ASSEMBLY, No. 19

 

STATE OF NEW JERSEY

 

INTRODUCED OCTOBER 21, 1996

 

 

By Assemblyman WEINGARTEN, Assemblywoman FARRAGHER, Assemblymen Kelly, Bucco, Felice and Gregg

 

 

An Act concerning residential development fees imposed by municipalities and supplementing P.L.1985, c.222 (C.52:27D-301 et al.).

 

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

 

    1. The Legislature finds and declares that:

    a. Mandatory development fees, authorized by the New Jersey Supreme Court in Holmdel Builder's Ass'n v. Holmdel Township, 121 N.J. 550 (1990) to be collected by certain municipalities, and which authorization has been incorporated into regulations promulgated by the Council on Affordable Housing, are onerous and unfair when collected from an individual home builder and owner;

    b. Single family homes, when not part of a greater development of homes, do not place the same burdens or have the same impact on the infrastructure of a municipality as does a development of a larger number of homes;

    c. The requirement of a development fee upon the construction or extensive renovation by the owner of a single family home creates additional costs for such construction, and thus causes this type of housing to be less affordable; and, therefore,

    d. It is in the best interest of the citizens of the State, and in concert with the public policy of encouraging affordable housing, that the Legislature now rectify this situation.

 

    2. Municipal ordinances which impose development fees and which are authorized pursuant to regulations promulgated by the Council on Affordable Housing shall not authorize the imposition of development fees for the construction or alteration of a single family residence in connection with an application submitted for development pursuant to P.L. 1975, c. 291 (C. 40:55D-1 et seq.) or an application for a permit for construction submitted pursuant to P.L. 1975, c. 217 (C. 52:27D-119 et seq.). Any ordinance which authorizes fees contrary to the provisions of and is in effect or adopted after the effective date of P.L. ,c. (C. )(now pending before the Legislature as this bill) shall be invalid and unenforeceable.

 

    3. This act shall take effect 30 days after enactment.

 

 

STATEMENT

 

    This bill would exempt newly constructed or renovated single family homes which are not part of a larger development from mandatory development fees. These fees were first authorized to be collected by municipalities by the court in Holmdel Builder's Ass'n v. Holmdel Township, 121 N.J. 550 (1990). The Council on Affordable Housing (COAH), pursuant to that ruling, promulgated regulations which permit a municipality to charge development fees. The term "developer" is defined very broadly under these rules, and includes a developer of large planned real estate communities, as well as an individual home owner who might be constructing a home, making extensive renovations or just buying a neighbor's garden plot.

    As discussed by the court in Holmdel, the rationale behind development fees is to assist the municipalities financially in meeting their Mount Laurel obligations. The court also noted in this case that the purpose of a municipal fee must be for reimbursement for services reasonably related to development, in order for the fee to be deemed a permissible regulatory exactment, and not an impermissible tax. The ordinances reviewed by the court in this case exacted fees from developers of large, planned real estate developments. These types of developments necessarily create an increased demand for municipal services. It is clear from the court's discussion and determination to leave the setting of the fees to COAH, so long as the fees would not become "confiscatory," and developers were assured "an adequate return on their investment," that the intent was to impose such fees on the large developer and not on an individual who is building or renovating his own home.

    Developers of planned real estate communities are better able to absorb or pass along the costs of development fees than are individual home builders. Therefore, this bill should assist the family desiring to construct or renovate its own house in keeping the costs of such housing affordable.

 

 

                             

 

Exempts certain residential construction from municipal residential development fees.