[Amended 4-12-2005 by Ord. No. 3537; 7-12-2005 by Ord. No.
3554; 12-13-2005 by Ord. No. 3583; 8-14-2007 by Ord. No. 3708; 11-8-2018 by Ord. No. 4247-18]
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 the Council
on Affordable Housing's (COAH's) adoption of rules.
B.
Pursuant to P.L. 2008, c. 46, Section 8 (N.J.S.A. 52:27D-329.2) and
the Statewide Nonresidential Development Fee Act (N.J.S.A. 40:55D-8.1
through 40:55D-8.7), COAH is authorized to adopt and promulgate regulations
necessary for the establishment, implementation, review, monitoring
and enforcement of municipal affordable housing trust funds and corresponding
spending plans. Municipalities that are under the jurisdiction of
the Council or court of competent jurisdiction and have a COAH-approved
spending plan may retain fees collected from nonresidential development.
C.
The New Jersey Supreme Court issued its decision in re adoption of
N.J.A.C. 5:96 and 5:97,[1] 221 N.J. 1 (2015) on March 10, 2015, stripping COAH of
its administrative duties. In response to that decision, Franklin
Township filed a declaratory judgment action with the Superior Court,
which action sought judicial determination of compliance with the
Township's third round affordable housing obligation. The Superior
Court of New Jersey Law Division Somerset County (the Court) issued
a Conditional Order of Compliance, dated January 16, 2018, which requires
that the Township submit for Court approval all resolutions and ordinances
necessary to implement the Housing Element and Fair Share Plan and
Affordable Housing Trust Fund Spending Plan prepared in response to
the Conditional Order of Compliance. Any and all references to COAH
shall mean the Court.
[1]
Editor's Note: Both chapters are reserved, having expired
on June 2, 2015.
D.
This article establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's regulations
and in accordance P.L. 2008, c. 46, Sections 8 and 32 to 38. Fees
collected pursuant to this article 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. 5:97-8.[2]
[2]
Editor's Note: Chapter 97 is reserved, its provisions having
expired on June 2, 2015.
The following terms, as used in this article, shall have the
following meanings:
A development included in the Housing Element and Fair Share
Plan and includes, but is not limited to, an inclusionary development,
a municipal construction project or a 100-percent affordable development.
The New Jersey Council on Affordable Housing established
under the Fair Housing Act which previously had primary jurisdiction
for the administration of housing obligations in accordance with sound
regional planning consideration in the State.
The legal or beneficial owner (owners) of a lot or of any
land proposed to be included in a proposed development, including
the holder of an option or contract to purchase, or other person having
an enforceable proprietary interest in such land.
Money paid by a developer for the improvement of property
as permitted in N.J.A.C. 5:97-8.3.[1]
The assessed value of a property divided by the current average
ratio of assessed to true value for the municipality in which the
property is situated, as determined in accordance with Sections 1,
5, and 6 of P.L. 1973, c. 123 (N.J.S.A. 54:1-35a through N.J.S.A.
c.54:1-35c).
Franklin Township in Somerset County.
[1]
Editor's Note: Chapter 97 is reserved, its provisions having
expired on June 2, 2015.
A.
Imposed fees.
(1)
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
that 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 "d" variance) has been permitted, developers
may be required to pay a development fee of 6% of the equalized assessed
value for each additional unit that may be realized. However, if the
zoning on a site has changed during the two-year period preceding
the filing of such a variance application, the base density for the
purposes of calculating the bonus development fee shall be the highest
density permitted by right during the two-year period preceding the
filing of the variance application.
B.
Eligible exactions, ineligible exactions and exemptions for residential
development.
(1)
Affordable housing developments and developments where the developer
is providing for the construction of affordable units 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. Developments that have received
preliminary or final site plan approval prior to effective date of
this article shall pay a fee of 1% of the equalized assessed value
as such was the applicable fee prior to the adoption of this article.
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 structures demolished and replaced
as a result of a fire, flood, or natural disaster shall be exempt
from paying a development fee.
(4)
Development fees shall be imposed and collected when an existing
structure undergoes a change to a more intense use (e.g., a single-family
dwelling converted into a two-family dwelling), 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.
A.
Imposed fees.
(1)
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.
(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 structures to be used for nonresidential purposes.
(3)
Development fees shall be imposed and collected when an existing
structure is demolished and replaced. The development fee of 2.5%
shall be calculated on the difference between the equalized assessed
value of the preexisting land and improvement and the equalized assessed
value of the newly improved structure, i.e., land and improvement,
at the time final certificate of occupancy is issued. If the calculation
required under this section results in a negative number, the nonresidential
development fee shall be zero.
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 Township as a lien against the real property
of the owner.
A.
Upon the granting of a preliminary, final or other applicable approval,
for a development, the 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 Municipal 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 notifies the local assessor of any and all
requests for the scheduling of a final inspection on property which
is subject to a development fee.
F.
Within 10 business days of a request for the scheduling of a final
inspection, the Municipal Assessor shall confirm or modify the previously
estimated equalized assessed value of the improvements of the development;
calculate the development fee; and thereafter notify the developer
of the amount of the fee.
G.
Should the Township 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-8.6b).
H.
Fifty percent of the development fee shall be collected at the time
of issuance of the building permit. The remaining portion shall be
collected at the issuance of the certificate of occupancy. The developer
shall be responsible for paying the difference between the fee calculated
at building permit and that determined at issuance of certificate
of occupancy.
I.
Appeal of development fees.
(1)
A developer may challenge residential development fees imposed
by filing a challenge with the County Board of Taxation. Pending a
review and determination by the Board, collected fees shall be placed
in an interest-bearing escrow account by the Township. 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 Township. 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.
A.
There is hereby created a separate, interest-bearing Housing Trust
Fund to be maintained by the chief financial officer 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: payments in lieu of on-site construction of affordable
units; developer-contributed funds to make 10% of the adaptable entrances
in a townhouse or other multistory attached development accessible;
rental income from municipally operated units; repayments from affordable
housing program loans; recapture funds; proceeds from the sale of
affordable units; and any other funds collected in connection with
the Township's affordable housing program.
C.
All interest accrued in the Housing Trust Fund shall only be used
on eligible affordable housing activities approved by the Department.
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 Township's fair
share obligation and may be set up as a grant or revolving loan program.
Such activities include, but are not limited to, preservation or purchase
of housing for the purpose of maintaining or implementing affordability
controls; rehabilitation; new construction of affordable housing units
and related costs; accessory apartment, market to affordable, or regional
housing partnership programs; conversion of existing nonresidential
buildings to create new affordable units; green building strategies
designed to be cost saving and in accordance with accepted national
or state standards; purchase of land for affordable housing; improvement
of land to be used for affordable housing; extensions or improvements
of roads and infrastructure to affordable housing sites; financial
assistance designed to increase affordability; administration necessary
for implementation of the Housing Element and Fair Share Plan; or
any other activity as permitted pursuant to N.J.A.C. 5:97-8.7 through
5:97-8.9[1] and specified in the approved spending plan.
[1]
Editor's Note: Chapter 97 is reserved, its provisions having
expired on June 2, 2015.
B.
Funds shall not be expended to reimburse the Township 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, 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 Township may contract with a private or public entity to administer
any part of its Housing Element and Fair Share Plan, including the
requirement for affordability assistance, in accordance with N.J.A.C.
5:96-18.[2]
[2]
Editor's Note: Chapter 96 is reserved, its provisions having
expired on June 2, 2015.
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 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 applicable monitoring requirements. Legal or other
fees related to litigation opposing affordable housing sites or objecting
to COAH's regulations and/or action are not eligible uses of the Affordable
Housing Trust Fund.
The Township shall monitor the collection of development fees
from residential and nonresidential developers, payments in lieu of
constructing affordable units on site, funds from the sale of units
with extinguished controls, barrier-free escrow funds, rental income,
repayments from affordable housing program loans, and any other funds
collected in connection with the Township's housing program, as well
as the expenditure of revenues and implementation of the plan approved
by the Court. Such collections and expenditures shall be reported
in the manner required by law, rule or Court.
The ability for the Township to impose, collect and expend development
fees shall expire with its judgment of compliance unless the Township
has filed an adopted Housing Element and Fair Share Plan with the
Court, has petitioned for substantive certification, and has received
the Court's approval of its development fee ordinance. The Township
shall not impose a residential development fee on a development that
receives preliminary or final site plan approval after the expiration
of its judgment of compliance, nor shall the Township retroactively
impose a development fee on such a development. The Township shall
not expend development fees after the expiration of its substantive
certification or judgment of compliance.