The provisions for a required percentage of units to be set aside for low and/or moderate income households shall not apply to developments containing four or less dwelling units.

The set aside percentage requirements shall apply to any multi-family or single-family attached residential development, including the residential portion of a mixed-use project, that consists of five or more new residential units, whether permitted by zoning, a zoning amendment, a variance granted by the Borough's Planning Board or Zoning Board, or adoption of a Redevelopment Plan or amended Redevelopment Plan in areas in need of redevelopment or rehabilitation.

For any such development for which the Borough's land use ordinances (for example, a zoning ordinance or an adopted Redevelopment Plan) already permitted residential development as of the effective date of this Chapter, the set-aside percentage requirements shall apply if the Borough permits an increase in approvable and developable gross residential density.

Nothing in this paragraph precludes the Borough and/or its Planning Board or Zoning Board from imposing an affordable housing set-aside percentage in a development not required to have a set-aside, consistent with N.J.S.A. 52:27D-311(h) and other applicable law.

This requirement does not create any entitlement for a property owner or applicant for a zoning amendment, variance, or adoption of a Redevelopment Plan or amended Redevelopment Plan in areas in need of redevelopment or rehabilitation, or for approval of any particular proposed project.

Where a project proposes demolition of existing dwelling units and construction of new dwelling units on the same site, or a project proposes to expand an existing building with residential units, the provisions of this section shall apply only if the net number of newly created dwelling units is five or more.

All subdivision and site plan approvals of qualifying residential developments shall be conditioned upon compliance with the provisions of this section.