[Amended 6-2-1997 by Ord. No. 5-97; 6-2-1997 by Ord. No. 7-97;4-20-1998 by Ord. No. 9-98; 11-9-2005 by Ord. No. 29-2005; 11-16-2009 by Ord. No. 30-2009]
This section of the "Code of the Township of Readington" shall
be known as the "Affordable Housing Ordinance of the Township of Readington."
A.
This section of the Readington Code sets forth regulations regarding
the very-low-, low-, and moderate-income housing units in the Township
consistent with the provisions known as the "Substantive Rules of
the New Jersey Council on Affordable Housing," N.J.A.C. 5:93 et seq.,
the Uniform Housing Affordability Controls ("UHAC"), N.J.A.C. 5:80-26.1
et seq., except where modified by the requirements for very-low-income
housing as established in P.L. 2008, c. 46 (the "Roberts Bill", codified
at N.J.S.A. 52:27D-329.1) as reflected in the terms of a settlement
agreement between the Township and Fair Share Housing Center ("FSHC")
such that the statutory requirement to provide very-low-income units
equal to 13% of affordable units approved and constructed after July
17, 2008, to be affordable households at 30% of the regional median
income, overrides the UHAC requirement that 10% of all low- and moderate-income
units must be affordable at 35% of the regional median income, and
the Township's constitutional obligation to provide a fair share of
affordable housing for very-low-, low-, and moderate-income households.
B.
This article is intended to assure that very-low-, low- and moderate-income
units ("affordable units") are created with controls on affordability
over time and that very-low-, low- and moderate-income households
shall occupy these units. This article shall apply to all inclusionary
developments and 100% affordable developments (including those funded
with low-income housing tax credit financing) except where inconsistent
with applicable law.
C.
This article implements and incorporates the Fair Share Plan and
addresses the requirements of N.J.A.C. 5:93, as may be amended and
supplemented.
The Township shall comply with the following monitoring and
reporting requirements regarding the status of the implementation
of its Court-approved Housing Element and Fair Share Plan:
A.
Beginning on July 19, 2019, and on every anniversary of that date
through July 19, 2025, the Township agrees to provide annual reporting
of its Affordable Housing Trust Fund activity to the New Jersey Department
of Community Affairs ("NJDCA"), Council on Affordable Housing ("COAH"),
or Local Government Services ("NJLGS"), or other entity designated
by the State of New Jersey, with a copy provided to FSHC and posted
on the municipal website, using forms developed for this purpose by
the NJDCA, COAH, or NJLGS. The reporting shall include an accounting
of all Affordable Housing Trust Fund activity, including the source
and amount of funds collected and the amount and purpose for which
any funds have been expended.
B.
Beginning on July 19, 2019, and on every anniversary of that date
through July 19, 2025, the Township agrees to provide annual reporting
of the status of all affordable housing activity within the municipality
through posting on the municipal website with a copy of such posting
provided to FSHC, using forms previously developed for this purpose
by COAH or any other forms endorsed by the Special Master and FSHC.
C.
By July 1, 2020, as required pursuant to N.J.S.A. 52:27D-313, the
Township will post on its municipal website, with a copy provided
to FSHC, a status report as to its implementation of its plan and
an analysis of whether any unbuilt sites or unfulfilled mechanisms
continue to present a realistic opportunity. Such posting shall invite
any interested party to submit comments to the municipality, with
a copy to FSHC, regarding whether any sites no longer present a realistic
opportunity. Any interested party may by motion request a hearing
before the Court regarding these issues.
D.
As part of its annual reporting and midpoint review reporting, the
Township will include annual reports as to changes in circumstances
relative to sewer including any already existing or anticipated increase
in capacity through reclaimed sewer or plant expansion; and reporting
on applications for existing or anticipated capacity.
E.
By July 19, 2022, and every third year thereafter, as required by
N.J.S.A. 52:27D-329.1, the Township will post on its municipal website,
with a copy provided to FSHC, a status report as to its satisfaction
of its very-low-income requirements, including its family very-low-income
requirements. Such posting shall invite any interested party to submit
comments to the municipality and FSHC on the issue of whether the
municipality has complied with its very-low-income and family very-low-income
housing obligations.
A.
The provisions of this article shall apply to all affordable housing
developments and affordable housing units that currently exist and
that are proposed to be created within the Township of Readington
pursuant to the Township's most recently adopted Housing Element and
Fair Share Plan.
B.
Moreover, this article shall apply to all developments that contain
very-low-, low-and moderate-income housing units, including any currently
unanticipated future developments that will provide very-low-, low-
and moderate-income housing units.
C.
Projects receiving Federal Low-Income Housing Tax Credit financing
shall comply with the income and bedroom distribution requirements
of UHAC at N.J.A.C. 5:80-26.3 (with the exception that the UHAC requirement
for 10% of the affordable units in rental projects being required
to be at 35% of median income be modified as required by the statutory
requirement, N.J.S.A. 52:27D-329.1 to 13% of affordable units in such
projects shall be required to be at 30% of median income) and the
length of the affordability controls applicable to such projects shall
be not less than a thirty-year compliance period, plus a fifteen-year
extended use period.
[Amended 11-16-2020 by Ord. No. 32-2020]
A.
Any multifamily development, including single-family attached residential
development, providing a minimum of five new housing units created
through any Planning Board action on subdivision or site plan applications;
municipal rezoning; Zoning Board use or density variance; redevelopment
plan or rehabilitation plan with a minimum density of six units per
acre is required to include a minimum affordable housing set-aside
of 20%.
B.
In each development that includes affordable housing, 13% of the
restricted units overall shall be very-low-income units, and these
very-low-income units may be counted toward the 50% low-income requirement.
The very-low-income units shall be provided as follows: in developments
that produce one very-low-income unit, the very-low-income unit shall
be a two- or three-bedroom unit; in developments that produce two
very-low-income units, no more than one of the very-low-income units
may be a one-bedroom unit; and in developments that produce three
or more very-low-income units, an equal number of very-low-income
units shall be provided within each bedroom distribution, and any
additional very-low-income units shall be two- or three-bedroom unit.
C.
All such affordable units, including bedroom distribution, shall
be governed by the controls on affordability and affirmatively marketed
in conformance with UHAC, N.J.A.C. 5:80-26.1 et seq., or any successor
regulation, and all other applicable law.
D.
No subdivision shall be permitted or approved for the purpose of
avoiding compliance with this requirement. Developers cannot, for
example, subdivide a project into two lots and then make each of them
a number of units just below the threshold.
E.
This requirement does not give any developer the right to any such
rezoning, variance or other relief, or establish any obligation on
the part of the Township to grant such rezoning, variance or other
relief.
F.
This Township-wide mandatory set-aside requirement does not apply
to any sites or specific zones otherwise identified in the Township's
Settlement Agreement with FSHC or Fair Share Plan, for which density
and set-aside requirements shall be governed by the specific standards
as set forth therein. The Township shall maintain this mandatory set-aside
provision through at least July 8, 2025 at which time the Township
may determine to extend the applicability of the provision.
A.
The administration of an alternative living arrangement shall be
in compliance with N.J.A.C. 5:93-5.8 and UHAC, with the following
exceptions:
B.
With the exception of units established with capital funding through
a twenty-year operating contract with the Department of Human Services,
Division of Developmental Disabilities, alternative living arrangements
shall have at least thirty-year controls on affordability in accordance
with UHAC, unless an alternative commitment is approved by the Court.
C.
The service provider for the alternative living arrangement shall
act as the Administrative Agent for the purposes of administering
the affirmative marketing and affordability requirements for the alternative
living arrangement.
In inclusionary developments the following schedule shall be
followed:
|
Maximum Percentage of Market-Rate Units Completed
|
Minimum Percentage of Low- and Moderate-Income Units Completed
|
|---|---|
|
25%
|
0%
|
|
25%+1
|
10%
|
|
50%
|
50%
|
|
75%
|
75%
|
|
90%
|
100%
|
A.
Low/moderate split and bedroom distribution of affordable housing
units:
[Amended 11-16-2020 by Ord. No. 32-2020]
(1)
The fair share obligation shall be divided equally between low-
and moderate-income units, except that where there is an odd number
of affordable housing units, the extra unit shall be a low-income
unit. At least 13% of all restricted rental units shall be very-low-income
units (affordable to a household earning 30% or less of regional median
income by household size). The very-low-income units shall be counted
as part of the required number of low income units within the development.
(2)
In each development that includes affordable housing, 13% of
the restricted units overall shall be very-low-income units, and these
very-low-income units may be counted toward the 50% low-income requirement.
The very-low-income units shall be provided as follows: in developments
that produce one very-low-income unit, the very-low-income unit shall
be a two- or three-bedroom unit; in developments that produce two
very-low-income units, no more than one of the very-low-income units
may be a one-bedroom unit; and in developments that produce three
or more very-low-income units, an equal number of very-low-income
units shall be provided within each bedroom distribution, and any
additional very-low-income units shall be two- or three-bedroom unit.
(3)
Affordable developments that are not age-restricted shall be
structured in conjunction with realistic market demands such that:
(a)
The combined number of efficiency and one-bedroom units shall
be no greater than 20% of the total low- and moderate-income units;
(b)
At least 30% of all low- and moderate-income units shall be
two-bedroom units;
(c)
At least 20% of all low- and moderate-income units shall be
three-bedroom units; and
(d)
The remaining units may be allocated among two- and three-bedroom
units at the discretion of the developer.
(4)
Affordable developments that are age-restricted shall be structured
such that the number of bedrooms shall equal the number of age-restricted
low- and moderate-income units within the inclusionary development.
This standard may be met by having all one-bedroom units or by having
a two-bedroom unit for each efficiency unit.
B.
Accessibility requirements:
(1)
The first floor of all restricted townhouse dwelling units and
all restricted units in all other multistory buildings shall be subject
to the technical design standards of the Barrier Free SubCode, N.J.A.C.
5:23-7 and the following.
(2)
All restricted townhouse dwelling units and all restricted units
in other multistory buildings in which a restricted dwelling unit
is attached to at least one other dwelling unit shall have the following
features:
(a)
An adaptable toilet and bathing facility on the first floor;
and
(b)
An adaptable kitchen on the first floor; and
(c)
An interior accessible route of travel on the first floor; and
(d)
An adaptable room that can be used as a bedroom, with a door
or the casing for the installation of a door, on the first floor;
and
(e)
If not all of the foregoing requirements in Subsection B(2)(a) through (d) can be satisfied, then an interior accessible route of travel must be provided between stories within an individual unit, but if all of the terms of Subsection B(2)(a) through (d) above have been satisfied, then an interior accessible route of travel shall not be required between stories within an individual unit; and
(f)
An accessible entranceway as set forth at P.L. 2005, c. 350
(N.J.S.A. 52:27D-311a, et seq.) and the Barrier Free SubCode, N.J.A.C.
5:23-7, or evidence that the Township has collected funds from the
developer sufficient to make 10% of the adaptable entrances in the
development accessible:
[1]
Where a unit has been constructed with an adaptable
entrance, upon the request of a disabled person who is purchasing
or will reside in the dwelling unit, an accessible entrance shall
be installed.
[2]
To this end, the builder of restricted units shall
deposit funds within the Township of Readington's Affordable Housing
Trust Fund sufficient to install accessible entrances in 10% of the
affordable units that have been constructed with adaptable entrances.
[3]
The funds deposited under Subsection B(2)(f)[2] above shall be used by the Township of Readington for the sole purpose of making the adaptable entrance of an affordable unit accessible when requested to do so by a person with a disability who occupies or intends to occupy the unit and requires an accessible entrance.
[4]
The developer of the restricted units shall submit
a design plan and cost estimate to the Construction Official of the
Township for the conversion of adaptable to accessible entrances.
[5]
Once the Construction Official has determined that
the design plan to convert the unit entrances from adaptable to accessible
meet the requirements of the Barrier Free SubCode, N.J.A.C. 5:23-7,
and that the cost estimate of such conversion is reasonable, payment
shall be made to the Township's Affordable Housing Trust Fund in care
of the Township's Director of Finance, or their designee, who shall
ensure that the funds are deposited into the Affordable Housing Trust
Fund and appropriately earmarked.
[6]
Full compliance with the foregoing provisions shall
not be required where an entity can demonstrate that it is "site impracticable"
to meet the requirements. Determinations of site impracticability
shall be in compliance with the Barrier Free SubCode, N.J.A.C. 5:23-7.
D.
Maximum rents and sales prices:
(1)
In establishing rents and sales prices of affordable housing
units, the Administrative Agent shall follow the procedures set forth
in UHAC, utilizing the most recently published regional weighted average
of the uncapped Section 8 income limits published by HUD and the calculation
procedures as approved by the Court and detailed herein.
(a)
"Regional income units shall be established for the region that
the Township is located within (i.e. Region 3) based on the median
income by household size, which shall be established by a regional
weighted average of the uncapped Section 8 income limits published
by HUD. To compute this regional income limit, the HUD determination
of median county income for a family of four is multiplied by the
estimated households within the county according to the most recent
decennial Census. The resulting product for each county within the
housing region is summed. The sum is divided by the estimated total
households from the most recent decennial Census in the Township's
housing region. This quotient represents the regional weighted average
of median income for a household of four. The income limit for a moderate-income
unit for a household of four shall be 80% of the regional weighted
average median income for a family of four. The income limit for a
low-income unit for a household of four shall be 50% of the HUD determination
of the regional weighted average median income for a family of four.
The income limit for a very-low-income unit for a household of four
shall be 30% of the regional weighted average median income for a
family of four. These income limits shall be adjusted by household
size based on multipliers used by HUD to adjust median income by household
size. In no event shall the income limits be less than those for the
previous year."
(2)
The maximum rent for restricted rental units within each affordable
development shall be affordable to households earning no more than
60% of median income, and the average rent for restricted rental units
shall be affordable to households earning no more than 52% of median
income.
(3)
The developers and/or municipal sponsors of restricted rental
units shall establish at least one rent for each bedroom type for
both low-income and moderate-income units, provided that at least
13% of all low- and moderate-income rental units shall be affordable
to very-low-income households, which very-low-income units shall be
part of the low-income requirement.
(4)
The maximum sales price of restricted ownership units within
each affordable development shall be affordable to households earning
no more than 70% of median income, and each affordable development
must achieve an affordability average of 55% for restricted ownership
units; in achieving this affordability average, moderate-income ownership
units must be available for at least three different sales prices
for each bedroom type, and low-income ownership units must be available
for at least two different sales prices for each bedroom type.
(5)
In determining the initial sales prices and rent levels for
compliance with the affordability average requirements for restricted
units other than assisted living facilities and age-restricted developments,
the following standards shall be used:
(a)
A studio shall be affordable to a one-person household;
(b)
A one-bedroom unit shall be affordable to a one-and-one-half-person
household;
(c)
A two-bedroom unit shall be affordable to a three-person household;
(d)
A three-bedroom unit shall be affordable to a four-and-one-half-person
household; and
(e)
A four-bedroom unit shall be affordable to a six-person household.
(6)
In determining the initial sales prices and rents for compliance
with the affordability average requirements for restricted units in
assisted living facilities and age-restricted developments, the following
standards shall be used:
(7)
The initial purchase price for all restricted ownership units
shall be calculated so that the monthly carrying cost of the unit,
including principal and interest (based on a mortgage loan equal to
95% of the purchase price and the Federal Reserve H.15 rate of interest),
taxes, homeowner and private mortgage insurance and condominium or
homeowner association fees do not exceed 28% of the eligible monthly
income of the appropriate size household as determined under N.J.A.C.
5:80-26.4, as may be amended and supplemented; provided, however,
that the price shall be subject to the affordability average requirement
of N.J.A.C. 5:80-26.3, as may be amended and supplemented.
(8)
The initial rent for a restricted rental unit shall be calculated
so as not to exceed 30% of the eligible monthly income of the appropriate
size household, including an allowance for tenant paid utilities,
as determined under N.J.A.C. 5:80-26.4, as may be amended and supplemented;
provided, however, that the rent shall be subject to the affordability
average requirement of N.J.A.C. 5:80-26.3, as may be amended and supplemented.
(9)
The price of owner-occupied low- and moderate-income units may
increase annually based on the percentage increase in the regional
median income limit for each housing region. In no event shall the
maximum resale price established by the Administrative Agent be lower
than the last recorded purchase price.
(10)
The rents of very-low-, low- and moderate-income units may be
increased annually based on the permitted percentage increase in the
Housing Consumer Price Index for the Northeast Urban Area. This increase
shall not exceed 9% in any one year. Rent increases for units constructed
pursuant to low-income housing tax credit regulations shall be indexed
pursuant to the regulations governing low-income housing tax credits.
A.
Affordable units shall utilize the same type of heating source as
market units within an inclusionary development.
B.
Tenant-paid utilities included in the utility allowance shall be
set forth in the lease and shall be consistent with the utility allowance
approved by HUD for the Section 8 program.
In referring certified households to specific restricted units,
the Administrative Agent shall, to the extent feasible and without
causing an undue delay in the occupancy of a unit, strive to:
A.
Control periods for restricted ownership units shall be in accordance
with N.J.A.C. 5:80-26.5, as may be amended and supplemented, and each
restricted ownership unit shall remain subject to the requirements
of this article for a period of at least 30 years, until the Township
takes action to release the unit from such requirements; prior to
such action, a restricted ownership unit must remain subject to the
requirements of N.J.A.C. 5:80-26.1, as may be amended and supplemented.
B.
The affordability control period for a restricted ownership unit
shall commence on the date the initial certified household takes title
to the unit.
C.
Prior to the issuance of the initial certificate of occupancy for
a restricted ownership unit and upon each successive sale during the
period of restricted ownership, the Administrative Agent shall determine
the restricted price for the unit and shall also determine the non-restricted,
fair market value of the unit based on either an appraisal or the
unit's equalized assessed value without the restrictions in place.
D.
At the time of the initial sale of the unit, the initial purchaser
shall execute and deliver to the Administrative Agent a recapture
note obligating the purchaser (as well as the purchaser's heirs, successors
and assigns) to repay, upon the first nonexempt sale after the unit's
release from the restrictions set forth in this article, an amount
equal to the difference between the unit's nonrestricted fair market
value and its restricted price, and the recapture note shall be secured
by a recapture lien evidenced by a duly recorded mortgage on the unit.
E.
The affordability controls set forth in this article shall remain
in effect despite the entry and enforcement of any judgment of foreclosure
with respect to restricted ownership units.
F.
A restricted ownership unit shall be required to obtain a continuing
certificate of occupancy or a certified statement from the Construction
Official stating that the unit meets all Code standards upon the first
transfer of title following the removal of the restrictions provided
under N.J.A.C. 5:80-26.5(a), as may be amended and supplemented.
Price restrictions for restricted ownership units shall be in
accordance with N.J.A.C. 5:80-26.1, as may be amended and supplemented,
including:
A.
The initial purchase price for a restricted ownership unit shall
be approved by the Administrative Agent.
B.
The Administrative Agent shall approve all resale prices, in writing
and in advance of the resale, to assure compliance with the foregoing
standards.
C.
The master deeds of inclusionary developments shall provide no distinction
between the condominium or homeowner association fees and special
assessments paid by low- and moderate-income purchasers and those
paid by market purchasers.
D.
The owners of restricted ownership units may apply to the Administrative Agent to increase the maximum sales price for the unit on the basis of anticipated capital improvements. Eligible capital improvements shall be those that render the unit suitable for a larger household or the addition of a bathroom. (See § 148-117.4, Capital improvements to ownership units.)
A.
Buyer income eligibility for restricted ownership units shall be
in accordance with N.J.A.C. 5:80-26.1, as may be amended and supplemented,
such that low-income ownership units shall be reserved for households
with a gross household income less than or equal to 50% of median
income and moderate-income ownership units shall be reserved for households
with a gross household income less than 80% of median income.
B.
Notwithstanding the foregoing, the Administrative Agent may, upon
approval by the Governing Body, and subject to the Court's approval,
permit a moderate-income purchaser to buy a low-income unit if and
only if the Administrative Agent can demonstrate that there is an
insufficient number of eligible low-income purchasers in the housing
region to permit prompt occupancy of the unit and all other reasonable
efforts to attract a low-income purchaser, including pricing and financing
incentives, have failed. Any such low-income unit that is sold to
a moderate-income household shall retain the required pricing and
pricing restrictions for a low-income unit.
C.
A certified household that purchases a restricted ownership unit
must occupy it as the certified household's principal residence and
shall not lease the unit; provided, however, that the Administrative
Agent may permit the owner of a restricted ownership unit, upon application
and a showing of hardship, to lease the restricted unit to another
certified household for a period not to exceed one year.
D.
The Administrative Agent shall certify a household as eligible for
a restricted ownership unit when the household is a low-income household
or a moderate-income household, as applicable to the unit, and the
estimated monthly housing cost for the particular unit (including
principal, interest, taxes, homeowner and private mortgage insurance
and condominium or homeowner association fees, as applicable) does
not exceed 33% of the household's eligible monthly income.
A.
Prior to incurring any indebtedness to be secured by a restricted
ownership unit, the owner shall apply to the Administrative Agent
for a determination in writing that the proposed indebtedness complies
with the provisions of this section, and the Administrative Agent
shall issue such determination prior to the owner incurring such indebtedness.
B.
With the exception of first purchase money mortgages, neither an
owner nor a lender shall at any time cause or permit the total indebtedness
secured by a restricted ownership unit to exceed 95% of the maximum
allowable resale price of the unit, as such price is determined by
the Administrative Agent in accordance with N.J.A.C. 5:80-26.6(b).
A.
The owners of restricted ownership units may apply to the Administrative
Agent to increase the maximum sales price for the unit on the basis
of capital improvements made since the purchase of the unit. Eligible
capital improvements shall be those that render the unit suitable
for a larger household or that add an additional bathroom. In no event
shall the maximum sales price of an improved housing unit exceed the
limits of affordability for the larger household.
B.
Upon the resale of a restricted ownership unit, all items of property
that are permanently affixed to the unit or were included when the
unit was initially restricted (for example, refrigerator, range, washer,
dryer, dishwasher, wall-to-wall carpeting) shall be included in the
maximum allowable resale price. Other items may be sold to the purchaser
at a reasonable price that has been approved by the Administrative
Agent at the time of the signing of the agreement to purchase. The
purchase of central air conditioning installed subsequent to the initial
sale of the unit and not included in the base price may be made a
condition of the unit resale provided the price, which shall be subject
to ten-year, straight-line depreciation, has been approved by the
Administrative Agent. Unless otherwise approved by the Administrative
Agent, the purchase of any property other than central air conditioning
shall not be made a condition of the unit resale. The owner and the
purchaser must personally certify at the time of closing that no unapproved
transfer of funds for the purpose of selling and receiving property
has taken place at the time of or as a condition of resale.
A.
Control periods for restricted rental units shall be in accordance
with N.J.A.C. 5:80-26.11, as may be amended and supplemented, and
each restricted rental unit shall remain subject to the requirements
of this article for a period of at least 30 years, until the Township
takes action to release the unit from such requirements. Prior to
such action, a restricted rental unit must remain subject to the requirements
of N.J.A.C. 5:80-26.1, as may be amended and supplemented.
B.
Deeds of all real property that include restricted rental units shall
contain deed restriction language. The deed restriction shall have
priority over all mortgages on the property, and the deed restriction
shall be filed by the developer or seller with the records office
of the County of Hunterdon. A copy of the filed document shall be
provided to the Administrative Agent within 30 days of the receipt
of a certificate of occupancy.
C.
A restricted rental unit shall remain subject to the affordability
controls of this article despite the occurrence of any of the following
events:
A.
A written lease shall be required for all restricted rental units
and tenants shall be responsible for security deposits and the full
amount of the rent as stated on the lease. A copy of the current lease
for each restricted rental unit shall be provided to the Administrative
Agent.
B.
No additional fees or charges shall be added to the approved rent
(except, in the case of units in an assisted living residence, to
cover the customary charges for food and services) without the express
written approval of the Administrative Agent.
C.
Application fees (including the charge for any credit check) shall
not exceed 5% of the monthly rent of the applicable restricted unit
and shall be payable to the Administrative Agent to be applied to
the costs of administering the controls applicable to the unit as
set forth in this article.
D.
No rent control ordinance or other pricing restriction shall be applicable
to either the market units or the affordable units in any development
in which at least 15% of the total number of dwelling units are restricted
rental units in compliance with this article.
A.
Tenant income eligibility shall be in accordance with N.J.A.C. 5:80-26.13,
as may be amended and supplemented, and shall be determined as follows:
(1)
Very-low-income rental units shall be reserved for households
with a gross household income less than or equal to 30% of the regional
median household income by household size.
(2)
Low-income rental units shall be reserved for households with
a gross household income less than or equal to 50% of the regional
median household income by household size.
(3)
Moderate-income rental units shall be reserved for households
with a gross household income less than 80% of the regional median
household income by household size.
B.
The Administrative Agent shall certify a household as eligible for
a restricted rental unit when the household is a very-low-income household,
low-income household or a moderate-income household, as applicable
to the unit, and the rent proposed for the unit does not exceed 35%
(40% for age-restricted units) of the household's eligible monthly
income as determined pursuant to N.J.A.C. 5:80-26.16, as may be amended
and supplemented; provided, however, that this limit may be exceeded
if one or more of the following circumstances exists:
(1)
The household currently pays more than 35% (40% for households
eligible for age-restricted units) of its gross household income for
rent, and the proposed rent will reduce its housing costs;
(2)
The household has consistently paid more than 35% (40% for households
eligible for age-restricted units) of eligible monthly income for
rent in the past and has proven its ability to pay;
(3)
The household is currently in substandard or overcrowded living
conditions;
(4)
The household documents the existence of assets with which the
household proposes to supplement the rent payments; or
(5)
The household documents reliable anticipated third-party assistance
from an outside source such as a family member in a form acceptable
to the Administrative Agent and the owner of the unit.
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 (the
Act), N.J.S.A. 52:27D-301 et seq., and the State Constitution, subject
to COAH's adoption of rules.
(2)
COAH was authorized by 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) 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
COAH or a court of competent jurisdiction and have a COAH- or court-approved
spending plan may retain fees collected from nonresidential development.
(3)
In Re: Adoption of N.J.A.C. 5:96 and 5:97 by the New Jersey
Council on Affordable Housing, 221 N.J. 1 (2015), also known as the
"Mount Laurel IV" decision, the Supreme Court remanded COAH's duties
to the Superior Court. As a result, affordable housing development
fee collections and expenditures from the municipal affordable housing
trust funds to implement municipal Third Round Fair Share Plans through
July 7, 2025 are under the Court's jurisdiction and are subject to
approval by the Court.
(4)
This section establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's regulations
and in accordance with P.L. 2008, c. 46, Sections 8 and 32 through
38. Fees collected pursuant to this section shall be used for the
sole purpose of providing low- and moderate-income housing. This chapter
shall be interpreted within the framework of COAH's rules on development
fees, codified at N.J.A.C. 5:93-8.
B.
Basic requirements:
(1)
COAH had previously approved ordinances adopting and amending Section 148-111, which established the Township's affordable housing trust fund. The Township's development fee ordinance which has been further amended remains effective pursuant to the Superior Court's jurisdiction in accordance with N.J.A.C. 5:93.8.
(2)
At such time that the Court approves the Township's Amended
Third Round Housing Element and Fair Share Plan and the Amended Third
Round Spending Plan, the Township may begin spending development fees
in conformance with N.J.A.C. 5:93-8 for the new 2020 Plan activities.
C.
Residential development fees:
(1)
Imposed fees.
(a)
Within all Zoning Districts, 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.
(b)
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 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.
(2)
Eligible exactions, ineligible exactions and exemptions for
residential development.
(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)
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:
[1]
The development fee shall be calculated on the
increase in the equalized assessed value of the improved building.
[2]
No development fee shall be collected for a demolition
and replacement of a residential building resulting from a natural
disaster.
[3]
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 Township Land Development Ordinance.
D.
Nonresidential development fees:
(1)
Imposed fees.
(a)
Within all zoning districts, nonresidential developers, except
for developers of the types of development specifically exempted,
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)
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.
(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 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.
(2)
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 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. Any exemption claimed by a developer shall be substantiated
by that developer.
(d)
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 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.
(e)
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 as a lien against the real property
of the owner.
E.
Collection procedures:
(1)
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.
(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," 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.
(3)
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.
(4)
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.
(5)
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.
(6)
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.
(7)
Should the Township of Readington 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)
Fifty percent 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.
(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 Readington.
Appeals from a determination of the Board may be made to the Tax Court
in accordance with the provisions of the State Uniform Tax 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
Readington. Appeals from a determination of the Director may be made
to the Tax Court in accordance with the provisions of the State Uniform
Tax 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.
F.
Affordable Housing Trust Fund:
(1)
There is hereby created a separate, interest-bearing housing
trust fund to be maintained by the Director of Finance, or their designee,
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 affordable units;
(b)
Developer-contributed funds to make 10% of the adaptable entrances
in a townhouse or other multistory attached 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 the Township of
Readington's affordable housing program.
(3)
The Township of Readington previously provided COAH with written
authorization, in the form of three-party escrow agreements between
the municipality, Unity Bank, and COAH, to permit COAH to direct the
disbursement of the funds as provided for in N.J.A.C. 5:93-8. The
Superior Court shall now have such jurisdiction to direct the disbursement
of the Township's trust funds per N.J.A.C. 5:93-8.
(4)
All interest accrued in the housing trust fund shall only be
used on eligible affordable housing activities approved by the Court.
G.
Use of funds:
(1)
The expenditure of all funds shall conform to a spending plan
approved by the Court. Funds deposited in the housing trust fund may
be used for any activity approved by the Court to address the Township'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. 5:93-8.16 and
specified in the approved spending plan.
(2)
Funds may not be expended to reimburse the Township of Readington
for past housing activities. However, funds may be expended to repay
municipal bonds issued to finance low- and moderate-income housing
activity.
[Amended 11-16-2020 by Ord. No. 32-2020]
(3)
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. 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
by region.
(a)
Affordability assistance programs may include closing cost assistance,
rental assistance, assistance with homeowners' association or condominium
fees and special assessments and assistance with emergency repairs.
(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.
(c)
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.
(4)
The Township of Readington 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. 5:93-8.16.
(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 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 the monitoring requirements set forth in the Court-approved
July 19, 2019 executed settlement agreement with Fair Share Housing
Center. 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.
H.
Monitoring:
(1)
On or about July 19 of each year through 2025, the Township
of Readington shall provide annual reporting of trust fund activity
to the DCA, COAH, or NJLGS, 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 DCA, COAH, or NJLGS. This reporting shall include an accounting
of all housing trust fund activity, including 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 the Township of Readington's housing
program, as well as to the expenditure of revenues and implementation
of the plan approved by the Court.
I.
Ongoing collection and expenditure of fees:
[Amended 11-16-2020 by Ord. No. 32-2020]
(1)
The ability for the Township of Readington to impose, collect
and expend development fees shall expire with its Court-issued Judgment
of Compliance and Repose unless the Township of Readington has filed
an adopted Housing Element and Fair Share Plan with the Court or other
appropriate jurisdiction, has filed a declaratory judgment action,
and has received the Court's approval of its development fee ordinance.
If the Township of Readington fails to renew its ability to impose
and collect development fees prior to the expiration of its judgment
of compliance and repose, 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 P.L. 1985, c. 222
(N.J.S.A. 52:27D-320). The Township of Readington 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 and repose, nor shall the Township of Readington retroactively
impose a development fee on such a development. The Township of Readington
shall not expend development fees after the expiration of its judgment
of compliance and repose.
(2)
Interest accrued in the Affordable Housing Trust Fund shall
only be used to fund eligible affordable housing activities approved
by the Court.
Appeals from all decisions of an Administrative Agent appointed
pursuant to this article shall be filed in writing as an action in
lieu of prerogative writ in the Superior Court, Law Division in the
County with jurisdiction over the Township's affordable housing proceedings,
or in such other manner as the Superior Court may direct.
