[Amended 2-15-2005 by Ord. No. O-05-6; 2-17-2009 by Ord. No.
O-09-05; 11-12-2019 by Ord. No. O-19-51]
A.
Purpose.
(1)
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, N.J.S.A.
52:27d-301 et seq., and the State Constitution, subject to the adoption
of Rules by the Council on Affordable Housing (COAH).
(2)
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 were under the jurisdiction of
COAH and that are now before a court of competent jurisdiction and
have a Court-approved spending plan may retain fees collected from
nonresidential development.
(3)
This section establishes standards for the collection, maintenance,
and expenditure of development fees that are consistent with COAH's
regulations developed in response to P.L. 2008, c. 46, Sections 8
and 32-38 (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 40:55D-8.7). Fees
collected pursuant to this section shall be used for the sole purpose
of providing low- and moderate-income housing in accordance with a
Court-approved spending plan.
C.
AFFORDABLE HOUSING DEVELOPMENT
COAH or THE COUNCIL
CONSTRUCTION OFFICIAL
DEVELOPER
DEVELOPMENT FEE
EQUALIZED ASSESSED VALUE
GREEN BUILDING STRATEGIES
TOWNSHIP
Definitions. The following terms, as used in this section, 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 housing development.
The New Jersey Council on Affordable Housing established
under the Fair Housing Act.
The construction officer or his/her designee.
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 at N.J.A.C. 5:97-8.3.
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.
The Township of Howell.
D.
Residential development fees.
(1)
Imposition of fees.
(a)
Within the Township of Howell, all residential developers, except
for developers of the types of developments 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.
(b)
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.
(c)
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.
(2)
Eligible exactions, ineligible exactions and exemptions for
residential developments.
(a)
Affordable housing developments, developments where the developer
is providing for the construction of affordable units elsewhere in
the municipality, 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)
Developers of educational facilities shall be exempt from paying
a development fee.
(d)
Developers of houses of worship and other uses that are entitled
to exemption from New Jersey real property tax shall be exempt from
the payment of a development fee, provided that such development does
not result in the construction of any additional housing or residential
units, including assisted living and continuing care retirement communities.
(e)
A development shall be exempt from an increase in the percentage
of the development fee, provided the building permit was issued prior
to the effective date of this article, or prior to any subsequent
ordinance increasing the fee percentage. The developer shall have
the right to pay the fee based on the percentage in effect on the
date the building permit was issued.
(f)
Any development or improvement to structures of owner-occupied
property in which there is located an affordable accessory residence.
This exemption shall only apply to development or improvements to
the property during the period of affordability controls.
(g)
The construction of a new accessory building or other structure
on the same lot as the principal building shall be exempt from the
imposition of development fees if the assessed value of the structure
is determined to be less than $100,000.
E.
Nonresidential development fees.
(1)
Imposition of fees.
(a)
Within all zoning districts, nonresidential developers, except
for developers of the types of developments 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.
(b)
Within all zoning districts, nonresidential developers, except
for developers of the types of developments 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.
(c)
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 improvements and the equalized assessed
value of the newly improved structure, i.e., land and improvements,
and such calculation shall be made at the time a 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.
(d)
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.
(2)
Eligible exactions, ineligible exactions and exemptions for
nonresidential development.
(a)
The development fee of 2.5% shall not apply to an increase in
equalized assessed value resulting from alterations, change in use
within the existing footprint, reconstruction, renovations and repairs.
(b)
Nonresidential developments shall be exempt from the payment
of nonresidential development fees in accordance with the exemptions
required pursuant to the Statewide Non-Residential Development Fee
Act (N.J.S.A. 40:55D-8.1 through 40:55D-8.7), as specified in Form
N-RDF, State of New Jersey Non-Residential Development Certification/Exemption.
Any exemption claimed by a developer shall be substantiated by that
developer.
(c)
A developer of a nonresidential development exempted from the
nonresidential development fee pursuant to the Statewide Non-Residential
Development Fee Act shall be subject to the fee 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 for the nonresidential development, whichever is later.
(d)
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 Howell as a lien against the
real property of the owner.
(e)
Pursuant to P.L. 2009, c. 90[1] and P.L. 2011, c. 122,[2] the nonresidential statewide development fee of 2.5% for
nonresidential development is suspended for all nonresidential projects
that received preliminary or final site plan approval subsequent to
July 17, 2008, until July 1, 2013, provided that a permit for the
construction of the building has been issued prior to January 1, 2015.
F.
Collection procedures.
(1)
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.
(2)
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.
(3)
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.
(4)
Within 90 days of receipt of such notification, the Township
Tax Assessor shall prepare an estimate of the equalized assessed value
of the development based on the plans filed.
(5)
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
a property which is subject to a development fee.
(6)
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
associated with the development; calculate the development fee; and
thereafter notify the developer of the amount of the fee.
(7)
Should the Township of Howell 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).
(8)
Except as provided in 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.
(9)
Appeal of development fees.
(a)
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 Howell. 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.
(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 the Township of
Howell. 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.
G.
Affordable Housing Trust Fund.
(1)
There is hereby created a separate, interest-bearing Affordable
Housing Trust Fund to be maintained by the Chief Financial Officer
of the Township of Howell for the purpose of depositing development
fees collected from residential and nonresidential developers and
proceeds from the sale of units with extinguished controls.
(2)
The following additional funds shall be deposited in the Affordable
Housing Trust Fund and shall at all times be identifiable by source
and amount:
(a)
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 Howell;
(b)
Funds contributed by developers to make 10% of the adaptable
entrances in a townhouse or other multistory attached dwelling unit
development accessible;
(c)
Rental income from municipally operated units;
(d)
Repayments from affordable housing program loans;
(e)
Recapture funds;
(f)
Proceeds from the sale of affordable units; and
(g)
Any other funds collected in connection with Howell Township's
affordable housing program.
(3)
In the event of a failure by the Township of Howell 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 judgment of compliance or a revocation of the judgment 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 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 Howell, or, if not practicable, then within
the County or the Housing Region.
(4)
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.
The Court may also impose such other remedies as may be reasonable
and appropriate to the circumstances.
(5)
Interest accrued in the Affordable Housing Trust Fund shall
only be used to fund eligible affordable housing activities approved
by the Court.
H.
Use of funds.
(1)
The expenditure of all funds shall conform to a spending plan
approved by the Court. Funds deposited in the Affordable Housing Trust
Fund may be used for any activity approved by the Court to address
the Township of Howell'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; 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
permitted by the Court and specified in the approved spending plan.
(2)
Funds shall not be expended to reimburse the Township of Howell
for past housing activities.
(3)
At least 30% of all development fees collected and interest
earned on such fees 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 the median income
for Housing Region 4, in which Howell Township is located.
(a)
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.
(b)
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.
(c)
Payments in lieu of constructing affordable housing units on
site, if permitted by ordinance or by agreement with the Township
of Howell, and funds from the sale of units with extinguished controls
shall be exempt from the affordability assistance requirement.
(4)
The Township of Howell may contract with a private or public
entity to administer any part of its Housing Element and Fair Share
Plan, including its programs for affordability assistance.
(5)
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 consultants'
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 a rehabilitation program.
(a)
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.
(b)
Administrative funds may be used for income qualification of
households, monitoring the turnover of sale and rental units, and
compliance with COAH's monitoring requirements. 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.
I.
Monitoring. The Township of Howell 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 Township), funds
from the sale of units with extinguished controls, barrier-free escrow
funds, rental income from Township-owned affordable housing units,
repayments from affordable housing program loans, and any other funds
collected in connection with Howell Township's affordable housing
programs, as well as an accounting of the expenditures of revenues
and implementation of the spending plan approved by the Court.
J.
Ongoing collection of fees.
(1)
The ability for the Township of Howell to impose, collect and
expend development fees shall expire with the expiration of the repose
period covered by its judgment of compliance unless the Township of
Howell has first filed an adopted Housing Element and Fair Share Plan
with the Court or with a designated state administrative agency, has
petitioned for a judgment 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.
(2)
If the Township of Howell fails to renew its ability to impose
and collect development fees prior to the expiration of its judgment
of compliance, it may be subject to forfeiture of any or all funds
remaining within its 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).
(3)
The Township of Howell 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, nor shall
the Township of Howell retroactively impose a development fee on such
a development. The Township of Howell also shall not expend any of
its collected development fees after the expiration of its judgment
of compliance.
