Norwood City Zoning Code
ARTICLE XII
Affordable Housing Development Fees and Trust Fund
§ 233-90 Purpose.
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 "FHA"), 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 (N.J.S.A. 40:55D-8.1 through 40:55D-8.7) ("Development Fee Act"), COAH was 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, such as the Borough of Norwood, that were or are under the jurisdiction of COAH, or a court of competent jurisdiction, and that have approved spending plans, are authorized to retain fees collected from nonresidential and residential development.
C.
This article ratifies and confirms the standards for the collection, maintenance, and expenditure of development fees in the Borough after the expiration of the COAH regulations. All fees collected pursuant to this article will be used only for the purpose of providing low- and moderate-income housing or otherwise advancing the Borough's compliance with its affordable housing obligations.
§ 233-91 Basic requirements.
§ 233-92 Definitions.
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 one-hundred-percent affordable development.
The Borough of Norwood.
The New Jersey Council on Affordable Housing.
New construction and additions, but does not include alterations, reconstruction, renovations, and repairs as those terms are defined under 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.).
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.
Funds paid by an individual, person, partnership, association, company, or corporation for the improvement of property in the Borough pursuant to the Development Fee Act, this article, and the FHA.
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 54:1-35c).
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.
Any development which includes both a nonresidential development component and a residential development component, and shall include developments for which:
There is a common developer for both the residential development component and the nonresidential development component, provided that for purposes of this definition, multiple persons and entities may be 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 nonresidential development, or both, or otherwise to contribute resources to the development; and
The residential and nonresidential 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.
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 promulgated to effectuate the State Uniform Construction Code Act, P.L. 1975, c. 217 (N.J.S.A. 52:27D-119 et seq.), including any subsequent amendments or revisions thereto;
Hotels, motels, vacation timeshares, and child-care facilities; and
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, P.L. 1986, c. 103 (N.J.S.A. 52:27D-330 et seq.).
The fee authorized to be imposed pursuant to the Development Fee Act.
Any person obtaining approval for a residential development in the Borough.
Any development in the Borough that includes one or more residential dwelling units and that is not a mixed-use development.
§ 233-93 Residential development fees.
A.
Imposed fees.
(1)
Within the R-40, R-22.5, R-10, R-7.5, and TH Zoning Districts, or in any other zoning district in which a developer is granted variance approval under N.J.S.A. 40:55D-70d for the construction of a building or buildings, including a residential dwelling or dwellings, residential developers shall pay a fee of 1.5% of the equalized assessed value for residential development, 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 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.
(3)
Development fees shall be imposed and collected when an existing structure undergoes a change to a more intense use, is demolished and replaced with new construction, or is expanded by an addition to an existing structure, if the expansion is not otherwise exempt from the development fee requirement.
(4)
Fees for the construction of new buildings not existing will be based on the equalized assessed value of the land and improvements.
(5)
Fees for the construction of additions to existing buildings will be based on the increase in the equalized assessed value resulting from the additions.
Example: If an approval allows four units to be constructed on a site that was zoned for two units, the fees could equal 1% of the equalized assessed value on the first two units; and the specified higher percentage up to 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. |
B.
Eligible exactions, ineligible exactions, and exemptions for residential development.
(1)
Affordable housing developments 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 Borough's Development Fee Ordinance on November 5, 2008, will continue to 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 is vested on the date that the building permit is issued.
§ 233-94 Collection procedures for residential development fees.
A.
Upon the grant of a preliminary, final, or other applicable approval for a residential development, the approving authority will direct its staff to notify the Construction Official responsible for the issuance of a building permit.
B.
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 residential development that is subject to a development fee.
C.
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 residential development.
D.
The Construction Official responsible for the issuance of a final certificate of occupancy will notify the local Assessor of any and all requests for the scheduling of a final inspection on property that is subject to a residential development fee.
E.
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 residential development fee; and thereafter notify the developer of the amount of the fee.
F.
If the Borough fails to determine or notify the residential developer of the amount of the residential development fee within 10 business days of the request for final inspection, the residential developer may estimate the amount due and pay that estimated amount consistent with the dispute process set forth in Subdivision b of § 37 of P.L. 2008, c. 46 (N.J.S.A. 40:55D-8.6).
G.
Fifty percent of the residential development fee shall be collected at the time of issuance of the building permit. The remaining portion shall be collected before the issuance of the certificate of occupancy. The developer shall be responsible for paying the difference between the fee calculated at building permit issuance and that determined at issuance of the certificate of occupancy. No certificate of occupancy may be issued until the developer pays the required residential development fee.
§ 233-95 Nonresidential development fees.
A.
In all zoning districts, developers obtaining approval for the construction of nonresidential developments and mixed-use developments will pay to the Borough the nonresidential development fee of 2.5% required by the Development Fee Act.
B.
Imposed fees.
(1)
Within all zoning districts, nonresidential developers, except for developers of the types of development specifically exempted by the Development Fee Act, 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 by the Development Fee Act, 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 pre-existing land and improvement and the equalized assessed value of the newly improved structure, i.e., land and improvement, at the time the 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.
C.
Eligible exactions, ineligible exactions, and exemptions for nonresidential development.
(1)
The residential portion of a mixed-use inclusionary or market rate development will be exempt from the nonresidential development fees, but the nonresidential portion is subject to the nonresidential development fee of 2.5%, unless otherwise exempted below.
(2)
The fee of 2.5% shall not apply to an increase in equalized assessed value resulting from alterations, changes in use within existing building 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 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 will 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 Borough as a lien against the real property of the owner.
§ 233-96 Collection procedures for nonresidential development fees.
A.
The Borough's officials, including the Construction Official and Assessor, will calculate and collect the nonresidential development fee in accordance with the Development Fee Act.
B.
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. The developer will also be provided with a copy of Form N-RDF, "State of New Jersey Non-Residential Development Certification/Exemption," which the developer will complete as per the instructions provided.
C.
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 final assessments as per the instructions provided in Form N-RDF.
D.
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.
E.
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.
F.
The Construction Official responsible for the issuance of a final certificate of occupancy will notify the local Assessor of any and all requests for the scheduling of a final inspection on property which is subject to a development fee.
G.
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.
H.
If the Borough fails 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 Subdivision b of § 37 of P.L. 2008, c. 46 (N.J.S.A. 40:55D-8.6).
I.
The nonresidential development fee shall be collected before the issuance of the certificate of occupancy. No certificate of occupancy may be issued until the developer pays the required residential development fee.
J.
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 Borough. 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.
§ 233-97 Affordable Housing Trust Fund.
A.
There is hereby ratified and confirmed a separate, interest-bearing housing trust fund to be maintained by the Chief Financial Officer for the purpose of depositing residential development fees and nonresidential development fees collected from residential and nonresidential developers in the Borough and the proceeds from the sales 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; and
(7)
Any other funds collected in connection with the Borough's affordable housing program.
C.
Within seven days from the opening of the trust fund account, the Borough shall provide COAH with written authorization, in the form of a three-party escrow agreement between the municipality, 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).[1]
[1]
Editor's Note: In accordance with N.J.S.A. 52:14B-5.1b, N.J.A.C. Title 5, Chapter 97, Substantive Rules of the New Jersey Council on Affordable Housing for the Period Beginning June 2, 2008, expired on June 2, 2015. See 43 N.J.R. 1203(a).
D.
All interest accrued in the housing trust fund shall only be used on eligible affordable housing activities approved by COAH, or otherwise consistent with the Borough's affordable housing spending plan and obligations.
§ 233-98 Use of funds.
A.
The expenditure of all funds shall conform to the Borough's approved spending plan. Funds deposited in the housing trust fund may be used for any activity addressing the Borough'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 previously 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: In accordance with N.J.S.A. 52:14B-5.1b, N.J.A.C. Title 5, Chapter 97, Substantive Rules of the New Jersey Council on Affordable Housing for the Period Beginning June 2, 2008, expired on June 2, 2015. See 43 N.J.R. 1203(a).
B.
Funds shall not be expended to reimburse the Borough 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. The use of development fees in this manner shall entitle the Borough to bonus credits pursuant to N.J.A.C. 5:96-18.[2]
[2]
Editor's Note: In accordance with N.J.S.A. 52:14B-5.1b, N.J.A.C. Title 5, Chapter 96, Procedural Rules of the New Jersey Council on Affordable Housing for the Period Beginning on June 2, 2008, expired on June 2, 2015. See 43 N.J.R. 1203(a).
(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 Borough 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.[3]
[3]
Editor's Note: In accordance with N.J.S.A. 52:14B-5.1b, N.J.A.C. Title 5, Chapter 96, Procedural Rules of the New Jersey Council on Affordable Housing for the Period Beginning on June 2, 2008, expired on June 2, 2015. See 43 N.J.R. 1203(a).
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 COAH's monitoring requirements. Legal or other fees related to litigation opposing affordable housing sites or objecting to the COAH's regulations and/or action are not eligible uses of the Affordable Housing Trust Fund.
§ 233-98.1 Monitoring.
The Borough 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, barrier-free escrow funds, rental income, repayments from affordable housing program loans, and any other funds collected in connection with the Borough's 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.