[HISTORY: Adopted by the Township Committee
of the Township of Middle 4-20-2020 by Ord. No. 1608-20.[1] Amendments noted where applicable.]
[1]
Editor's Note: This ordinance also repealed
former Ch. 116, Development Fees, adopted 9-18-2006 by Ord. No. 1237-06.
This chapter 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 through 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 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 6-22-2022 by Ord. No. 1650-22]
A.
Imposition of fees.
(1)
Within the Township of Middle, 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.
(2)
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.
B.
Eligible exactions, ineligible exactions and exemptions for residential
developments.
(1)
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 Middle,
shall be exempt from the payment of development fees.
(2)
Developments that have received preliminary or final site plan approval
prior to the adoption of this chapter shall be exempt from the payment
of development fees, unless the developer seeks a substantial change
in the original approval. Where site plan approval is not applicable,
the issuance of a zoning permit and/or construction 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)
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.
A.
Imposition of fees.
(1)
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.
(2)
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.
(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 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.
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 a development fee of 2.5%, unless
otherwise exempted below.
(2)
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.
(3)
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.
(4)
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.
(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 Middle 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 approving authority or entity shall notify
or direct its staff to notify the Construction Official responsible
for the issuance of a construction 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 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 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.
D.
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.
E.
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.
F.
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.
G.
Should the Township of Middle 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).
H.
Except as provided in § 116-5A(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.
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 Middle. 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 Township of
Middle. 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.
There is hereby created a separate, interest-bearing Affordable Housing
Trust Fund to be maintained by the Chief Financial Officer of the
Township of Middle 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 a fraction of an affordable
unit, where permitted by ordinance or by agreement with the Township
of Middle;
(2)
Funds contributed by developers to make 10% of the adaptable entrances
in a townhouse or other multistory attached dwelling unit 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 Middle's affordable
housing program.
C.
In the event of a failure by the Township of Middle 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 (DCA), 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 Middle, or, if not practicable, then
within the county or the housing region.
(1)
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.
D.
Interest accrued in the Affordable Housing Trust Fund shall only
be used to fund eligible affordable housing activities approved by
the Court.
A.
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 Middle'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.
B.
Funds shall not be expended to reimburse the Township of Middle for
past housing activities.
C.
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 3, in which Middle is located.
(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. 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 housing units on site,
if permitted by ordinance or by agreement with the Township of Middle,
and funds from the sale of units with extinguished controls shall
be exempt from the affordability assistance requirement.
D.
The Township of Middle 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.
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 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.
(1)
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.
(2)
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.
The Township of Middle 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.
A.
The ability for the Township of Middle to impose, collect, and expend
development fees shall be permitted through the expiration of the
repose period covered by its judgment of compliance and shall continue
thereafter so long as the Township of Middle has 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.
B.
If the Township of Middle is not pursuing authorization to impose
and collect development fees after 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).
C.
After the expiration of the judgment of compliance, or any extensions
thereof, if the Township does not pursue or obtain continued authorization,
the Township of Middle shall not impose a residential development
fee on a development that receives preliminary or final site plan
approval, retroactively impose a development fee on such a development,
or expend any of its collected development fees.