[Added 1-26-1988 by Ord. No. 2539-88; amended 5-10-1988 by Ord. No. 2568-88; 5-10-1988 by Ord. No. 2570-88; 6-14-1988 by Ord. No. 2581-88; 12-26-1991 by Ord. No. 2881-91; 11-10-1992 by Ord. No. 2942-92; 4-28-1993 by Ord. No. 2974-93; 5-11-1994 by Ord. No. 3036-94; 4-12-1995 by Ord. No. 3097-95; 1-26-1999 by Ord. No. 3403-99; 12-7-2004 by Ord. No. 39211-04]
A. This section of the Township of Dover Code sets forth regulations regarding low- and moderate-income housing units in Dover Township that are consistent with the provisions of N.J.A.C. 5:93 et seq., as effective on June 6, 1994. These rules are pursuant to the Fair Housing Act of 1985 and Dover Township's constitutional obligation to provide for its fair share of low- and moderate-income housing.
B. Terms defined. The following terms are defined in accordance with Council on Affordable Housing (COAH) rules:
AFFORDABLE HOUSING ADMINISTRATOR (AH ADMINISTRATOR) - The Township Planner of the Township of Dover, other municipal officials) and/or designee(s) appointed or contracted by the Township Council of the Township of Dover to administer the compliance and/or implementation of the Township's affordable housing plan.
DEVELOPER'S AFFORDABLE HOUSING PLAN - A plan submitted by the developer and approved by the Affordable Housing Management Service of the State of New Jersey, Department of Community Affairs, which shall identify the manner in which the developer plans to develop, price, market and restrict the low- and moderate-income dwelling units in accordance with this article.
EXEMPT SALES - Includes the transfer of ownership between husband and wife and transfers of ownership between former spouses as a result of a judicial decree of divorce or a 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 executors deed to a Class A beneficiary and a transfer of ownership by court order.
FAIR MARKET VALUE - The unrestricted price of a low- or moderate-income housing unit if sold at a current real estate market rate.
INCLUSIONARY DEVELOPMENT - A residential housing development in which a percentage of the housing units are reserved for low- and moderate-income households.
LOW-INCOME HOUSING - Housing affordable according to Council on Affordable Housing (COAH) standards for homeownership and rental costs and 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 the same size within the housing region in which the house is located in and subject to affordability controls.
MODERATE-INCOME HOUSING - Housing affordable according to Council on Affordable Housing (COAH) standards for homeownership and rental costs and occupied or reserved for occupancy by households with a gross household income of more than 50%o but less than 80% of the median gross household income for households of the same size within the housing region in which the house is located and subject to affordability control.
PRICE DIFFERENTIAL - The difference between the controlled unit sale price and the fair market value as determined at the date of the proposed contract sale after reasonable real estate broker fees have been paid.
REPAYMENT CLAUSE - Obligation of a seller exercising the repayment option to pay 95% of the price differential to a municipality at closing for use within the municipal housing plan.
REPAYMENT OPTION - The option of a seller of a low or moderate income unit to sell a unit pursuant to N.J.A.C. 5:93-12.7 at a fair market value subject to compliance with the terms of the repayment clause.
SET ASIDE - The percentage of housing units devoted to low- and moderate-income households within an inclusionary development.
UNIT COMPLETION - The receipt of any temporary or final certificate of occupancy.
A. Low- and moderate-income housing required. Developers of the affordable housing (AH) sites, as designated on the Zoning Map of the Township of Dover, Ocean County, New Jersey, shall be required to set aside the number of affordable units specified in any existing valid approval or in accordance with the following schedule:
In addition to the set aside requirements above, the developers of Affordable Housing (AH) sites shall be subject to the requirements of the underlying zoning of the respective site set forth in Article X.
B. Affordable housing plan required.
(1) Each developer of an affordable housing development shall file a developer's affordable housing plan with the Township Planning Board. Said plan shall be filed at the time of application for final approval for any site plan which includes low- and moderate-income housing units. It shall be a plan that has been approved by the Housing Affordability Service (HAS) of the Division of Housing and Community Resources, Department of Community Affairs, State of New Jersey. Said plan shall meet all Department of Community Affairs requirements and shall specify in detail the methods, procedures and forms to be used by the developer and comply with provisions of this article. It shall contain the following information as to the proposed development.
(a) Phasing and location of the low- and moderate-income units.
(b) The bedroom mix, proposed unit pricing and specific affirmative marketing plans.
(c) The restrictive covenant and mortgage lien to be used to insure affordability.
(2) The plan shall be in such form and content in which the Township Planning Board may from time to time establish. The Township Planning Board's approval of the developer's affordable housing plan will be required prior to the issuance of a development permit or the signing of any subdivision plat by the Township. Also, compliance with the affordable housing construction phasing schedule set forth in
C. Planning Board applications expedited and application fees waived. The Dover Township Planning Board, with the cooperation of the developer, shall expedite, to the maximum extent possible, the processing of applications for development of affordable housing. The township shall, to the maximum extent permitted by the law, waive the Township Land Use fees for submission of applications for only. There shall be no waiver or reduction of fees as to the market rate units included within the application. Additionally, the Planning Board shall consider waiver requests for Township-required design standards that can be shown to generate unnecessary costs.
D. Fee required. Prior to the issuance of a certificate of occupancy for an affordable housing unit, the developer of affordable housing sites shall pay a fee to the Township to offset the costs of the services of the Affordable Housing (AH) administrator. Said fee shall be the prevailing fees charged by the Housing Affordability Service (HAS) of the Division of Housing and Community Resources, Department of Community Affairs, State of New Jersey, for such services.
A. Building permits. No building permit(s) shall be issued for any development on an Affordable Housing (AH) site unless the developer's Affordable Housing Plan has been approved by the AH administrator.
B. Dover Township's fair share obligation will be divided equally between low- and moderate-income households as per N.J.A.C. 5:932 20.
C. Except for inclusionary developments constructed pursuant to low income tax credit regulations:
(1) At least half of all units within each inclusionary development shall be affordable to low-income households;
(2) At least half of all rental units shall be affordable to low-income households; and
(3) At least one-third of all units in each bedroom distribution pursuant to N.J.A.C. 5:93-7.3 shall be affordable to low-income households.
D. In conjunction with realistic market information, the following criteria will be used in determining maximum rents and sales prices:
(1) Efficiency units shall be affordable to a one-person household;
(2) One-bedroom, units shall be affordable to 1.5 person households;
(3) Two bedroom units shall be affordable to three-person households;
(4) Three-bedroom units shall be affordable to 4.5 person households;
(5) Median income by household size shall be established by a regional weighted average of the uncapped Section eight income limits published by HUD as per N.J.A.C. 5:93-7.4(b);
(6) The maximum sales prices of low- and moderate-income units within each inclusionary development shall be affordable to households earning no more than 70% of median income. In averaging an affordability range of 55% for sales units, 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;
(7) For both owner-occupied and rental units, the low- and moderate-income units shall utilize the same heating source as market units within an inclusionary development;
(8) Low-income units shall be reserved for households with a gross household income equal to 50% of the median income approved by COAH; moderate-income units shall be reserved for households with a gross household income less than 80% of the median income approved by COAH per N.J.A.C. 5:93-7.4(g); and
(9) The regulations outlined in N.J.A.C. 5:93-9.15 and 5:93-9.16 shall be applicable for purchased and rental units.
E. Bedroom distribution. Affordable, non-age-restricted housing units within AH sites shall have the following distribution of bedroom types:
(I) At a minimum, 30% of all low- and moderate-income units shall be two-bedroom units;
(2) At a minimum, 20% of all low- and moderate-income units shall be three-bedroom units; ,
(3) The combination of efficiency and one-bedroom units shall be at least 10% and no greater than 20% of the total low- and moderate-income units; and
(4) low- and moderate-income units that are age-restricted may utilize a modified bedroom distribution. At a minimum, the number of bedrooms will equal the number of age-restricted low- and moderate-income units within the inclusionary development.
F. Unit location. Affordable housing units shall be situated on the development tract in locations no less desirable than market priced dwelling units within the development, and shall be equally accessible to common open space, community facilities and shopping facilities.
G. Phasing. Approval of the developer's Affordable Housing Plan shall be contingent upon the development, whether if developed in one stage or in two or more stages, meeting the following phasing schedule:
H. Occupancy section.
(1) The AH administrator shall designate an application period during which applications to purchase or rent affordable housing units will be accepted.
(2) Applications shall be accepted only if submitted on an application form prepared and/or approved by the AH administrator. Applications shall be completely filled out and notarized. Knowingly or intentionally making any false statement on a form shall be grounds for disqualifying an applicant even if the applicant is otherwise eligible. The following information shall be required:
(a) A copy of IRS Form 1040A or 1040EZ (Tax Computation Form) for each of the three years prior to the date of the application.
(b) A letter from all employers stating present annual income or four consecutive pay stubs dated within 120 days of the interview date.
(c) A letter or appropriate reporting from verifying benefits, including but not limited to social security or pension.
(d) A letter or appropriate reporting form verifying any other sources of income claimed by the applicant household.
(e) Reports that verify income from assets to be submitted by banks or other financial institutions managing trust funds, money market accounts, stocks or bonds.
(f) Reports that verify assets that do not earn regular income such as real estate and savings with delayed earning provisions.
(3) The AH administrator shall determine whether the applicant meets the income and other requirements established in these regulations. The review process for a prospective purchaser shall involve a credit background report; to be an eligible applicant, the applicant shall have an acceptable credit history such that there is a realistic possibility that he will be approved for a mortgage.
(4) Waiting list. The AH administrator may establish a waiting list for the remaining eligible applicants. After all the units are occupied, the AH administrator may choose to accept new applications. If an applicant is deemed eligible, the applicant shall be placed on the waiting list at the bottom of the particular priority classification for which the applicant qualifies. The AH administrator shall periodically recertify the applicants on the waiting list do ensure that the list remains current and that the applicants are still qualified for the units to which they applied.
I. Income eligibility standards.
(1) Income eligibility ceilings for low- and moderate-income units for various sized households shall be established by the AH administrator based upon United States Department of Housing and Urban Development "uncapped median income by family size" for Ocean County and as adopted by COAH. No applicant with a household income in excess of these ceilings shall be eligible to rent or purchase the low- and moderate-income units.
(2) Upon annual adoption of updated income standards by COAH, the AH administrator shall modify its income eligibility ceilings accordingly.
(3) For purposes of determining income and eligibility, the AH administrator shall consider:
(a) All sources of income, whether taxable or nontaxable, including social security and pensions.
(b) Imputed income. For the purpose of determining eligibility and rents, interest on the present value of real property and extraordinary personal property owned by the applicant shall be imputed and deemed additional income. Interest shall be imputed at the average interest rate on money market accounts in the region as determined by the AH administrator.
(c) The income and assets of all members of the household as well as the income and assets of any individual who is expected to occupy the unit for which the household is seeking to qualify shall be included in the determination of eligibility and of rents. The form used for verification of household income shall include an affidavit attesting that the application contains the complete income of all current or anticipated household members.
J. Initial sales prices. Sales prices shall be considered affordable where the household purchasing the unit will not spend more than 28% of gross household income, after a 5% down payment, including the monthly principal, interest, property taxes (based on the restricted value of the low- and moderate-income unit), insurance, and homeowners' association lees, if any. In making these calculations, the following considerations shall govern:
(1) Property taxes shall be determined by applying the equalized property tax rate in Dover Township currently in effect to the proposed selling price of the unit;
(2) The developer shall use the best available assumptions to determine the insurance and homeowners' association fees to be applied to the units, subject to the approval of the AH administrator as to reasonableness only for use in this calculation.
(3) Master deeds of inclusionary developments shall regulate condominium or homeowners' associations fees or special assessments of low- and moderate-income purchasers of 100% of those paid by market purchasers. This one-hundred-percent is consistent with the requirements of N.J.A.C. 5:93-7-4(e). Once established with a master deed, the one-hundred-percent will not be amended without prior approval from COAH;
(4) Dover Township shall follow the general provisions concerning uniform deed restriction liens and enforcement through certificates of occupancy or reoccupancy on sale units as per N.J.A.C.-5-93-9.3; and
(5) Dover Township shall require a certificate of reoccupancy for any occupancy of a low or moderate income sales unit resulting from a resale as per N.J.A.C. 5:93-9.3 (c).
K. Rental prices. For rental units, developers and/or municipal sponsors shall:
(1) Establish one rent for a low-income unit and one for a moderate-income unit for each bedroom distribution;
(2) Gross rent for rental units, including an allowance for tenant-paid utilities, shall be established so as to not exceed 30% of the gross monthly income of the appropriate household size as per N.J.A.C. 5:93-7.9(f). The tenant-paid utility allowance shall be consistent with the utility allowance approved by HUD for use in New Jersey; and
(3) The maximum rents of low- and moderate-income units within each inclusionary development shall be affordable to households eaming no more than 60% of mean income. In averaging an affordability range of 52% for rental units, developers and/or municipal sponsors of rental units may establish one rent for a low-income unit and rent for a moderate-income unit for each bedroom distribution.
L. Procedure for resale transaction prior to expiration of controls.
(1) All resale transactions of affordable housing units shall be administered by the AH administrator. From the date on which the AH administrator receives a notice of intent to sell by the owner of a low- and moderate-income unit, the AH administrator shall have the exclusive right to refer prospective purchasers to that unit for a period of 90 days unless waived in writing. In the event that a contract for the unit is executed within the ninety-day period set above and the prospective buyer is unable to close, the period during which the AH administrator shall have the exclusive right to market the unit is automatically extended for a period of 21 days from the date it is notified of the buyer's inability to close.
(2) In the event no contract has been entered into for the unit at the end of a ninety-day period, the owner of the unit may seek approval from the AH administrator to sell the unit directly. The AH administrator may authorize the applicant to sell the unit as follows. However, if the AH administrator determines that the failure to enter into a contract was the result of negligence, absence of good faith effort or lack of cooperation on the part of the seller, the AH administrator shall require the applicant to attempt to sell the unit for an additional ninety-day period.
(a) In the case of a low-income unit, to a low or moderate income buyer; or
(b) In the case of a moderate-income unit, to a buyer whose income does not exceed 120% of median.
(3) Any subsequent sale shall be fully subject to the resale restrictions contained in these regulations. The deed to the above income purchaser shall specifically contain a deed restriction establishing that it is subject to all the affordability controls outlined in this article.
M. Calculation of resale price. The resale price of the affordable housing unit shall be the base price increased pursuant to Subsection M(1) and (2) below.
(1) Percentage increase in household income. The price approved by the AH administrator at which the seller acquired the property shall be the base price. The base price shall be multiplied by 100% plus the percentage increase in the COAH uncapped median income by family size for Ocean County from the time of acquisition of the property to the date that notice of intent to sell is given to the AH administrator. For example, if the base price is $30,000 and the median income at the time of the initial acquisition is $32,000 and at the time of the resale transaction the median income has increased 25% to $40,000, then the resale price is as follows:
(2) Improvements. In addition, the seller shall be entitled to add to the selling price of the unit the cost of an eligible capital improvement to the affordable housing unit which, pursuant to N.J.A.C. 5:92-12.8, renders the unit suitable for a larger household.
(3) Upon request of an owner of an affordable housing unit, the AH administrator shall consider within 30 days whether to grant prior approval of an improvement and to approve a specific dollar amount up to the amount actually expended for that improvement.
N. Exempt sales.
(1) The following transactions shall be deemed non-sales for the purpose of this article. The owner of the affordable unit shall be entitled to a statement of exemption from the AH administrator upon application.
(a) Transfer of an affordable housing unit between husband and wife.
(b) Transfer of ownership o an affordable housing unit between former spouses as a result of a judicial decree, judgment or order of divorce, but not including sales to third parties.
(c) Transfer of ownership of an affordable housing unit as a result of inheritance.
(d) Transfer of ownership of an affordable housing unit through an order of the Superior Court.
(2) A grant of exemption shall not eliminate the resale control restriction set forth in these regulations.
O. Rental increases. All rerental transactions shall be administered by the AH administrator. The rents of affordable housing units may increase annually based on the percentage increase in median income for the Ocean County housing region as determined from the uncapped Section 8 income limits published by HUD, or other recognized standard adopted by the COAH that applies to the rental housing unit.
P. Rental of low- and moderate-income sales unit. No owner of an affordable housing unit may lease the unit to a tenant without prior written approval of the AH administrator. Such approval shall not be granted except when justified by particular and unusual circumstances. An owner seeking such approval shall submit a written request to the AH administrator setting forth the particular circumstances of the case, including the reasons for the request to rent, the proposed duration of the tenancy and certification that the proposed tenant is a qualified low or moderate income household. In the event the AH administrator approves the request, it shall notify the owner of the unit. The owner shall rent the unit only to a qualified low or moderate income tenant for the period approved by the AH administrator at a rent affordable to a low or moderate income tenant, whichever is applicable.
Q. Conversion of rental units to sales units. Rental units may be converted for sale as condominium, cooperative or fee simple units, but any sale of converted units shall continue to be restricted. to persons meeting the income eligibility standards as set forth in this article unless COAH requires otherwise. No rental unit which is part of the rental component of the Township's Housing Element and Fair Share Plan shall be converted to a condominium, cooperative or sale unit without approval of the Court.
R. Exemption from rent control ordinances. All rental units, both market and affordable, shall not be subject to any rent control ordinance which may be adopted in the Township of Dover during the time period in which affordable housing price controls are effective.
S. Duration of controls.
(1) Except as otherwise provided in these regulations, all units for sale or resale subject to the provisions of this article shall be subject to resale and rental controls for a period of 30 years from the date of acquisition of the unit by the initial purchaser or lessee.
(2) All units for owner-occupied rehabilitation subject to the Dover Township Housing Rehabilitation Program shall be subject to affordability controls for a period of six years. Renter-occupied rehabilitated housing units that are improved to code standards shall be subject to affordability controls for at least 10 years.
(3) All lower-income dwelling units shall be covered by covenants to ensure that in all initial sales and rentals, and in all subsequent resales and rerentals, the units will continue to remain available and affordable to the lower-income households for which they were intended for the period specified in this subsection in accordance with the requirements and standards established by COAH.
T. Expiration of controls. The restrictive covenant governing the deeds of the low- and moderate-income units shall include an option permitting sale of the affordable unit in accordance with N.J.A.C. 5:93-9.3 through 9.9.
U. Foreclosure.
(1) A judgment of foreclosure or a deed in lieu of foreclosure by a fnancial institution regulated by state and/or federal law shall extinguish controls on affordable housing units, provided that there is a compliance with N.J.A.C. 5:93-9.13: Notice of foreclosure shall allow the Township, the Department of Community Affairs, the Housing and Mortgage Finance Agency or a nonprofit organization to purchase the affordable housing unit at a maximum permitted sales price and maintain it as an affordable unit for the balance of the intended period of control.
(2) In the event of a foreclosure sale, the owner of the affordable housing unit shall be personally obligated to pay the Township any surplus funds but only to the extent that such surplus funds exceed the difference between the maximum price permitted at the time of foreclosure and the amount necessary to redeem the debt to the financial institution, including the cost of foreclosure.
V. Second mortgages. No second mortgage shall be placed upon the property without the prior written approval of the AH administrator. In determining whether to grant an approval for the second mortgage, the AH administrator shall consider the need for the second mortgage and the impact that the second mortgage shall have upon the ability to maintain the unit as a low- and moderate-income unit. Under no circumstances shall a foreclosure of a second mortgage constitute grounds for eliminating the resale controls provided for in this regulation. Prior written approval shall be denied unless second mortgages are specifically authorized by COAH regulations and the application is consistent with those regulations.
W. Capital improvements. Property owners of single-family, owner-occupied housing may apply to the AH administrator 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 AH administrator if an increase in the maximum sales price is sought.
X. Sale of personal items. Items of personal property which are not permanently affixed to the unit (e.g., refrigerator, freezer, washer, dryer) and which were not included when the affordable housing unit was purchased may be the subject of separate negotiations between the parties subsequent to the signing of the contract for the purchase of the house. Any agreed price for the purchase of any item or items of personal property shall be reasonable considering the original cost, nature, age and condition of the item. The price to be paid for items of personal property shall not be used as a mechanism to avoid or circumvent the limitations on the resale price of unit itself. In no event shall the right to purchase the unit be conditioned upon the buyer's willingness to agree to purchase any item or items of personal properties of the seller.
(1) No certificate of occupancy for a low or moderate income unit shall be issued until the developer shall have submitted and have approved by the Township Attorney a deed restriction encompassing all the provisions of these regulations.
(2) No certificate of occupancy shall be issued for the resale of a low or moderate income unit unless the AH administrator shall certify that the resale complies with the terms of these regulations.
(3) No low- and moderate-income unit may be occupied by an initial purchaser or resale purchaser without a certificate of occupancy.
Z. Waiver. In the event of a special hardship or in the event that a minor technical modification of these regulations is necessary to effectively implement the policy of this article, the AH administrator may waive or modify those regulations relating to occupancy selection, sale or resale prices, or income eligibility standards, provided that such waiver of modification is consistent with the intent of these regulations and the Land Use and Development Regulations; and does not violate COAH policy or regulation or any statute.
