Borough of Clayton, NJ Article II Development Fees

§ 31A-2 Development fees.

A. Residential development fee.

(1) Within all zoning districts of the Borough, developers of residential development, except as specifically exempted below, shall pay a fee of 1.5% of the equalized assessed value for residential development, provided that no increased density is permitted pursuant to N.J.S.A. 40:55D-70d(5).

(2) When an increase in residential density pursuant to N.J.S.A. 40:55D-70d(5) (known as a "d variance") has been permitted, residential developers shall be required to pay a residential development fee of 6% of the equalized assessed value for each additional unit that may be realized. However, if the zoning on a site has changed during the two-year period preceding the filing of such a variance application, the base density for the purposes of calculating the bonus residential development fee shall be the highest density permitted by right during the two-year period preceding the filing of the variance application. Example: If an approval allows four units to be constructed on a site that was zoned for two units, the fees could equal 1.5% of the equalized assessed value on the first two units and the specified higher percentage up to 6% of the equalized assessed value for the two additional units, provided that zoning on the site has not changed during the two-year period preceding the filing of such a variance application.

B. Exemptions and partial exemptions for residential development.

(1) Affordable housing developments and developments where the developer has made a payment in lieu of on-site construction of affordable units shall be exempt from residential development fees.

(2) Developments which otherwise meet the definition of "residential development" but are required to pay the nonresidential development fee pursuant to the Statewide Non-Residential Development Fee Act, shall be exempt from residential development fees pursuant to § 31A-2A only as to the portion of the development for which a nonresidential development fee was paid pursuant to the Stateside Non-Residential Development Fee Act.

(3) Developments that have received preliminary or final site plan approval prior to the adoption of Ord. No. 21-2009[1] shall pay the residential development fee in effect at the time of these aforementioned approvals, unless the developer seeks a substantial change in the approval. Where a site plan approval does not apply, a zoning and/or building permit shall be synonymous with preliminary or final site plan approval for this purpose. The fee percentage shall be vested on the date that the building permit is issued.

[1] Editor's Note: Ord. No. 21-2009 was adopted 12-10-2009.

(4) When an existing structure undergoes a change to a more intense use, is demolished and replaced, or is expanded, residential development fees shall be imposed and collected on the increase in the equalized assessed value of said structure, unless otherwise exempt from the residential development fee requirement.

(5) Developers of residential structures demolished and replaced as a result of a natural disaster shall be exempt from paying a residential development fee.

[Amended 6-8-2023 by Ord. No. 14-2023]

(6) Within duly designated redevelopment areas, developers of residential development shall pay the residential development fee set forth in the redevelopment agreement between the Borough and the developer. Residential development fees included in redevelopment agreements may not exceed the limits set forth in § 31A-2A.

C. Developers of nonresidential development shall be obligated to comply with the requirements of the Statewide Non-Residential Development Fee Act.

D. Developers of mixed-use development shall be required to comply with the requirements of the Statewide Non-Residential Development Fee Act for the portion of the development consisting of nonresidential development and the requirements of this § 31A-2A and B for the portion of the development consisting of residential development, provided that no affordable housing obligation shall be imposed which would result in an affordable housing obligation greater than that which would have been imposed if the residential development portion of the mixed-use development would have been developed independently of the nonresidential portion of the mixed-use development.

§ 31A-3 Collection procedures.

A. Upon the granting of a preliminary, final or other applicable approval for a development, the applicable approving authority shall direct its staff to notify the Construction Official responsible for the issuance of a building permit.

B. At the time of applying for a demolition permit or the first construction permit, as the term is defined in N.J.A.C. 5:23-1.4 of the State Uniform Construction Code, whichever is earlier, all developers shall comply with the following:

(1) For nonresidential developments only: The developer shall complete and submit to the Construction Official Form N-RDF as per the instructions provided. The Construction Official shall verify the information submitted by the developer as per the instructions provided in the Form N-RDF.

(2) For residential developments only: The developer shall complete and submit to the Construction Official a residential development fee form as per the instructions provided. The Construction Official shall verify the information submitted by the developer in the residential development fee form as per the instructions provided in the residential development fee form.

(3) For mixed use developments: The developer shall complete and submit to the Construction Official Form N-RDF and the residential development fee form, as per the instructions provided on each form. The Construction Official shall verify the information submitted by the developer in both forms as per the instructions provided the respective forms.

C. The Construction Official responsible for the issuance of a building permit shall notify the Gloucester County Tax Assessor of the issuance of the first building permit for a development which is subject to a residential development fee and/or a nonresidential development fee and shall send the Gloucester County Tax Assessor a copy of the residential development fee form and/or Form N-RDF, as applicable, submitted by the developer. The Gloucester County Tax Assessor shall verify the exemptions requested, if any, and shall prepare estimated and final assessments as per the instructions provided in residential development fee form or Form N-RDF, as applicable.

D. Within 90 days of receipt of that notice, the Gloucester County Tax Assessor, based on the plans filed, shall provide an estimate of the equalized assessed value of the development to the developer with a copy to the Construction Official responsible for issuance of the building permit.

E. The Construction Official responsible for the issuance of a final certificate of occupancy, as the term is defined in N.J.A.C. 5:23-1.4 of the State Uniform Construction Code, shall notify the Gloucester County Tax Assessor of any and all requests for the scheduling of a final inspection on property which is subject to a residential development fee and/or a nonresidential development fee.

F. Within 10 business days of a request for the scheduling of a final inspection, the Gloucester County Tax Assessor shall confirm or modify the previously estimated equalized assessed value of the improvements of the development, calculate the residential development fee and/or nonresidential development fee, as applicable, and thereafter notify the developer of the amount of the fee. The developer shall pay the amount of the residential development fee and/or nonresidential development fee, as applicable, as determined by the Gloucester County Tax Assessor and upon payment of said amount and provided that the developer is in full compliance with all other applicable laws, the Construction Official responsible for the issuance of a final certificate of occupancy shall issue the final certificate of occupancy.

G. Should the Gloucester County Tax Assessor fail to determine or notify the developer of the amount of the residential development fee and/or nonresidential development fee, as applicable, 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 (N.J.S.A. 40:55D-8.6). Upon payment of the estimated amount, and provided that the developer is in full compliance with all other applicable laws, the Construction Official responsible for the issuance of a final certificate of occupancy shall issue the final certificate of occupancy.

H. No certificate of occupancy shall be issued until the applicable residential development fee and/or nonresidential development fee has been paid in accordance with this section.

I. Appeal of development fees.

(1) A developer may challenge residential development fees imposed by filing a challenge with the County Board of Taxation. Pending a review and determination by the Board, collected fees shall be placed in an interest-bearing escrow account by Clayton. Appeals from a determination of the Board may be made to the Tax Court in accordance with the provisions of the State Tax Uniform Procedure Law, N.J.S.A. 54:48-1 et seq., within 90 days after the date of such determination. Interest earned on amounts escrowed shall be credited to the prevailing party.

(2) A developer may challenge nonresidential development fees imposed by filing a challenge with the Director of the Division of Taxation. Pending a review and determination by the Director, which shall be made within 45 days of receipt of the challenge, collected fees shall be placed in an interest-bearing escrow account by Clayton. Appeals from a determination of the Director may be made to the Tax Court in accordance with the provisions of the State Tax Uniform Procedure Law, N.J.S.A. 54:48-1 et seq., within 90 days after the date of such determination. Interest earned on amounts escrowed shall be credited to the prevailing party.

§ 31A-4 Affordable Housing Trust Fund.

A. This section confirms that Clayton previously created an Affordable Housing Trust Fund which COAH approved in 1990. The Affordable Housing Trust Fund is a separate, interest-bearing housing trust fund to be maintained by the Chief Financial Officer for the purpose of depositing residential development fees and nonresidential development fees collected from residential developers and nonresidential developers and proceeds from the sale of affordable housing units with extinguished controls.

B. The following additional funds shall be deposited in the Affordable Housing Trust Fund and shall at all times be identifiable by source and amount:

(1) Payments in lieu of on-site construction of affordable units;

(2) Developer-contributed funds to make 10% of the adaptable entrances in a townhouse or other multistory attached development accessible;

(3) Rental income from municipally operated units;

(4) Repayments from affordable housing program loans;

(5) Recapture funds;

(6) Proceeds from the sale of affordable units; and

(7) Any other funds collected in connection with the Borough of Clayton's affordable housing program.

C. All interest accrued in the housing trust fund shall only be used on eligible affordable housing activities set forth in the approved spending plan.

D. Nothing in this chapter shall be construed to prohibit any party from filing a legal challenge in the Superior Court of New Jersey challenging the Borough's administration of the Affordable Housing Trust Fund in accordance with applicable law.

§ 31A-5 Use of funds.

A. The expenditure of all funds shall conform to the Borough's approved spending plan. Funds deposited in the Affordable Housing Trust Fund may be used for any activity identified in the spending plan or the Housing Element and Fair Share Plan to address Clayton's fair share obligation and may be set up as a grant or revolving loan program. Such activities include, but are not limited to, preservation or purchase of housing for the purpose of maintaining or implementing affordability controls, rehabilitation, new construction of affordable housing units and related costs, accessory apartment, market to affordable, or regional housing partnership programs, conversion of existing nonresidential buildings to create new affordable units, green building strategies designed to be cost saving and in accordance with accepted national or state standards, purchase of land for affordable housing, improvement of land to be used for affordable housing, extensions or improvements of roads and infrastructure to affordable housing sites, financial assistance designed to increase affordability, administration necessary for implementation of the Housing Element and Fair Share Plan, or any other activity as permitted under the Fair Housing Act and its implementing regulations and specified in the approved spending plan.

B. Funds shall not be expended to reimburse Clayton for past housing activities.

C. At least 30% of all residential development fees and nonresidential development fees collected and interest earned shall be used to provide affordability assistance to low-income households and moderate-income households in affordable units included in the municipal Fair Share Plan. One-third of the affordability assistance portion of residential development fees and nonresidential development fees collected shall be used to provide affordability assistance to those households earning 30% or less of median income by region.

(1) Affordability assistance programs may include down payment assistance, security deposit assistance, low-interest loans, rental assistance, assistance with homeowners' association or condominium fees and special assessments, and assistance with emergency repairs.

(2) Affordability assistance to households earning 30% or less of median income may include buying down the cost of low-income units or moderate-income units in the municipal Fair Share Plan to make them affordable to households earning 30% or less of median income.

(3) Payments in lieu of constructing affordable units on-site and funds from the sale of units with extinguished controls shall be exempt from the affordability assistance requirement.

D. Clayton may contract with a private or public entity to administer any part of its Housing Element and Fair Share Plan, including the requirement for affordability assistance, in accordance with the Fair Housing Act and its implementing regulations.

E. No more than 20% of all revenues collected from residential development fees and nonresidential development fees may be expended on administration, including, but not limited to, salaries and benefits for municipal employees or consultant fees necessary to develop or implement a new construction program, a Housing Element and Fair Share Plan, and/or an affirmative marketing program. In the case of a rehabilitation program, no more than 20% of the revenues collected from residential development fees and nonresidential development fees shall be expended for such administrative expenses. Administrative funds may be used for income qualification of households, monitoring the turnover of sale and rental units, and compliance with DCA's monitoring requirements or the monitoring requirements set forth in any judgment of compliance. Legal or other fees related to litigation opposing affordable housing sites or objecting to DCA's regulations and/or action are not eligible uses of the Affordable Housing Trust Fund.

§ 31A-6 Monitoring.

Clayton shall complete and return to DCA acting on behalf of COAH or any other entity identified in a judgment of compliance all monitoring forms included in monitoring requirements related to the collection of residential development fees from residential developers and nonresidential development fees from nonresidential developers, payments in lieu of constructing affordable units on site, funds from the sale of units with extinguished controls, barrier-free escrow funds, rental income, repayments from affordable housing program loans, and any other funds collected in connection with the Borough of Clayton's housing program, as well as to the expenditure of revenues and implementation of the spending plan. All monitoring reports shall be completed on forms designed by DCA acting on behalf of COAH or on forms identified in a judgment of compliance.

§ 31A-7 Ongoing collection of fees.

The ability for Clayton to impose, collect and expend residential development fees and its ability to expend nonresidential development fees shall expire with its substantive certification unless Clayton has filed an adopted Housing Element and Fair Share Plan with the DCA, has petitioned for substantive certification or has received court approval of its Housing Element and Fair Share Plan by way of a judgment of compliance, and has received DCA or court approval of its spending plan. If Clayton fails to apply for renewal of its ability to impose and collect residential development fees and its ability to expend nonresidential development fees prior to the expiration of substantive certification or its judgment of compliance, it 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 (N.J.S.A. 52:27D-320). Clayton shall not impose a residential development fee on a development that receives preliminary or final site plan approval after the expiration of its substantive certification or judgment of compliance, nor shall Clayton retroactively impose a residential development fee on such a development. Clayton shall not expend residential development fees or nonresidential development fees after the expiration of its substantive certification or judgment of compliance.