[HISTORY: Adopted by the Borough Council of the Borough of Lodi as indicated in article histories. Amendments noted where applicable.]
[Adopted 3-10-2026 by Ord. No. 2026-06]
A. 
This chapter of the Code sets forth regulations regarding the very-low-, low- and moderate-income housing units in the Borough of Lodi consistent with the provisions outlined in P.L. 2024, Chapter 2, including the amended Fair Housing Act ("FHA") at N.J.S.A. 52:27D-301 et seq., as well as the Department of Community Affairs, Division of Local Planning Services ("LPS") at N.J.A.C. 5:99 et seq., statutorily upheld existing regulations of the now-defunct Council on Affordable Housing ("COAH") at N.J.A.C. 5:93 and 5:97, the Uniform Housing Affordability Controls ("UHAC") at N.J.A.C. 5:80-26.1 et seq., and as reflected in the adopted municipal Fourth Round Housing Element and Fair Share Plan ("HEFSP").
B. 
This chapter is intended to ensure that very-low-, low- and moderate-income units ("affordable units") are created or rehabilitated with controls on affordability over time and that very-low-, low- and moderate-income households shall occupy these units pursuant to statutory requirements. This chapter shall apply to all inclusionary developments, individual affordable units, and 100% affordable housing developments except where inconsistent with applicable law. Low-Income Housing Tax Credit financed developments shall adhere to the provisions set forth below in Subsection E(3) below.
C. 
The Borough of Lodi Planning Board has adopted a HEFSP pursuant to the Municipal Land Use Law at N.J.S.A. 40:55D-1, et seq. The Fair Share Plan describes the ways the municipality shall address its fair share of very-low-, low- and moderate-income housing as approved by the Superior Court and documented in the Housing Element.
D. 
This chapter implements and incorporates the relevant provisions of the HEFSP and addresses the requirements of P.L. 2024, Chapter 2, the FHA,[1] N.J.A.C. 5:99, NJ Supreme Court upheld COAH regulations at N.J.A.C. 5:93 and 5:97, and UHAC at N.J.A.C. 5:80-26.1, as may be amended and supplemented.
[1]
Editor's Note: See N.J.S.A. 52:27D-301 et seq.
E. 
Applicability.
(1) 
The provisions of this chapter shall apply to all affordable housing developments and affordable housing units that currently exist and that are proposed to be created pursuant to the municipality's most recently adopted HEFSP except that § 586-8, Development Fees, shall also apply to all developments.
(2) 
This chapter shall apply to all developments that contain very-low-, low- and moderate-income housing units included in the Municipal HEFSP, including any unanticipated future developments that will provide very-low-, low- and moderate-income housing units except that § 586-8, Development Fees, shall also apply to all developments.
(3) 
Projects receiving federal Low Income Housing Tax Credit financing and are proposed for credit shall comply with the low/moderate split and bedroom distribution requirements, maximum initial rents and sales prices requirements, affirmative fair marketing requirements of UHAC at N.J.A.C. 5:80-26.16 and the length of the affordability controls applicable to such projects shall be not less than a 30-year compliance period plus a 15-year extended-use period, for a total of not less than 45 years.
As used herein the following terms shall have the following meanings:
95/5 RESTRICTION
Means a deed restriction governing a restricted ownership unit that is part of a housing element that received substantive certification from COAH pursuant to N.J.A.C. 5:93, as it was in effect at the time of the receipt of substantive certification, before October 1, 2001, or any other deed restriction governing a restricted ownership unit with a seller repayment option requiring 95% of the price differential to be paid to the municipality or an instrument of the municipality at the closing of a sale at market price.
ACCESSORY APARTMENTS
Means a residential dwelling unit that provides complete independent living facilities with a private entrance for one or more persons, consisting of provisions for living, sleeping, eating, sanitation, and cooking, including a stove and refrigerator, and is located within a proposed preexisting primary dwelling, within an existing or proposed structure that is an accessory to a dwelling on the same lot, constructed in whole or part as an extension to a proposed or existing primary dwelling, or constructed as a separate detached structure on the same lot as the existing or proposed primary dwelling. Accessory apartments are also referred to as "accessory dwelling units."
ACT
Means the New Jersey Fair Housing Act, N.J.S.A. 52:27D-301 et seq.
ADAPTABLE
Means constructed in compliance with the technical design standards of the barrier free subcode adopted by the Commissioner of Community Affairs pursuant to the "State Uniform Construction Code Act," P.L. 1975, c. 217 (N.J.S.A. 52:27D-119 et seq.) and in accordance with the provisions of section 5 of P.L. 2005, c. 350 (N.J.S.A. 52:27D-123.15).
ADMINISTRATIVE AGENT
Means the entity approved by the Division responsible for the administration of affordable units, in accordance with N.J.A.C. 5:99-7, and UHAC at N.J.A.C. 5:80-26.15.
AFFIRMATIVE MARKETING
Means a regional marketing strategy designed to attract buyers and/or renters of affordable units pursuant to N.J.A.C. 5:80-26.16.
AFFIRMATIVE MARKETING PLAN
Means the municipally adopted plan of strategies from which the administrative agent will choose to implement as part of the Affirmative Marketing requirements.
AFFIRMATIVE MARKETING PROCESS or PROGRAM
Means the actual undertaking of Affirmative Marketing activities in furtherance of each project with very-low- low- and moderate-income units.
AFFORDABILITY ASSISTANCE
Means the use of funds to render housing units more affordable to low- and moderate-income households, and includes, but is not limited to, down payment assistance, security deposit assistance, low interest loans, rental assistance, assistance with homeowner's association or condominium fees and special assessments, common maintenance expenses, and assistance with emergency repairs and rehabilitation to bring deed-restricted units up to code, pursuant to N.J.A.C. 5:99-2.5.
AFFORDABILITY AVERAGE
Means an average of the percentage of regional median income at which restricted units in an affordable development are affordable to low- and moderate-income households.
AFFORDABLE
Means, in the case of an ownership unit, that the sales price for the unit conforms to the standards set forth at N.J.A.C. 5:80-26.7 and, in the case of a rental unit, that the rent for the unit conforms to the standards set forth at N.J.A.C. 5:80-26.13.
AFFORDABLE HOUSING DEVELOPMENT
Means a development included in a municipality's housing element and fair share plan, and includes, but is not limited to, an inclusionary development, a municipally sponsored affordable housing project, or a 100% affordable development. This includes developments with affordable units on-site, off-site, or provided as a payment in-lieu of construction only if such a payment-in-lieu option has been previously approved by the Program or Superior Court as part of the HEFSP. Payments in lieu of construction were invalidated per P.L. 2024, c.2.[1]
AFFORDABLE HOUSING DISPUTE RESOLUTION PROGRAM OR THE PROGRAM
Refers to the dispute resolution program established pursuant to N.J.S.A. 52:27D-313.2.
AFFORDABLE HOUSING MONITORING SYSTEM or AHMS
Means the Department's cloud-based software application, which shall be the central repository for municipalities to use for reporting detailed information regarding affordable housing developments, affordable housing unit completions, and the collection and expenditures of funds deposited into the municipal affordable housing trust fund.
AFFORDABLE HOUSING TRUST FUND OR AHTF
Means that non-lapsing, revolving trust fund established in DCA pursuant to N.J.S.A. 52:27D-320 and N.J.A.C. 5:43 to be the repository of all State funds appropriated for affordable housing purposes. All references to the "Neighborhood Preservation Nonlapsing Revolving Fund" and "Balanced Housing" mean the AHTF.
AFFORDABLE UNIT
Means a housing unit proposed or developed pursuant to the Act, including units created with municipal affordable housing trust funds.
AGE-RESTRICTED HOUSING
Means a housing unit that is designed to meet the needs of, and is exclusively for, an age-restricted segment of the population such that: 1. All the residents of the development where the unit is situated are 62 years or older; 2. At least 80% of the units are occupied by one person that is 55 years or older; or 3. The development has been designated by the Secretary of HUD as "housing for older persons" as defined in Section 807(b)(2) of the Fair Housing Act, 42 U.S.C. § 3607.
AGENCY
Means the New Jersey Housing and Mortgage Finance Agency established by P.L. 1983, c. 530 (N.J.S.A. 55:14K-1 et seq.).
ASSISTED LIVING RESIDENCE
Means a facility licensed by the New Jersey Department of Health to provide apartment-style housing and congregate dining and to ensure that assisted living services are available when needed for four or more adult persons unrelated to the proprietor. Apartment units must offer, at a minimum, one unfurnished room, a private bathroom, a kitchenette, and a lockable door on the unit entrance.
BARRIER-FREE ESCROW
Means the holding of funds collected to adapt affordable unit entrances to be accessible in accordance with N.J.S.A. 52:27D-311a et seq. Such funds shall be held in a municipal affordable housing trust fund pursuant to N.J.A.C. 5:99-2.6.
BUILDER'S REMEDY
Means court-imposed site-specific relief for a litigant who seeks to build affordable housing for which the court requires a municipality to utilize zoning techniques, such as mandatory set-asides or density bonuses, including techniques which provide for the economic viability of a residential development by including housing that is not for low- and moderate-income households.
CERTIFIED HOUSEHOLD
Means a household that has been certified by an administrative agent as a very-low-income household, a low-income household, or a moderate-income household.
CHOICE
Means the no-longer-active Choices in Homeownership Incentives for Everyone Program, as it was authorized by the Agency.
COAH OR THE COUNCIL
Means the Council on Affordable Housing established in, but not of, DCA pursuant to the Act and that was abolished effective March 20, 2024, pursuant to section 3 at P.L. 2024, c. 2 (N.J.S.A. 52:27D-304.1).
COMMISSIONER
Means the Commissioner of the Department of Community Affairs.
COMPLIANCE CERTIFICATION
Means the certification obtained by a municipality pursuant to section 3 of P.L. 2024, c. 2 (N.J.S.A. 52:27D-304.1), that protects the municipality from exclusionary zoning litigation during the current round of present and prospective need and through July 1 of the year the next round begins, which is also known as a "judgment of compliance" or "judgment of repose." The term "compliance certification" shall include a judgment of repose granted in an action filed pursuant to section 13 of P.L. 1985, c.222 (N.J.S.A. 52:27D-313).
CONSTRUCTION
Means new construction and additions, but does not include alterations, reconstruction, renovations, conversion, relocation, or repairs, as those terms are defined in the State Uniform Construction Code promulgated pursuant to the State Uniform Construction Code Act, P.L. 1975, c. 217 (N.J.S.A. 52:27D-119 et seq.).
COUNTY-LEVEL HOUSING JUDGE
Means a judge appointed pursuant to section 5 at P.L. 2024, c. 2,[2] to resolve disputes over the compliance of municipal fair share affordable housing obligations and municipal Fair Share plans and housing elements with the Act.
DCA and DEPARTMENT
Mean the State of New Jersey Department of Community Affairs.
DEFICIENT HOUSING UNIT
Means a housing unit with health and safety code violations that require the repair or replacement of a major system. A major system includes weatherization, roofing, plumbing (including wells), heating, electricity, sanitary plumbing (including septic systems), lead paint abatement and/or load bearing structural systems.
DEPARTMENT
Means the New Jersey Department of Community Affairs.
DEVELOPER
Means 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.
DEVELOPMENT
Means the division of a parcel of land into two or more parcels, the construction, reconstruction, conversion, structural alteration, relocation, or enlargement of any building or other structure, or of any mining, excavation, or landfill, and any use or change in the use of any building or other structure, or land or extension of use of land, for which permission may be required pursuant to the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq.
DEVELOPMENT FEE
Means money paid by a developer for the improvement of residential and non-residential property as permitted pursuant to N.J.S.A. 52:27D-329.2 and 40:55D-8.1 through 40:55D-8.7 and N.J.A.C. 5:99-3.
DISPUTE RESOLUTION PROGRAM
Means the Affordable Housing Dispute Resolution Program, established pursuant to section 5 at P.L. 2024, c. 2 (N.J.S.A. 52:27D-313.2).
DIVISION
Means the Division of Local Planning Services within the Department of Community Affairs.
EMERGENT OPPORTUNITY
Means a circumstance that has arisen whereby affordable housing will be able to be produced through a delivery mechanism not originally contemplated by or included in a fair share plan that has been the subject of a compliance certification.
EQUALIZED ASSESSED VALUE (or EAV)
Means 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 at P.L. 1973, c. 123 (N.J.S.A. 54:1-35a, 54:1-35b, and 54:1-35c). Estimates at the time of building permit may be obtained by the tax assessor using construction cost estimates. Final EAV shall be determined at project completion by the municipal assessor.
EQUITY SHARE AMOUNT
Means the product of the price differential and the equity share, with the equity share being the whole number of years that have elapsed since the last non-exempt sale of a restricted ownership unit, divided by 100, except that the equity share may not be less than 5% and may not exceed 30%.
EXCLUSIONARY ZONING LITIGATION
Means litigation challenging the fair share plan, housing element, ordinances, or resolutions that implement the fair share plan or housing element of a municipality based on alleged noncompliance with the Act or the Mount Laurel doctrine, which litigation shall include, but shall not be limited to, litigation seeking a builder's remedy.
EXIT SALE
Means the first authorized non-exempt sale of a restricted unit following the end of the control period, which sale terminates the affordability controls on the unit.
EXTENSION OF EXPIRING CONTROLS
Means extending the deed restriction period on units where the controls will expire in the current round of a housing obligation, so that the total years of a deed restriction is at least 60 years.
FAIR SHARE OBLIGATION
Means the total of the present need and prospective need, including prior rounds, as determined by the Affordable Housing Dispute Resolution Program, or a court of competent jurisdiction.
FAIR SHARE PLAN
Means the plan or proposal, with accompanying ordinances and resolutions, by which a municipality proposes to satisfy its constitutional obligation to create a realistic opportunity to meet its fair share of low- and moderate-income housing needs of its region and which details the affirmative measures the municipality proposes to undertake to achieve its fair share of low- and moderate-income housing, as provided in the municipal housing element, and which addresses the development regulations necessary to implement the housing element, including, but not limited to, inclusionary requirements and development fees, and the elimination of unnecessary housing cost-generating features from the municipal land use ordinances and regulations.
FHA
Means the New Jersey Fair Housing Act, N.J.S.A. 52:27D-301 et seq.
GREEN BUILDING STRATEGIES
Means the 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.
HMFA or THE AGENCY
Means the New Jersey Housing and Mortgage Finance Agency established pursuant to P.L. 1983, c. 530 (N.J.S.A. 55:14K-1 et seq.).
HOUSEHOLD INCOME
Means a household's gross annual income calculated in a manner consistent with the determination of annual income pursuant to section 8 of the United States Housing Act of 1937 (Section 8), not in accordance with the determination of gross income for Federal income tax liability.
HOUSING ELEMENT
Means the portion of a municipality's master plan adopted in accordance with the Municipal Land Use Law (MLUL) at N.J.S.A. 40:55D-28.b(3) and the Act consisting of reports, statements proposals, maps, diagrams, and text designed to meet the municipality's fair share of its region's present and prospective housing needs, particularly with regard to low- and moderate-income housing, which shall include the municipal present and prospective obligation for affordable housing, determined pursuant to subsection f. at N.J.S.A. 52:27D-304.1.
HOUSING REGION
Means a geographic area established pursuant to N.J.S.A. 52:27D-304.2b.
INCLUSIONARY DEVELOPMENT
Means a residential housing development in which a substantial percentage of the housing units are provided for a reasonable income range of low- and moderate- income households.
JUDGMENT OF COMPLIANCE or JUDGMENT FOR REPOSE
Means a determination issued by the Superior Court approving a municipality's fair share plan to satisfy its affordable housing obligation for a particular ten-year round.
LOW-INCOME HOUSEHOLD
Means a household with a household income equal to 50% or less of the regional median income.
LOW-INCOME UNIT
Means a restricted unit that is affordable to a low-income household.
MAJOR SYSTEM
Means the primary structural, mechanical, plumbing, electrical, fire protection, or occupant service components of a building which include but are not limited to, weatherization, roofing, plumbing (including wells), heating, electricity, sanitary plumbing (including septic systems), lead paint abatement or load bearing structural systems.
MIXED USE DEVELOPMENT
Means any development that includes both a non-residential development component and a residential development component, and shall include developments for which: 1) there is a common developer for both the residential development component and the non-residential development component, provided that for purposes of this definition, multiple persons and entities maybe considered a common developer if there is a contractual relationship among them obligating each entity to develop at least a portion of the residential or non-residential development, or both, or otherwise to contribute resources to the development; and 2) the residential and non-residential developments are located on the same lot or adjoining lots, including, but not limited to, lots separated by a street, a river, or another geographical feature.
MODERATE-INCOME HOUSEHOLD
Means a household with a household income in excess of 50% but less than 80% of the regional median income.
MODERATE-INCOME UNIT
Means a restricted unit that is affordable to a moderate-income household.
MONI
Means the no-longer-active Market Oriented Neighborhood Investment Program, as it was authorized by the Agency.
MUNICIPAL AFFORDABLE HOUSING TRUST FUND
Means a separate, interest-bearing account held by a municipality for the deposit of development fees, payments in lieu of constructing affordable units on sites zoned for affordable housing previously approved prior to March 20, 2024 (per P.L. 2024, c.2)[3], barrier-free escrow funds, recapture funds, proceeds from the sale of affordable units, rental income, repayments from affordable housing program loans, enforcement fines, unexpended RCA funds remaining from a completed RCA project, application fees, and any other funds collected by the municipality in connection with its affordable housing programs, which shall be used to address municipal low- and moderate-income housing obligations within the time frames established by the Legislature and this chapter.
MUNICIPAL DEVELOPMENT FEE ORDINANCE
Means an ordinance adopted by the governing body of a municipality that authorizes the collection of development fees.
MUNICIPAL HOUSING LIAISON (or MHL)
Means an appointed municipal employee who is, pursuant to N.J.A.C. 5:99-6, responsible for oversight and/or administration of the affordable units created within the municipality.
NEW CONSTRUCTION
Means the creation of a new housing unit under regulation by a code enforcement official regardless of the means by which the unit is created. Newly constructed units are evidenced by the issuance of a certificate of occupancy and may include new residences created through additions and alterations, adaptive reuse, subdivision, or conversion of existing space, and moving a structure from one location to another.
NEW JERSEY AFFORDABLE HOUSING TRUST FUND
Means an account established pursuant to N.J.S.A. 52:27D-320.
NEW JERSEY HOUSING RESOURCE CENTER or HOUSING RESOURCE CENTER
Means the online affordable housing listing portal, or its successor, overseen by the Agency pursuant to N.J.S.A. 52:27D-321.3 et seq.
NON-EXEMPT SALE
Means any sale or transfer of ownership of a restricted unit to one's self or to another individual other than the transfer of ownership between spouses or civil union partners; the transfer of ownership between former spouses or civil union partners ordered as a result of a judicial decree of divorce or judicial separation, but not including sales to third parties; the transfer of ownership between family members as a result of inheritance; the transfer of ownership through an executor's deed to a class A beneficiary; and the transfer of ownership by court order.
NON-RESIDENTIAL DEVELOPMENT
Means:
A. 
Any building or structure, or portion thereof, including, but not limited to, any appurtenant improvements, which is designated to a use group other than a residential use group according to the State Uniform Construction Code, N.J.A.C. 5:23, promulgated to effectuate the State uniform Construction Code Act, N.J.S.A. 52:27D-119 et seq., including any subsequent amendments or revisions thereto;
B. 
Hotels, motels, vacation timeshares, and child-care facilities; and
C. 
The entirety of all continuing care facilities within a continuing care retirement community which is subject to the Continuing Care Retirement Community Regulation and Financial Disclosure Act, N.J.S.A.52:27D-330 et seq.
NON-RESIDENTIAL DEVELOPMENT FEE
Means the fee authorized to be imposed pursuant to N.J.S.A. 40:55D-8.1 through 40:55D-8.7.
NONPROFIT
Means an organization granted nonprofit status in accordance with section 501(c)(3) of the Internal Revenue Code.
ORDER FOR REPOSE
Means the protection a municipality has from a builder's remedy lawsuit for a period of time from the entry of a judgment of compliance by the Superior Court. A judgment of compliance often results in an order for repose.
PAYMENT IN LIEU OF CONSTRUCTING AFFORDABLE UNITS
Means the prior approval of the payment of funds to the municipality by a developer when affordable units are were not produced on a site zoned for an inclusionary development. The statutory permission for payments in lieu of constructing affordable units was eliminated per P.L. 2024, c.2.[4]
PERSON WITH A DISABILITY
Means a person with a physical disability, infirmity, malformation, or disfigurement which is caused by bodily injury, birth defect, aging, or illness including epilepsy and other seizure disorders, and which shall include, but not be limited to, any degree of paralysis, amputation, lack of physical coordination, blindness or visual impairment, deafness or hearing impairment, the inability to speak or a speech impairment, or physical reliance on a service animal, wheelchair, or other remedial appliance or device.
PRICE DIFFERENTIAL
Means the difference between the controlled sale price of a restricted unit and the contract price at the exit sale of the unit, determined as of the date of a proposed contract of sale for the unit. If there is no proposed contract of sale, the price differential is the difference between the controlled sale price of a restricted unit and the appraised value of the unit as if it were not subject to UHAC, determined as of the date of the appraisal. If the controlled sale price exceeds the contract price or, in the absence of a contract price, the appraised value, the price differential is zero dollars.
PRIOR ROUND UNIT
Means a housing unit that addresses a municipality's fair share obligation from a round prior to the fourth round of affordable housing obligations, including any unit that: 1) received substantive certification from COAH; 2) is part of a third-round settlement agreement or judgment of compliance approved by a court of competent jurisdiction, inclusive of units created pursuant to a zoning designation adopted as part of the settlement agreement or judgment of compliance to create a realistic opportunity for development; 3) is subject to a grant agreement or other contract with either the state or a political subdivision thereof entered into prior to July 1, 2025, pursuant to either item (1) or (2) above; or 4) otherwise addresses a municipality's fair share obligation from a round prior to the fourth round of affordable housing obligations. A unit created after the enactment of P.L. 2024, c. 2 (N.J.S.A. 52:27D-304.1) on March 20, 2024, is not a prior round unit unless: 1) it is created pursuant to a prior round development plan or zoning designation that received COAH or court approval on or before the cutoff date of June 30, 2025, or the date that the municipality adopts the implementing ordinances and resolutions for the fourth round of affordable housing obligations, whichever occurs sooner; and 2) its siting and creation are consistent with the form of the prior round development plan or zoning designation in effect as of the cutoff date, without any amendment or variance.
PROGRAM
Means the Affordable Housing Dispute Resolution Program, established pursuant to section 5 of P.L. 2024, c. 2 (N.J.S.A. 52:27D-313.2).
PROSPECTIVE NEED
Means a projection of housing needs based on development and growth which is reasonably likely to occur in a region or a municipality, as the case may be, as a result of actual determination of public and private entities. Prospective need shall be determined by the methodology set forth pursuant to sections 6 and 7 of P.L.2024, c. 2 (N.J.S.A. 52:27D-304.2 and N.J.S.A. 52:27D-304.3) for the fourth round and all future rounds of housing obligations.
QUALIFIED URBAN AID MUNICIPALITY
Means a municipality that meets the criteria established pursuant to N.J.S.A. 52:27D-304.3.c(1).
RANDOM SELECTION PROCESS
Means a lottery process by which currently income-eligible applicant-households are selected, at random, for placement in affordable housing units such that no preference is given to one applicant over another, except in the case of a veterans' preference where such an agreement exists; for purposes of matching household income and size with an appropriately priced and sized affordable unit; or another purpose allowed pursuant to N.J.A.C. 5:80-26.7(k)3. This definition excludes any practices that would allow affordable housing units to be leased or sold on a first-come, first-served basis.
RCA ADMINISTRATOR
Means an appointed municipal employee who is responsible for oversight and/or administration of affordable units and associated revenues and expenditures within the municipality that were funded through regional contribution agreements.
RCA PROJECT PLAN
Means a past application, submitted by a receiving municipality in an RCA, delineating the manner in which the receiving municipality intended to create or rehabilitate low- and moderate-income housing.
RECEIVING MUNICIPALITY
Means, for the purposes of an RCA, a municipality that contractually agreed to assume a portion of another municipality's fair share obligation.
RECONSTRUCTION
Means any project where the extent and nature of the work is such that the work area cannot be occupied while the work is in progress and where a new certificate of occupancy is required before the work area can be reoccupied, pursuant to the Rehabilitation Subcode of the uniform Construction Code, N.J.A.C. 5:23-6. Reconstruction shall not include projects comprised only of floor finish replacement, painting or wallpapering, or the replacement of equipment or furnishings. Asbestos hazard abatement and lead hazard abatement projects shall not be classified as reconstruction solely because occupancy of the work area is not permitted.
RECREATIONAL FACILITIES AND COMMUNITY CENTERS
Means any indoor or outdoor buildings, spaces, structures, or improvements intended for active or passive recreation, including, but not limited to, ballfields, meeting halls, and classrooms, accommodating either organized or informal activity.
REGIONAL CONTRIBUTION AGREEMENT (or RCA)
Means a contractual agreement, pursuant to the Act, into which two municipalities voluntarily entered into and was approved by COAH and/or Superior Court prior to July 18, 2008, to transfer a portion of a municipality's affordable housing obligation to another municipality within its housing region.
REGIONAL MEDIAN INCOME
Means the median income by household size for an applicable housing region, as calculated annually in accordance with N.J.A.C. 5:80-26.3.
REHABILITATION
Means the repair, renovation, alteration, or reconstruction of any building or structure, pursuant to the Rehabilitation Subcode, N.J.A.C. 5:23-6.
RENT
Means the gross monthly cost of a rental unit to the tenant, including the rent paid to the landlord, as well as an allowance for tenant-paid utilities computed in accordance with allowances published by DCA for its Section 8 program. With respect to units in assisted living residences, rent does not include charges for food and services.
RESIDENTIAL DEVELOPMENT FEE
Means money paid by a developer for the improvement of residential property as permitted pursuant to N.J.S.A. 52:27D-329.2 and N.J.A.C. 5:99-3.2.
RESTRICTED UNIT
Means a dwelling unit, whether a rental unit or ownership unit, that is subject to the affordability controls of this section but does not include a market-rate unit that was financed pursuant to UHORP, MONI, or CHOICE.
SPENDING PLAN
Means a method of allocating funds contained in an affordable housing trust fund account, which includes, but is not limited to, development fees collected and to be collected pursuant to an approved municipal development fee ordinance, or pursuant to N.J.S.A. 52:27D-329.1 et seq., for the purpose of meeting the housing needs of low- and moderate-income individuals.
STATE DEVELOPMENT AND REDEVELOPMENT PLAN (or STATE PLAN)
Means the plan prepared pursuant to sections 1 through 12 of the "State Planning Act," P.L. 1985, c. 398 (N.J.S.A. 52:18A-196 et al.), designed to represent a balance of development and conservation objectives best suited to meet the needs of the State, and for the purpose of coordinating planning activities and establishing Statewide planning objectives in the areas of land use, housing, economic development, transportation, natural resource conservation, agriculture and farmland retention, recreation, urban and suburban redevelopment, historic preservation, public facilities and services, and intergovernmental coordination pursuant to subsection f. of section 5 of P.L. 1985, c.398 (N.J.S.A. 52:18A-200).
SUPPORTIVE HOUSING HOUSEHOLD
Means a very-low-, low- or moderate-income household certified as income eligible by an administrative agent in accordance with N.J.A.C. 5:80-26.14, in which at least one member is an individual who requires supportive services to maintain housing stability and independent living and who is part of a population identified by federal or state statute, regulation, or program guidance as eligible for supportive or special needs housing. Such populations include, but are not limited to: persons with intellectual or developmental disabilities, persons with serious mental illness, person with head injuries (as defined in Section 2 of P.L. 1977), persons with physical disabilities or chronic health conditions, persons who are homeless as defined by the U.S. Department of Housing and Urban Development at 24 C.F.R. Part 578, survivors of domestic violence, youth aging out of foster care, and other special needs populations recognized under programs administered by the U.S. Department of Housing and Urban Development, the Low-Income Housing Tax Credit Program, the McKinney—Vento Act, or the New Jersey Department of Human Services. A supportive housing household may include family members, unrelated individuals, or live-in aides, provided that the household meets the income eligibility requirements of this section, except that in the case of unrelated individuals not operating as a family unit, income eligibility shall be tested on an individual basis rather than in the aggregate; the unit is leased or sold subject to the affordability controls established herein; and the supportive services available to the household are designed to promote housing stability, independent living, and community integration. The determination of whether unrelated individuals are operating as a family unit shall be made based on the applicant's self-identification of household members on the affordable housing application.
SUPPORTIVE HOUSING SPONSORING PROGRAM
Means grant or loan program which provided financial assistance to the development of the unit.
SUPPORTIVE HOUSING UNIT
Means a restricted rental unit, as defined by N.J.S.A. 34:1B-21.24, that is affordable to very-low-, low- or moderate-income households and is reserved for occupancy by a supportive housing household. Supportive housing units are also referred to as permanent supportive housing units.
TRANSITIONAL HOUSING
Means temporary housing that: 1) includes, but is not limited to, single-room room occupancy housing or shared living and supportive living arrangements; 2) provides access to on-site or off-site supportive services for very-low-income households who have recently been homeless or lack stable housing; 3) is licensed by the department; and 4) allows households to remain for a minimum of six months.
TREASURER
Means the Treasurer of the State of New Jersey.
UHAC
Means the Uniform Housing Affordability Controls set forth at N.J.A.C. 5:80-26.
UHORP
Means the Agency's Urban Homeownership Recovery Program, as it was authorized by the Agency Board.
UNIT TYPE
Means type of dwelling unit with various building standards including but not limited to single-family detached, single-family attached/townhouse, stacked townhouse (attached building containing 2 units each with separate entrances), duplex (detached building containing 2 units each with separate entrances), triplex (3 units each with separate entrance), quadplex (4 units each with separate entrance), multifamily/flat (2 or more units with a shared entrance). Inclusion of a garage, or not, shall not define the unit type.
VERY-LOW-INCOME HOUSEHOLD
Means a household with a household income less than or equal to 30% of the regional median income.
VERY-LOW-INCOME HOUSING
Means housing affordable according to the Federal Department of Housing and Urban Development or other recognized standards for home ownership and rental costs and occupied or reserved for occupancy by households with a gross household income equal to 30% or less of the median gross household income for households of the same size within the housing region in which the housing is located.
VERY-LOW-INCOME UNIT
Means a restricted unit that is affordable to a very-low-income household.
VETERAN
Means a veteran as defined at N.J.S.A. 54:4-8.10.
VETERANS' PREFERENCE
Means the agreement between a municipality and a developer or residential development owner that allows for low- to moderate-income veterans to be given preference for up to 50% of rental units in relevant projects, as provided for at N.J.S.A. 52:27D-311.j.
WEATHERIZATION
Means building insulation (for attic, exterior walls and crawl space), siding to improve energy efficiency, replacement storm windows, replacement storm doors, replacement windows and replacement doors and is considered a major system for rehabilitation.
[1]
Editor's Note: See N.J.S.A. 52:27D-302 et seq.
[2]
Editor's Note: See N.J.S.A. 52:27D-313.2.
[3]
Editor's Note: See N.J.S.A. 52:27D-302 et seq.
[4]
Editor's Note: See N.J.S.A. 52:27D-302 et seq.
The municipality 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. 
The municipality shall provide electronic monitoring data with the Department pursuant to P.L. 2024, Chapter 2[1] and N.J.A.C. 5:99 through the Affordable Housing Monitoring System (AHMS). All monitoring information required to be made public by the FHA shall be available to the public on the Department's website at https://www.nj.gov/dca/dlps/hss/MuniStatusReporting.shtml.
[1]
Editor's Note: See N.J.S.A. 52:27D-302 et seq.
B. 
On or before February 15 of each year, the municipality shall provide annual reporting of its municipal Affordable Housing Trust Fund activity to the Department on the AHMS portal. The reporting shall include an accounting of all municipal Affordable Housing Trust Fund activity, including the sources and amounts of funds collected and the amounts and purposes for which any funds have been expended, for the previous year from January 1st to December 31st.
C. 
On or before February 15 of each year, the annual reporting of the status of all affordable housing activity shall be provided to the Department on the AHMS portal, for the previous year from January 1st to December 31st.
A. 
Pursuant to amended UHAC regulations at N.J.A.C. 5:80-26.1 et seq. and, in addition, pursuant to P.L. 2024, c.2[1] and specifically to the amended FHA at N.J.S.A. 52:27D-311.m, "All parties shall be entitled to rely upon regulations on municipal credits, adjustments, and compliance mechanisms adopted by the Council on Affordable Housing unless those regulations are contradicted by statute, including but not limited to P.L. 2024, c.2, or binding court decisions." The following are many of the main provisions of the COAH regulations at either N.J.A.C. 5:93 or 5:97 that have been upheld by the NJ Supreme Court. Municipalities should consult the cited full COAH regulations when preparing the HEFSP for required documentation, etc. Additional compliance details may also be included in the specific municipal program manual.
[1]
Editor's Note: See N.J.S.A. 52:27D-302 et seq.
B. 
Rehabilitation programs (per N.J.A.C. 5:93-5.2 with updated provisions herein per N.J.A.C. 5:97-6.2 related to credit towards a municipal present need obligation).
(1) 
The Borough will participate in a Bergen County sponsored rehabilitation program.
(2) 
The rehabilitation program shall be designed to renovate deficient housing units occupied or intended to be occupied by very-low-, low- and moderate-income households such that, after rehabilitation, these units will comply with the New Jersey State Housing Code pursuant to N.J.A.C. 5:28-1.1 et seq. or the Rehabilitation Subcode, N.J.A.C. 5:23-6 to the extent applicable.
(3) 
Both ownership and rental units shall be eligible for rehabilitation funds.
(4) 
All rehabilitated units shall remain affordable to very-low-, low- and moderate-income households for a period of 10 years (the control period). For owner-occupied units, the control period shall be enforced with a mortgage and note and for renter-occupied units the control period will be enforced with a deed restriction.
(5) 
The municipality shall dedicate a minimum average hard cost of $10,000 for each unit to be rehabilitated through this program and in addition shall dedicate associated rehabilitation program soft costs such as case management, inspection fees and work write-ups.
(6) 
The municipality shall designate, subject to the approval of the Department, one or more administrative agents to administer the rehabilitation program in accordance with P.L. 2024, Chapter 2.[2] The administrative agent(s) shall provide rehabilitation manuals for ownership and rental rehabilitation programs. Manuals shall be adopted by resolution of the governing body. Both rehabilitation manuals shall be available for public inspection in the Office of the Municipal Clerk and on the municipal affordable housing web page.
[2]
Editor's Note: See N.J.S.A. 52:27D-302 et seq.
(7) 
Households determined to be very-low-, low-, or moderate-income may participate in a rehabilitation program. Rehabilitated units shall be exempt from the very-low-income requirements, low/mod split, and bedroom distribution requirements of UHAC, but shall be administered in accordance with the following:
(a) 
If a unit is vacant at the time of rehabilitation, or if a rehabilitated unit becomes vacant and is re-rented before the expiration of the affordability controls, the deed restriction shall require that the unit be rented to a low- or moderate-income household at an affordable rent.
(b) 
If a rental unit is occupied by a tenant at the time rehabilitation is completed, the rent charged after rehabilitation shall not exceed the lesser of the tenant's current rent or the maximum rent permitted under UHAC.
(c) 
Rents in rehabilitated units may increase annually based on the standards in UHAC.
(d) 
At the time of application, applicant households and/or tenant households shall be subject to income eligibility determinations in accordance with UHAC.
A. 
The municipality shall adopt, by resolution, an Affirmative Marketing Plan, subject to approval of the Superior Court, compliant with N.J.A.C. 5:80-26.16, as may be amended and supplemented. The Affirmative Marketing Plan shall not apply to low and moderate income units owned or controlled by the Lodi Housing Authority including their Section 8 Program since they have their own Marketing Plan in accordance with Federal Government Requirements and Guidelines.
B. 
The Affirmative Marketing Plan is a regional marketing strategy designed to attract buyers and/or renters of all majority and minority groups, regardless of race, creed, color, national origin, ancestry, marital or familial status, gender, affectional or sexual orientation, disability, age, or number of children, to housing units which are being marketed by a developer, sponsor or owner of affordable housing. The Affirmative Marketing Plan is intended to target those potentially eligible persons who are least likely to apply for affordable units in that region. It is a continuing program that directs all marketing activities toward Housing Region 1 and is required to be followed throughout the period of deed restriction.
C. 
The Affirmative Marketing Plan provides the following preferences, provided that units that remain unoccupied after these preferences are exhausted may be offered to households without regard to these preferences.
(1) 
Where the municipality has entered into an agreement with a developer or residential development owner to provide a preference for very-low-, low-, and moderate-income veterans who served in time of war or other emergency, pursuant to N.J.S.A. 52:27D-311.j, there shall be a preference for veterans for up to 50% of the restricted rental units in a particular project.
(2) 
There shall be a regional preference for all households that live and/or work in Housing Region 1 comprising Bergen, Hudson, Passaic, and Sussex Counties.
(3) 
Subordinate to the regional preference, there shall be a preference for households that live and/or work in New Jersey.
(4) 
With respect to existing restricted units undergoing approved rehabilitation for the purpose of preservation or to restricted units newly created to replace existing restricted units undergoing demolition, a preference for the very-low-, low-, and moderate-income households that are displaced by the rehabilitation or demolition and replacement.
D. 
The municipality has the ultimate responsibility for adopting the Affirmative Marketing Plan and for the proper administration of the Affirmative Marketing Process, including the marketing of initial sales and rentals and resales and re-rentals. The administrative agent designated by the municipality shall implement the Affirmative Marketing Process to ensure the Affirmative Marketing of all affordable units, with the exception of affordable programs that are exempt from Affirmative Marketing as noted herein.
E. 
The Affirmative Marketing Process shall describe the media to be used in advertising and publicizing the availability of housing. In implementing the Affirmative Marketing Process, the administrative agent shall consider the use of language translations where appropriate.
F. 
Applications for affordable housing or notices thereof, if offered online, shall be available in several locations, including, at a minimum, the County Administration Building and/or the County Library for each county within the housing region; the municipal administration building and municipal library in the municipality in which the units are located; and the developer's rental or sales office. The developer shall mail applications to prospective applicants upon request and shall make applications available through a secure online website address.
G. 
In addition to other Affirmative Marketing strategies, the administrative agent shall provide specific notice of the availability of affordable housing units on the New Jersey Housing Resource Center website. Any other entities, including developers or persons or companies retained to implement the Affirmative Marketing Process, shall comply with this subsection.
H. 
In implementing the Affirmative Marketing Process, the administrative agent shall provide a list of counseling services to low- and moderate-income applicants on subjects such as budgeting, credit issues, mortgage qualification, rental lease requirements, and landlord/tenant law.
I. 
The Affirmative Marketing Process for available affordable units shall begin at least four months (120 days) prior to the expected date of occupancy.
A. 
The Municipal Housing Liaison shall be approved by municipal resolution.
B. 
The Municipal Housing Liaison shall be approved by the Division, or is in the process of getting approval, and fully or conditionally meets the requirements for qualifications, including initial and periodic training as set forth in in N.J.A.C. 5:99-1 et seq.
C. 
The Municipal Housing Liaison shall be responsible for oversight and administration of the affordable housing program, including the following responsibilities, which may not be contracted out to the administrative agent:
(1) 
Serving as the primary point of contact for all inquiries from the Affordable Housing Dispute Resolution Program, the state, affordable housing providers, administrative agents and interested households.
(2) 
The oversight of the Affirmative Marketing Plan and affordability controls.
(3) 
When applicable, overseeing and monitoring any contracting administrative agent.
(4) 
Overseeing the monitoring of the status of all restricted units listed in the Fair Share Plan.
(5) 
Verifying, certifying and providing annual information within AHMS at such time and in such form as required by the Division.
(6) 
Coordinating meetings with affordable housing providers and administrative agents, as needed.
(7) 
Attending continuing education opportunities on affordability controls, compliance monitoring, and affirmative marketing as offered or approved by the Division.
(8) 
Overseeing the recording of a preliminary instrument in the form set forth at N.J.A.C. 5:80-26.1 for each affordable housing development.
(9) 
Coordinating with the administrative agent, municipal attorney and municipal Construction Code Official to ensure that permits are not issued unless the document required in Subsection C(8) above has been duly recorded.
(10) 
Listing on the municipal website contact information for the MHL and administrative agents.
A. 
All municipalities that have created or will create affordable housing programs and/or affordable units shall designate or approve, for each project within its HEFSP, an administrative agent to administer the affordable housing program and/or affordable housing units in accordance with the requirements of the FHA, NJAC 5:99-1 et seq. and UHAC.
B. 
The fees for administrative agents shall be paid as follows:
(1) 
Administrative agent fees related to rental units shall be paid by the developer/owner.
(2) 
Administrative agent fees related to initial sale of units shall be paid by the developer.
(3) 
Administrative agent fees related to resales shall be paid by the seller of the affordable home.
(4) 
Administrative agent fees related to ongoing administration and enforcement shall be paid by the municipality.
C. 
An operating manual for each affordable housing program shall be provided by the administrative agent(s). The operating manual(s) shall be available for public inspection in the Office of the Clerk and in the office(s) of the administrative agent(s). Operating manuals shall be adopted by resolution of the Governing Body.
D. 
Subject to the role of the administrative agent(s), the duties and responsibilities as are set forth in N.J.A.C. 5:99-7 and which are described in full detail in the operating manual, including those set forth in UHAC, include:
(1) 
Attending continuing education opportunities on affordability controls, compliance monitoring, and affirmative marketing as offered or approved by the Division;
(2) 
Affirmative marketing:
(a) 
Conducting an outreach process to affirmatively market affordable housing units in accordance with the Affirmative Marketing Plan of the municipality and the provisions of N.J.A.C. 5:80-26.16.
(b) 
Providing counseling, or contracting to provide counseling services, to low- and moderate-income applicants on subjects such as budgeting, credit issues, mortgage qualification, rental lease requirements; and landlord/tenant law.
(3) 
Household certification.
(a) 
Soliciting, scheduling, conducting and following up on interviews with interested households.
(b) 
Conducting interviews and obtaining sufficient documentation of gross income and assets upon which to base a determination of income eligibility for a low- or moderate-income unit;
(c) 
Providing written notification to each applicant as to the determination of eligibility or non-eligibility within five days of the determination thereof.
(d) 
Requiring that all certified applicants for restricted units execute a certificate substantially in the firm, as applicable, of either the ownership or rental certificates set forth in the Appendices J and K of N.J.A.C. 5:80-26.1 et seq.
(e) 
Creating and maintaining a referral list of eligible applicant households living in the housing region, and eligible applicant households with members working in the housing region, where the units are located.
(f) 
Employing a random selection process as provided in the Affirmative Marketing Plan when referring households for certification to affordable units.
(4) 
Affordability controls.
(a) 
Furnishing to attorneys or closing agents forms of deed restrictions and mortgages for the recording at the time of conveyance of title of each restricted unit.
(b) 
Ensuring that the removal of the deed restrictions and cancellation of the mortgage note are effectuated and filed properly with the County Register of Deeds or County Clerk's office after the termination of the affordability controls for each restricted unit in accordance with UHAC.
(c) 
Communicating with lenders and the Municipal Housing Liaison regarding foreclosures.
(d) 
Ensuring the issuance of Continuing Certificates of Occupancy or certifications pursuant to N.J.A.C. 5:80-26.11.
(5) 
Records retention.
(a) 
Creating and maintaining a file on each restricted unit for its control period, including the recorded deed with restrictions, recorded recapture mortgage, and note, as appropriate.
(b) 
Records received, retained, retrieved, or transmitted in furtherance of crediting affordable units of a municipality constitute public records of the municipality as defined by N.J.S.A. 47:3-16, and are legal property of the municipality.
(6) 
Resales and re-rentals.
(a) 
Instituting and maintaining an effective means of communicating information between owners and the administrative agent regarding the availability of restricted units for resale or re-rental.
(b) 
Instituting and maintaining an effective means of communicating information to very-low-, low-, or moderate-income households regarding the availability of restricted units for resale or re-rental.
(7) 
Processing requests from unit owners.
(a) 
Reviewing and approving requests from owners of restricted units who wish to refinance or take out home equity loans during the term of their ownership to determine that the amount of indebtedness to be incurred will not violate the terms of this chapter.
(b) 
Reviewing and approving requests to increase sales prices from owners of restricted units who wish to make capital improvements to the units that would affect the selling price, such authorizations to be limited to those improvements resulting in additional bedrooms or bathrooms and the depreciated cost of central air conditioning systems.
(c) 
Notifying the municipality of an owner's intent to sell a restricted unit.
(d) 
Making determinations on requests by owners of restricted units for hardship waivers.
(8) 
Enforcement.
(a) 
Securing annually from the municipality a list of all affordable ownership units for which property tax bills are mailed to absentee owners, and notifying all such owners that they must either move back to their unit or sell it;
(b) 
Securing from all developers and sponsors of restricted units, at the earliest point of contact in the processing of the project or development, written acknowledgement of the requirement that no restricted unit can be offered, or in any other way committed, to any person, other than a household duly certified to the unit by the administrative agent;
(c) 
Sending annual mailings to all owners of affordable dwelling units reminding them of the notices and requirements outlined in N.J.A.C. 5:80-26.19(d)4;
(d) 
Establishing a program for diverting unlawful rent payments to the municipal Affordable Housing Trust Fund; and
(e) 
Creating and publishing a written operating manual for each affordable housing program administered by the administrative agent setting forth procedures for administering the affordability controls.
(9) 
The administrative agent(s) shall, as delegated by the municipality, have the authority to take all actions necessary and appropriate to carry out its/their responsibilities, herein.
A. 
Purpose.
(1) 
This section establishes standards for the collection, maintenance, and expenditure of development fees that are consistent with the amended Fair Housing Act (P.L. 2024, c.2[1]), N.J.A.C. 5:99, and the Statewide Non-Residential Development Fee Act (N.J.S.A. 40:55D-8.1 through 8.7). Fees collected pursuant to this chapter shall be used for the sole purpose of rehabilitating or providing very-low-, low- and moderate-income housing in accordance with a Court-approved Spending Plan or rehabilitation of housing units.
[1]
Editor's Note: See N.J.S.A. 52:27D-301 et seq.
B. 
Basic requirements.
(1) 
This chapter establishes the Municipal Affordable Housing Trust Fund.
(2) 
The municipality shall not spend development fees until the court has approved a plan for spending such fees.
C. 
Residential development fees.
(1) 
Imposed fees.
(a) 
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. Development fees shall also be imposed and collected when an additional dwelling unit is added to an existing residential structure; in such cases, the fee shall be calculated based on the increase in the equalized assessed value of the property due to the additional dwelling unit.
(b) 
When an increase in residential density is permitted pursuant to a "d" variance granted under N.J.S.A. 40:55D-70d(5), developers shall be required to pay a "bonus" development fee of 6.0% of the equalized assessed value for each additional unit that may be realized, except that this provision shall not be applicable to a development that will include affordable housing. If the zoning on a site has changed during the two-year period preceding the filing of such a variance application, the base density for the purposes of calculating the bonus development fee shall be the highest density permitted by right during the two-year period preceding the filing of the variance application.
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 of 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 an eligible payment in lieu of on-site construction of affordable units, if permitted by ordinance, or by agreement with the municipality and if approved by a municipality prior to the statutory elimination of payments in-lieu on March 20, 2024 per P.L.2024, c.2,[2] shall be exempt from development fees.
[2]
Editor's Note: See N.J.S.A. 52:27D-302 et seq.
(b) 
Development fees shall be imposed and collected when an existing structure undergoes a change to a more intense use, is demolished and replaced, or is expanded, if the expansion is not otherwise exempt from the development fee requirement. The development fee shall be calculated on the increase in the equalized assessed value of the improved structure.
(c) 
No development fee shall be collected for the demolition and replacement of a residential building resulting from a fire or natural disaster.
(d) 
Developers of one-, two-, three-, and four-family residential dwellings shall be exempt from paying a development fee.
D. 
Non-residential development fees.
(1) 
Imposition of fees.
(a) 
Within all zoning districts, non-residential 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 non-residential construction on an unimproved lot or lots.
(b) 
Within all zoning districts, non-residential 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 non-residential 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 pre-existing land and improvements and the equalized assessed value of the newly improved structure (i.e., land and improvements); and such calculation shall be made at the time a final certificate of occupancy is issued. If the calculation required under this section results in a negative number, the non-residential development fee shall be zero.
(2) 
Eligible exactions, ineligible exactions and exemptions for non-residential development.
(a) 
The non-residential portion of a mixed-use inclusionary or market-rate development shall be subject to a 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.
(3) 
Non-residential developments shall be exempt from the payment of non-residential development fees in accordance with the exemptions required pursuant to the Statewide Non-Residential Development Fee Act (N.J.S.A. 40:55D-8.1 through 8.7), as specified in Form N-RDF "State of New Jersey Non-Residential Development Certification/Exemption." Any exemption claimed by a developer shall be substantiated by that developer.
(4) 
A developer of a non-residential development exempted from the non-residential development fee pursuant to the Statewide Non-Residential Development Fee Act shall be subject to the fee at such time as the basis for the exemption no longer applies, and shall make the payment of the non-residential development fee, in that event, within three years after that event or after the issuance of the final certificate of occupancy of the non-residential development, whichever is later.
(5) 
If a property that was exempted from the collection of a non-residential 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 non-residential development fees under these circumstances may be enforceable by the municipality 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 non-residential developments only, the developer shall also be provided with a copy of Form N-RDF, "State of New Jersey Non-Residential Development Certification/Exemption," to be completed by the developer as per the instructions provided in the Form N-RDF. The construction official shall verify the information submitted by the non-residential developer as per the instructions provided on 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 tax assessor of the issuance of the first construction permit for a development that is subject to a development fee.
(4) 
Within 90 days of receipt of that notice, the tax assessor shall provide an estimate, based on the plans filed, of the equalized assessed value of the development.
(5) 
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 that is subject to a development fee.
(6) 
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 associated with the development; calculate the development fee; and thereafter notify the developer of the amount of the fee.
(7) 
Should the municipality 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) 
50% of the development fee shall be collected at the time of issuance of the construction permit. The remaining portion shall be collected at the time of issuance of the certificate of occupancy. The developer shall be responsible for paying the difference between the fee calculated at the time of issuance of the construction permit and that determined at the time of issuance of certificate of occupancy.
F. 
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 that board, collected fees shall be placed in an interest-bearing escrow account by the municipality. Appeals from a determination of the board may be made to the Tax Court in accordance with the provisions of the State Tax Uniform Procedure Law, R.S. 54:48-1 et seq., within 90 days after the date of such determination. Interest earned on amounts escrowed shall be credited to the prevailing party.
(2) 
A developer may challenge non-residential 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. Appeals from a determination of the director may be made to the Tax Court in accordance with the provisions of the State Tax Uniform Procedure Law, R.S. 54:48-1 et seq., within 90 days after the date of such determination. Interest earned on amounts escrowed shall be credited to the prevailing party.
G. 
Affordable Housing Trust Fund.
(1) 
A separate, interest-bearing Municipal Affordable Housing Trust Fund shall be maintained by the chief financial officer of the municipality for the purpose of depositing development fees collected from residential and non-residential developers and proceeds from the sale of units with extinguished controls.
(2) 
The following additional funds shall be deposited in the Municipal Affordable Housing Trust Fund and shall at all times be identifiable by source and amount:
(a) 
Payments in lieu of on-site construction of an affordable unit, where previously permitted by ordinance or by agreement with the municipality and if approved by a municipality prior to the statutory elimination of payments in-lieu on March 20, 2024, per P.L. 2024, c.2;[3]
[3]
Editor's Note: See N.J.S.A. 52:27D-302 et seq.
(b) 
Funds contributed by developers to make 10% of the adaptable entrances in a townhouse or other multistory attached dwelling unit 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 municipal affordable housing program including but not limited to interest earned on fund deposits.
(3) 
The municipality shall provide the Division with written authorization, in the form of a tri-party escrow agreement(s) between the municipality, the Division and the financial institution in which the municipal affordable housing trust fund has been established to permit the Division to direct the disbursement of the funds as provided for in N.J.A.C. 5:99-2.1 et seq.
(4) 
Occurrence of any of the following deficiencies may result in the Division requiring the forfeiture of all or a portion of the funds in the municipal Affordable Housing Trust Fund:
(a) 
Failure to meet deadlines for information required by the Division in its review of a development fee ordinance;
(b) 
Failure to commit or expend development fees within four years of the date of collection in accordance with N.J.A.C. 5:99-5.5;
(c) 
Failure to comply with the requirements of the Non-Residential Development Fee Act and N.J.A.C. 5:99-3;
(d) 
Failure to submit accurate monitoring reports pursuant to this section within the time limits imposed by the Act, this chapter, and/or the Division;
(e) 
Expenditure of funds on activities not approved by the Superior Court or otherwise permitted by law;
(f) 
Revocation of compliance certification or a judgment of compliance and repose;
(g) 
Failure of a municipal housing liaison or administrative agent to comply with the requirements set forth at N.J.A.C. 5:99-6, 5:99-7, and 5:99-8;
(h) 
Other good cause demonstrating that municipal affordable housing funds are not being used for an approved purpose.
(5) 
All interest accrued in the housing trust fund shall only be used on eligible affordable housing purposes approved by the Court.
H. 
Use of funds.
(1) 
The expenditure of all funds shall conform to a spending plan approved by Superior Court. Funds deposited in the municipal Affordable Housing Trust Fund may be used for any activity approved by the Court to address the fair share obligation and may be set up as a grant or revolving loan program. Such activities include, but are not limited to: preservation or purchase of housing for the purpose of maintaining or implementing affordability controls; housing rehabilitation; new construction of affordable housing units and related costs; accessory apartments; a market-to-affordable program; conversion of existing non-residential buildings to create new affordable units; green building strategies designed to be cost-saving and in accordance with accepted national or state standards; purchase of land for affordable housing; improvement of land to be used for affordable housing; extensions or improvements of roads and infrastructure to affordable housing sites; financial assistance designed to increase affordability; administration necessary for implementation of the Housing Element and Fair Share Plan; and/or any other activity permitted by Superior Court and specified in the approved Spending Plan.
(2) 
Funds shall not be expended to reimburse the municipality or activities that occurred prior to the authorization of a municipality to collect development fees.
(3) 
At least a portion of all development fees collected and interest earned shall be used to provide affordability assistance to very-low-, low- and moderate-income households in affordable units included in the municipal Fair Share Plan. A portion of the development fees which provide affordability assistance shall be used to provide affordability assistance to very-low-income households.
(a) 
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. The specific programs to be used for affordability assistance shall be identified and described within the Spending Plan.
(b) 
Affordability assistance for very low income households may include producing very-low-income units or 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.
(4) 
No more than 20% of all affordable housing trust funds, exclusive of those collected to fund an RCA prior to July 17, 2008, shall be expended on administration, including, but not limited to, salaries and benefits for municipal employees or consultants' fees necessary to develop or implement a new construction program, prepare and implement a Housing Element and Fair Share Plan, administer an Affirmative Marketing Program and for compliance with the Superior Court and the Program including the costs to the municipality of resolving a challenge.
I. 
Monitoring.
(1) 
On or before February 15 of each year, the municipality shall provide annual electronic data reporting of trust fund activity for the previous year from January 1st to December 31st through the AHMS Reporting System. This reporting shall include an accounting of all Municipal Affordable Housing Trust Fund activity, including the sources and amounts of all funds collected and the amounts and purposes for which any funds have been expended. Such reporting shall include an accounting of development fees collected from residential and non-residential developers, previously eligible payments in lieu of constructing affordable units on site (if permitted by ordinance or by agreement with the municipality prior to the March 20, 2024, statutory elimination per P.L. 2024, c.4), funds from the sale of units with extinguished controls, barrier-free escrow funds, rental income from municipally-owned affordable housing units, repayments from affordable housing program loans, interest and any other funds collected in connection with municipal housing programs, as well as an accounting of the expenditures of revenues and implementation of the Spending Plan approved by the Court.
J. 
Ongoing collection of fees.
(1) 
The ability to impose, collect and expend development fees shall continue so long as the municipality retains authorization from the Court in the form of Compliance Certification or the good faith effort to obtain it.
(2) 
If the municipality fails to renew its ability to impose and collect development fees prior to the expiration of its Judgment of Compliance, it may be subject to forfeiture of any or all funds remaining within its Affordable Housing Trust Fund. Any funds so forfeited shall be deposited into the New Jersey Affordable Housing Trust Fund established pursuant to section 20 of P.L. 1985, c.222 (N.J.S.A. 52:27D-320).
K. 
Emergent affordable housing opportunities, requests to expend affordable housing trust funds on emergent affordable housing opportunities not included in the municipal fair share plan shall be made to the Division and shall be in the form of a governing body resolution. Any request shall be consistent with N.J.A.C. 5:99-4.1.