[Amended 11-27-07 by Ord. No. 2007-12; 11-10-09 by Ord. No. 2009-19]
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 (C. 52:27D-329.2) and the Statewide
Non-Residential Development Fee Act (C. 40:55D-8.1 through 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 regulations
and in accordance P.L.2008, c.46, Sections 8 and 32-38. Fees collected
pursuant to this Article shall be used for the sole purpose of providing
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.
A.
The following terms, as used in this Article, shall have the following
meanings:
(1)
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.
(2)
COAH or the COUNCIL — 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.
(3)
DEVELOPMENT FEE — Money paid by a developer for the improvement
of property as permitted in N.J.A.C. 5:97-8.3.
(4)
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.
(5)
EQUALIZED ASSESSED VALUE — 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 (C.54:1-35a
through C.54:1-35c).
A.
Imposed fees.
(1)
Within all zoning district(s), residential developers, except for
developers of the types of development specifically exempted below,
shall pay a fee of one and one-half percent (1.5%) of the equalized
assessed value for residential development provided 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
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 one and
one-half percent (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 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)
Within any inclusionary zones in the township residential developers
shall be exempt from paying a development fee. Development fees shall
be imposed and collected when an existing structure is demolished
and replaced, except that owner-occupied residential structures demolished
and replaced as a result of a fire, flood or natural disaster shall
be exempt from paying a development fee. The development fee shall
be calculated on the increase in the equalized assessed value of the
improved structure.
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 two and one-half percent (2.5%) of the equalized
assessed value of the land and improvements, for all new nonresidential
construction on an unimproved lot or lots.
(2)
Nonresidential developers, except for developers of the types of
development specifically exempted, shall also pay a fee equal to two
and one-half percent (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 two and
one-half (2.5%) percent shall be calculated on the difference between
the equalized assessed value of the pre-existing land and improvement
and the equalized assessed value of the newly improved structure,
i.e. land and improvement, 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.
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 two and one-half percent
(2.5%) development fee, unless otherwise exempted below.
(2)
The two and one-half percent (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.
(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 the basis for the exemption no longer applies, and shall
make the payment of the non-residential 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 Montague as a lien against the
real property of the owner.
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 Township of Montague 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 (C.40:55D-8.6).
H.
50% 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 the 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.
(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 Township of Montague. 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, R.S.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 Township of
Montague. 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.
It is hereby reaffirmed the Township of Montague has established
a separate, interest-bearing housing trust fund to be maintained by
the Municipal Housing Liaison 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;
(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 Montague's affordable
housing program.
C.
Montague has provided COAH with written authorization, in the form
of a three-party escrow agreement between the municipality, Lakeland
Bank Corp., and COAH to permit COAH to direct the disbursement of
the funds as provided for in N.J.A.C. 5:97-8.13(b).
D.
All interest accrued in the housing trust fund shall only be used
on eligible affordable housing activities approved by COAH.
A.
The expenditure of all funds shall conform to a spending plan approved
by COAH. Funds deposited in the housing trust fund may be used for
any activity approved by COAH to address the Township of Montague'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 pursuant to N.J.A.C. 5:97-8.7 through
8.9 and specified in the approved spending plan.
B.
Funds shall not be expended to reimburse the Township of Montague
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. 1/3 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 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 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.
(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 Township of Montague 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.
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 COAH's monitoring requirements. Legal or other
fees related to litigation opposing affordable housing sites or objecting
to the Council's regulations and/or action are not eligible uses
of the affordable housing trust fund.
The Township of Montague shall complete and return to COAH all
monitoring forms included in monitoring requirements related to the
collection of development fees from residential and nonresidential
developers, payments in lieu of constructing affordable units on site,
funds from the sale of units with extinguished controls, barrier free
escrow funds, rental income, repayments from affordable housing program
loans, and any other funds collected in connection with Montague's
housing program, as well as to the expenditure of revenues and implementation
of the plan certified by COAH. All monitoring reports shall be completed
on forms designed by COAH.
The ability for the Township of Montague to impose, collect
and expend development fees shall expire with its substantive certification
unless the Township of Montague has filed an adopted Housing Element
and Fair Share Plan with COAH, has petitioned for substantive certification,
and has received COAH's approval of its development fee ordinance.
If the Township of Montague fails to renew its ability to impose and
collect development fees prior to the 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 section 20 of P1.1985 c.222 (C.52:27D-320). The Township of Montague
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, nor shall
the Township of Montague retroactively impose a development fee on
such a development. The Township of Montague shall not expend development
fees after the expiration of its substantive certification or judgment
of compliance.
