Board of Taxation. Such a challenge
must be made within 45 days from the issuance of the certificate of
occupancy. Pending a review and determination by the Board, collected
fees shall be placed in an interest-bearing escrow account by Eatontown
Borough. 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. Other challenges to the imposition
of a residential development fee must be brought in the Superior Court
as a prerogative writ challenge.
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 Eatontown Borough.
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.
All collected development fees and any proceeds from the sale of
units with extinguished controls shall be deposited by the Chief Financial
Officer of the Borough of Eatontown into a separate designated interest-bearing
Housing Trust Fund, which shall be maintained by the Borough Chief
Financial Officer.
B.
The following additional funds shall be deposited in the Housing
Trust Fund and shall at all times be identifiable by source and amount:
(1)
Recapture funds;
(2)
Proceeds from the sale of affordable units;
(3)
Rental income from municipally operated units;
(4)
Affordable housing enforcement fines and application fees;
(6)
Repayments from affordable housing program loans; and
(7)
Any other funds collected in connection with the Borough's affordable
housing program.
C.
Interest accrued in the Affordable 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, COAH, or its successor agency. Funds deposited in the
Affordable Housing Trust Fund may be used for any activity approved
by the Court to address the Borough's fair share obligation and may
be set up as a grant or revolving loan program. Such activities include,
but are not limited to:
(1)
A housing rehabilitation program;
(2)
New construction of affordable housing units and related costs;
in the case of inclusionary developments, eligible costs shall be
prorated based on the proportion of affordable housing units included
in the development;
(3)
Accessory apartment, market to affordable, or regional affordable
housing partnership programs;
(4)
Financial assistance designed to increase affordability;
(5)
Conversion of existing nonresidential buildings to create new
affordable units;
(6)
Purchase of and/or improvement of land to be used for affordable
housing;
(7)
Purchase of existing market-rate or affordable housing for the
purpose of maintaining or implementing affordability controls;
(8)
Extensions or improvements of roads and infrastructure directly
serving affordable housing sites; in the case of inclusionary developments,
costs shall be prorated based on the proportion of affordable housing
units included in the development;
(9)
Green building strategies designed to be cost-saving and in
accordance with accepted national or state standards,
(10)
Administration necessary for implementation of the Housing Element
and Fair Share Plan, or any other activity as specified in the approved
spending plan and as permitted by the Court and specified in the approved
spending plan.
B.
Funds shall not be expended to reimburse the Borough of Eatontown
for past housing activities.
C.
At least 30% 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
Housing Element and 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 for Housing Region 4, in which Eatontown is
located.
(1)
Affordability assistance programs may include down payment assistance,
security deposit assistance, low-interest loans, rental assistance,
assistance with homeowner's 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.
(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. The specific programs
to be used for very-low-income affordability assistance shall be identified
and described within the spending plan.
(3)
Payments in lieu of constructing affordable units on site, if
permitted by ordinance or by agreement with the Borough of Eatontown,
and funds from the sale of units with extinguished controls shall
be exempt from the affordability assistance requirement.
D.
The Borough of Eatontown 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 development fee revenues collected in any given
year from the development fees may be expended on administration,
including, but not limited to, the salaries and benefits for Eatontown
Borough employees or consultant fees necessary to develop or implement
a new affordable housing program, a Housing Element and Fair Share
Plan, and/or an affirmative marketing program.
(1)
In the case of a rehabilitation program, the administrative
costs of the rehabilitation program shall be included as part of the
20% of the collected development fees that may be expended on administration.
(2)
Administrative funds may be used for income qualification of
households, monitoring the turnover of sale and rental units, and
compliance with COAH and/or its successor agency, and/or Court monitoring
requirements. All other housing rehabilitation costs are considered
programmatic and not administrative. Legal or other fees related to
litigation opposing affordable housing sites or related to securing
or appealing a judgment from the Court are not eligible uses of the
Affordable Housing Trust Fund.
The Eatontown Borough Municipal Housing Liaison 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 amounts 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
units on site (if permitted by ordinance or by agreement with the
Borough), funds from the sale of units with extinguished controls,
barrier-free escrow funds, repayments from affordable housing program
loans, and any other funds collected in connection with the Borough's
housing program, as well as an accounting of the expenditures of the
revenues and implementation of the spending plan approved by the Court.
The ability for the Borough of Eatontown to impose, collect
and expend development fees shall expire with its judgment of repose
and compliance and/or substantive certification from COAH unless Eatontown
Borough has filed an adopted Housing Element and Fair Share Plan with
the Court, COAH or its successor agency, has petitioned for substantive
certification or filed a declaratory judgment action seeking Court
approval of a new Housing Element and Fair Share Plan, and has received
the Court's or COAH's approval of its development fee ordinance. If
the Borough of Eatontown fails to renew its ability to impose and
collect development fees prior to the date of 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 § 20 of P.L. 1985, c. 222 (N.J.S.A.
52:27D-320). The Borough of Eatontown 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 and repose.
