[Adopted 12-7-2009 by Ord. No. 36-2009[1]]
[1]
Editor's Note: This article also repealed former Art. III,
COAH Fees, adopted 5-21-2001 by Ord. No. 15-2001, as amended.
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, § 8 (N.J.S.A. 52:27D-329.2),
and the Statewide Non-Residential Development Fee Act[1] (N.J.S.A. 40:55D-8.1 through 40:55D8.7), 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.
This article establishes standards for the collection, maintenance,
and expenditure of development fees pursuant to COAH's regulations
and in accordance with P.L. 2008, c. 46, §§ 8 and 32
through 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.
As used herein, the following terms 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 one-hundred-percent affordable
development.
The New Jersey Council on Affordable Housing established
under the Act that has primary jurisdiction for the administration
of housing obligations in accordance with sound regional planning
considerations in the state.
The legal or beneficial owner or owners of a lot or of any
land proposed to be included in a proposed development, including
the holder of an option or contract to purchase, or other person having
an enforceable proprietary interest in such land.
Money paid by a developer for the improvement of property
as permitted in N.J.A.C. 5:97-8.3.
The assessed value of a property divided by the current average
ratio of assessed to true value for the municipality in which the
property is situated, as determined in accordance with §§ 1,
5, and 6 of P.L. 1973, c. 123 (N.J.S.A. 54:1-35a through c).
Those strategies that minimize the impact of development
on the environment, and enhance the health, safety and well-being
of residents by producing durable, low-maintenance, resource-efficient
housing while making optimum use of existing infrastructure and community
services.
A.
Imposed fees.
(1)
Within all zoning districts, residential developers, except for developers
of the types of development specifically exempted below, shall pay
a residential development fee of 1.5% of the equalized assessed value
of land and improvements, provided no increased density is permitted.
(2)
When an increase in residential density pursuant to N.J.S.A. 40:55D-70d(5)
(known as a "d" variance) has been permitted, developers shall be
required to pay a development fee of 1.5% of the equalized assessed
value of the initial "by-right" number of units and 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.
(3)
Example: If an approval allows four units to be constructed on a
site that was zoned for two units, the fees shall equal 1.5% of the
equalized assessed value on the first two units, and 6.0% of the equalized
assessed value for the two additional units, provided zoning on the
site has not changed during the two-year period preceding the filing
of such a variance application.
B.
Eligible exactions, ineligible exactions and exemptions for residential
development.
(1)
Affordable housing developments, developments where the developer
is providing for the construction of affordable units elsewhere in
the municipality, and developments where the developer has made a
payment in lieu of on-site construction of affordable units shall
be exempt from development fees.
(2)
Developments that have received preliminary or final site plan approval
prior to the adoption of the Township's first development fee ordinance
shall be exempt from development fees, unless the developer seeks
a substantial change in the approval. Where a site plan approval does
not apply, a zoning and/or building permit shall be synonymous with
preliminary or final site plan approval for this purpose. The fee
percentage shall be vested on the date that the building permit is
issued.
(3)
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.
(a)
A change to a more intense use shall include, but not be limited
to, the conversion of unfinished basement, attic and/or garage spaces
to habitable space.
(b)
Exemption. Any change to a more intense use, replacement or
expansion of an existing structure that does not result in an increase
to the equalized assessed value of the improved structure by greater
than $19,999 shall be exempt from the development fee requirements
of this section.
(c)
Exemption. Developers of residential structures demolished and
replaced with a substantially similar residence, as a result of an
accidental fire or natural disaster, shall be exempt from paying a
development fee.
A.
Imposed fees.
(1)
Pursuant to the provisions of P.L. 2008, C. 46, within all zoning
districts, nonresidential developers, except for developers of the
types of development specifically exempted, shall pay a fee equal
to 2.5% of the equalized assessed value of the land and improvements,
for all new nonresidential construction on an unimproved lot or lots.
(2)
Nonresidential developers, except for developers of the types of
development specifically exempted, shall also pay a fee equal to 2.5%
of the increase in equalized assessed value resulting from any additions
to existing 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 the 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 two-and-one-half-percent development
fee, unless otherwise exempted below.
(2)
The two-and-one-half-percent 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 said statute may from time to time be amended,
and as specified in Form N-RDF, State of New Jersey Non-Residential
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 appropriate approving authority shall direct
its staff to notify the construction official responsible for the
issuance of a building permit.
B.
For nonresidential developments, the developer shall be provided
with a copy of Form N-RDF, State of New Jersey Non-Residential Development
Certification/Exemption, for completion. The developer shall complete
fully Form N-RDF as per the instructions provided. The construction
official shall verify the information submitted by the developer.
The Township Tax Assessor shall then verify any exemptions claimed
and prepare estimated and final assessments in accordance with the
instructions provided on Form N-RDF.
C.
For all development:
(1)
The construction official responsible for the issuance of a building
permit shall notify the Township Tax Assessor of the issuance of the
first building permit for a development that is subject to a development
fee.
(2)
Within 90 days of receipt of said notice, the Township Tax Assessor,
based on the plans filed, shall provide an estimate of the equalized
assessed value of the development.
(3)
The construction official responsible for the issuance of a final
certificate of occupancy shall notify the Township Tax Assessor of
any and all requests for the scheduling of a final inspection on property
which is subject to a development fee.
(4)
Within 10 business days of a request for the scheduling of a final
inspection, the Township Tax Assessor shall confirm or modify the
previously estimated equalized assessed value of the improvements
of the development; calculate the development fee; and thereafter
notify the developer of the amount of the fee.
(5)
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 § 37 of P.L. 2008, C. 46 (N.J.S.A.
40:55D-8.6).
D.
Payment of development fees. Fifty percent of the estimated development
fee shall be collected at the time of issuance of the building permit.
The remaining portion shall be assessed and collected at the issuance
of the certificate of occupancy. The developer shall be responsible
for paying any difference between the fee calculated at building permit
and that determined at issuance of certificate of occupancy.
E.
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 Tax Uniform 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 Tax Uniform 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.
The Township shall create and/or continue to maintain a separate,
interest-bearing affordable housing trust fund that is maintained
by the Township 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:
(1)
Payments in lieu of on-site construction of affordable units.
(2)
Developer-contributed funds to make 10% of the adaptable entrances
in a townhouse or other multistory attached development accessible.
(3)
Rental income from municipally operated units.
(4)
Repayments from affordable housing program loans.
(5)
Recapture funds.
(6)
Proceeds from the sale of affordable units.
(7)
Any other funds collected in connection with the Township's affordable
housing program.
C.
Within seven days from the opening of the trust fund account, the
Township shall provide COAH with written authorization, in the form
of a three-party escrow agreement between the Township, the bank,
and COAH, to permit COAH to direct the disbursement of the funds as
provided for in N.J.A.C. 5:97-8.13(b).
D.
All interest accrued in the Affordable Housing Trust Fund shall only
be used on eligible affordable housing activities approved by COAH.
A.
The expenditure of all funds shall conform to a spending plan approved
by COAH. Funds deposited in the Affordable Housing Trust Fund may
be used for any activity approved by COAH 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 and specified in the approved spending plan.
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 Township's 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 Township's 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.
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 Township 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 COAH's monitoring requirements. Legal or other fees
related to litigation opposing affordable housing sites or objecting
to the Council's regulations and/or action are not eligible uses of
the Affordable Housing Trust Fund.
The Township shall complete and return to COAH all monitoring
forms included in monitoring requirements related to the collection
of development fees from residential and nonresidential developers,
payments in lieu of constructing affordable units on site, funds from
the sale of units with extinguished controls, barrier-free escrow
funds, rental income, repayments from affordable housing program loans,
and any other funds collected in connection with the Township's affordable
housing program, as well as to the expenditure of revenues and implementation
of the plan certified by COAH. All monitoring reports shall be completed
on forms designed by COAH.
The Township's ability to impose, collect and expend development
fees shall expire with its substantive certification unless the Township
has filed an adopted Housing Element and Fair Share Plan with COAH,
has petitioned for substantive certification, and has received COAH's
approval of its development fee ordinance. If the Township fails to
renew its ability to impose and collect development fees prior to
the expiration of substantive certification, 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 § 20
of P.L. 1985, c. 222 (N.J.S.A. 52:27D-320). 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
substantive certification or 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.
This article and the provisions set forth in §§ 110-5 through 110-14 above are being adopted in accordance with the policies, procedures and requirements of the New Jersey Council on Affordable Housing. Pursuant to COAH's requirements for approval of a municipal development fee ordinance and the model ordinance promulgated by COAH, the Township is required to, and has, included provisions for the assessment and collection of nonresidential development fees ("NRDF"). Notwithstanding the inclusion of such provisions as required by COAH, the Township notes and acknowledges the following legislative enactments that impact upon the collection of the NRDF:
A.
Sections 32 through 38 of P.L. 2008, C. 46 (N.J.S.A. 40:55D-8.1 through
40:55D-8.7), known as the "Statewide Non-Residential Development Fee
Act," preempt and void any provision of a local ordinance which imposes
a fee for the development of affordable housing upon a developer of
nonresidential property, including any and all development fee ordinances
adopted in accordance with any regulations of the Council on Affordable
Housing. (See N.J.S.A. 40:55D-8.7a.)
B.
Sections 36 through 41 of P.L. 2009, C. 90, known as the "Economic
Stimulus Act of 2009," in relevant part, suspends the NRDF imposed
by the Statewide Non-Residential Development Fee Act, and, in particular,
provides that the imposition of such fee upon the developer of nonresidential
property shall not apply to nonresidential property for which preliminary
or final site plan approval, or capital project review pursuant to
N.J.S.A. 40:55D-31, was obtained prior to July 1, 2010, provided that
a permit for the construction of the building has been issued by the
local enforcing agency prior to January 1, 2013.
C.
As such, the Township shall continue to assess and collect any NRDF
in accordance with all applicable laws.
