Gov. Chris Christie recently issued a conditional veto on legislation that would have retroactively reinstated and extended the moratorium on the collection of the 2.5% developer’s fee on non-residential development projects. In his veto message, the Governor called for more comprehensive reform of the Fair Housing Act and the programs administered by the Council on Affordable Housing (“COAH”).
As previously discussed on the Scarinci Hollenbeck Business Law News Blog, the amount of the non-residential development fee is equal to 2.5 percent of a project’s equalized assessed value for new improvements. The fee must be paid by the commercial project developer prior to the issuance of a certificate of occupancy.
The Statewide Non-residential Development Fee Act has been suspended several times since it was first passed in 2008. A previous moratorium suspended the collection of such fees until July 1, 2013. However, it lapsed when Gov. Chris Christie conditionally vetoed a bill last year that also included the “New Jersey Residential Foreclosure Transformation Act.”
The most recently proposed legislation (A1907/S1011) would have reinstated the moratorium on imposition of non-residential development fees through December 31, 2014. It would have also required municipalities to return any monies paid, due to the previous expiration of the moratorium, during the time period commencing on July 1, 2013 through the effective date of the bill.
In his veto message, Gov. Christie stated: “I support efforts that facilitate commercial development and economic growth in New Jersey and for that reason, have approved extensions of this moratorium in the past. However, the moratorium on the non-residential fee cannot be considered in isolation. Instead, as a component of the existing patchwork of affordable housing laws, our approach to funding affordable housing must operate in concert with concrete reforms to improve affordable housing policies and assist municipalities in meeting their affordable housing goals.” He also proposed several recommendations, which included abolishing COAH and implementing a different affordable housing methodology.
In light of Gov. Christie’s veto, the 2.5% non-residential developer’s fee remains in full force and effect. Going forward, lawmakers can either accept Gov. Christie’s proposal or seek to override his veto. Lawmakers in Trenton may now await the adoption of new regulations by COAH in November before taking up any new reform efforts.
We will continue to closely monitor the ever-changing legal landscape surrounding affordable housing in New Jersey. We encourage you to check back for updates.
For more information about the imposition of non-residential development fees or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.