[HISTORY: Adopted by the Mayor and Council of the Borough of Palisades Park as indicated in article histories. Amendments noted where applicable.]
[Adopted 3-21-2006 by Ord. No. 1467]
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, 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. This article establishes standards for the collection, maintenance, and expenditure of development fees pursuant to COAH's rules. 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.
The Borough of Palisades Park shall not spend development fees until COAH has approved a plan for spending such fees and has received third round substantive certification from COAH or a judgment of compliance.
The following terms, as used in this article, shall have the following meanings:
- AFFORDABLE HOUSING DEVELOPMENT
- 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.
- DEVELOPMENT FEE
- Funds paid by an individual, person, partnership, association, company or corporation for the improvement of property as permitted in COAH's rules.
- EQUALIZED ASSESSED VALUE
- The value of a property determined by the Municipal Tax Assessor through a process designed to ensure that all property in the municipality is assessed at the same assessment ratio or ratios required by law. Estimates at the time of issuance of a building permit may be obtained utilizing estimates for construction cost. Final equalized assessed value will be determined at project completion by the Municipal Tax Assessor.
[Amended 9-16-2008 by Ord. No. 1515]
Within the A, AA, E, MHR-1 and MHR-2 Residential Zoning Districts, residential developers shall pay a fee of 1 1 /2% of the equalized assessed value for new residential development and for additions and alterations to existing residential developments, provided that no increased density is permitted. This fee shall be paid by noninclusionary housing developments where the unit threshold of five units has not been met or exceeded. All developments that meet or exceed the threshold of five units shall be deemed inclusionary developments and must provide their fair share obligation.
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.
Within the B-1, B-2, M-1 and MC Zoning Districts, nonresidential developers shall pay a fee of 2% of the equalized assessed value for new nonresidential development and for additions and alterations to existing nonresidential developments.
[Amended 9-16-2008 by Ord. No. 1515]
If an increase in floor area ratio is approved pursuant to N.J.S.A. 40:55D-70d(4), then the additional floor area realized (above what is permitted by right under the existing zoning) will incur a bonus development fee of 6% of the equalized assessed value for nonresidential development. However, if the zoning on a site has changed during the two-year period preceding the filing of such a variance application, the base floor area for the purposes of calculating the bonus development fee shall be the highest floor area permitted by right during the two-year period preceding the filing of the variance application.
Affordable housing developments shall be exempt from development fees. All other forms of new construction shall be subject to development fees.
[Amended 9-16-2008 by Ord. No. 1515]
Developments that have received preliminary or final approval prior to the imposition of a municipal development fee shall be exempt from development fees unless the developer seeks a substantial change in the approval.
Editor's Note: Former Subsection C, concerning developers of retail, office or single-family lots, which immediately followed this subsection, was repealed 9-16-2008 by Ord. No. 1515.
Fifty percent of the development fee will be collected at the time of issuance of the building permit. The remaining portion will be collected at the 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 a building permit and that determined at issuance of certificate of occupancy.
Imposed and collected development fees that are challenged shall be placed in an interest-bearing escrow account by the Borough of Palisades Park. If all or a portion of the contested fees are returned to the developer, the accrued interest on the returned amount shall also be returned.
There is hereby created a separate, interest-bearing housing trust fund in an official depository for the Borough for the purpose of depositing development fees collected from residential and nonresidential developers and proceeds from the sale of units with extinguished controls. All development fees paid by developers pursuant to this article shall be deposited into this fund.
Within seven days from the opening of the trust fund account, the Borough of Palisades Park shall provide COAH with written authorization, in the form of a three-party escrow agreement between the municipality, the official depository, and COAH to permit COAH to direct the disbursement of the funds as provided for in N.J.A.C. 5:94-6.16(b).
No funds shall be expended from the affordable housing trust fund unless the expenditure conforms to a spending plan approved by COAH. All interest accrued in the housing trust fund shall only be used on eligible affordable housing activities approved by COAH.
Funds deposited in the housing trust fund may be used for any activity approved by COAH to address the municipal fair share. Such activities include, but are not limited to, rehabilitation, new construction, RCAs subject to the provisions of N.J.A.C. 5:94-4.4(d), ECHO housing, purchase of land for affordable housing, improvement of land to be used for affordable housing, purchase of housing, extensions or improvements of roads and infrastructure to affordable housing sites, financial assistance designed to increase affordability, or administration necessary for creation and implementation of the Housing Element and Fair Share Plan. The expenditure of all funds shall conform to a spending plan approved by COAH.
[Amended 9-16-2008 by Ord. No. 1515]
Funds shall not be expended to reimburse the Borough of Palisades Park for past housing activities.
After subtracting development fees collected to finance an RCA, a rehabilitation program or a new construction project that are necessary to address the Borough of Palisades Park affordable housing obligation, at least 30% of the balance remaining 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.
Affordability assistance programs may include down payment assistance, security deposit assistance, low-interest loans, and rental assistance.
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 third round municipal fair share plan to make them affordable to households earning 30% or less of median income. The use of development fees in this manner shall entitle the Borough of Palisades Park to bonus credits pursuant to N.J.A.C. 5:94-4.22.
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.
The Borough of Palisades Park 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. 5:94-7.
Editor's Note: Former Subsection E, concerning the percentage of fees expended on administration, which immediately followed this subsection, was repealed 9-16-2008 by Ord. No. 1515.
The Borough of Palisades Park shall complete and return to COAH all monitoring forms included in the annual monitoring report related to the collection of development fees from residential and nonresidential developers, payments in lieu of constructing affordable units on site, and funds from the sale of units with extinguished controls, and the expenditure of revenues and implementation of the plan certified by COAH. All monitoring reports shall be completed on forms designed by COAH.
[Amended 9-16-2008 by Ord. No. 1515]
The ability for the Borough of Palisades Park to impose, collect and expend development fees shall expire with its substantive certification on 2018 unless the Borough of Palisades Park 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 Borough of Palisades Park fails to renew its ability to impose and collect development fees prior to 2018, it may resume the imposition and collection of development fees only by complying with the requirements of N.J.A.C. 5:94-6. The Borough of Palisades Park shall not impose a development fee on a development that receives preliminary or final approval after the expiration of its substantive certification on 2018. The Borough of Palisades Park will not expend development fees after the expiration of its substantive certification on 2018.
[Adopted 6-17-2008 by Ord. No. 1511]
The purpose of this article is to create the administrative mechanisms needed for the execution of the Borough of Palisades Park's responsibility to assist in the provision of affordable housing pursuant to the Fair Housing Act of 1985.
As used in this article, the following terms shall have the meanings indicated:
- ADMINISTRATIVE AGENT
- The entity responsible for administering the affordability controls of some or all units in the affordable housing program for the Borough of Palisades Park to ensure that the restricted units under administration are affirmatively marketed and sold or rented, as applicable, only to low- and moderate-income households.
- MUICIPAL HOUSING LIAISON
- The employee charged by the governing body with the responsibility for oversight and administration of the affordable housing program for the Borough of Palisades Park.
Establishment of position of Municipal Housing Liaison. There is hereby established the position of Municipal Housing Liaison for the Borough of Palisades Park.
Subject to the approval of the Council of Affordable Housing (COAH), the Municipal Housing Liaison shall be appointed by the Governing Body and may be a full- or part-time municipal employee.
The Municipal Housing Liaison shall be responsible for oversight and administration of the affordable housing program for the Borough of Palisades Park, including the following responsibilities, which may not be contracted out, exclusive of Section C(6), which may be contracted out:
Serving as the Borough of Palisades Park's primary point of contact for all inquiries from the state, affordable housing providers, administrative agents, and interested households;
Monitoring the status of all restricted units in the Borough of Palisades Park's Fair Share Plan;
Compiling, verifying, and submitting annual reports as required by COAH;
Coordinating meetings with affordable housing providers and administrative agents, as applicable;
Attending continuing education opportunities on affordability controls, compliance monitoring, and affirmative marketing as offered or approved by COAH;
Subject to approval by COAH, the Borough of Palisades Park may contract with or authorize a consultant, authority, government or any agency charged by the governing body, which entity shall have the responsibility of administering the affordable housing program of the Borough of Palisades Park, except for those responsibilities which may not be contracted out pursuant to Subsection C above. If the Borough of Palisades Park contracts with another entity to administer all or any part of the affordable housing program, including the affordability controls and affirmative marketing plan, the Municipal Housing Liaison shall supervise the contracting administrative agent.
Compensation. Compensation shall be fixed by the governing body at the time of the appointment of the Municipal Housing Liaison.
Administrative powers and duties assigned to the Municipal Housing Liaison.
Conducting an outreach process to insure affirmative marketing of affordable housing units in accordance with the affirmative marketing plan of the Borough of Palisades Park and the provisions of N.J.A.C. 5:80-26.15; and
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.
Soliciting, scheduling, conducting and following up on interviews with interested households;
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;
Providing written notification to each applicant as to the determination of eligibility or noneligibility;
Requiring that all certified applicants for restricted units execute a certificate substantially in the form, as applicable, of either the ownership or rental certificates set forth in Appendixes J and K of N.J.A.C. 5:80-26.1 et. seq.;
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; and
Employing the random selection process as provided in the affirmative marketing plan of the Borough of Palisades Park when referring households units.
Furnishing to attorneys or closing agents forms of deed restrictions and mortgages for recording at the time of conveyance of tide of each restricted unit;
Creating and maintaining a file on each restricted unit for its control period, including the recorded deed with restrictions, recorded mortgage and note, as appropriate;
Ensuring that the removal of the deed restrictions and cancellation of the mortgage note are effectuated and properly filed with the appropriate county's register of deeds or county clerk's office after the termination of the affordability controls for each restricted unit;
Communicating with lenders regarding foreclosures; and
Ensuring the issuance of continuing certificates of occupancy or certifications pursuant to N.J.A.C. 5:80-26.10.
Resale and rental.
Instituting and maintaining an effective means of communicating information between owners and the administrative agent regarding the availability of restricted units for resale or rental; and
Instituting and maintaining an effective means of communicating information to low- and moderate-income households regarding the availability of restricted units for resale or re-rental.
Processing request from unit owners.
Reviewing and approving requests from owners of restricted units who wish to take out home equity loans or refinance during the term of their ownership;
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 cost of central air conditioning systems; and
Processing requests and making determinations on requests by owners of restricted units for hardship waivers.
Securing annually lists of all affordable housing units for which tax bills are mailed to absentee owners and notifying all such owners that they must either move back to their unit or sell it;
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;
The posting annually in all rental properties, including two-family homes, of a notice as to the maximum permitted rent together with the telephone number of the administrative agent where complaints of excess rent can be made;
Sending annual mailings to all owners of affordable dwelling units, reminding them of the notices and requirements outlined in N.J.A.C. 5:80-26.18(d)4;
Establishing a program for diverting unlawful rent payments to the municipality's affordable housing trust fund or other appropriate municipal fund approved by the DCA;
Creating and publishing a written operating manual, as approved by COAH, setting forth procedures for administering such affordability controls; and
Providing annual reports to COAH as required.
The administrative agent shall have authority to take all actions necessary and appropriate to carry out its responsibilities hereunder.