Watchung City Zoning Code
ARTICLE 28
1100 AFFORDABLE HOUSING DEVELOPMENT FEES
28-1101 FINDINGS AND PURPOSE.
[Ord. No. OR:09/01 § 28-1101]
A.
The New Jersey Supreme Court, in Holmdel Builders vs. Holmdel Township, 121 N.J. 550 (1990), determined that mandatory development fees are both statutorily and constitutionally permissible. The court further anticipated that COAH would promulgate appropriate development fee rules specifying, among other things, the standards for these development fees. The purpose of this section is to provide such rules pursuant to N.J.A.C. 5:92-18 et seq.
B.
The Mayor and Borough Council find and declare that the creation and preservation of affordable housing in the Borough serves the public interest. Maintaining and improving a stock at sound affordable housing requires affirmative steps by local government working cooperatively with public bodies at all levels and with the private sector. The purpose of this section is to create in the Borough of Watchung trust fund from payment or development fees to assist in the marshalling of public and private monies dedicated to affordable housing projects and programs.
28-1102 DEFINITIONS.
[Ord. No. OR:09/01 § 28-1102]
Any housing unit with an acquisition price or rent level not exceeding the maximum resale or rent level for low and moderate income housing as set forth in N.J.A.C. 5:92-1.2.
The New Jersey Council on Affordable Housing; and shall also refer to Superior Court, Law Division.
[Amended 5-16-2019 by Ord. No. 19/13]
Money paid by an individual, person, partnership, association, company, or corporation to the improvement of property as permitted in N.J.A.C. 5:92-18 et seq.
The value of a property determined by the Borough Tax Assessor through a process designed to ensure that all property in the Borough is assessed at the same assessment ratio or ratios required by law. Estimates at the time of building permit may be obtained by the Tax Assessor utilizing estimates for construction cost. Final equalized assessed value will be determined at project completion by the Tax Assessor.
28-1103 DEVELOPMENT FEE SCHEDULE.
[Ord. No. OR:09/01 § 12-1103; Ord. No. 14/12]
A.
Residential Development.
1.
Residential development fees shall be a maximum of one and one-half (1 1/2%) percent of the equalized assessed value for residential development which is not exempt from the provisions of this chapter as set forth below, provided no increased density is permitted.
2.
If a "d" variance is granted pursuant to N.J.S.A. 40:55D-70d(5), then the additional residential units realized (above what is permitted by right under the existing zoning) will incur a bonus development fee of six percent (6%) rather than the development fee of one and one-half (1 1/2%) percent. However, if the zoning on a site has changed during the two-year period preceding the filing of the "d" 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 (2) years preceding the filing of the "d" variance application.
3.
The Borough may allow developers of sites zoned for inclusionary development to pay a fee in lieu of building low and moderate income units provided COAH determines the Borough's Housing Element and Fair Share Plan provides a realistic opportunity for addressing the Borough's fair share obligation. The fee may equal the cost of subsidizing the low and moderate income units that are replaced by the development fee. For example, an inclusionary development may include a twenty percent (20%) set-aside, no set-aside and a fee that is the equivalent of a twenty percent (20%) set-aside or a combination of a fee and set-aside that is the equivalent of a twenty percent (20%) set-aside.
4.
The Borough may collect fees exceeding those permitted in this section provided the Borough enters into agreements with developers that offer a financial incentive for paying higher fees. The financial incentive may be in the form of a tax abatement. No agreement may provide for a voluntary development fee without also providing for a comparable off-setting incentive. All agreements are subject to COAH approval.
B.
Nonresidential Development.
1.
Nonresidential development fees shall be a maximum of two and one-half (2 1/2%) percent of the equalized assessed value for nonresidential development which is not exempt from the provisions of this chapter as set forth below.
2.
If a "d" variance is granted 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 six percent (6%) rather than the development fee of two and one-half (2 1/2%) percent. However, if the zoning on a site has changed during the two (2) year period preceding the filing of the "d" 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 (2) years preceding the filing of the "d" variance application.
3.
The Borough may collect fees exceeding those permitted in this section provided they enter into agreements with developers that offer a financial incentive for paying higher fees. Such agreements may include, but are not limited to, a tax abatement, increased commercial/industrial square footage, increased commercial/industrial lot coverage and/or increased commercial or industrial impervious coverage, in return for an increased development fee. The development fee negotiated must bear a reasonable relationship to the additional commercial/industrial consideration to be received. All agreements are subject to approval by COAH.
28-1104 ELIGIBLE EXACTIONS, INELIGIBLE EXACTIONS, AND EXEMPTIONS.
[Ord. No. OR:09/01 § 28-1104]
A.
Except as provided in § 28-1103 above, inclusionary developments shall be exempt from development fees.
B.
Development fees may only be collected for any residential structure which requires the installation of a new foundation (excluding foundations required for an addition to or renovation of an existing residential structure or a foundation required for an accessory structure to an existing residential structure).
C.
All forms of new nonresidential construction shall be subject to development fees provided, however, that development fees may only be collected for improvements that add usable or rentable footage to an existing nonresidential structure. In the event that a development fee is collected for a nonresidential structure and thereafter usable or rentable footage is obtained through modification of the said structure, a development fee may be collected for the additional unable or rentable footage based upon the increase in the equalized assessed value of the improved structure.
D.
The Borough shall not reduce densities from preexisting levels and then require developers to pay development fees in exchange for an increased density.
E.
Developments that have received preliminary or final approval prior to the imposition of a development fee shall be exempt from development fees unless the developer seeks a substantial change in the approval.
28-1105 COLLECTION OF DEVELOPMENT FEES.
[Ord. No. OR:09/01 § 28-1105]
The Borough shall collect fifty percent (50%) of the fee on any specific development prior to and as a condition of the issuance of the building permit therefor. The remaining portion shall be collected prior to and as a condition of the issuance of the certificate of occupancy. Once the final equalized assessed value of a particular development has been determined by the Tax Assessor, and such final equalized assessed value is greater than the estimated equalized assessed value, the developer shall, within ten (10) business days from receipt of notification from the Borough, pay to the Borough the difference between the development fees required to be paid by the developer once such final equalized assessed value has been determined and the estimated development fees actually paid by the developer. The failure of the developer to make timely payments of the aforesaid deficiency shall entitle the Borough to file, without notice to the developer, a lien against the subject development. In the event the Borough shall file such lien, the Borough may add to the aforesaid deficiency amount, reasonable attorney fees to file and discharge such lien, together with any and all costs incurred to file and discharge said lien. In the event that the estimated equalized assessed value proves to have been too high, the Borough shall promptly refund the difference between the estimated development fees actually paid by the developer and the development fees required to be paid by the developer once such final equalized assessed value has been determined.
28-1106 HOUSING TRUST FUND.
[Ord. No. OR:09/01 § 28-1106]
All development fees shall be deposited with the Chief Financial Officer of the Borough in a separate designated interest-bearing housing trust fund. The development fees placed in the housing trust fund shall be deemed "dedicated revenues" as such term is defined in N.J.S.A. 40A:4-36. In establishing the housing trust fund, the Borough shall provide whatever express written authorization that may be required by the bank utilized by the Borough in order to permit COAH to direct the disbursement of development fees pursuant to this chapter.
28-1107 USE OF MONEY.
[Ord. No. OR:09/01 § 28-1107]
A.
The Borough shall use revenues collected from development fees for any activity approved by COAH for addressing the Borough's fair share obligation. Such activities include, but are not limited to, rehabilitation, new construction, regional contribution agreements, the purchase of land for low and moderate income housing, the improvement of land to be used for low and moderate income housing, the extension and/or improvements of roads and infrastructure to low and moderate income housing sites, assistance designed to render units more affordable and the administration or implementation of the housing element.
B.
Funds shall not be expended to reimburse the Borough for past housing activities.
C.
At least thirty percent (30%) of the revenues collected from development fees shall be devoted to render units more affordable. Examples of such activities include, but are not limited to, down payment assistance, low interest loans, and rental assistance. This requirement may be waived in whole or in part when the Borough demonstrates to COAH the ability to address the requirement of affordability assistance from another source.
D.
No more than twenty percent (20%) of the revenues collected from development fees shall be expended on administration, including but not limited to, salaries and benefits for Borough employees or consultant fees necessary to develop or implement a rehabilitation program, a new construction program, a regional contribution agreement, a housing element, and an affirmative marketing program. 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. Development fees shall not be used to defray the costs of existing staff.
28-1108 MONITORING.
[Ord. No. OR:09/01 § 28-1108; 5-16-2019 by Ord. No. 19/13]
The Borough shall provide annual reporting of trust fund activity to the New Jersey Department of Community Affairs, Council on Affordable Housing, or Local Government Services, or other entity designated by the State of New Jersey, with a copy provided to Fair Share Housing Center, Inc., and posted on the municipal website, using forms developed for this purpose by the New Jersey Department of Community Affairs, Council on Affordable Housing or Local Government Services. The reporting shall include an accounting of all housing trust fund activity, including the source and amount of funds collected and the amount and purpose for which any funds have been expended.
28-1109 SPENDING PLAN.
[Ord. No. OR:09/01 § 28-1109]
A.
The Borough shall submit to COAH a spending plan for the development fees collected by it prior to the expiration of its substantive certification period. Plans to spend development fees shall consist of the following information:
1.
A projection at revenues anticipated from imposing fees on development based on historic activity.
2.
A description of the administrative mechanism that the Borough will use to collect and distribute revenues.
3.
A description of the anticipated use or all development fees.
4.
A schedule for the creation or rehabilitation of housing units.
5.
In the event the Borough envisions being responsible for public sector or nonprofit construction of housing, a pro-forma statement of the anticipated costs and revenues associated with the development.
6.
The manner through which the Borough will address any shortfall if the anticipated revenues from development fees are not sufficient to implement the plan.
28-1110 PENALTIES.
[Ord. No. OR:09/01 § 28-1110]
A.
In the event that any of the conditions set forth below occur, COAH shall be authorized, on behalf of the Borough, to direct the manner in which all development fees collected pursuant to this chapter shall be expended. Should any such condition occur, such revenues shall immediately become available for expenditure at the direction of COAH upon the Borough Clerk's receipt of written notification from COAH that such a condition has occurred. In furtherance of the foregoing, the Borough shall, in establishing a bank account pursuant to this chapter, ensure that the Borough has provided whatever express written authorization which may be required by the bank to permit COAH to direct disbursement of such revenues from the account following the delivery to the bank of the aforementioned written notification provided by COAH to the Borough Clerk.
B.
Occurrence of the following may result in COAH taking an action pursuant to paragraph A above:
1.
Failure to submit a spending plan within the time limits imposed by COAH.
2.
Failure to meet deadlines for information required by COAH in its review of this chapter, the Borough's housing element, or spending plan.
3.
Failure to address COAH's conditions for approval of a plan to spend development fees within the deadlines imposed by COAH.
4.
Failure to address COAH's conditions for substantive certification within the deadlines imposed by COAH.
5.
Failure to submit accurate monitoring reports within the time limits imposed by COAH.
6.
Failure to implement the spending plan for development fees within the time limits imposed by COAH or within reasonable extensions granted by COAH.
7.
Expenditure of development fees on activities not permitted by COAH.
8.
Revocation of the Borough's substantive certification.
9.
Other good cause demonstrating that the revenues are not being used for the intended purpose.
28-1111 ONGOING COLLECTION OF DEVELOPMENT FEES.
[Ord. No. OR:09/01 § 28-1111]
The Borough's ability to collect development fees shall expire with substantive certification unless the Borough has filed an adopted housing element with COAH, petitioned for substantive certification, and received COAH's approval of its development fee ordinance.