[Added 6-29-2020 by Ord.
No. 2020-15]
(a)
In Holmdel Builder's Association v. Holmdel Township, 121 N.J.
550 (1990), the New Jersey Supreme Court determined that mandatory
development fees are authorized by the Fair Housing Act of 1985 (the
Act), N.J.S.A. 52:27D-301 et seq., and the State Constitution, subject
to COAH's adoption of rules.
(b)
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.
(c)
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.
(d)
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 article
shall be interpreted within the framework of COAH's rules on development
fees, codified at N.J.A.C. 5:93-8.
[Added 6-29-2020 by Ord.
No. 2020-15]
(a)
COAH had previously approved ordinances which established both
the former Township's and former Borough's affordable housing trust
funds. The Municipality'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.
(b)
At such time that the Court approves the Municipality's Third
Round Housing Plan Element and Fair Share Plan and the Third Round
Spending Plan, Princeton may begin spending development fees in conformance
with N.J.A.C. 5:93-8 for the new 2020 Plan activities.
[Added 6-29-2020 by Ord.
No. 2020-15]
(a)
Imposed fees.
(1)
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.
(2)
When an increase in residential density pursuant to N.J.S.A.
40:55D-70d(5) (known as a density 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.
(b)
Eligible exactions, ineligible exactions and exemptions for
residential development.
(1)
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 for a
fractional of an affordable housing unit less than 0.5 shall be exempt
from development fees.
(2)
Developments that have received preliminary or final site plan
approval prior to the adoption of a municipal development fee ordinance
shall be exempt from development fees, unless the developer seeks
a substantial change in the approval. Where a site plan approval does
not apply, a zoning and/or building permit shall be synonymous with
preliminary or final site plan approval for this purpose. The fee
percentage shall be vested on the date that the building permit is
issued.
(3)
Owner-occupied residential buildings demolished as a result
of a fire, flood, or natural disaster and replaced with a substantially
similar residence shall be exempt from paying a development fee. If
the new owner-occupied residential building is not substantially similar
to the prior, demolished building, then the owner shall pay a development
fee based on the net increase in equalized assessed value.
(5)
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, and/or
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 except as a result of a natural disaster as covered
under paragraph (3), above, provided that the development fee shall
be calculated on the increase in the equalized assessed value of the
improved building.
[Added 6-29-2020 by Ord.
No. 2020-15]
(a)
Imposed fees.
(1)
Within all zoning districts, nonresidential developers, except
for developers of the types of development specifically exempted,
shall pay a fee equal to 2.5% of the equalized assessed value of the
land and improvements for all new nonresidential construction on an
unimproved lot or lots.
(2)
Nonresidential developers, except for developers of the types
of development specifically exempted, shall also pay a fee equal to
2.5% of the increase in equalized assessed value resulting from any
additions to existing buildings to be used for nonresidential purposes.
(3)
Development fees shall be imposed and collected when an existing
building 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 building, i.e., land and improvement,
at the time final certificate of occupancy is issued. If the calculation
required under this section results in a negative number, the nonresidential
development fee shall be zero.
(b)
Eligible exactions, ineligible exactions and exemptions for
nonresidential development.
(1)
The nonresidential portion of a mixed-use inclusionary or market
rate development shall be subject to the 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 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.
(4)
A developer of a nonresidential development exempted from the
nonresidential development fee pursuant to P.L. 2008, c. 46, shall
be subject to it at such time the basis for the exemption no longer
applies and shall make the payment of the 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.
(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 Municipality as a lien against the real
property of the owner.
[Added 6-29-2020 by Ord.
No. 2020-15]
(a)
Upon the granting of a preliminary, final or other applicable
approval for a development, the applicable approving authority shall
direct its staff to notify the construction official responsible for
the issuance of a building permit.
(b)
For nonresidential developments only, the developer shall also
be provided with a copy of Form N-RDF, "State of New Jersey 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.
(c)
The Construction Official responsible for the issuance of a
building permit shall notify the local tax assessor of the issuance
of the first building permit for a development which is subject to
a development fee.
(d)
Within 90 days of receipt of that notice, the tax assessor,
based on the plans filed, shall provide an estimate of the equalized
assessed value of the development.
(e)
The Construction Official responsible for the issuance of a
final certificate of occupancy shall notify the tax assessor of any
and all requests for the scheduling of a final inspection on property
which is subject to a development fee.
(f)
Within 10 business days of a request for the scheduling of a
final inspection, the 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.
(g)
Should the Municipality of Princeton 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)
Fifty percent (50%) of the development fee shall be collected
at the time of issuance of the building permit. The remaining portion
shall be collected at the issuance of the certificate of occupancy.
The developer shall be responsible for paying the difference between
the fee calculated at building permit and that determined at issuance
of certificate of occupancy.
(i)
Appeal of development fees.
(1)
A developer may challenge residential development fees imposed
by filing a challenge with the County Board of Taxation. Pending a
review and determination by the Board, collected fees shall be placed
in an interest-bearing escrow account by the Municipality of Princeton.
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.
(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 Municipality
of Princeton. 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.
[Added 6-29-2020 by Ord.
No. 2020-15]
(a)
There is hereby created a separate, interest-bearing affordable
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.
(b)
The following additional funds shall be deposited in the affordable
housing trust fund and shall at all times be identifiable by source
and amount:
(1)
Payments in lieu of on-site construction of affordable units;
(2)
Developer-contributed funds to make 10% of the adaptable entrances
in a townhouse or other multistory attached development accessible;
(3)
Rental income from municipally operated units;
(4)
Repayments from affordable housing program loans;
(5)
Recapture funds;
(6)
Proceeds from the sale of affordable units; and
(7)
Any other funds collected in connection with the Municipality
of Princeton's affordable housing program.
(c)
The Borough of Princeton and the Township of Princeton previously
provided COAH with written authorization, in the form of three-party
escrow agreements between the municipality, Bank of Princeton, 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 Municipality's trust funds per N.J.A.C.
5:93-8.
(d)
All interest accrued in the housing trust fund shall only be
used on eligible affordable housing activities approved by the Court.
[Added 6-29-2020 by Ord.
No. 2020-15]
(a)
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 Municipality'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 Plan 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.
(b)
Funds shall not be expended to reimburse the Municipality of
Princeton for past housing activities.
(c)
At least 30% of all development fees collected and interest
earned shall be used to provide affordability assistance to low- and
moderate-income households in affordable units included in the municipal
Fair Share Plan. 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.
(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, infrastructure assistance, and assistance with emergency
repairs.
(2)
Affordability assistance to households earning 30% or less of
median income may include buying down the cost of low- or moderate-income
units in the municipal Fair Share Plan to make them affordable to
households earning 30% or less of median income.
(3)
Payments in lieu of constructing affordable units on site and
funds from the sale of units with extinguished controls shall be exempt
from the affordability assistance requirement.
(d)
The Municipality of Princeton 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. 5:93-8.16.
(e)
No more than 20% of all revenues collected from development
fees may be expended on administration, including, but not limited
to, salaries and benefits for municipal employees or consultant fees
necessary to develop or implement a new construction program, a Housing
Plan 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 December 8, 2018 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.
[Added 6-29-2020 by Ord.
No. 2020-15]
On the anniversary of the final Judgment of Repose each year
through 2025, the Municipality of Princeton 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 source and amount of funds collected and the amount and purpose
for which any funds have been expended.
[Added 6-29-2020 by Ord.
No. 2020-15; amended 12-21-2021 by Ord. No. 2021-34]
(a)
The
ability of the Municipality of Princeton to impose, collect and expend
development fees shall expire with its Court-issued Judgment of Compliance
and Repose unless the Municipality has filed an adopted Housing Plan
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 Municipality 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 Municipality
shall not impose a residential development fee on a development that
receives preliminary or final site plan approval after the expiration
of its Judgment Compliance and Repose, nor shall the Municipality
impose a development fee retroactively on such a development. The
Municipality shall not expend development fees after the expiration
of its Judgment of Compliance and Repose.
(b)
Interest
accrued in the Affordable Housing Trust Fund shall only be used to
fund eligible affordable housing activities approved by the Court.
