A.
In Holmdel Builder's Ass'n v. Holmdel Borough, 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 section 8 (N.J.S.A. 52:27D-329.2) and
the Statewide Nonresidential 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.
The purpose of this section is to establish standards for the collection,
maintenance and expenditure of development fees pursuant to COAH's
rules and in accordance with P.L. 2008, c. 46, Sections 8 and 32-38.
Fees collected pursuant to this section shall be used for the sole
purpose of providing low- and moderate-income housing. This section
shall be interpreted within the framework of COAH's rules on
development fees, codified at N.J.A.C. 5:97-8.
A.
The ability to impose, collect and spend development fees is predicated
on the Borough of Old Tappan's participation in COAH's substantive
certification process.
B.
The Borough of Old Tappan shall not spend development fees until
COAH has approved a plan for spending such fees in conformance with
N.J.A.C. 5:97-8.10 and N.J.A.C. 5:96-5.3.
C.
This section shall not be effective until COAH has approved, and
the Borough has adopted, the section pursuant to N.J.A.C. 5:96-5.1.
The following terms, as used in this chapter, 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 established
under the Act which has primary jurisdiction for the administration
of housing obligations in accordance with sound regional planning
consideration in the state.
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 in 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.
A.
In accordance with N.J.A.C. 5:97-8.3(c) of COAH's Substantive Rules, all new development of principal and accessory residential buildings within the Borough of Old Tappan, not exempt from the collection of development fees in accordance with the provisions specified in § 80-20C of this chapter hereinbelow, shall pay a fee to Old Tappan Borough equal to 1.5% of the equalized assessed value of the residential construction, provided no increased density is permitted.
B.
Notwithstanding the provisions of Subsection A hereinabove, if a "d" variance is granted pursuant to N.J.S.A. 40:55D-70 d.(5) for more residential units than otherwise permitted by right under the existing zoning, then the additional residential units realized as a result of the "d" variance approval shall pay a bonus development fee to Old Tappan Borough equal to 6.0% of the equalized assessed value of the residential development, rather than the 1.5% development fee otherwise required for the residential units permitted by right.
(1)
However, if the zoning of a site has changed during the immediate
two years prior to the filing of the "d" variance application, then
the base density for the purposes of calculating the bonus development
fee shall be the highest density permitted by right during the two-year
time period.
C.
Eligible exactions, ineligible exactions and exemptions for residential
development.
(1)
All affordable housing developments and developments where the developer
has made a payment in lieu of constructing affordable units shall
be exempt from paying development fees. All other forms of new construction
shall be subject to development fees.
(2)
Developments that have received preliminary or final site plan approval
prior to October 1, 1996, 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 construction permit
shall be synonymous with preliminary or final site plan approval for
this purpose. The fee percentage shall be vested on the date that
building permits are issued.
(3)
In addition to the construction of new principal and/or accessory
buildings, development fees shall be imposed and collected for the
construction of additions or expansions to existing buildings, for
the change or conversion of an existing building to accommodate a
more intense use, and/or for the demolition and replacement of an
existing building, provided that:
(a)
The development fee shall be calculated on the increase in the
equalized assessed value of the improved building.
(b)
No development fee shall be collected for a demolition and replacement
of a residential building resulting from a natural disaster.
(c)
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 Old Tappan Borough Land Development Ordinance.
A.
All new nonresidential development within the Borough of Old Tappan, not exempt from the collection of development fees in accordance with the provisions specified in Subsection C of this section hereinbelow, shall pay a fee to Old Tappan Borough equal to 2.5% of the equalized assessed value of the land and improvements for all new nonresidential construction on an unimproved lot(s) or equal to 2.5% of the increase in equalized assessed value resulting from any additions to existing structures to be used for nonresidential purposes.
B.
Development fees also shall be imposed and collected when an existing
structure is demolished and replaced. The development fee of 2 1/2%
shall be calculated on the difference between the equalized assessed
value of the preexisting land and improvement and the equalized assessed
value of the newly improved structure, i.e., land and improvement,
at the time the 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.
C.
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)
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.
(3)
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.
(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
Nonresidential Development Certification/Exemption" form and listed
below. Any exemption claimed by a developer shall be substantiated
by that developer.
(a)
All nonresidential construction of buildings or structures on
property used by houses of worship, and property used for educational
purposes which is tax-exempt pursuant to R.S.54:4-3.6, provided that
the property continues to maintain its tax- exempt status under that
statute for a period of at least three years from the date of the
certificate of occupancy;
(b)
Parking lots and parking structures, regardless of whether the
parking lot or parking structure is constructed in conjunction with
a nonresidential development or as a stand-alone nonresidential development;
(c)
Any nonresidential development which is an amenity to be made
available to the public, including, but not limited to, recreational
facilities, community centers and senior centers as defined in section
35 of P.L. 2008, c. 46 (N.J.S.A. 40:55D-8.4), which are developed
in conjunction with or funded by a nonresidential developer;
(d)
Nonresidential construction resulting from a relocation of or
an on-site improvement to a nonprofit hospital or a nursing home facility;
(e)
Projects that are located within a specifically delineated urban
transit hub, as defined pursuant to section 2 of P.L. 2007, c. 346
(N.J.S.A. 34:1B-208);
(f)
Projects that are located within an eligible municipality, as
defined under section 2 of P.L. 2007, c. 346 (N.J.S.A. 34:1B-208),
when a majority of the project is located within a one-half-mile radius
of the midpoint of a platform area for a light rail system;
(g)
Projects determined by the New Jersey Transit Corporation to
be consistent with a transit village plan developed by a transit village
designated by the New Jersey State Department of Transportation; and
(h)
Commercial farms and Use Group "U" buildings and structures.
(5)
A developer of a nonresidential development exempted from the nonresidential
development fee above shall be subject to it at such time the basis
for the exemption set forth in this subsection 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.
(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 the Borough of Old Tappan as a lien against
the real property of the owner.
A.
Old Tappan Borough shall collect development fees for affordable
housing in accordance with the following:
(1)
The Secretary of the Old Tappan Borough Planning Board shall notify
the Old Tappan Borough Construction Code Official whenever either
a preliminary or final approval is granted to any development which
is subject to the collection of a development fee.
(2)
For nonresidential developments only, the developer shall also be
provided with a copy of Form N-RDF "State of New Jersey Nonresidential
Development Certification/Exemption," which is to be completed by
the developer as per the instructions provided.
(a)
The Borough Construction Official shall verify the information
submitted by the nonresidential developer as per the instructions
provided in the Form N-RDF.
(b)
The Borough Tax Assessor shall verify exemptions and prepare
estimated and final assessments as per the instructions provided in
Form N-RDF.
(3)
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 which is subject to
a development fee.
(4)
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. The equalized assessed value and
the required development fee shall be estimated by the Borough Tax
Assessor prior to the issuance of the construction permit, with the
understanding that the estimate of the equalized assessed value is
not intended to establish the equalized assessed value for tax purposes.
(5)
Developers shall pay 50% of the required development fee to Old Tappan
Borough at the time of the issuance of the construction permit.
(6)
Developers shall pay the remainder of the development fee to Old
Tappan Borough at the time of the issuance of a certificate of occupancy.
(a)
The Borough Construction Official responsible for the issuance
of a final certificate of occupancy notifies the Borough Tax Assessor
of any and all requests for the scheduling of a final inspection on
property which is subject to a development fee.
(b)
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.
(c)
The equalized assessed value and the required development fee
shall be reestimated by the Borough Tax Assessor prior to the issuance
of the certificate of occupancy, again with the understanding that
the estimate of the equalized assessed value is not intended to establish
the equalized assessed value for tax purposes. The developer shall
be responsible for paying the difference between the development fee
calculated at the time of the issuance of the certificate of occupancy
and the amount paid at the time of the issuance of the construction
permit.
(d)
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 Section 37 of P.L. 2008, c. 46 (N.J.S.A.40:55D-8.6).
(e)
Upon tender of the remaining development fee, provided the developer
is in full compliance with all other applicable laws, the Borough
shall issue a final certificate of occupancy for the subject property.
(7)
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.
(8)
The Construction Code Official shall forward all collected development
fees to Old Tappan Borough's Chief Financial Officer who shall
deposit such fees into the established Housing Trust Fund.
B.
A developer may challenge the development fees imposed by filing
a challenge with the Director of the Division of Taxation for nonresidential
development and with the County Board of Taxation for residential
development.
(1)
Pending a review and determination by the Director or Board, as the
case may be, 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 Borough.
(2)
Appeals from a determination of the Director or Board, as the case
may be, 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.
(3)
Accrued interest earned on escrowed amounts to be returned shall
also be returned to the developer.
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 Old Tappan into a separate designated interest-bearing
Housing Trust Fund, which shall be maintained by the Borough Chief
Financial Officer.
(1)
No money shall be expended from the Housing Trust Fund unless the
expenditure conforms to the spending plan which has been approved
by COAH; and
(2)
In establishing the Housing Trust Fund, the Borough Council shall
provide COAH with written authorization in the form of a three-party
escrow agreement between the Borough, COAH and the bank in order to
permit COAH to direct the disbursement of development fee funds as
provided in N.J.A.C. 5:97-8.13(b) of the Substantive Rules of COAH.
This authorization shall be submitted to COAH within seven days from
the opening of the Housing Trust Fund.
B.
Additionally, the following sources of funding 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)
Payments in lieu of on-site construction of affordable units;
(5)
Affordable housing enforcement fines and application fees;
(6)
Developer-contributed funds for barrier-free affordable housing pursuant
to N.J.A.C. 5:97-8.5;
(7)
Repayments from affordable housing program loans; and
(8)
Any other funds collected in connection with the Borough's affordable
housing program.
C.
All interest accrued in the Housing Trust Fund shall only be used
on eligible affordable housing activities approved by COAH.
A.
Funds deposited in the Housing Trust Fund may be used for any housing
activity as itemized in the spending plan and approved by COAH 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 rehabilitation program;
(2)
New construction of affordable housing units and related development
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)
Acquisition 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, such as in
the event of a foreclosure;
(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 for low- and
moderate-income households, either for new construction that is not
funded by other sources, or as part of necessary maintenance or repair
of existing units, in accordance with accepted federal or state standards
or such guidance as may be provided by the New Jersey State Department
of Community Affairs or the New Jersey Housing and Mortgage Finance
Agency;
(10)
Maintenance and repair of affordable housing units;
(11)
Repayment of municipal bonds issued to finance low- and moderate-income
housing activity;
(12)
To defray the costs of structural parking; in the case of inclusionary
developments, eligible costs shall be prorated based on the proportion
of affordable housing units included in the development;
(13)
Administration necessary for implementation of the Housing Plan Element and Fair Share Plan, in accordance with Subsection G below; and
(14)
Any other activity as specified in the approved spending plan
and as permitted pursuant to N.J.A.C. 5:97-8.7 through 5:97-8.9.
B.
The Borough also may request authorization for expenditure of Housing
Trust Funds on emergent affordable housing mechanisms not included
in the Borough's Fair Share Plan in the form of an amendment
to the spending plan. In addition to the amendment to the spending
plan, the Borough shall submit the following:
(1)
A resolution to COAH that includes a certification that the affordable
housing opportunity addresses COAH's criteria set forth in N.J.A.C.
5:97-6 and information regarding the proposed mechanism in a format
to be provided by COAH; and
(2)
An amendment to its Fair Share Plan to include the mechanism at the
earlier of two years after COAH's approval of the spending plan
amendment or the next planned amendment to the Fair Share Plan resulting
from the plan evaluation review pursuant to N.J.A.C. 5:96-10.
C.
Funds shall not be expended to reimburse the Borough of Old Tappan
for past housing activities.
D.
Payments in lieu of constructing affordable housing units on residential
and mixed-use sites shall only be used to fund eligible affordable
housing activities within the Borough.
E.
At least 30% of all development fees collected and interest earned
shall be devoted to providing affordability assistance to low- and
moderate-income households in affordable units included in the Housing
Element and Fair Share Plan, provided and in accordance with the following:
(1)
One-third of the affordability assistance portion of development
fees collected shall be used to provide affordability assistance to
very-low-income households.
(2)
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.
(3)
Affordability assistance for very-low-income households may include
buying down the cost of low- or moderate-income units in the third-round
Borough's Fair Share Plan to make them affordable to very-low-income
households (earning 30% or less of median income). The use of development
fees in this manner may entitle the Borough to bonus credits pursuant
to N.J.A.C. 5:97-3.7.
(4)
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.
F.
The Borough of Old Tappan may contract with a private or public entity
to administer any part of its Housing Plan Element and Fair Share
Plan, including the requirement for affordability assistance, in accordance
with N.J.A.C. 5:96-18, subject to COAH's approval.
G.
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 Old Tappan
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, no more than 20% of the
revenues collected from development fees shall be expended for such
administrative expenses.
(2)
Administrative funds may be used for income qualification of households,
monitoring the turnover of sale and rental units, preserving existing
affordable housing, and compliance with COAH's monitoring requirements.
(3)
Legal or other fees related to litigation opposing affordable housing
sites or objecting to COAH's regulations and/or action are not
eligible uses of the Housing Trust Fund.
A.
The Old Tappan Borough Municipal Housing Liaison shall coordinate
with the appropriate municipal officials the completion and return
to COAH of all monitoring forms included in the annual monitoring
report 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, recapture funds, proceeds from the sale
of affordable units, rental income, repayments from affordable housing
program loans, enforcement fines and application fees, and any other
funds collected in connection with the Borough's housing program,
and the expenditure of revenues and implementation of the plan certified
by COAH.
B.
At minimum, the monitoring shall include an accounting of any Housing
Trust Fund activity, identifying the source and amount of funds collected,
the amount and purpose for which any funds have been expended, and
the status of the spending plan regarding the remaining balance pursuant
to N.J.A.C. 5:97-8.10(a)8.
C.
All monitoring reports shall be completed on forms designed by COAH.
A.
The ability for the Borough of Old Tappan to impose, collect and
expend development fees shall expire with its substantive certification
unless Old Tappan Borough 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.
B.
If the Borough of Old Tappan 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.
C.
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).
D.
The Borough of Old Tappan 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, nor
shall the Borough of Old Tappan retroactively impose a development
fee on such a development.
E.
The Borough of Old Tappan shall not expend development fees after
the expiration of its substantive certification or judgment of compliance.
