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LAND USE and MUNICIPAL CLIENT ALERT: COAH UPDATEOn January 26, 2009, the New Jersey Senate Economic Growth Committee adopted Senate Bill No. S-2485, which modifies the current 2.5% non-residential development fee for affordable housing. The Bill has been referred to the Senate Budget and Appropriations Committee. S-2485 has exempted projects which have received preliminary or final site plan approval prior to July 1, 2010 from the statewide non- residential development fee. Further, municipal housing obligations attributable to non-residential development that are exempted from the 2.5% fee have their obligation suspended. The Bill also appropriates $15 million to the New Jersey Affordable Housing Trust Fund. Under the proposed legislation, municipalities will be able to petition for a grant or loan in order to fund housing projects and programs that would have been funded by the development fees. The Bill recognizes that the statewide Non-residential Fee Act, approved on July 17, 2008, wrongly relied upon a municipal fee structure and required municipalities to impose onerous fees and charges on developers, which diminished commerce in New Jersey. Non-residential developments that received preliminary or final site plan approval between July 17, 2008 and July 1, 2010 and that paid a 2.5% non-residential development fee are entitled to return of their monies, upon submission of a claim to the municipality. A claim must be submitted within 120 days of the effective date of this Bill (which is still pending), and municipalities must return the fees within 30 days of receipt of a claim. Municipalities will petition the Council on Affordable Housing ("COAH") for an adjustment to their fair share obligation and COAH must adjust the obligation given the revisions to the Non-Residential Fee Act. S-2485 has a major impact on COAH, municipalities and developers alike, as it effectively places an 18 month moratorium on collection of the 2.5% non-residential development fees, while at the same time reducing municipalities' obligations. At this time, there are no pending bills regarding amendments to the residential portions of COAH. Unfortunately this Bill requires municipalities to yet again revise their affordable housing plans. This Laddey, Clark & Ryan, LLP Client Alert provides information of general interest to our readers. It is not intended, and should not be used, as a substitute for consultation with legal counsel. If you have any questions regarding specific issues raised in this Client Alert, you may contact Laddey, Clark & Ryan's Land Use Practice Group at (973)729-1880.
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