It is the intent and purpose of this article to implement the Housing Plan Element and Fair Share Plan of the Township of Freehold in accordance with affordable housing regulations established and, from time to time, amended by the New Jersey Council on Affordable Housing in accordance with the Fair Housing Law, N.J.S.A. 52:27D-301, and New Jersey Council on Affordable Housing Procedural and Substantive Regulations contained in N.J.A.C. 5:91, 5:92 and 5:93 et seq. and to provide a realistic opportunity for the construction of affordable housing for households with low and moderate incomes as required by the New Jersey Supreme Court in Southern Burlington County N.A.A.C.P. v. Township of Mount Laurel, 92 N.J. 158 (1983) (Mount Laurel II) and the Fair Housing Law (N.J.S.A. 52:27D-301).
The following words and terms, when used in this section, shall have the meanings established in N.J.A.C. 5:93-1.3, Definitions, unless the context clearly indicates otherwise.
AFFORDABLE A sales price or rent within the means of a low- or moderate-income household as defined in N.J.A.C. 5:93-7.4.
COAH The New Jersey Council on Affordable Housing.
DEVELOPMENT FEES Money paid by an individual, person, partnership, association, company or corporation for the improvement of property as permitted in N.J.A.C. 5:93-8.
HOUSING REGION The East Central Housing Region consisting of Monmouth, Ocean and Mercer Counties in accordance with N.J.A.C. 5:93 and 5:91.
LOW-INCOME HOUSING Housing affordable according to Federal Department of Housing and Urban Development or the standards included in this article for home ownership and rental costs, occupied or reserved for occupancy by households with a gross household income equal to 50% or less of the median gross household income for households of the same size within the housing region in which the housing is located, and which is subject to COAH affordability controls and this article.
MODERATE-INCOME HOUSING Housing affordable according to Federal Department of Housing and Urban Development or the standards included in this chapter for home ownership and rental costs, occupied or reserved for occupancy by households with a gross household income in excess of 50% but less than 80% of the median gross household income for households of the same size within the housing region in which the housing is located, and which is subject to COAH affordability controls and this article.
OWNER The current title holder of record of a low- or moderate-income unit. This definition shall refer to and mean the title if record is the same as reflected in the most recently dated and recorded deed of the particular low- or moderate-income unit. Where appropriate, the term "owner" shall also mean and refer to a person who owns a low- or moderate-income unit as a landlord. [Added 4-26-2005 by Ord. No. O-05-9]
RENTAL UNITS Units specifically built at the time of construction for the sole purpose of being occupied by tenants and not owners of affordable housing units. [Added 4-26-2005 by Ord. No. O-05-9]
SENIOR CITIZEN A person who is 62 years of age or older.
A. Designation of administrative authority. For the purposes of administering these affordable housing provisions, the Township Administrator, or designated administrative agency (e.g., NJDCA Affordable Housing Management Services and Monmouth County Community Development Program), shall be the responsible agent of the Township for the purpose of monitoring the occupancy, resale and rental restrictions of low- and moderate-income housing units and shall be referred to as the authority. The authority will be the power to take enforcement action, as authorized by § 190-227 of this article, against any owner or tenant of an affordable housing unit for violation of this article, the Affordable Housing Plan or the COAH deed restrictions. [Amended 4-26-2005 by Ord. No. O-05-9]
B. Affordable housing regulations for development approvals. All development approvals shall provide for affordable housing opportunities, and requirements shall apply to approvals granted by the Planning Board as follows: [Amended 12-22-2015 by Ord. No. O-15-26]
(1) All approvals in affordable housing zones shall provide for the required mandatory inclusionary development or of actual construction or payment of an affordable housing development fee or both in accordance with this article and the Freehold Township Housing Plan Element and Fair Share Plan as approved by COAH or the courts.
(2) All approvals of use variances, site plans, or subdivisions, including extensions and substantial revisions, shall be made subject to mandatory provision of affordable housing except for classes of uses contained in Subsection B(4) below. A substantial revision to a development approval shall, for the purposes of these affordable housing regulations, be any revision which increases or decreases the number of residential units or amount of nonresidential floor space by more than 15%.
(3) All final approvals not providing inclusionary units shall provide for the payment of an affordable housing development fee except for exempted development in Subsection B(4) below.
(4) Exempted from these provisions shall be development approvals for the following classes of development:
(a) Nonprofit organizations which have received tax exempt status pursuant to Section 501(c)(3) of the Internal Revenue Code, providing current evidence of that status is submitted to the Township Administrator, together with a certification that services of the organization are provided at reduced rates to those who establish an inability to pay existing charges.
(b) Federal, state, county and local governments.
(c) Public utilities under the jurisdiction of the New Jersey Board of Public Utilities to the extent that the construction for which approval is sought is of a facility which shall house equipment only and not to be occupied by any employees.
(d) Hospital uses which receive a certificate of need from the New Jersey Department of Health.
The Freehold Township Fair Share Obligation will be divided equally between low- and moderate-income households as per N.J.A.C. 5:93-2.20. Furthermore, except for inclusionary developments constructed pursuant to low-income tax credit regulations, developments which include affordable housing units shall be subject to the following provisions:
A. Low- and moderate-income housing requirements.
(1) At least 1/2 (50%) of all affordable units within each inclusionary development shall be affordable to low-income households; and
(2) At least 1/2 (50%) of all affordable rental units shall be affordable to low-income households; and
(3) At least 1/3 of all affordable units in each bedroom distribution pursuant to N.J.A.C. 5:93-7.3, Bedroom Distribution, shall be affordable to low-income households.
B. Affordability requirements for low- and moderate-income housing units.
(1) Low-income housing. Low-income sales and rental housing shall be affordable, according to Federal Department of Housing and Urban Development or other recognized standards for home ownership and rental costs, and occupied or reserved for occupancy by households with gross household income equal to 50% or less of the median gross household income for households of the same size within the housing region in which the housing is located, and subject to affordability controls.
(2) Moderate-income housing. Moderate-income sales and rental housing shall be affordable, according to Federal Department of Housing and Urban Development or other recognized standards for home ownership and rental costs, and occupied or reserved for occupancy by households with a gross household income in excess of 50% but 80% or less of the median gross household income for households of the same size within the housing region in which the housing is located, and subject to affordability controls.
C. Age restriction. The sales and rentals of not more than 25% of the affordable housing units constructed within the Township may be age-restricted to senior citizens, aged 62 or older as defined by and in accordance with the Federal Fair Housing Act and N.J.A.C. 5:93-5.1 and as regulated by N.J.A.C. 5:93-5.12. A request to age-restrict housing units may only be granted after the Planning Board has received the consent of the Township Committee. In designing an age-restricted affordable housing project, the applicant may propose constructing the senior citizen restricted affordable units in the same building or buildings in order to maximize the potential of preserving a more tranquil lifestyle for the senior citizen residents; and to the foregoing extent, the requirement of integration of the affordable units with conventional units is modified. [Amended 12-22-2015 by Ord. No. O-15-26]
D. Bedroom distribution.
(1) Inclusionary developments that are not age-restricted shall be structured in conjunction with realistic market demands so that:
(a) The combination of efficiency and one-bedroom units is at least 10% and no greater than 20% of the total low- and moderate-income units.
(b) At least 30% of all low- and moderate-income units are two-bedroom units.
(c) At least 20% of all low- and moderate-income units are three-bedroom units.
(d) At least 1/3 of all units in each bedroom distribution pursuant to N.J.A.C. 5:93-7.3 shall be affordable to low-income households.
(2) In the event the rules of the Council on Affordable Housing shall provide for a bedroom mix different than the foregoing, the requirements of COAH shall control and the foregoing shall be deemed modified for all projects which have not received final site plan or subdivision approval.
(3) Age-restricted low- and moderate-income units may utilize a modified bedroom distribution. At a minimum, the number of bedrooms may equal the number of age-restricted low- and moderate-income units within the inclusionary development. The standard can be met by creating all one-bedroom units or by creating a two-bedroom unit for each efficiency unit. Applications to waive this standard shall be made in accordance with N.J.A.C. 5:93-15, Waiver Provisions.
E. Location and design. Low- and moderate-income inclusionary housing shall be designed in accordance with the following provisions:
(1) The low- and moderate-income housing units shall be sited on the tract in locations at least as accessible to common open space and community facilities as market-priced dwelling units. Rental units may be concentrated for ownership and management reasons.
(2) The exterior design of the low- and moderate-income housing units shall be harmonious in scale, texture, and materials with the market-priced units on the tract.
F. Deed restrictions. Developers of housing units for low- and moderate-income households shall enter into a written agreement, binding on all successors-in-interest, in accordance with N.J.A.C. 5:93-9.3 et seq., Resale/Rental Control, at the time of sale, resale, rental or re-rental regardless of the availability of federal, state, county or Township subsidy programs.
G. Heating requirements. Low- and moderate-income units shall utilize the same heating source as market units within inclusionary developments.
Certificates of occupancy for developments which include affordable housing units shall be subject to the following additional provisions.
A. Phasing of affordable units. Affordable housing units shall be built, occupied and receive certificates of occupancy in accordance with the following schedule:
B. No initial occupancy of a low- or moderate-income housing sales unit shall be permitted prior to issuance of a certificate of occupancy, and no certificate of occupancy for initial occupancy of a low- or moderate-income housing sales unit shall issue unless there is a written determination by the authority that the unit is to be controlled by a deed restriction and mortgage lien as adopted by COAH.
C. A certificate of reoccupancy for any occupancy of a low- or moderate-income housing sales unit resulting from a resale shall be required, and the Township shall not issue such certificate unless there is a written determination by the authority that the unit is to be controlled by the deed restriction and mortgage lien required by the COAH.
D. The certificate of reoccupancy shall not be required where there is a written determination by the authority that controls are allowed to expire or in that the repayment option is being exercised pursuant to N.J.A.C. 5:93-9.4.
[Amended 4-26-2005 by Ord. No. O-05-9]
A.developer of an affordable inclusionary housing development shall incorporate deed restrictions on all dwelling units sold or rented as units affordable to low- and moderate-income households pursuant to N.J.A.C. 5:93-9.2, Council on Affordable Housing Substantive Rules. Affordability controls shall remain in force for 30 years in accordance with N.J.A.C. 5:93-9.2, shall run with the land and shall place limitations upon the resale/re-rental of affordable units in accordance with N.J.A.C. 5:93-9.4 through 5:93-9.16 and by means of any deed restrictions and/or lien documents promulgated by the Council on Affordable Housing.
A. Documentation. All owners and tenants of affordable units within the Township of Freehold shall provide documentation to the authority on a yearly basis commencing one year after the date of purchase or rental of the affordable unit that the following payments on the unit, as applicable, are current: first-purchase money mortgages, municipal property taxes, public utilities, condominium, homeowners' or cooperative association fees and all rent payments. Owners and tenants of affordable units who fail to provide said documentation within 60 days of their yearly purchase or rental anniversary date shall be subject to the fines specified in § 190-227A of this article.
B. Foreclosure. In the event of a foreclosure on an affordable unit, the enforcement of a lien against an affordable unit or in the event that any of the following payments, as applicable, are not current, owners and tenants of affordable units within the Township of Freehold shall immediately notify the authority: first-purchase money mortgages, municipal property taxes, public utilities, condominium, homeowners' or cooperative association fees and all rent payments.
C. Exempt sales. Sales exempted from resale/re-rental controls shall include the transfer of ownership between husband and wife; the transfer of ownership between former spouses ordered as a result of a judicial decree of divorce or judicial separation, but not including sales to third parties; the transfer of ownership between family members as a result of inheritance; the transfer of ownership through an executor's deed to a Class A beneficiary; and the transfer of ownership by court order.
D. Deed restrictions, notice of sale. All deed restrictions governing low- and moderate-income housing units shall require the owner to notify the authority and COAH by certified mail of any intent to sell the unit at least 90 days prior to entering into an agreement for the first nonexempt sale after controls have been in effect on the housing unit for the period specified in N.J.A.C. 5:93-9.2.
E. Deed restrictions, sales options. The deed restrictions governing the deeds of low- and moderate-income housing units shall include an option permitting purchase of the affordable housing unit at the maximum allowable restricted sales price at the time of the first nonexempt sale after controls on affordability have been in effect on the unit for the period specified in N.J.A.C. 5:93-9.2. The option to buy shall be first available to Freehold Township, then the New Jersey Department of Community Affairs, Housing and Mortgage Finance Agency, or a qualified nonprofit agency as determined by COAH.
F. Options. Rights shall be held and exercised in accordance with the following provisions:
(1) Upon receipt of notice, the option to buy the unit at the maximum allowable restricted sales price shall be available for 90 days. The authority shall first notify Freehold Township, then the New Jersey Department of Community Affairs, Housing and Mortgage Finance Agency, and COAH that the unit is for sale. If Freehold Township exercises this option, it may enter into a contract of sale. If Freehold Township fails to exercise this option within 90 days, the first of the other entities giving notice to the seller of its intent to purchase during the ninety-day period shall be entitled to purchase the unit. If the option to purchase the unit at the maximum allowable restricted sales price is not exercised by a written offer to purchase the housing unit within 90 days of receipt of the intent to sell, the owner may proceed to sell the housing unit (pursuant to N.J.A.C. 5:93-9.8). If the owner does not sell the unit within one year of the date of the delivery of notice of intent to sell, the option to buy the unit shall be restored and the owner shall be required to submit a new notice of intent to sell at least 90 days prior to any future proposed date of sale.
(2) Any option to buy a housing unit at the maximum allowable restricted sales price shall be exercised by certified mail and shall be deemed exercised upon mailing.
(3) An eligible seller of a low- or moderate-income unit which has been controlled for the period established in N.J.A.C. 5:93-9.2, and who has provided notice of an intent to sell may proceed with the sale if no eligible entity as outlined in N.J.A.C. 5:93-9.4(c) and 5:93-9.7 exercises its option to purchase within 90 days. Subject to N.J.A.C. 5:93-9.9, the seller may elect the affordable resale option or the repayment option.
(a) Affordable resale option. The seller may sell to a qualified low- and moderate-income household at the maximum allowable restricted sales price in accordance with existing COAH regulations, provided that the unit is regulated by the deed restriction and lien adopted by COAH for a period of up to 30 years.
(b) Repayment option. Provided that the municipality has not suspended the repayment option, the seller may sell to any purchaser at market price, provided that 95% of the price differential is paid to the authority, as an instrument of Freehold Township, at closing. Such sale shall be approved by the authority.
(4) Municipal option. Freehold Township may elect to purchase a low- or moderate-income unit provided for in N.J.A.C. 5:93-9.4, and may:
(a) Convey or rent the housing unit to a low- or moderate-income household purchaser or tenant at a price or rent not to exceed the maximum allowable restricted sales price or rental, provided that the unit is controlled by a deed restriction in accordance with Technical Appendix E of N.J.A.C. 5:93-1 et seq. or an alternative approved by COAH; or
(b) Convey the unit at fair market value subject to the provisions of the following subsection.
(c) Upon purchase, Freehold Township may maintain the unit as an affordable housing unit or convey it at fair market value in accordance with the following:
[1] Notify COAH of any proposed sale and sales price 90 days before closing;
[2] Notify COAH of the price differential as defined in COAH regulations;
[3] Deposit the price differential in the Freehold Township Affordable Housing Trust Fund; and
(5) State option. When the Department of Community Affairs or Housing and Mortgage Finance Agency elects to purchase a low- or moderate-income unit pursuant to N.J.A.C. 5:93-9.4, it may:
(a) Convey or rent the housing unit to a low- or moderate-income household purchaser or tenant at a price or rent not to exceed the allowable restricted sales price or rental; or
(b) Convey the unit at fair market value and utilize the price differential to subsidize the construction, rehabilitation or maintenance of low- and moderate-income housing within the housing region.
(6) Nonprofit option. Nonprofit agencies may apply to COAH at any time for the right to purchase low- or moderate-income housing units subsequent to the period of controls on affordability, provided that the unit remains controlled by a deed restriction in accordance with Technical Appendix E in N.J.A.C. 5:93-1 et seq., or an alternative approved by COAH. Nonprofit agencies that have been designated by COAH shall be eligible to purchase low- or moderate-income housing units pursuant to N.J.A.C. 5:93-9.4 for the sole purpose of conveying or renting the housing unit to a low- or moderate-income household purchaser or tenant at a price or rent not to exceed the allowable restricted sales price or rental. Low-income housing units shall be made available to low-income household purchasers or tenants and the housing unit shall be regulated by the deed restriction and lien adopted by COAH. The terms and length of the controls on affordability shall be the same as those required by N.J.A.C. 5:93-9.2.
G. Nonexempt sales or rentals. Owners of affordable units intending to sell or rent their units prior to the expiration of deed restrictions shall comply with the following procedure: [Added 4-26-2005 by Ord. No. O-05-9]
(1) Prior to reselling or renting a low- or moderate-income unit, the owner of an affordable housing unit shall provide written proof to the authority that the resale or rental has been approved by the authority.
(2) Unless otherwise exempt pursuant to this article, the owner of an affordable housing unit shall only resell or rent a low- or moderate-income unit to a qualified purchaser or tenant as determined by the authority or the authorized state agency.
(3) Unless otherwise exempt pursuant to this article, the owner of an affordable housing unit shall be responsible for guaranteeing that the necessary documents are executed and filed at the closing of title or rental of a low- or moderate-income unit to assure that the unit remains affordable to and occupied by low- or moderate-income households. Copies of all such documents shall also be provided to the authority no later than 60 days after the date of closing.
(4) An owner of an affordable housing unit shall not permit the occupation of its unit in violation of the COAH regulations, this article or the Township's Affordable Housing Plan.
The affordable housing regulations shall be administered in accordance with the following provisions:
A. Determination of maximum affordable sales prices/rents. The affordability of a low- or moderate-income unit shall be a function of the rent or sales price which shall be established so as to ensure that occupants do not pay a sum for shelter costs greater than approximately 30% of gross annual income for rental units or approximately 28% of gross annual income for sales units in accordance with Council on Affordable Housing regulations as follows:
(1) Shelter costs for rental units shall include gross rent, including an allowance for utilities so as not to exceed 30% of the gross monthly income of the appropriate household size referenced in Subsection A(4) below. Those tenant-paid utilities that are included in the utility allowance shall be so stated in the lease. The allowance for utilities shall be consistent with the utility allowance approved by the U.S. Department of Housing and Urban Development for use in New Jersey.
(2) Shelter costs for sales units shall include principal, interest, taxes, condominium fees and insurance.
(3) Sales costs of a unit shall be based on a down payment of 5%.
(4) The initial price of a low- and moderate-income owner occupied single-family housing unit shall be established so that after a down payment of 5% (based on a mortgage loan equal to 95% of the purchase price and a market rate of interest), the monthly principal, interest, homeowner and private mortgage insurances, property taxes (property taxes shall be based on the restricted value of low- and moderate-income units) and condominium or homeowner fees do not exceed 28% of the eligible gross monthly income. Master deeds of inclusionary developments shall regulate condominium or homeowner association fees or special assessments of low- and moderate-income purchasers at a specific percentage of those paid by market purchasers. The percentage that shall be paid by low- and moderate-income purchasers shall be at least 1/3 of the condominium or homeowner association fees paid by market purchasers. Once established within the master deed, the percentage shall not be amended without prior approval from COAH.
(5) Rental and sales costs shall be fixed for a unit depending on bedroom number calculated on the following basis as to household size:
(a) Efficiency units shall be affordable to one-person households.
(b) One-bedroom units shall be affordable to one-and-one-half-person households.
(c) Two-bedroom units shall be affordable to three-person households.
(d) Three-bedroom units shall be affordable to four-and-one-half-person households.
(6) In the case of owner-occupied housing rehabilitation assistance, affordability shall be based on unit occupancy by a low- or moderate-income household.
B. Median income by household size.
(1) The maximum average rent and sales prices of low- and moderate-income housing units within each inclusionary development shall be affordable to households earning 57.5% of median income.
(2) Median income by household size will be established by a regional weighted average of the uncapped Section 8 income limits published by the U.S. Department of Housing and Urban Development in accordance with N.J.A.C. 5:93-7.4(b). To compute this regional income limit, the HUD determination of median county income for a family of four is multiplied by the households within the county. The resulting product for each county within the housing region is summed. The sum is divided by the estimated total households in each housing region. This quotient represents the regional weighted average of median income for a household of four. This regional weighted average is adjusted by household size based on multipliers used by HUD to adjust median income by household size. The maximum average rent and price of low- and moderate-income units within each inclusionary development shall be affordable to households earning 57.5% of median income. The municipal ordinance shall require moderate-income sales units to be available for at least two different prices and low-income sales units to be available for at least two different prices.
(3) In averaging 57.5% under Subsection B(2) above, developers and/or municipal sponsors of rental units may establish one rent for a low-income unit and one rent for a moderate-income unit for each bedroom distribution.
(4) Determination of sales values. Values of sales units shall be determined in accordance with the following provisions:
(a) Fair market value. Fair market value shall be established on the basis of the unrestricted price of a low- or moderate-income housing unit if sold at a current real estate market rate.
(b) Maximum allowable restricted sales price. The maximum allowable restricted sales price shall be determined in accordance with COAH regulations at the date of a proposed contract of sale.
(c) Price differential. Price differential shall be established as the difference between the maximum allowable restricted sales price and the fair market value, as determined at the date of a proposed contract of sale, after deducting reasonable real estate broker fees.
(5) Assisted living residences as defined in N.J.A.C. 5:93-1.3, Definitions, shall conform to requirements contained in N.J.A.C. 5:93-5.16, Assisted Living Residence. Assisted living residences shall enter into an agreement with Freehold Township and Freehold Township shall enter into an agreement with the New Jersey Department of Community Affairs Housing Mortgage Finance Agency to administer and monitor the low- and moderate-income apartments in an assisted living residence.
C. Annual indexed increases while controls are in place; sales and rentals.
(1) The price of an owner-occupied housing unit may increase annually based on the percentage increase in the regional median income limit for each housing region. In no event shall the maximum resale price established by the authority be lower than the last recorded purchase price.
(2) With the exception of rentals constructed pursuant to low-income tax credit regulations, the rent of a low- or moderate-income housing unit may be increased annually based on the percentage increase in the housing consumer price index for the United States. This increase shall not exceed 9% in any one year. Rents for units constructed pursuant to low-income tax credit regulations shall be indexed pursuant to the regulations governing low-income tax credits.
D. Procedures for initial sales, resale prior to the expiration of controls, and rentals.
(1) Low- and moderate-income sales units shall not be offered to nonincome eligible households at initial sale without COAH approval. Parties that petition COAH for such approval shall document efforts to sell housing units to income eligible households and shall adhere to the procedures outlined in N.J.A.C. 5:91-12, Motions.
(2) Persons wishing to sell affordable units shall notify the authority responsible for assuring affordability of the intent to sell. If no eligible buyer enters a contract of sale for the unit within 90 days of notification, the authority shall have the option to purchase the unit for a negotiated price that shall not exceed the maximum price permitted based on the regional increase in the median income as defined by the U.S. Department of Housing and Urban Development or other recognized standard adopted by COAH. If the authority does not purchase the unit, the seller may apply for permission to offer the unit to a non-income-eligible household at the maximum price permitted. The seller shall document efforts to sell the unit to an income-eligible household as part of this application. In reviewing the request, the authority shall consider the specific reasons for any delay in selling the housing unit and the hardship to the seller in continuing to offer the affordable unit to an income-eligible applicant. The inability to sell a unit for the maximum permitted resale price shall not, in itself, be considered an appropriate reason for allowing a housing unit to be sold to a non-income-eligible household. If the request is granted the seller may offer a low-income housing unit to a moderate-income household and a moderate-income housing unit to a household earning in excess of 80% of median. In no case shall the seller be permitted to receive more than the maximum price permitted. In no case shall a sale pursuant to this section eliminate the resale controls on the unit or permit any subsequent seller to convey the unit except in full compliance with the terms of this section.
(3) Owners of low- and moderate-income rental units shall not offer rental units to non-income-eligible households without prior approval of COAH. Parties that petition for such approval shall document all efforts to rent to income-eligible households and demonstrate to the satisfaction of COAH that alternatives, such as a reduction in rent, are not feasible. Parties that petition COAH shall adhere to the procedures outlined in N.J.A.C. 5:91-12, Motions.
E. Approval required to exercise repayment option. If the sale will be to a qualified low- and moderate-income household, the authority shall certify the income qualifications of the purchaser and shall ensure the housing unit is regulated by the restrictive covenant and lien required by COAH.
(1) The authority shall examine any contract of sale containing a repayment option to determine if the proposed sales price bears a reasonable relationship to the housing unit's fair market value. In making this determination, the authority may rely on comparable sales data or an appraisal. The authority shall not approve any contract of sale where there is a determination that the sales price does not bear a reasonable relationship to fair market value. The authority shall make a determination within 20 days of receipt of the contract of sale and shall calculate the repayment option payment.
(2) The authority shall adopt an appeal procedure by which a seller may submit written documentation requesting the authority to:
(a) Recompute the repayment obligation if the seller believes an error has been made; or
(b) Reconsider a determination that a sales price does not bear a reasonable relationship to fair market value. A repayment obligation determination made as a result of an owner's appeal shall be a final administrative determination of the authority.
(3) The repayment shall occur at the date of closing and transfer of title for the first nonexempt transaction after the expiration of controls on affordability.
(4) Repayment proceeds shall be deposited in the Freehold Township Affordable Housing Trust Fund. Money deposited in the Freehold Township Affordable Housing Trust Fund trust account from such sale may not be expended until Freehold Township submits and COAH approves a spending plan. COAH may approve the spending plan if it determines that it provides a realistic opportunity for the creation, rehabilitation or maintenance of low- and moderate-income housing.
F. Township rejection of repayment option. Freehold Township shall have the right to determine that the most desirable means of promoting an adequate supply of low- and moderate-income housing is to prohibit the exercise of the repayment option and maintain controls on lower income housing units sold within the Township beyond the period required by N.J.A.C. 5:93-9.2. Such determination shall be made by resolution of the Township Committee and shall be effective upon filing with COAH and the authority. The resolution shall specify the time period for which the repayment option shall not be applicable. During such period, no seller in Freehold Township may utilize the repayment option permitted by N.J.A.C. 5:93-9.8. If the Township exercises the rejection of repayment option outlined above, it shall:
(1) Provide public notice in a newspaper of general circulation; and
(2) Notify the authority and COAH of the Township Committee's action. The authority shall ensure that the deed restriction on all affected housing units reflects the extended period of controls.
G. Continued application of options to create, rehabilitate or maintain low- and moderate-income housing units. When a housing unit has been maintained as a low- or moderate-income unit after controls have been in effect for the period specified in N.J.A.C. 5:93-9.2, the deed restriction governing the housing units shall allow the Township, the state, nonprofit agencies and sellers of low- and moderate-income housing units to again exercise all of the same options as provided in this article.
H. Affirmative marketing plan. Freehold Township shall provide for the marketing of all low- and moderate-income housing units developed pursuant to the provisions of this article in accordance with the provisions of an affirmative marketing plan as described below:
(1) Marketing plan defined. The affirmative marketing plan is regional marketing strategy designed to attract buyers and/or renters of all majority and minority groups, regardless of sex, age or number of children, to housing units which are being marketed by a developer or municipal sponsor of affordable housing. It is a continuing program and covers the period of deed restriction.
(2) Information. The Affirmative Marketing Plan shall include the information provided in N.J.A.C. 5:93-11.1(b).
(3) Marketing program. The marketing program shall be designed to reach all segments of the eligible population within the housing region. It shall be used in advertising and publicizing the availability of housing in accordance with the marketing program requirements of N.J.A.C. 5:93-11.3.
(a) The marketing process for low- and moderate-income units shall begin at least four months prior to expected occupancy.
(b) In implementing the marketing program, there shall be at least one paid advertisement in a newspaper of general circulation within the housing region during the first week of the marketing program. Such advertisement shall include such items specified in N.J.A.C. 5:93-11.3(c).
(c) Applications for low- and moderate-income housing shall be available in several locations, including, at a minimum, the municipal administrative building(s), the municipal library and at the developer's sales office. Applications shall be mailed to prospective applicants upon request.
(d) If the cost of advertising low- and moderate-income units are to be a developer's responsibility, the requirement shall be a condition of the Township Planning Board approval. [Amended 12-22-2015 by Ord. No. O-15-26]
(4) Marketing for initial sales and/or rental; composition of marketing pool.
(a) Households that apply for low- and moderate-income housing shall be screened for preliminary income eligibility by comparing their total income to the low- and moderate-income limits adopted by COAH. Applicants shall be notified as to their eligibility status.
(b) Having screened applicants for preliminary income eligibility, the authority may analyze the income and household sizes of applicants to determine which applicants have the assets and/or income necessary to purchase or rent each available low- or moderate-income unit.
(c) The authority shall interview each applicant and utilize the procedures outlined in N.J.A.C. 5:93-9.1 to verify the applicant's income and household size; determine the applicant's asset availability; and review the applicant's credit history. Applicants shall be required to submit income verification for each household member 18 years or older. This process shall be utilized in establishing the final certified applicant group.
(d) The process described in (a) through (c) above may begin no sooner than one month after the advertising program outlined in N.J.A.C. 5:93-11.3 begins. Households shall be selected to proceed through the process described in Subsection H(4)(a) through (c) above through a method of random selection. Households shall be certified for low- and moderate-income units using the procedures outlined in N.J.A.C. 5:93-9.1. The process described in Subsection H(4)(a) through (c) shall be continued until all the low- and moderate-income units are occupied.
(5) Continuing marketing activities.
(a) The types of activities to be undertaken after the completion of initial occupancy of sales and rental units in order to fill vacancies resulting from normal turnover shall include:
[1] Ensuring a sufficient supply of income eligible applicants by continuing to implement the marketing plan throughout the housing region, as outlined in N.J.A.C. 5:93-11.3. At a minimum, the municipality shall maintain a current pool of at least five income-eligible applicants for each low- and moderate-income unit.
[2] Contacting each income-eligible applicant annually to request updated information regarding income and family size.
(b) As units become available, the authority shall select eligible applicants for the units, as described in N.J.A.C. 5:93-11.4(b) through (d) until the units are occupied by low- and moderate-income households.
(6) Monitoring and reporting requirements.
(a) The Township shall collect information on each applicant for low- and moderate-income housing on forms approved by COAH. Such report shall include:
[1] Monitoring forms approved by COAH.
[2] An evaluation of the income and demographic characteristics of each applicant of low- and moderate-income housing, as well as the occupants of the units; and
[3] An evaluation of any necessary adjustments in the affirmative marketing program as a result of the evaluation in Subsection H(6)(a) above.
(b) The Township shall evaluate the results of its affirmative marketing activities and file a report with COAH by February 28 of each year.
(c) COAH shall review and assess the effectiveness of the Township affirmative marketing program. If it is deemed that the affirmative marketing program is not effective, the Township shall be required to amend the program.
I. General provisions concerning new construction of sales units. In developing its Housing Plan Element, COAH requires that Freehold Township shall adopt measures to assure that low- and moderate-income housing units remain affordable to low- and moderate-income households for a period of not less than 30 years. The authority shall do so by requiring all conveyances of low- and moderate-income housing units subject to this section to contain the restrictive covenant and mortgage lien adopted by COAH.
J. General provisions concerning enforcement through certificates of occupancy or reoccupancy of sales units.
(1) The authority shall issue written determinations for the purpose of issuing certificates of occupancy for initial occupancy or certificates of reoccupancy for low- and moderate-income housing sales units where the authority finds that the unit is to be controlled by a deed restriction and mortgage lien as adopted by COAH. The authority shall make such determination within 10 days of receipt of a proposed deed restriction and mortgage lien. Amendments to the deed restriction and lien shall be permitted only if they have been approved by COAH. A request for an amendment to the deed restriction and lien may be made by the authority, the Township or a developer.
(2) The authority shall not permit the initial occupancy of a low- or moderate-income sales unit prior to issuance of certificate of occupancy in accordance with Subsection J(1) above.
(3) The authority shall issue written determinations for the purpose of issuing certificates of reoccupancy for low- or moderate-income housing sales units where the authority finds that the unit is to be controlled by a deed restriction and mortgage lien as adopted by COAH. Purchasers of low- and moderate-income housing sales units shall execute the deed restriction and mortgage lien prior to issuance of a certificate of occupancy regardless of whether the sellers had executed the deed restriction and mortgage lien adopted by COAH upon acquisition of the property. The authority shall make such determination within 10 days of receipt of a proposed deed restriction and mortgage lien.
(4) The authority shall issue written determinations for the purpose of issuing certificates of reoccupancy for low- and moderate-income housing sales units where the authority finds that the unit is to be sold and controls are allowed to expire or in which the repayment option is being exercised pursuant to N.J.A.C. 5:93-9.4.
(5) The mortgage lien and the deed restriction shall be filed with the Clerk of Monmouth County. The lien and deed restriction shall be adopted by COAH unless amendments have been approved by COAH.
(6) The deed restriction, including the repayment clause, and the mortgage lien shall have priority over all mortgages on the property except for a first mortgage placed on the property by the mortgagee prior to the expiration of resale controls.
K. Eligible capital improvements prior to the expiration of controls; sales units.
(1) Property owners of single-family owner-occupied housing may apply to the authority for permission to increase the maximum price for eligible capital improvements. Eligible capital improvements shall be those that render the unit suitable for a larger household. In no event shall the maximum price of an improved housing unit exceed the limits of affordability for the larger household. Property owners shall apply to the authority if an increase in the maximum sales price is sought.
(2) At resale, all items of property which are permanently affixed to the units and/or were included when the unit was initially restricted (for example, refrigerator, range, washer, dryer, dishwasher, wall to wall carpeting) shall be included in the maximum allowable resale price. Other items of property may be sold to the purchaser at a reasonable price that has been approved by the authority at the time of signing the agreement to purchase. The purchase of central air conditioning installed subsequent to the initial sale of the unit and not included in the base price may be made a condition of the unit resale, provided that the price has been approved by the authority. Unless otherwise permitted by the Council, the purchase of any property other than central air conditioning shall not be made a condition of the unit resale. The owner and the purchaser must personally certify at the time of closing that no unapproved transfer of funds for the purpose of selling and receiving property has taken place at resale.
L. Subsidy to ensure affordability prior to the expiration of controls, sales units. If the use of median income data adopted by the Council to index the cost of housing renders a unit unaffordable to a low- or moderate-income household at the time of resale, a municipality shall not lose credit for the housing unit, provided that adequate controls on affordability remain in place, but the municipality may subsidize the housing unit to maintain affordability.
M. Impact of foreclosure on resale while controls are in place; sales units. A judgment of foreclosure or a deed in lieu of foreclosure to a financial institution regulated by state and/or federal law or to a lender on the secondary mortgage market (including, but not limited to, the Federal National Mortgage Association, the Home Loan Mortgage Corporation, the Government National Mortgage Association or an entity acting on their behalf) shall extinguish controls on affordable housing units provided there is compliance with N.J.A.C. 5:93-9.14. Notice of foreclosure shall allow the authority, the municipality, the Department of Community Affairs, the agency or a nonprofit entity to purchase the affordable housing unit at a negotiated price not to exceed the maximum permitted sales price and maintain it as an affordable unit for the balance of the intended period of controls. Failure to purchase the affordable housing unit shall result in COAH adding that unit to the municipal present and prospective fair share obligation. Failure of the financial institution to provide notice of a foreclosure action to the authority shall not impair any of the financial institution's rights to recoup loan proceeds, shall not negate the extinguishment of controls or the validity of the foreclosure; and shall create no cause of action against the financial institution.
N. Excess proceeds upon foreclosures; sales units. In the event of a foreclosure sale, the owner of the affordable housing unit shall be personally obligated to pay to the Authority responsible for assuring affordability, any surplus funds, but only to the extent that such surplus funds exceed the difference between the sales price at the time of foreclosure and the amount necessary to redeem the debt to the financial institution including costs of foreclosure.
O. Length of controls for rehabilitated, conversion and accessory apartment housing units.
(1) Rehabilitated owner-occupied single-family housing units that are improved to code standard will be subject to affordability controls for at least six years.
(2) Rehabilitated renter-occupied housing units that are improved to code standard shall be subject to affordability controls for at least 10 years.
(3) Newly constructed low- and moderate-income rental units shall remain affordable to low- and moderate-income households for a period of 30 years. Affordability controls on rental units may exceed the prescribed period if the developer agrees to a longer period.
(4) Housing units created through conversion of a nonresidential structure shall be considered a new housing unit and shall be subject to 30 year controls on affordability.
(5) Affordability controls on accessory apartments shall be for a period of at least 10 years. However, in order to be eligible for a rental bonus (pursuant to N.J.A.C. 5:93-5.15), controls on affordability shall extend for a period of 30 years.
(6) Alternative living arrangements shall be controlled in a manner, suitable to the Council, that provides assurances that such a facility will house low- and moderate-income households for at least 10 years. However, in order to be eligible for a rental bonus (pursuant to N.J.A.C. 5:93-5.15(d), controls on affordability shall extend for a period of 30 years.
