COAH History & Fees (for additions)
ATTENTION RESIDENTS and DEVELOPERS:
If you are looking to add an addition to your/a home, you may be subject to a COAH development fee. This includes expanding the footprint of your building or building "up" (i.e. adding a second floor).
As per “Article 4.7 - Affordable Housing Development Fees” of the Township Code, which is the Township’s Court approved Affordable Housing Development Fee Ordinance that was adopted on November 6, 2017, a development fee is imposed on residents looking to put additions on their homes, and on developers constructing residential developments.
Development (COAH) Fee Ordinance Overview
Please note that this ordinance applies to developers as well as individual homeowners looking to put additions on, or doing other alterations to their home.
As per “Article 4.7 - Affordable Housing Development Fees” of the Township Code, which is the Township’s Court approved Affordable Housing Development Fee Ordinance that was adopted on November 6, 2017, an overview of the collection of affordable housing development fees to be deposited in the Township’s Affordable Housing Trust Fund is as follows.
- The Township’s Affordable Housing Development Fee Ordinance (Borough Code at Article 4.7) was adopted by the Township Council on November 6, 2017 and was approved by the Court so that the Township can collect affordable housing development fees.
- All such fees are deposited in the Township’s Affordable Housing Trust Fund and can only be used for affordable housing purposes.
- Expenditures from the Affordable Housing Trust Fund are made in accordance with the Township’s adopted and Court Approved Spending Plan, include but are not limited to, (a) monies for the Township’s Rehabilitation Program, (b) monies to assist with the creation of supportive and special needs housing in the Township, (c) monies to assist with a write-down/buy-down program, (d) monies to assist with future affordable housing projects in the Township, (e) affordability assistance for existing affordable housing in the Township, and (f) Township administrative expenses relating to affordable housing.
2. Residential Development Fees:
- Developers of all residential developments, except for those that are specifically exempted in the Development Fee Ordinance, must pay a fee of one and half percent (1.5%) of the equalized assessed value for all new residential development provided no increased density is permitted.
- If an increase in density is permitted pursuant to a “d” variance granted under N.J.S.A. 40:55D-70d(5), developers must pay a “bonus” development fee of six percent (6%), unless the development includes affordable housing.
- Development fees are also collected when an additional dwelling unit is added to an existing residential structure, and in such cases the development fee is calculated on the increase in the equalized assessed value of the property due to the additional dwelling unit.
- Eligible exactions, ineligible exactions, and exemptions from paying a residential development fee:
- Affordable Housing developments do not have to pay a development fee. This includes if a project delivers off-site affordable units or a payment in lieu of building affordable units, if such a payment is permitted by Ordinance or Agreement.
- Developments that have received preliminary or final site plan approval prior to the adoption of the Township’s first adopted Development Fee Ordinance do not have to pay a fee. If the approval occurred prior to the adoption of the Township’s 2017 Development Fee Ordinance, then the older Development Fee Ordinance in place at the time will control.
- Development fees are imposed and collected when an existing structure undergoes a change to a more intense use, is demolished and replaced, or is expanded, if the expansion is not otherwise exempt from the development fee requirement. The development fee is calculated on the increase in the equalized assessed value of the improved structure.
- Homes that are demolished and replaced as a result of a natural disaster (such as a fire or flood) are exempt from the payment of development fees.
3. Non-Residential Development Fees:
- Non-residential development fees are required by both the Township’s Development Fee Ordinance and the Statewide Non-Residential Development Fee Act (N.J.S.A. 40:55D-8.1 through 8.7).
- Non-residential developers, unless an exemption applies, must pay a development fee of two and a half percent (2.5%) of the equalized assessed value of land and improvements for all new non-residential construction on an unimproved lot.
- Non-residential developers must also pay a fee equal to two and a half percent (2.5%) of the increase in equalized assessed value resulting from any additions to existing structures to be used for non-residential purposes.
- Non-residential developers must also pay a development fee when an existing structure is demolished and replaced. A development fee of two and a half percent (2.5%) shall be calculated at the issuance of a final Certificate of Occupancy on the difference of the equalized assessed value of the pre-existing land and improvements and the equalized assessed value of the newly improved structure.
- Eligible exactions, ineligible exactions, and exemptions from paying a non-residential development fee:
- A non-residential developer must pay a two and a half percent (2.5%) fee on the non-residential portion of a mixed-use project.
- The two and a half percent (2.5%) fee will not apply to an increase in equalized assessed value resulting from alterations, change in use within the existing footprint, reconstruction, renovations, or repairs.
- A non-residential developer does not have to pay the 2.5% fee if exempted by the Statewide Non-Residential Development Fee Act (N.J.S.A. 40:55D-8.1 through 8.7), as specified in Form N-RDF “State of New Jersey Non-Residential Development Certification/Exemption.”
4. Collection Procedures:
Notice of Approval of a Residential or Non-Residential Development
- Upon the granting of preliminary, final or other applicable approval for a development (residential or non-residential), the approving authority (Planning Board or Zoning Board) shall direct its staff to notify the Township’s Land Use Officer responsible for the issuance of a building permit.
Non-Residential Developer Receives and Fills Out Exemption Form
- For Non-Residential developments only, the developer shall be provided with a copy of Form N-RDF “State of New Jersey Non-Residential Development Certification/Exemption” to be completed as per the instructions provided.
Tax Assessor Determines if any Exactions or Exemptions Apply
- Next, all exemptions and exactions regarding whether or not an affordable housing development fee applies must be determined by the Tax Assessor for both Residential and Non-Residential developments. If the Tax Assessor is not sure if an exemption or exaction applies, the Tax Assessor can consult with the Township’s legal counsel.
After First Building Permit is issued Tax Assessor Calculates Estimate of Development Fee
- After the first building permit for a development that is subject to a development fee is issued, the Township’s Construction Official will notify the Township’s Tax Assessor of same.
- The Tax Assessor will then provide an estimate of the equalized assessed value of the development.
- Fifty percent (50%) of the initially calculated fee will then be collected from the developer before first permits can be issued.
Tax Assessor Confirms or Modifies the Initial Development Fee Estimate
- Within 10 days of the final inspection of property prior to the issuance of a final Certificate of Occupancy, the Tax Assessor will confirm or modify the previously estimated equalized assessed value of the improvements associated with the development, re-calculate the development fee if necessary, and thereafter notify the developer of the final amount of the fee.
- The developer shall be responsible for paying the difference between the estimate fee calculated at the time of the issuance of the building permit and the final fee determined at the time of the issuance of the Certificate of Occupancy.
Remaining Portion of Development Fee is Collected as Modified
- The remaining portion of the fee will then be collected at the time of issuance of the Certificate of Occupancy to the developer.
- Click here to read the Mount Laurel history to better understand the affordable housing mandates for Berkeley Heights and New Jersey.
- COAH Letter - Non-Residential
- COAH Letter Final Residential
- Review and Analysis of Report Prepared by David N. Kinsey, PhD Entitled: “New Jersey Low and Moderate Income Housing Obligations for 1999-2025