SENATE COMMITTEE SUBSTITUTE FOR
SENATE, No. 2485
STATE OF NEW JERSEY
ADOPTED JANUARY 26, 2009
Senator RAYMOND J. LESNIAK
District 20 (Union)
Senator CHRISTOPHER "KIP" BATEMAN
District 16 (Morris and Somerset)
Senators Whelan, Sarlo, Madden, Oroho and Van Drew
Modifies laws concerning affordable housing and makes an appropriation to the Affordable Housing Trust Fund.
CURRENT VERSION OF TEXT
As reported by the Senate Budget and Appropriations Committee on February 26, 2009, with amendments.
An Act concerning affordable housing, amending and supplementing P.L.1985, c.222 and P.L.2008, c.46, and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) The Legislature finds and declares:
a. In order to provide for housing affordable to all the residents of the State of New Jersey, the Legislature in July 2008 enacted a law imposing a fee on non-residential development, increasing the cost of commercial and industrial development as a means to raise revenues to make up the difference between the cost of providing for housing and the reasonable price that low and moderate income residents were able to pay for housing.
b. Concurrent with and subsequent to the adoption of this policy, the State and our nation and indeed the world was engulfed in an economic recession that has resulted in substantial increases in unemployment, including an unemployment rate of more than 7 percent, and decreases in revenue to the State treasury.
c. Revenues actually collected pursuant to 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) have fallen far short of the amounts anticipated. The State faced an expected shortfall of more than $2 billion against projected revenues in its 2009 Appropriations Act, and the Legislature will be forced to consider its 2010 budget in a declining revenue environment.
d. The development fee, under the current economic conditions which economic experts universally predict will worsen and last for at least another year, is a cost that non-residential developers in New Jersey cannot bear.
e. In addition to ensuring a realistic opportunity for the provision of affordable housing for its citizens, the State of New Jersey must attend to the general welfare of its residents by staffing and funding the entire spectrum of services traditionally provided by the State, despite the decline in government revenue.
f. As part of the duty to protect the general welfare, the State provides financial support of municipal governments and local school districts. In the event that a revenue shortfall prevents the State from funding these services, the burden will fall on property taxpayers, further hampering growth in commerce, consequently revenues.
g. Continued imposition of the development fee during an economic crisis may hamper the state's ability to recover from the economic recession, slowing job creation and development that are normally are a source of revenue, increasing the revenue shortfall in the State's budget, further hampering the state's ability to provide for the general welfare needs of its residents, including funding developmentally disabled, health care services for senior citizens and indigent families, financial support for special education services within local school districts, funding for state institutions for the mentally ill and general financial support for municipal governments and local school districts.
h. Increasing property taxes, which are already precariously high, or borrowing money in order to provide for those needs would adversely affect our residents' ability to provide for those needs themselves and the municipalities ability to provide for those needs in the future by increasing costs and slowing economic development and job creation.
i. It is essential to the public good to temporarily delay implementation imposition of the fee under 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).
2. 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. 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), prohibits municipalities from imposing their own fees to fund affordable housing on non-residential development, and P.L. , c. (C. ) (pending before the Legislature as this bill) is not intended to alter this underlying policy.
f. The negative impact of a State policy that over-relies on a municipal fee structure and of State programs that require a municipality to impose onerous fees and charges on developers must be balanced against any public good expected from such regulation. It is undisputable that the charging of fees at high levels dissuades commerce from locating within a State or municipality or locality and halts non-residential and residential development, and these ill effects directly increase the overall costs of housing, and could impede the constitutional obligation to provide for a realistic opportunity for housing for families at all income levels.
(cf: P.L.2008, c.46, s.33)
3. Section 37 of P.L.2008, c.46 (C.40:55D-8.6) is amended to read as follows:
37. a. The provisions of 1[sections 32 through 38 of]1 P.L.2008, c.46 1[(C.40:55D-8.1 through C.40:55D-8.7)] that would permit the imposition of a fee upon a developer of non-residential property1 shall not apply to:
(1) Non-residential property for which a [certificate of occupancy has been issued] 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.)] July 1, 2010; 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;
(3) A non-residential project that, prior to July 1, 2010, has been referred to a planning board by the State, a governing body, or other public agency for review pursuant to section 22 of P.L.1975, c.291 (C. 40:55D-31); or
(4) A non-residential property for which a site plan application has received approval by the New Jersey Meadowlands Commission, pursuant to section 13 of P.L.1968, c.404 (C.13:17-14) prior to July 1, 2010.
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)
4. Section 20 of P.L.1985, c.222 (C.52:27D-320) is amended o read as follows:
20. There is established in the Department of Community Affairs a separate trust fund, to be used for the exclusive purposes as provided in this section, and which shall be known as the "New Jersey Affordable Housing Trust Fund." The fund shall be a non-lapsing, revolving trust fund, and all monies deposited or received for purposes of the fund shall be accounted for separately, by source and amount, and remain in the fund until appropriated for such purposes. The fund shall be the repository of all State funds appropriated for affordable housing purposes, including, but not limited to, the proceeds from the receipts of the additional fee collected pursuant to paragraph (2) of subsection a. of section 3 of P.L.1968, c.49 (C.46:15-7), proceeds from available receipts of the Statewide non-residential development fees collected pursuant to section 35 of P.L.2008, c.46 (C.40:55D-8.4), monies lapsing or reverting from municipal development trust funds, or other monies as may be dedicated, earmarked, or appropriated by the Legislature for the purposes of the fund. All references in any law, order, rule, regulation, contract, loan, document, or otherwise, to the "Neighborhood Preservation Nonlapsing Revolving Fund" shall mean the "New Jersey Affordable Housing Trust Fund." The department shall be permitted to utilize annually up to 7.5 percent of the monies available in the fund for the payment of any necessary administrative costs related to the administration of the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.), the State Housing Commission, or any costs related to administration of P.L.2008, c.46 (C.52:27D-329.1 et al.).
a. Except as permitted pursuant to subsection g. of this section, and by section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill), the commissioner shall award grants or loans from this fund for housing projects and programs in municipalities whose housing elements have received substantive certification from the council, in municipalities receiving State aid pursuant to P.L.1978, c.14 (C.52:27D-178 et seq.), in municipalities subject to builder's remedy as defined in section 28 of P.L.1985, c.222 (C.52:27D-328) or in receiving municipalities in cases where the council has approved a regional contribution agreement and a project plan developed by the receiving municipality.
Of those monies deposited into the "New Jersey Affordable Housing Trust Fund" that are derived from municipal development fee trust funds, or from available collections of Statewide non-residential development fees, a priority for funding shall be established for projects in municipalities that have petitioned the council for substantive certification.
Programs and projects in any municipality shall be funded only after receipt by the commissioner of a written statement in support of the program or project from the municipal governing body.
b. The commissioner shall establish rules and regulations governing the qualifications of applicants, the application procedures, and the criteria for awarding grants and loans and the standards for establishing the amount, terms and conditions of each grant or loan.
c. For any period which the council may approve, the commissioner may assist affordable housing programs which are not located in municipalities whose housing elements have been granted substantive certification or which are not in furtherance of a regional contribution agreement; provided that the affordable housing program will meet all or part of a municipal low and moderate income housing obligation.
d. Amounts deposited in the "New Jersey Affordable Housing Trust Fund" shall be targeted to regions based on the region's percentage of the State's low and moderate income housing need as determined by the council. Amounts in the fund shall be applied for the following purposes in designated neighborhoods:
(1) Rehabilitation of substandard housing units occupied or to be occupied by low and moderate income households;
(2) Creation of accessory apartments to be occupied by low and moderate income households;
(3) Conversion of non-residential space to residential purposes; provided a substantial percentage of the resulting housing units are to be occupied by low and moderate income households;
(4) Acquisition of real property, demolition and removal of buildings, or construction of new housing that will be occupied by low and moderate income households, or any combination thereof;
(5) Grants of assistance to eligible municipalities for costs of necessary studies, surveys, plans and permits; engineering, architectural and other technical services; costs of land acquisition and any buildings thereon; and costs of site preparation, demolition and infrastructure development for projects undertaken pursuant to an approved regional contribution agreement;
(6) Assistance to a local housing authority, nonprofit or limited dividend housing corporation or association or a qualified entity acting as a receiver under P.L.2003, c.295 (C.2A:42-114 et al.) for rehabilitation or restoration of housing units which it administers which: (a) are unusable or in a serious state of disrepair; (b) can be restored in an economically feasible and sound manner; and (c) can be retained in a safe, decent and sanitary manner, upon completion of rehabilitation or restoration; and
(7) Other housing programs for low and moderate income housing, including, without limitation, (a) infrastructure projects directly facilitating the construction of low and moderate income housing not to exceed a reasonable percentage of the construction costs of the low and moderate income housing to be provided and (b) alteration of dwelling units occupied or to be occupied by households of low or moderate income and the common areas of the premises in which they are located in order to make them accessible to handicapped persons.
e. Any grant or loan agreement entered into pursuant to this section shall incorporate contractual guarantees and procedures by which the division will ensure that any unit of housing provided for low and moderate income households shall continue to be occupied by low and moderate income households for at least 20 years following the award of the loan or grant, except that the division may approve a guarantee for a period of less than 20 years where necessary to ensure project feasibility.
f. Notwithstanding the provisions of any other law, rule or regulation to the contrary, in making grants or loans under this section, the department shall not require that tenants be certified as low or moderate income or that contractual guarantees or deed restrictions be in place to ensure continued low and moderate income occupancy as a condition of providing housing assistance from any program administered by the department, when that assistance is provided for a project of moderate rehabilitation if the project (1) contains 30 or fewer rental units and (2) is located in a census tract in which the median household income is 60 percent or less of the median income for the housing region in which the census tract is located, as determined for a three person household by the council in accordance with the latest federal decennial census. A list of eligible census tracts shall be maintained by the department and shall be adjusted upon publication of median income figures by census tract after each federal decennial census.
g. In addition to other grants or loans awarded pursuant to this section, and without regard to any limitations on such grants or loans for any other purposes herein imposed, the commissioner shall annually allocate such amounts as may be necessary in the commissioner's discretion, and in accordance with section 3 of P.L.2004, c.140 (C.52:27D-287.3), to fund rental assistance grants under the program created pursuant to P.L.2004, c.140 (C.52:27D-287.1 et al.). Such rental assistance grants shall be deemed necessary and authorized pursuant to P.L.1985, c.222 (C.52:27D-301 et al.), in order to meet the housing needs of certain low income households who may not be eligible to occupy other housing produced pursuant to P.L.1985, c.222 (C.52:27D-301 et al.).
h. The department and the State Treasurer shall submit the "New Jersey Affordable Housing Trust Fund" for an audit annually by the State Auditor or State Comptroller, at the discretion of the Treasurer. In addition, the department shall prepare an annual report for each fiscal year, and submit it by November 30th of each year to the Governor and the Legislature, and the Joint Committee on Housing Affordability, or its successor, and post the information to its web site, of all activity of the fund, including details of the grants and loans by number of units, number and income ranges of recipients of grants or loans, location of the housing renovated or constructed using monies from the fund, the number of units upon which affordability controls were placed, and the length of those controls. The report also shall include details pertaining to those monies allocated from the fund for use by the State rental assistance program pursuant to section 3 of P.L.2004, c.140 (C.52:27D-287.3) and subsection g. of this section.
i. The commissioner may award or grant the amount of any appropriation deposited in the "New Jersey Affordable Housing Trust Fund" pursuant to section 7 of P.L. , c (C. ) (pending before the Legislature as this bill) to municipalities pursuant to the provisions of section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
(cf: P.L.2008, c.46, s.17)
5. (New section) 1The provisions of this section shall apply only to those developments for which a fee was imposed pursuant to sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7), known as the "Statewide Non-residential Development Fee Act."1
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 1, 2010 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. A developer of a non-residential project that, prior to July 1, 2010, has been referred to a planning board by the State, a governing body, or other public agency for review pursuant to section 22 of P.L.1975, c.291 (C. 40:55D-31) 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.
c. If moneys are required to be returned under subsection a. or b. 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.
1d. Notwithstanding the provisions of subsections a., b., and c. of this section, if, on February 26, 2009, a municipality has already expended or legally committed by binding contract to spend the fees collected pursuant to sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7), the municipality shall return the funds to the developer in accordance with this section, but shall be reimbursed from the funds available through the appropriation made into the New Jersey Affordable Housing Trust Fund pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill.)1
6. (New section) a. Notwithstanding any law, rule or regulation to the contrary, 1[a municipality shall not be obligated to provide for that portion of the fair share of the need for low and moderate income housing attributable to non-residential growth in the municipality that,] a municipality’s fair share housing obligation shall not be increased as a result of the issuance of certificates of occupancy for non-residential development or as a result of any other approval relating to non-residential development, when such development,1 pursuant to paragraph (1), paragraph (3), and paragraph (4) of subsection a. of section 37 of P.L.2008, c.461,1 is not subject to the 1imposition of a fee pursuant to the1 provisions of 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). 1[The provisions of this subsection a. shall not apply to any municipality that receives and retains revenue generated by the fee imposed 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) on property subject to paragraph (1), paragraph (3), and paragraph (4) of subsection a. of section 37 of P.L.2008, c.46 (pending before the Legislature as this bill) as a deposit in the municipality's municipal development trust fund, or as a grant or award from the New Jersey Affordable Housing Trust Fund or Urban Housing Assistance Act.
b. Municipalities may petition the council for an adjustment of their fair share obligation pursuant to subsection a. of this section. The council shall adjust a municipality's fair share obligation according to the council's methodology.]
b. Nothing in this section shall be construed to affect the authority of the Council on Affordable Housing to calculate and allocate State and regional affordable housing need in accordance with the provisions of the “Fair Housing Act,” P.L.1985, c. 222 (C.52:27D-301 et al.)
c. In recognition of the language of subsection d. of section 11 of P.L.1985, c.222 (C.52:27D-311) that declares that under the “Fair Housing Act” no municipality is required to raise or expend municipal revenues in order to provide low and moderate income housing, the portion of the fair share obligation of a municipality attributable to a particular non-residential development shall be suspended whenever:
(1) the collection of fees under sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7) is effectively suspended for a period of time pursuant to that law, or the particular non-residential development is exempted from the collection of the fees imposed under sections 32 through 38 of P.L.2008, c.46 (C.40:55D-8.1 through C.40:55D-8.7); and
(2) there are insufficient funds in the New Jersey Affordable Housing Trust Fund available to a municipality to assist in the production of such housing units.1
7. (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 (C.52:27D-320), the sum of $15,000,000 from the Long Term Obligation and Capital Expenditure Fund, for the purposes of creating opportunities for affordable housing pursuant to the Fair Housing Act, P.L.1985, c.222 (C.52:27D-301 et al.).
b. The commissioner may transfer any portion of the appropriation described in subsection a. of this section to the "Urban Housing Assistance Fund" established by section 13 of P.L.2008, c.46 (C.52:27D-329.7) for housing purposes.
c. (1) Municipalities authorized by the provisions of 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) to directly receive and use development fees are permitted to petition the commissioner for the award of a grant or loan of any portion of the appropriation described in subsection a. of this section. The commissioner shall award grants or loans from the fund to municipalities that incorporated anticipated or existing housing projects and programs funded by a municipal development trust fund in a housing element submitted to the council pursuant to section 7 of P.L.1985, c.222 (C.52:27D-307).
(2) The commissioner shall target the award of any grant or loan to municipalities based on the extent that their housing plan relied on housing projects or programs funded in part or in whole by municipal development trust fund revenues.
8. This act shall take effect immediately.