SENATE, No. 2485

STATE OF NEW JERSEY

213th LEGISLATURE

 

INTRODUCED JANUARY 13, 2009

 


 

Sponsored by:

Senator RAYMOND J. LESNIAK

District 20 (Union)

Senator CHRISTOPHER "KIP" BATEMAN

District 16 (Morris and Somerset)

 

Co-Sponsored by:

Senators Whelan, Sarlo, Madden and Oroho

 

 

 

 

SYNOPSIS

     Modifies laws concerning affordable housing and makes an appropriation to the Affordable Housing Trust Fund.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning affordable housing, supplementing and amending various parts of the statutory law and making an appropriation.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.  Section 33 of P.L.2008, c.46 (C.40:55D-8.2) is amended to read as follows

     33.  The Legislature finds and declares:

     a.     The collection of development fees from builders of residential and non-residential properties has been authorized by the court through the powers delegated to the Council on Affordable Housing established pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.).

     b.    New Jersey's land resources are becoming more scarce, while its redevelopment needs are increasing.  In order to balance the needs of developing and redeveloping communities, a reasonable method of providing for the housing needs of low and moderate income and middle income households, without mandating the inclusion of housing in every non-residential project, must be established.

     c.     A Statewide non-residential development fee program which permits municipalities under the council's jurisdiction to retain these fees for use in the municipality will provide a fair and balanced funding method to address the State's affordable housing needs, while providing an incentive to all municipalities to seek substantive certification from the council.

     d.    Whereas pursuant to P.L.1977, c.110 (C.5:12-1 et seq.), organizations are directed to invest in the Casino Reinvestment Development Authority to ensure that the development of housing for families of low and moderate income shall be provided. The Casino Reinvestment Development Authority, in consultation with the council, shall work to effectuate the purpose and intent of P.L.1985, c.222 (C.52:27D-301 et al.).

     e.  During periods of economic downturn, development fees exacerbate the contraction of the property development component of the economy and, consequently, of related trade and industry activity by imposing additional costs.  Under these conditions, an immediate and vigorous response is necessary to remove any roadblocks to continued development activity.

     f.  State policy that relies on a fee structure may raise insufficient revenues to subsidize affordable housing units and prove State programs that require a municipality to impose onerous fees and charges on developers in order to be deemed to have met a fair share housing obligation must be balanced with the negative economic impacts of such municipal regulation. It is undisputable that the charging of fees high levels results in great disincentives for commerce to locate within the State, region or locality, and for non-residential and residential development to occur, and these directly increase the overall costs of housing for everyone, and impede the constitutional obligation provide for a realistic opportunity for housing for families at all income levels.

     g.  It is declared to be in the public interest to provide a flexible system that allows individual municipalities and individual developments to be more responsive to market conditions, which is not just economic, but also responsive to the individual consumer who wants to live in a New Jersey community.

(cf: P.L.2008, c.46, s.33)

 

     2.  Section 3 of P.L.1985, c.222 (C.52:27D-303) is amended to read as follows:

     3.  The Legislature declares that the statutory scheme set forth in this act is  in the public interest in that it comprehends a low and moderate income housing planning and financing mechanism in accordance with regional considerations and sound planning concepts which satisfies the constitutional obligation enunciated by the Supreme Court.  The Legislature declares that the State's preference for the resolution of existing and future disputes involving exclusionary zoning is the mediation and review process set forth in this act and not litigation, and that it is the intention of this act to provide various alternatives to the use of the builder's remedy as a method of achieving fair share housing.

     State policy should recognize the need to treat local officials as partners in providing affordable housing.

     It is important to recognize that upheaval in the national housing market may fundamentally alter the financing and economics of constructing market rate housing during subsequent periods.  It is necessary, particularly during periods of economic contraction, to efficiently take advantage of available sources of financing from the federal government and to coordinate the utilization of resources available from the State for affordable housing purposes.

     It is declared to be in the public interest to provide a flexible system that allows individual municipalities and individual developments to be more responsive to market conditions in general and also responsive to the individual consumer who wants to live in a New Jersey community.

(cf: P.L.1985, c.222, s.3)

 

     3.  Section 34 of P.L.2008, c.46 (C.40:55D-8.3) is amended to read as follows:

     34.  As used in sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7):

     "Construction" means 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 (C.52:27D-119 et seq.).

     "Commissioner" means the Commissioner of Community Affairs.

     "Council" means the Council on Affordable Housing, established pursuant to P.L.1985, c.222 (C.52:27D-301 et al.).

     "Developer" means 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.

     "Equalized assessed value" means 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 sections 1, 5, and 6 of P.L.1973, c.123 (C.54:1-35a through C.54:1-35c).

     "Inherently beneficial use" means any use that by its essential nature primarily serves the public good and promotes the general welfare at a particular site.  Such uses include, but are not limited to, educational facilities, hospitals, nursing homes, public utility facilities and infrastructure, and wind, solar or photovoltaic energy facilities.

     "Mixed use development" means any development which includes both a non-residential development component and a residential development component, and shall include developments for which (1) there is a common developer for both the residential development component and the non-residential 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 non-residential development, or both, or otherwise to contribute resources to the development; and (2) the residential and non-residential 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. 

     "Non-residential development" means:  (1) 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 (C.52:27D-119 et seq.), including any subsequent amendments or revisions thereto; (2) hotels, motels, vacation timeshares, and child-care facilities; and (3) 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 (C.52:27D-330 et seq.).

     "Non-residential development fee" means the fee authorized to be imposed pursuant to sections  32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7).

     "Relating to the provision of housing" shall be liberally construed to include the construction, maintenance, or operation of housing, including but not limited to the provision of services to such housing and the funding of any of the above.

     "Spending plan" means a method of allocating funds collected and to be collected pursuant to an approved municipal development fee ordinance, or pursuant to P.L.2008, c.46 (C.52:27D-329.1 et al.) for the purpose of meeting the housing needs of low and moderate income individuals.

     "Treasurer" means the Treasurer of the State of New Jersey.

(cf: P.L.2008, c.46, s.34)

 

     4. Section 35 of P.L.2008, c.46 (C.40:55D-8.4) is amended to read as follows:

     35. a. Beginning on the effective date of P.L.2008, c.46 (C.52:27D-329.1 et al.), a fee is imposed on all construction resulting in non-residential development, as follows:

     (1) A fee equal to two and one-half percent of the equalized assessed value of the land and improvements, for all new non-residential construction on an unimproved lot or lots; or

     (2) A fee equal to two and one-half percent of the increase in equalized assessed value, of the additions to existing structures to be used for non-residential purposes.

     b.    All non-residential construction of buildings or structures on property used by churches, synagogues, mosques, and other houses of worship, and property used for educational purposes, which is tax-exempt pursuant to R.S.54:4-3.6, shall be exempt from the imposition of a non-residential development fee pursuant to this section, provided that the property continues to maintain its tax exempt status under that statute for a period of at least three years from the date of issuance of the certificate of occupancy. Any property currently used or enjoyed for, or devoted to an inherently beneficial use shall be exempt from the imposition of a non-residential development fee pursuant to this section, provided that the property continues to be devoted to an inherently beneficial use.  In addition, the following shall be exempt from the imposition of a non-residential development fee: 

     (1)   parking lots and parking structures, regardless of whether the parking lot or parking structure is constructed in conjunction with a non-residential development, such as an office building, or whether the parking lot is developed as an independent non-residential development;

     (2)   any non-residential development which is an amenity to be made available to the public, including, but not limited to, recreational facilities, community centers, and senior centers, which are developed in conjunction with or funded by a non-residential developer;

     (3)   non-residential construction resulting from a relocation of or an on-site improvement to a nonprofit hospital or a nursing home facility;

     (4)   projects that are located within a specifically delineated urban transit hub, as defined pursuant to section 2 of P.L.2007, c.346 (C.34:1B-208);

     (5)   projects that are located within an eligible municipality, as defined under section 2 of P.L.2007, c.346 (C.34:1B-208), when a majority of the project is located within a one-half mile radius of the midpoint of a platform area for a light rail system; and

     (6)   projects determined by the New Jersey Transit Corporation to be consistent with a transit village plan developed by a transit village designated by the Department of Transportation.

     A developer of a non-residential development exempted from the non-residential development fee pursuant to this section shall be subject to it at such time the basis for the exemption set forth in this subsection no longer applies, and shall make the payment of the non-residential development fee, in that event, within three years after that event or after the issuance of the final certificate of occupancy of the non-residential development whichever is later.

     For purposes of this subsection, "recreational facilities and community center" means any indoor or outdoor buildings, spaces, structures, or improvements intended for active or passive recreation, including but not limited to ball fields, meeting halls, and classrooms, accommodating either organized or informal activity; and "senior center" means any recreational facility or community center with activities and services oriented towards serving senior citizens.

     If a property which was exempted from the collection of a non-residential 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 non-residential development fees under these circumstances may be enforceable by the municipality as a lien against the real property of the owner.

     c. (1) Unless authorized to pay directly to the municipality in which the non-residential construction is occurring in accordance with paragraph (2) of this subsection, developers shall pay non-residential development fees imposed pursuant to P.L.2008, c.46 (C.52:27D-329.1 et al.) to the Treasurer, in accordance with subsection g. of this section in a manner and on such forms as required by the Treasurer, provided that a certified proof concerning the payment shall be furnished by the Treasurer, to the municipality.

     (2)   The council shall maintain on its website a list of each municipality that is authorized to use the development fees collected pursuant to this section and that has a confirmed status of compliance with the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), which compliance shall include a spending plan authorized by the council for all development fees collected.

     d.    The payment of non-residential development fees required pursuant to sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7) shall be made prior to the issuance of a certificate of occupancy for such development.  A final certificate of occupancy shall not be issued for any non-residential development until such time as the fee imposed pursuant to this section has been paid by the developer.  A non-residential developer may deposit with the appropriate entity the development fees as calculated by the municipality under protest, and the local code enforcement official shall thereafter issue the certificate of occupancy provided that the construction is otherwise eligible for a certificate of occupancy.

     e.     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 may be subject to a non-residential development fee.  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 non-residential development.  The construction official responsible for the issuance of a final certificate of occupancy shall notify the local assessor of any and all requests for the scheduling of a final inspection on property which may be subject to a non-residential development fee.  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 non-residential development in accordance with the regulations adopted by the Treasurer pursuant to P.L.1971, c.424 (C.54:1-35.35); calculate the non-residential development fee pursuant to sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7); and thereafter notify the developer of the amount of the non-residential development fee.  Should the municipality fail to determine or notify the developer of the amount of the non-residential 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 section 37 of P.L.2008, c.46 (C.40:55D-8.6).  Upon tender of the estimated non-residential development fee, provided the developer is in full compliance with all other applicable laws, the municipality shall issue a final certificate of occupancy for the subject property.  Failure of the municipality to comply with the timeframes or procedures set forth in this subsection may subject it to penalties to be imposed by the commissioner; any penalties so imposed shall be deposited into the "New Jersey Affordable Housing Trust Fund" established pursuant to section 20 of P.L.1985, c.222 as amended by section 17 of P.L.2008, c.46 (C.52:27D-320).

     A developer of a mixed use development shall be required to pay the Statewide non-residential development fee relating to the non-residential development component of a mixed use development subject to the provisions of P.L.2008, c.46 (C.52:27D-329.1 et al.).

Non-residential construction which is connected with the relocation of the facilities of a for-profit hospital shall be subject to the fee authorized to be imposed under this section to the extent of the increase in equalized assessed valuation in accordance with regulations to be promulgated by the Director of the Division of Taxation, Department of the Treasury.

     f.     Any municipality that is not in compliance with the requirements established pursuant to sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7), or regulations of the council adopted thereto, may be subject to forfeiture of any or all funds remaining within its municipal development trust fund.  Any funds so forfeited shall be deposited into the New Jersey Affordable Housing Trust Fund established pursuant to section 20 of P.L.1985, c.222 as amended by section 17 of P.L.2008, c.46 (C.52:27D-320).

     g.     The Treasurer shall credit to the "Urban Housing Assistance Fund," established pursuant to section 13 of P.L.2008, c.46 (C.52:27D-329.7) annually from the receipts of the fees authorized to be imposed pursuant to this section an amount equal to $20 million; all receipts in excess of this amount shall be deposited into the "New Jersey Affordable Housing Trust Fund," established pursuant to section 20 of P.L.1985, c.222 as amended by section 17 of P.L.2008, c.46 (C.52:27D-320), to be used for the purposes of that fund.

     The Treasurer shall adopt such regulations as necessary to effectuate sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7), in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

(cf: P.L.2008, c.46, s.35)

 

     5.  Section 37 of P.L.2008, c.46 (C.40:55D-8.6) is amended to read as follows:

     37. a.  The provisions of sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7) shall not apply to:

     (1) Non-residential property for which [a certificate of occupancy has been issued] a site plan has received either preliminary approval, pursuant to section 34 of P.L.1975, c.291 (C.40:55D-46), or final approval, pursuant to section 38 of P.L.1975, c.291 (C.40:55D-50) prior to the effective date of P.L.2008, c.46 (C.52:27D-329.1 et al.); or

     (2)   A non-residential planned development which has received approval of a general development plan pursuant to section 5 of P.L.1987, c.129 (C.40:55D-45.3), or a nonresidential development for which the developer has entered into a developer's agreement pursuant to a development approval granted pursuant to P.L.1975, c.291 (C.40:55D-1 et seq.) or for which the redeveloper has entered into a redevelopment agreement pursuant to P.L.1992, c.79 (C.40A:12A-1 et al.) prior to the effective date of P.L.2008, c.46 (C.52:27D-329.1 et al.); provided, however, that the general development plan, developer's agreement, redevelopment agreement, or any development agreement pursuant to the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.) provides that the developer or redeveloper pay a fee for affordable housing of at least one percent of the equalized assessed value of the improvements which are the subject of the development plan, developer's agreement, or redevelopment agreement.

     b.    A developer may challenge non-residential development fees imposed pursuant to P.L.2008, c.46 (C.52:27D-329.1 et al.) 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 municipality or by the State, as the case may be.  Appeals from a determination of the director may be made to the  tax court in accordance with the provisions of the State Uniform Tax  Procedure Law, R.S.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.

     c.     Whenever non-residential development is situated on real property that has been previously developed with a building, structure, or other improvement, the non-residential development fee shall be equal to two and a half (2.5) percent of the equalized assessed value of the land and improvements on the property where the non-residential development is situated at the time the final certificate of occupancy is issued, less the equalized assessed value of the land and improvements on the property where the non-residential development is situated, as determined by the tax assessor of the municipality at the time the developer or owner, including any previous owners, first sought approval for a construction permit, including, but not limited to, demolition permits, pursuant to the State Uniform Construction Code, or approval under the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).  If the calculation required under this section results in a negative number, the non-residential development fee shall be zero.

     Whenever the developer of a non-residential development has made or committed itself to make a financial or other contribution relating to the provision of housing affordable to low and moderate income households prior to the enactment of P.L.2008, c.46 (C.52:27D-329.1 et al.), the non-residential development fee shall be reduced by the amount of the financial contribution and the fair market value of any other contribution made by or committed to be made by the developer.  For purposes of this section, a developer is considered to have made or committed itself to make a financial or other contribution, if and only if:  (1) the contribution has been transferred, including but not limited to when the funds have already been received by the municipality; (2) the developer has obligated itself to make a contribution as set forth in a written agreement with the municipality, such as a developer's agreement; or (3) the developer's obligation to make a contribution is set forth as a condition in a land use approval issued by a municipal land use agency pursuant to the "Municipal Land Use Law," P.L.1975, c.291 (C.40:55D-1 et seq.).

     d.    Unless otherwise provided for by law, no municipality shall be required to return a financial or any other contribution made by or committed to be made by the developer of a non-residential development prior to the enactment of P.L.2008, c.46 (C.52:27D-329.1 et al.) relating to the provision of housing affordable to low and moderate income households, provided that the developer does not obtain an amended, modified, or new municipal land use approval with a substantial change in the non-residential development.  If the developer obtains an amended, modified, or new land use approval for non-residential development, the municipality, person, or entity shall be required to return to the developer any funds or other contribution provided by the developer for the provision of housing affordable to low and moderate income households and the developer shall not be entitled to a reduction in the affordable housing development fee based upon that contribution.

     e.     The provisions of sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7) shall not be construed in any manner as affecting the method or timing of assessing real property for property taxation purposes.  The payment of a non-residential development fee shall not increase the equalized assessed value of any property.

(cf: P.L.2008, c.46, s.37)

 

     6.  Section 7 of P.L.1985, c.222 (C.52:27D-307) is amended to read as follows:

     7.    It shall be the duty of the council, seven months after the confirmation of the last member initially appointed to the council, or January 1, 1986, whichever is earlier, and from time to time thereafter, to:

     a.     Determine housing regions of the State;

     b.    Estimate the present and prospective need for low and moderate income housing at the State and regional levels;

     c.     Adopt criteria and guidelines for:

     (1)   Municipal determination of its present and prospective fair share of the housing need in a given region which shall be computed for a 10-year period.

     Notwithstanding any rule or regulation to the contrary, any development project constructed under the authority of the New Jersey Sports and Exposition Authority established pursuant to section 4 of P.L.1971, c.137 (C.5:10-4) shall not create any additional affordable fair share housing obligation for a municipality.

     Municipal fair share shall be determined after crediting on a one-to-one basis each current unit of low and moderate income housing of adequate standard, including any such housing constructed or acquired as part of a housing program specifically intended to provide housing for low and moderate income households.  Notwithstanding any other law to the contrary, a municipality shall be entitled to a credit for a unit if it demonstrates that (a) the municipality issued a certificate of occupancy for the unit, which was either newly constructed or rehabilitated between April 1, 1980 and December 15, 1986; (b) a construction code official certifies, based upon a visual exterior survey, that the unit is in compliance with pertinent construction code standards with respect to structural elements, roofing, siding, doors and windows; (c) the household occupying the unit certifies in writing, under penalty of perjury, that it receives no greater income than that established pursuant to section 4 of P.L.1985, c.222 (C.52:27D-304) to qualify for moderate income housing; and (d) the unit for which credit is sought is affordable to low and moderate income households under the standards established by the council at the time of filing of the petition for substantive certification.  It shall be sufficient if the certification required in subparagraph (c) is signed by one member of the household.  A certification submitted pursuant to this paragraph shall be reviewable only by the council or its staff and shall not be a public record;

     Nothing in P.L.1995, c.81 shall affect the validity of substantive certification granted by the council prior to November 21, 1994, or of a judgment of compliance entered by any court of competent jurisdiction prior to that date.  Additionally, any municipality that received substantive certification or a judgment of compliance prior to November 21, 1994 and filed a motion prior to November 21, 1994 to amend substantive certification or a judgment of compliance for the purpose of obtaining credits, shall be entitled to a determination of its right to credits pursuant to the standards established by the Legislature prior to P.L.1995, c.81.  Any municipality that filed a motion prior to November 21, 1994 for the purpose of obtaining credits, which motion was supported by the results of a completed survey performed pursuant to council rules, shall be entitled to a determination of its right to credits pursuant to the standards established by the Legislature prior to P.L.1995, c.81;

     (2)   Municipal adjustment of the present and prospective fair share based upon available vacant and developable land, infrastructure considerations or environmental or historic preservation factors and adjustments shall be made whenever:

     (a)   The preservation of historically or important architecture and sites and their environs or environmentally sensitive lands may be jeopardized,

     (b)   The established pattern of development in the community would be drastically altered,

     (c)   Adequate land for recreational, conservation or agricultural and farmland preservation purposes would not be provided,

     (d)   Adequate open space would not be provided,

     (e)   The pattern of development is contrary to the planning designations in the State Development and Redevelopment Plan prepared pursuant to sections 1 through 12 of P.L.1985, c.398 (C.52:18A-196 et seq.),

     (f)    Vacant and developable land is not available in the municipality, and

     (g)   Adequate public facilities and infrastructure capacities are not available, or would result in costs prohibitive to the public if provided.

     (3)   (Deleted by amendment, P.L.1993, c.31).

     d.    Provide population and household projections for the State and housing regions;

     e.     In its discretion, place a limit, based on a percentage of existing housing stock in a municipality and any other criteria including employment opportunities which the council deems appropriate, upon the aggregate number of units which may be allocated to a municipality as its fair share of the region's present and prospective need for low and moderate income housing.  No municipality shall be required to address a fair share of housing units affordable to households with a gross household income of less than 80% of the median gross household income beyond 1,000 units within ten years from the grant of substantive certification, unless it is demonstrated, following objection by an interested party and an evidentiary hearing, based upon the facts and circumstances of the affected municipality that it is likely that the municipality through its zoning powers could create a realistic opportunity for more than 1,000 low and moderate income units within that ten-year period.  For the purposes of this section, the facts and circumstances which shall determine whether a municipality's fair share shall exceed 1,000 units, as provided above, shall be a finding that the municipality has issued more than 5,000 certificates of occupancy for residential units in the ten-year period preceding the petition for substantive certification in connection with which the objection was filed.

     For the purpose of crediting low and moderate income housing units in order to arrive at a determination of present and prospective fair share, as set forth in paragraph (1) of subsection c. of this section, housing units comprised in a community residence for the developmentally disabled, as defined in section 2 of P.L.1977, c.448 (C.30:11B-2), shall be fully credited pursuant to rules promulgated or to be promulgated by the council, to the extent that the units are affordable to persons of low and moderate income and are available to the general public.

     The council, with respect to any municipality seeking substantive certification, shall require that a minimum percentage of housing units in any residential development resulting from a zoning change made to a previously non-residentially-zoned property, where the change in zoning precedes or follows the application for residential development by no more than 24 months, be reserved for occupancy by low or moderate income households, which percentage shall be determined by the council based on economic feasibility with consideration for the proposed density of development.

     In carrying out the above duties, including, but not limited to, present and prospective need estimations the council shall give appropriate weight to pertinent research studies, government reports, decisions of other branches of government, implementation of the State Development and Redevelopment Plan prepared pursuant to sections 1 through 12 of P.L.1985, c.398 (C.52:18A-196 et seq.) and public comment.  To assist the council, the State Planning Commission established under that act shall provide the council annually with economic growth, development and decline projections for each housing region for the next ten years.  The council shall develop procedures for periodically adjusting regional need based upon the low and moderate income housing that is provided in the region through any federal, State, municipal or private housing program.

     No housing unit subject to the provisions of section 5 of P.L.2005, c.350 (C.52:27D-123.15) and to the provisions of the barrier free subcode adopted by the Commissioner of Community Affairs pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) shall be eligible for inclusion in the municipal fair share plan certified by the council unless the unit complies with the requirements set forth thereunder.

(cf: P.L.2008, c.46, s.6)

 

     7.  Section 11 of P.L.1985, c.222 (C.52:27D-311) is amended to read as follows:

     11. a. In adopting its housing element, the municipality may provide for its fair share of low and moderate income housing by means of any technique or combination of techniques which provide a realistic opportunity for the provision of the fair share.  The housing element shall contain an analysis demonstrating that it will provide such a realistic opportunity, and the municipality shall establish that its land use and other relevant ordinances have been revised to incorporate the provisions for low and moderate income housing.  In preparing the housing element, the municipality shall consider the following techniques for providing low and moderate income housing within the municipality, as well as such other techniques as may be published by the council or proposed by the municipality:

     (1)   Rezoning for densities necessary to assure the economic viability of any inclusionary developments, either through mandatory set-asides or density bonuses, as may be necessary to meet all or part of the municipality's fair share in accordance with the regulations of the council and the provision of subsection h. of this section;

     (2)   Determination of the total residential zoning necessary to assure that the municipality's fair share is achieved;

     (3)   Determination of measures that the municipality will take to assure that low and moderate income units remain affordable to low and moderate income households for an appropriate period of not less than six years;

     (4)   A plan for infrastructure expansion and rehabilitation if necessary to assure the achievement of the municipality's fair share of low and moderate income housing;

     (5)   Donation or use of municipally owned land or land condemned by the municipality for purposes of providing low and moderate income housing;

     (6)   Tax abatements for purposes of providing low and moderate income housing;

     (7)   Utilization of funds obtained from any State or federal subsidy toward the construction of low and moderate income housing;

     (8)   Utilization of municipally generated funds toward the construction of low and moderate income housing; and

     (9)   The purchase of privately owned real property used for residential purposes at the value of all liens secured by the property; excluding any tax liens, notwithstanding that the total amount of debt secured by liens exceeds the appraised value of the property, pursuant to regulations promulgated by the Commissioner of Community Affairs pursuant to subsection b. of section 41 of P.L.2000, c.126 (C.52:27D-311.2).

     b.    The municipality may provide for a phasing schedule for the achievement of its fair share of low and moderate income housing.

     c.     (Deleted by amendment, P.L.2008, c.46)

     d.    Nothing in P.L.1985, c.222 (C.52:27D-301 et al.) shall require a municipality to raise or expend municipal revenues in order to provide low and moderate income housing.

     e.     When a municipality's housing element includes the provision of rental housing units in a community residence for the developmentally disabled, as defined in section 2 of P.L.1977, c.448 (C.30:11B-2), which will be affordable to persons of low and moderate income, and for which adequate measures to retain such affordability pursuant to paragraph (3) of subsection a. of this section are included in the housing element, those housing units shall be fully credited as permitted under the rules of the council towards the fulfillment of the municipality's fair share of low and moderate income housing.

     f.     It having been determined by the Legislature that the provision of housing under P.L.1985, c.222 (C.52:27D-301 et al.) is a public purpose, a municipality or municipalities may utilize public monies to make donations, grants or loans of public funds for the rehabilitation of deficient housing units and the provision of new or substantially rehabilitated housing for low and moderate persons, providing that any private advantage is incidental.

     g.     A municipality which has received substantive certification from the council, and which has actually effected the construction of the affordable housing units it is obligated to provide, may amend its affordable housing element or zoning ordinances without the approval of the council.

     h.     Whenever affordable housing units are proposed to be provided through an inclusionary development, a municipality shall provide, through its zoning powers, incentives to the developer, which shall include increased densities and reduced costs, in accordance with the regulations of the council and this subsection.

     i.      The council, upon the application of a municipality and a developer, may approve reduced affordable housing set-asides or increased densities to ensure the economic feasibility of an inclusionary development.

     j. When a municipality's housing element reserves for occupancy a maximum of 25 percent of the units affordable to persons of low and moderate income who live or work in the municipality, or within a 10 mile radius of the municipality, and for which adequate measures to retain such affordability pursuant to paragraph (3) of subsection a. of this section are included in the housing element, those housing units shall be fully credited against a municipality's fair share of the regional housing need.  Affirmative regional marketing of any unit of affordable housing that meets the criteria of this section shall not be required in order for the unit to be credited toward the fair share obligation pursuant to P.L.1985, c.222. (C.52:27D-301 et al.)

(cf: P.L.2008, c.46, s.15)

 

     8.  Section 8 of P.L.2008, c.46 (C.52:27D-329.2) is amended to read as follows;

     8. a. The council may authorize a municipality that has petitioned for substantive certification, or that has been so authorized by a court of competent jurisdiction, and which has adopted a municipal development fee ordinance to impose and collect development fees from developers of residential property, in accordance with rules promulgated by the council.  Each amount collected shall be deposited and shall be accounted for separately, by payer and date of deposit.

     A municipality may not spend or commit to spend any affordable housing development fees, including Statewide non-residential fees collected and deposited into the municipal affordable housing trust fund, without first obtaining the council's approval of the expenditure.  The council shall promulgate regulations regarding the establishment, administration and enforcement of the expenditure of affordable housing development fees by municipalities.  The council shall have exclusive jurisdiction regarding the enforcement of these regulations, provided that any municipality which is not in compliance with the regulations adopted by the council may be subject to forfeiture of any or all funds remaining within its municipal trust fund.  Any funds so forfeited shall be deposited into the "New Jersey Affordable Housing Trust Fund" established pursuant to section 20 of P.L.1985, c.222 (C.52:27D-320).

     b.    A municipality shall deposit all fees collected, whether or not such collections were derived from fees imposed upon non-residential or residential construction into a trust fund dedicated to those purposes as required under this section, and such additional purposes as may be approved by the council.

     c.     (1) A municipality may only spend development fees for an activity approved by the council to address the municipal fair share obligation.

     (2)   Municipal development trust funds shall not be expended to reimburse municipalities for activities which occurred prior to the authorization of a municipality to collect development fees.

     (3)   A municipality shall set aside a portion of its development fee trust fund for the purpose of providing affordability assistance to low and moderate income households in affordable units included in a municipal fair share plan, in accordance with rules of the council.

     (a)   Affordability assistance programs may include down payment assistance, security deposit assistance, low interest loans, common maintenance expenses for units located in condominiums, rental assistance, and any other program authorized by the council.

     (b)   Affordability assistance to households earning 30 percent or less of median income may include buying down the cost of low income units in a municipal fair share plan to make them affordable to households earning 30 percent or less of median income. The use of development fees in this manner shall not entitle a municipality to bonus credits except as may be provided by the rules of the council.

     (4)   A municipality 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, or any program or activity for which the municipality expends development fee proceeds, in accordance with rules of the council.

     (5)   Not more than 20 percent of the revenues collected from development fees shall be expended on administration, in accordance with rules of the council.

     d.    The council shall establish a time by which all development fees collected within a calendar year shall be expended; provided, however, that all fees shall be committed for expenditure within four years from the date of collection, provided further that the council in its discretion may extend this deadline for a municipality that submits sufficient proof of building or other permits, or other efforts concerning land acquisition or project development.  A municipality that fails to commit to expend the balance required in the development fee trust fund by the time set forth in this section shall be required by the council to transfer the remaining unspent balance at the end of the four-year period to the "New Jersey Affordable Housing Trust Fund," established pursuant to section 20 of P.L.1985, c.222 (C.52:27D-320), as amended by P.L.2008, c.46 (C.52:27D-329.1 et al.), to be used in the housing region of the transferring municipality for the authorized purposes of that fund.

     e.     Notwithstanding any provision of this section, or regulations of the council, a municipality shall not collect a development fee from a developer whenever that developer is providing for the construction of affordable units, either on-site or elsewhere within the municipality.

     This section shall not apply to the collection of a Statewide development fee imposed upon non-residential development pursuant to sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 et seq.) by the State Treasurer, when such collection is not authorized to be retained by a municipality.

(cf: P.L.2008, c.46, s.8)

 

     9.  Section 18 of P.L.2008, c.46 (C.52:27D-329.9) is amended to read as follows

     18. a. Notwithstanding any rules of the council to the contrary, for developments consisting of newly-constructed residential units located, or to be located, within the jurisdiction of any regional planning entity required to adopt a master plan or comprehensive management plan pursuant to statutory law, including the New Jersey Meadowlands Commission pursuant to subsection (i) of section 6 of P.L.1968, c.404 (C.13:17-6), the Pinelands Commission pursuant to section 7 of the "Pinelands Protection Act," P.L.1979, c.111 (C.13:18A-8), the Fort Monmouth Economic Revitalization Planning Authority pursuant to section 5 of P.L.2006, c.16 (C.52:27I-5), or its successor, and the Highlands Water Protection and Planning Council pursuant to section 11 of P.L.2004, c.120 (C.13:20-11), but excluding joint planning boards formed pursuant to section 64 of P.L.1975, c.291 (C.40:55D-77), there shall be required to be reserved for occupancy by low or moderate income households at least 20 percent of the residential units constructed, to the extent this is economically feasible.

     b.    A developer of a project consisting of newly-constructed residential units being financed in whole or in part with State funds, including, but not limited to, transit villages designated by the Department of Transportation, units constructed on State-owned property, and urban transit hubs as defined pursuant to section 2 of P.L.2007, c.346 (C.34:1B-208), shall be required to reserve at least 20 percent of the residential units constructed for occupancy by low or moderate income households, as those terms are defined in section 4 of P.L.1985, c.222 (C.52:27D-304), with affordability controls as required under the rules of the council, unless the municipality in which the property is located has received substantive certification from the council and such a reservation is not required under the approved affordable housing plan, or the municipality has been given a judgment of repose or a judgment of compliance by the court, and such a reservation is not required under the approved affordable housing plan.

     c.  (1) The Legislature recognizes that regional planning entities are appropriately positioned to take a broader role in the planning and provision of affordable housing based on regional planning considerations.  In recognition of the value of sound regional planning, including the desire to foster economic growth, create a variety and choice of housing near public transportation, protect critical environmental resources, including farmland and open space preservation, and maximize the use of existing infrastructure, there is created a new program to foster regional planning entities.

     (2)   The regional planning entities identified in subsection a. of this section shall identify and coordinate regional affordable housing opportunities in [cooperation] consultation with municipalities in areas with convenient access to infrastructure, employment opportunities, and public transportation.  Coordination of affordable housing opportunities may include methods to regionally provide housing in line with regional concerns, such as transit needs or opportunities, environmental concerns, or such other factors as the council may permit; provided, however, that such provision by such a regional entity may not result in more than a 50 percent change in the fair share obligation of any municipality[; provided that this limitation shall not apply to affordable housing units directly attributable to development by the New Jersey Sports and Exposition Authority within the New Jersey Meadowlands District].

     (3)   In addition to the entities identified in subsection a. of this section, the Casino Reinvestment Development Authority, in conjunction with the Atlantic County Planning Board, shall identify and coordinate regional affordable housing opportunities directly attributable to Atlantic City casino development, which may be provided anywhere within Atlantic County, subject to the restrictions of paragraph (4) of this subsection.

     (4)   The coordination of affordable housing opportunities by regional entities as identified in this section shall not include activities which would provide housing units to be located in those municipalities that are eligible to receive aid under the "Special Municipal Aid Act," P.L.1987, c.75 (C.52:27D-118.24 et seq.), or are coextensive with a school district which qualified for designation as a "special needs district" pursuant to the "Quality Education Act of 1990," P.L.1990, c.52 (C.18A:7D-1 et al.), or at any time in the last 10 years has been qualified to receive assistance under P.L.1978, c.14 (C.52:27D-178 et seq.) and that fall within the jurisdiction of any of the regional entities specified in subsection a. of this section.

(cf: P.L.2008, c.46, s.18)

 

     10.  Section 29 of P.L.2008, c.46 (C.52:27D-329.18) is amended to read as follows:

     29. a. On or before January 1 of each year, beginning with the first January 1 that falls after the annual anniversary of the effective date of P.L.2008, c.46 (C.52:27D-329.1 et al.), the department, in consultation with the commission and the working group, shall prepare and submit to the Governor and the Joint Committee on Housing Affordability, or its successor, an Annual Housing Performance Report.  Within 30 days following receipt of the Annual Housing Performance Report, a hearing shall be held by the Joint Committee on Housing Affordability, or its successor, to provide an opportunity for public comment and discussion.

     b.    The report shall include, but shall not be limited to, the following information:

     (1)   All housing units constructed, rehabilitated, or preserved in which funds controlled by any agency of the State were utilized, including the number of units by:

     (a)   Location;

     (b)   Affordability and income ranges of occupants;

     (c)   Target population; i.e., small family, large family, senior citizens, people with disabilities;

     (d)   Type of housing, including ownership, rental, and other forms of tenure; physical type such as single family or multifamily; and whether the unit was newly constructed, rehabilitated, or preserved; and

     (e)   The amount and source of all State-controlled funds used.

     (2)   All bond issuance activity by the agency, including interest rates and the use of bond proceeds.

     (3)   All other activities, including financial support, technical assistance, or other support conducted by the State to further affordable housing, including the use of surplus and underutilized State property for actual construction of affordable housing.

     (4)   Municipal performance pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), including the number of units listed for the distinct populations as enumerated in subsection b. of section 27 of P.L.2008, c.46 (C.52:27D-329.16), and the monies collected and the use of all developer fee proceeds deposited into municipal housing trust funds.

     (5)   For every report issued subsequent to the end of the first year for which a plan has been prepared pursuant to sections 27 and 28 of P.L.2008, c.46 (C.52:27D-329.16 and C.52:27D-329.17):

     (a)   A comparison between the goals, strategies, and priorities set forth in the plan and the outcomes of programs and strategies carried out by the State during the year, and a statement of the reasons for any differences between the plan and the State's programs and strategies; and

     (b)   A description of the manner in which the State has addressed the recommendations, if any, for procedural or substantive changes to any State program or activity set forth in the plan. 

     (6)   Statistical appendices providing information on individual projects and funding allocations.

     c.     The report, appendices, and all supporting documentation thereof shall be made available both in printed form from the department and in downloadable form on the department's web site.

(cf:  P.L.2008, c.46, s.29)

 

     11. (New section) Notwithstanding any law or regulation to the contrary, for a period of 18 months following the effective date of P.L.    , c.   (C.    ) (pending before the Legislature as this bill) neither the State, a county, a municipality, nor any agency or instrumentality thereof shall collect development fees imposed upon developers of non-residential property by the "Statewide Non-Residential Development Fee Act," sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7) or by any ordinance adopted pursuant to regulations of the Council on Affordable Housing promulgated pursuant to any section of the “Statewide Non-Residential Development Fee Act.”

 

      12.  (New section)  a.  A developer of a property that received preliminary site plan approval, pursuant to section 34 of P.L.1975, c.291 (C.40:55D-46), or final approval, pursuant to section 38 of P.L.1975, c.291 (C.40:55D-50) prior to July 17, 2008, and that was subject to the payment of a nonresidential development fee prior to the enactment of P.L.     , c.   (C.     ) (pending before the Legislature as this bill), shall be entitled to a return of any moneys paid.

      b.  If moneys are required to be returned under subsection a. of this section, a claim shall be submitted, in writing, to the same entity to which the moneys were paid, within 120 days of the effective date of P.L.    , c.    (C.       ) (pending before the Legislature as this bill).  The entity to whom the funds were paid shall promptly review all requests for returns, and the fees paid shall be returned to the claimant within 30 days of receipt of the claim for return.

 

     13. (New section) a.  In recent years, affordable housing production has fallen far short of the expectations of the State and the citizens of New Jersey, and quantities housing units affordable to residents of the State at all income levels have not been generated in proportion to housing construction as a whole.

     b.  The reasons for the current affordable housing shortage in New Jersey are varied, complex and interrelated, but may be attributed in part to a patchwork system or regulation created by the courts and the council, deflation in the housing market as a whole, and the failure of the State Planning Commission to provide the Council on Affordable Housing with economic growth, development and decline projections for each housing region pursuant to the requirements of the "Fair Housing Act," P.L.1985, c.222.

     c.  Efforts to coordinate the regulatory practices of the multiple State planning agencies, and to harmonize the responsibilities and practices of the State's system for affordable housing with available federal resources for creating affordable housing have not been thorough or efficacious.

     d.  Instead of the "low and moderate income housing planning and financing mechanism in accordance with regional considerations and sound planning concepts which satisfies the constitutional obligation enunciated by the Supreme Court," the net effect of the "Fair Housing Act" has been to create a bureaucracy that micromanages communities disparate and conflicting requirements that impede the provision of the Constitutional requirement of realistic opportunity for a fair share of its region's present and prospective needs for affordable housing for New Jerseyans of all income levels.

     e.  Existing rigid regulatory requirements create barriers to the development of affordable housing because they ignore local market conditions often require the creation of affordable housing units that stand vacant, and create a financial burden upon an affordable developer.

     f.  The overregulation has created an unworkable system for planners and developers as well as municipalities because it requires onerous compliance paperwork that requires expensive administrative capacity and provides a disincentive to work honestly within the system.

     g.     A regulatory system that burdens market rate residential development drives up the prices of those units, forcing the price of these units past the levels that are affordable for consumers with moderate income, creating a barrier to opportunities for affordable housing for New Jersey citizens at this income level.

     h.  During times of national economic contraction, which have a dramatic impact on the State because the financial sector is the source of many New Jerseyans' livelihood, the affordable housing bureaucracy inhibits economic growth, exacerbating an already untenable situation.

 

     14.  (New section) Notwithstanding any law or regulation to the contrary, for purposes of crediting units of housing against a municipality’s fair share, the council shall permit a municipality to satisfy no less than two units of its fair share obligation for each unit of rental housing occupied or reserved for occupancy by households of moderate income This section shall not apply to units in an age-restricted development.

 

     15.  (New section )  No more than 12 months following the effective date of P.L.    , c.   (C.    ) (pending before the Legislature as this bill), the commission shall review and report on:

     a.  The performance of the program and practices established pursuant to the “Statewide Non-Residential Development Fee Act,” sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 et seq.). The commission shall report separately to the Governor and the Legislature on:

     (1) the effect of the Statewide Non-Residential Development Fee Act and the programs established thereunder on the economic development of municipalities, regions and the State;

     (2) the effectiveness of the fee in generating a revenue stream to be deposited in the New Jersey Affordable Housing Trust Fund established pursuant to section 17 of P.L.2008, c.46; and

     (3) the effectiveness of the Statewide Non-Residential Development Fee Act in promoting the provision of low- and moderate income housing in the several housing regions of this State.

     The commission shall develop recommendations for repeal, modification or other action on the Act as part of the commission’s report to the Governor and Legislature.

     b.  The performance of the regulations promulgated by the council for the housing round ending December 31, 2018 and the practices established thereunder. The commission shall report separately to the Governor and the Legislature on:

     (1) the effectiveness of the regulations in promoting low- and moderate-income housing;

     (2) the reasonableness and effect of the administrative burden placed on municipalities, planners and developers by the regulations; and

     The commission shall develop recommendations for repeal, modification or other action on the Act as part of the commission’s report to the Governor and Legislature.

     c.  Appropriate, effective and feasible strategies to provide affordable housing generally and work force in the State based on available research, if any, from the Office of Legislative Services.

     Pursuant to the authority granted in this section, the commission may, based on the commission's review and recommendations, may submit rule pre-proposals for adoption by the council in the council's discretion, pursuant to section 4 of P.L.1968, c.410 (C.52:14B-4)

 

     16.  (New section) a.  Notwithstanding the provisions of P.L.2008, c.22 (C.52:9H-2.1 et al.), there is appropriated to the Affordable Housing Trust Fund established pursuant to Section 20 of P.L.1985, c.222, the sum of $15,000,000 from the Long Term Obligation and Capital Expenditure Fund, created line item for the purposes of creating opportunities for affordable housing pursuant to the Fair Housing Act, P.L.1985, c.222.

     b.  The State Housing Commission is authorized to utilize up to $500,000 of the appropriation herein to pay the salaries and costs of professionals performing technical or professional analysis pursuant to section 19 of P.L.    , c.   (C.    ) (pending before the Legislature as this bill).

 

     17.  This act shall take effect immediately.

 

 

STATEMENT

 

     This bill makes various changes to the "Fair Housing Act," P.L.1985, c.222 and to recently adopted law affecting the provision of affordable housing (P.L.2008, c.46 (C.52:27D-329.1 et al)). It is the belief of the sponsor that current regulatory scheme, rather than facilitating the creation of Mt. Laurel's "reasonable opportunity for an appropriate variety and choice of housing...to meet the needs, desires and resources of all categories of people may desire to live within its boundaries," impedes the development of housing          affordable to all.

     If enacted, this legislation would impose a moratorium on the collection of the 2.5 percent non-residential development fee imposed by the “Statewide Non-Residential Development Fee Act,” P.L.2008, c.46, for 18 months following the effective date.  The revenue stream halted by the moratorium would be replaced by a $15 million appropriation from the Long term Obligation and Capital Expenditure Fund.  Simultaneously, the bill charges the newly created State Housing Commission with reviewing the non-residential development fee program to determine whether the program has been effective and with making a recommendation about modifications or repeal of the fee collection program.

     This legislation also now exempts properties used for an inherently beneficial use, including energy provision, from the non-residential development fee. The “Statewide Non-residential Development Fee Act” is also amended to exempt projects that that received site approvals prior to July 17, 2008, the effective date of the act.  The bill also includes a refund mechanism for improperly paid fees.

     This legislation would require the Council on Affordable Housing to fully credit municipalities when they reserve up to 25 percent of affordable units for individuals who work in or near the municipality. This bill also permits bonus credits whenever a municipality provides housing for very low income individuals, and provides for a two-to-one credit bonus for rental housing.

     The bill also clarifies that the council may extend time frames for expenditure of municipal development trust funds on the basis of construction permitting and similar documentation concerning timelines.  The bill provides that no municipality will have additional affordable housing obligations on the basis of reviews performed by its planning board or by the New Jersey Hackensack Meadowlands Commission.

     This bill also charges the State Housing Commission created pursuant to P.L.2008, c.46, with reviewing the regulations of the Council on Affordable Housing for its effectiveness in generating affordable housing opportunities. The Commission is also required to file a report making recommendations concerning the rules.