By Amy Batista, Special Writer
The Fair Housing Act states that municipalities need to provide a reasonable opportunity for affordable housing to be developed, according to Borough Planner Tamara Lee.
“It also specifically says that towns should not use their own money in order to make that happen,” Ms. Lee said during the Borough Council’s workshop meeting on Sept. 8.
Developers have to include affordable housing units in their development projects or pay developer fees, which the borough puts into a housing trust fund it uses to subsidize affordable housing in town, according to Ms. Lee.
The borough’s ordinance regarding affordable housing has a couple of developer fee sections, according to Ms. Lee.
“We have a regular development fees section that says we would collect 1 percent of the assessed value of new residential development and 2 percent of commercial development,” she said.
The borough hasn’t enforced this particular section of the ordinance because it subsequently adopted what’s called “growth share” when growth share was being used to calculate affordable housing, according to Ms. Lee.
“It’s a completely different way of calculating how you collect money,” she said.
However, the borough suspended the growth share section of the ordinance when the Supreme Court determined that the state’s method of regulating growth share was unconstitutional,” Ms. Lee said.
“We never really reinstituted the other development fee process,” she said.
The affordable housing development fee section of the ordinance is outdated at this point, according to Ms. Lee.
Ms. Lee proposed rewriting the developer fee section of the ordinance to be able to collect 1.5 percent of the assessed value of residential and 2.5 percent of the assessed value of commercial development.
“My point is this,” she said. “Our current development fees ordinances are somewhat outdated and somewhat confusing. We have growth share ordinances in the code book even though we have an ordinance that also suspends that same section, which is confusing. To have both growth share and development fees with percentages also confuses people.”
The Planning Board has talked about the issue and is in favor of “cleaning up” the ordinances, Ms. Lee said.
“I am here tonight to see if the governing body is able to update that and adopt it and, if so, we then would need some guidance from you as to where you want to institute development fees,” she said. “I am hoping to get some direction from you.”
She presented the council with a few options. She said the borough could adopt an ordinance that institutes affordable housing development fees on residential development, commercial development or both. Or, she said, the borough could institute the fees for development in certain zones or for specific land uses.
Ms. Lee recommended instituting development fees on specific land uses.
“We thought it was important to start collecting fees because our housing fund is pretty depleted at this point,” she said. “We spent it down pretty rapidly when the state was threatening to essentially to take all the funds.”
The borough has a chance of rebuilding the housing fund, she said.
“Which if for nothing else, we are going to need to subsidize what is going to be a rehab component (of the borough’s new affordable housing obligation),” she said.
The borough does not know the number of units it will have to redevelop into affordable housing, she said, but “we know that is not going to go away.”
During the discussion, Councilman Connor Montferrat asked Ms. Lee where she came up with the number of 56 rehab units.
She replied that the council could not discuss the number outside of executive session.
“There are some numbers out there,” Borough Attorney Frederick Raffetto said. “Nothing has been finalized yet.”
“We know that there are people who are interested in developing here in town,” Ms. Lee said. “The Planning Board doesn’t know if developers who might be interested in redeveloping some areas might be scared off by development fees so we need feedback.”
Mayor Larry Quattrone asked if the borough could break the development fee percentages down by dollar value.
“In other words, if somebody wanted to build a house for $200,000 the development fee for $200,000 would be one and a half percent and if it exceeded $200,000 it could go down to 1 percent,” Mayor Quattrone said.
Ms. Lee said she had never seen it done that way but she would look into it.
“I’m trying to encourage high-end stuff being built,” Mayor Quattrone said. “I don’t want to stop any growth in town, downtown especially, or hinder that growth.”
He said he wants to encourage “decent development.”
“I want to get away from the small stuff — the $100,000, the $50,000,” he said. “It’s just not happening.”
Ms. Lee said the borough could include a provision for developers to request waivers from the fee.
“That could potentially help you get a better project,” she said.
Council President Denise “Denny” Hansen asked at what point during a development project the fee is assessed.
“At two points,” Ms. Lee said. “When they apply for a building permit and submit their plans, there is an initial assessment done and they pay half of the fee. Then, after the project is constructed, there is another inspection done before they get a Certificate of Occupancy (CO) and then the final assessment is done and the adjustment is done and they pay the other half.”
Councilman Steven Misiura said the money for affordable housing is going to have come from somewhere.
“I do think we need some kind of development fee ordinance,” he said. “I think every town in New Jersey is going to have it. It’s not like somebody is going to have an unfair competitive edge over us.”
Ms. Hansen requested establishing a subcommittee to put an affordable housing development fee ordinance together for council. Mr. Stults and Mr. Montferrat volunteered for the subcommittee.
