§ 105-4. Administration., Chapter 105. Affordable Housing, Part II. General Legislation, Code of Ordinances, Fanwood

Municipal Housing Liaison.

(1)

Fanwood Borough shall appoint a specific municipal employee to serve as a Municipal Housing Liaison responsible for administering the affordable housing program, including affordability controls, the Affirmative Marketing Plan, monitoring and reporting, and, where applicable, supervising any contracted Administrative Agent. Fanwood Borough shall adopt an ordinance creating the position of Municipal Housing Liaison and shall adopt a resolution appointing said Municipal Housing Liaison. The Municipal Housing Liaison shall be appointed by the governing body and may be a full- or part-time municipal employee. The Municipal Housing Liaison shall be approved by COAH, its successor entity, or the Court and shall be duly qualified through a training program sponsored by affordable housing professionals of New Jersey before assuming the duties of Municipal Housing Liaison.

(2)

The Municipal Housing Liaison shall be responsible for oversight and administration of the affordable housing program for Fanwood Borough, including the following responsibilities which may not be contracted out to the Administrative Agent:

(a)

Serving as Fanwood Borough's primary point of contact for all inquiries from the state, affordable housing providers, Administrative Agents and interested households;

(b)

Monitoring the status of all restricted units in Fanwood Borough's Fair Share Plan;

(c)

Compiling, verifying and submitting annual monitoring reports as may be required by COAH, its successor entity, or the Court, including the following:

[1]

Providing annual reporting of the status of all affordable housing activity within the Borough through posting on the municipal website with a copy of such posting provided to the Fair Share Housing Center, using forms previously developed for this purpose by the Council on Affordable Housing;

[2]

Providing for the midpoint realistic opportunity review due on July 1, 2020, as required pursuant to N.J.S.A. 52:27D-313, a status report as to the Borough's implementation of its Plan and an analysis of whether any unbuilt sites or unfulfilled mechanisms continue to present a realistic opportunity and whether the mechanisms to meet unmet needs, as stated in the Borough's Housing Element and Fair Share Plan, should be revised or supplemented through posting on the municipal website, with a copy of such posting provided to the Fair Share Housing Center; and

[3]

Providing on every third year reporting as to the Borough's satisfaction of its very-low-income requirements, including the family very-low-income requirements, as stated in the Borough's Housing Element and Fair Share Plan, through posting on the municipal website with a copy of such posting provided to the Fair Share Housing Center.

(d)

Coordinating meetings with affordable housing providers and Administrative Agents, as needed; and

(e)

Attending continuing education opportunities on affordability controls, compliance monitoring and affirmative marketing at least annually and more often as needed.

(3)

Subject to the approval of COAH, its successor entity, or the Court, Fanwood Borough shall designate one or more Administrative Agent(s) to administer newly constructed affordable units in accordance with the UHAC. An operating manual for each affordable housing program shall be provided by the Administrative Agent(s) to be adopted by resolution of the governing body and subject to approval of COAH, its successor entity, or the Court. The operating manual(s) shall be available for public inspection in the office of the Borough Clerk, in the office of the Municipal Housing Liaison, and in the office(s) of the Administrative Agent(s). The Municipal Housing Liaison shall supervise the contracting Administrative Agent(s).

Administrative agent.

(1)

The Administrative Agent shall be an independent entity serving under contract and reporting to the municipality. The fees of the Administrative Agent shall be paid by the owners of the affordable units for which the services of the Administrative Agent are required. The Administrative Agent shall perform the duties and responsibilities of an Administrative Agent as set forth in the UHAC, including those set forth in N.J.A.C. 5:80-26.14, 16 and 18 thereof, which include:

(a)

Affirmative marketing:

[1]

Conducting an outreach process to affirmatively market affordable housing units in accordance with the Affirmative Marketing Plan of Fanwood Borough and the provisions of N.J.A.C. 5:80-26.15; and

[2]

Providing counseling or contracting to provide counseling services to low- and moderate-income applicants on subjects such as budgeting, credit issues, mortgage qualification, rental lease requirements, and landlord/tenant law.

(b)

Household certification:

[1]

Soliciting, scheduling, conducting and following up on interviews with interested households;

[2]

Conducting interviews and obtaining sufficient documentation of gross income and assets upon which to base a determination of income eligibility for a low- or moderate-income unit;

[3]

Providing written notification to each applicant as to the determination of eligibility or noneligibility;

[4]

Requiring that all certified applicants for restricted units execute a certificate substantially in the form, as applicable, of either the ownership or rental certificates set forth in Appendices J and K of N.J.A.C. 5:80-26.1 et seq.;

[5]

Creating and maintaining a referral list of eligible applicant households living in the housing region and eligible applicant households with members working in the housing region where the units are located; and

[6]

Employing a random selection process as provided in the Affirmative Marketing Plan of Fanwood Borough when referring households for certification to affordable units.

(c)

Affordability controls:

[1]

Furnishing to attorneys or closing agents forms of deed restrictions and mortgages for recording at the time of conveyance of title of each restricted unit;

[2]

Creating and maintaining a file on each restricted unit for its control period, including the recorded deed with restrictions, recorded mortgage and note, as appropriate;

[3]

Ensuring that the removal of the deed restrictions and cancellation of the mortgage note are effectuated and properly filed with the Union County Register of Deeds or Union County Clerk's office after the termination of the affordability controls for each restricted unit;

[4]

Communicating with lenders regarding foreclosures; and

[5]

Ensuring the issuance of continuing certificates of occupancy or certifications pursuant to N.J.A.C. 5:80-26.10.

(d)

Resales and rerentals:

[1]

Instituting and maintaining an effective means of communicating information between owners and the Administrative Agent regarding the availability of restricted units for resale or rerental; and

[2]

Instituting and maintaining an effective means of communicating information to low- and moderate-income households regarding the availability of restricted units for resale or rerental.

(e)

Processing requests from unit owners:

[1]

Reviewing and approving requests for determination from owners of restricted units who wish to take out home equity loans or refinance during the term of their ownership that the amount of indebtedness to be incurred will not violate the terms of this chapter;

[2]

Reviewing and approving requests to increase sales prices from owners of restricted units who wish to make capital improvements to the units that would affect the selling price, such authorizations to be limited to those improvements resulting in additional bedrooms or bathrooms and the depreciated cost of central air-conditioning systems;

[3]

Notifying the municipality of an owner's intent to sell a restricted unit; and

[4]

Making determinations on requests by owners of restricted units for hardship waivers.

(f)

Enforcement:

[1]

Securing annually from the municipality a list of all affordable housing units for which tax bills are mailed to absentee owners, and notifying all such owners that they must either move back to their unit or sell it;

[2]

Securing from all developers and sponsors of restricted units, at the earliest point of contact in the processing of the project or development, written acknowledgement of the requirement that no restricted unit can be offered, or in any other way committed, to any person, other than a household duly certified to the unit by the Administrative Agent;

[3]

The posting annually in all rental properties, including two-family homes, of a notice as to the maximum permitted rent together with the telephone number of the Administrative Agent where complaints of excess rent or other charges can be made;

[4]

Sending annual mailings to all owners of affordable dwelling units, reminding them of the notices and requirements outlined in N.J.A.C. 5:80-26.18(d)4;

[5]

Establishing a program for diverting unlawful rent payments to the municipality's Affordable Housing Trust Fund; and

[6]

Creating and publishing a written operating manual for each affordable housing program administered by the Administrative Agent, to be approved by the Borough Council and COAH, its successor entity, or the Court, setting forth procedures for administering the affordability controls.

(g)

Additional responsibilities:

[1]

The Administrative Agent shall have the authority to take all actions necessary and appropriate to carry out its responsibilities hereunder;

[2]

The Administrative Agent shall prepare monitoring reports for submission to the Municipal Housing Liaison in time to meet any monitoring requirements and deadlines imposed by COAH, its successor entity, or the Court; and

[3]

The Administrative Agent shall attend continuing education sessions on affordability controls, compliance monitoring, and affirmative marketing at least annually and more often as needed.

Affirmative marketing requirements.

(1)

Fanwood Borough shall adopt by resolution an Affirmative Marketing Plan, subject to approval of COAH, its successor entity, or the Court that is compliant with N.J.A.C. 5:80-26.15, as may be amended and supplemented.

(2)

The Affirmative Marketing Plan is a regional marketing strategy designed to attract buyers and/or renters of all majority and minority groups, regardless of race, creed, color, national origin, ancestry, marital or familial status, gender, affectional or sexual orientation, disability, age or number of children to housing units that are being marketed by a developer, sponsor or owner of affordable housing. The Affirmative Marketing Plan is intended to target those potentially eligible persons who are least likely to apply for affordable units in that region. It is a continuing program that directs marketing activities toward Housing Region 2 and is required to be followed throughout the period of restriction.

(3)

The Affirmative Marketing Plan shall provide a regional preference for all households that live and/or work in Housing Region 2, comprised of Essex, Morris, Union, and Warren counties.

(4)

The municipality has the ultimate responsibility for adopting the Affirmative Marketing Plan and for the proper administration of the Affirmative Marketing Program, including initial sales and rentals and resales and rerentals. The Administrative Agent designated by the Borough shall implement the Affirmative Marketing Plan to assure the affirmative marketing of all affordable units.

(5)

In implementing the Affirmative Marketing Plan, the Administrative Agent shall provide a list of counseling services to low- and moderate-income applicants on subjects such as budgeting, credit issues, mortgage qualification, rental lease requirements, and landlord/tenant law.

(6)

The Affirmative Marketing Plan shall describe the media to be used in advertising and publicizing the availability of housing. In implementing the Affirmative Marketing Plan, the Administrative Agent shall consider the use of language translations where appropriate.

(7)

The affirmative marketing process for available affordable units shall begin at least four months (i.e., 120 days) prior to the expected date of occupancy.

(8)

Applications for affordable housing shall be available in several locations, including, at a minimum, the county administration building and the county library for each county within the housing region; the Fanwood Borough Municipal Building and the Fanwood Public Library; and the developer's rental office. Applications shall be mailed to prospective applicants upon request.

(9)

The costs of advertising and affirmative marketing of the affordable units shall be the responsibility of the developer, sponsor or owner.

Occupancy standards.

(1)

In referring certified households to specific restricted units, the Administrative Agent shall, to the extent feasible and without causing an undue delay in the occupancy of a unit, strive to:

(a)

Provide an occupant for each bedroom;

(b)

Provide children of different sexes with separate bedrooms;

(c)

Provide separate bedrooms for parents and children; and

(d)

Prevent more than two persons from occupying a single bedroom.

Control periods for restricted ownership units and enforcement mechanisms.

(1)

Control periods for restricted ownership units shall be in accordance with N.J.A.C. 5:80-26.5, as may be amended and supplemented, and each restricted ownership unit shall remain subject to the requirements of this chapter for a period of at least 30 years, until Fanwood Borough takes action to release the unit from such requirements; prior to such action, a restricted ownership unit must remain subject to the requirements of N.J.A.C. 5:80-26.1, as may be amended and supplemented.

(2)

The affordability control period for a restricted ownership unit shall commence on the date the initial certified household takes title to the unit.

(3)

Prior to the issuance of the initial certificate of occupancy for a restricted ownership unit and upon each successive sale during the period of restricted ownership, the Administrative Agent shall determine the restricted price for the unit and shall also determine the nonrestricted, fair market value of the unit based on either an appraisal or the unit's equalized assessed value without the restrictions in place.

(4)

At the time of the initial sale of the unit, the initial purchaser shall execute and deliver to the Administrative Agent a recapture note obligating the purchaser (as well as the purchaser's heirs, successors and assigns) to repay, upon the first nonexempt sale after the unit's release from the restrictions set forth in this chapter, an amount equal to the difference between the unit's nonrestricted fair market value and its restricted price, and the recapture note shall be secured by a recapture lien evidenced by a duly recorded mortgage on the unit.

(5)

The affordability controls set forth in this chapter shall remain in effect despite the entry and enforcement of any judgment of foreclosure with respect to restricted ownership units.

(6)

A restricted ownership unit shall be required to obtain a continuing certificate of occupancy or a certified statement from the Construction Official stating that the unit meets all Code standards upon the first transfer of title following the removal of the restrictions provided under N.J.A.C. 5:80-26.5(a), as may be amended and supplemented.

Price restrictions for restricted ownership units, homeowners' association fees and resale prices.

(1)

Price restrictions for restricted ownership units shall be in accordance with N.J.A.C. 5:80-26.1, as may be amended and supplemented, including:

(a)

The initial purchase price for a restricted ownership unit shall be approved by the Administrative Agent;

(b)

The Administrative Agent shall approve all resale prices, in writing, and in advance of the resale, to assure compliance with the foregoing standards;

(c)

The master deeds of inclusionary developments shall provide no distinction between the condominium or homeowners' association fees and special assessments paid by low- and moderate-income purchasers and those paid by market purchasers; and

(d)

The owners of restricted ownership units may apply to the Administrative Agent to increase the maximum sales price for the unit on the basis of anticipated capital improvements. Eligible capital improvements shall be those that render the unit suitable for a larger household or the addition of a bathroom.

Buyer income eligibility.

(1)

Buyer income eligibility for restricted ownership units shall be in accordance with N.J.A.C. 5:80-26.1, as may be amended and supplemented, such that low-income ownership units shall be reserved for households with a gross household income less than or equal to 50% of median income and moderate-income ownership units shall be reserved for households with a gross household income less than 80% of median income.

(2)

Notwithstanding the foregoing, however, the Administrative Agent may, upon approval by the Borough Council, and subject to the approval of COAH, its successor entity or the court, permit moderate-income purchasers to buy low-income units in housing markets if the Administrative Agent determines that there are an insufficient number of eligible low-income purchasers to permit prompt occupancy of the units. All such low-income units to be sold to moderate-income households shall retain the required pricing and pricing restrictions for low-income units.

(3)

A certified household that purchases a restricted ownership unit must occupy it as the certified household's principal residence and shall not lease the unit; provided, however, that the Administrative Agent may permit the owner of a restricted ownership unit, upon application and a showing of hardship, to lease the restricted unit to another certified household for a period not to exceed one year.

(4)

The Administrative Agent shall certify a household as eligible for a restricted ownership unit when the household is a low-income household or a moderate-income household, as applicable to the unit, and the estimated monthly housing cost for the particular unit (including principal, interest, taxes, homeowner and private mortgage insurance and condominium or homeowners' association fees, as applicable) does not exceed 33% of the household's eligible monthly income.

Limitations on indebtedness secured by ownership unit; subordination.

(1)

Prior to incurring any indebtedness to be secured by a restricted ownership unit, the owner shall apply to the Administrative Agent for a determination, in writing, that the proposed indebtedness complies with the provisions of this section, and the Administrative Agent shall issue such determination prior to the owner incurring such indebtedness.

(2)

With the exception of first purchase money mortgages, neither an owner nor a lender shall at any time cause or permit the total indebtedness secured by a restricted ownership unit to exceed 95% of the maximum allowable resale price of the unit, as such price is determined by the Administrative Agent in accordance with N.J.A.C. 5:80-26.6(b).

Capital improvements to ownership units.

(1)

The owners of restricted ownership units may apply to the Administrative Agent to increase the maximum sales price for the unit on the basis of capital improvements made since the purchase of the unit. Eligible capital improvements shall be those that render the unit suitable for a larger household or that adds an additional bathroom. In no event shall the maximum sales price of an improved housing unit exceed the limits of affordability for the larger household.

(2)

Upon the resale of a restricted ownership unit, all items of property that are permanently affixed to the unit or were included when the unit was initially restricted (e.g., refrigerator, range, washer, dryer, dishwasher, wall-to-wall carpeting) shall be included in the maximum allowable resale price. Other items may be sold to the purchaser at a reasonable price that has been approved by the Administrative Agent at the time of the signing of 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 the price, which shall be subject to ten-year, straight-line depreciation, has been approved by the Administrative Agent. Unless otherwise approved by the Administrative Agent, 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 the time of or as a condition of resale.

Control periods for restricted rental units.

(1)

Control periods for restricted rental units shall be in accordance with N.J.A.C. 5:80-26.11, as may be amended and supplemented, and each restricted rental unit shall remain subject to the requirements of this chapter for a period of at least 30 years, until Fanwood Borough takes action to release the unit from such requirements. Prior to such action, a restricted rental unit must remain subject to the requirements of N.J.A.C. 5:80-26.1, as may be amended and supplemented.

(2)

Deeds of all real property that include restricted rental units shall contain deed restriction language. The deed restriction shall have priority over all mortgages on the property, and the deed restriction shall be filed by the developer or seller with the records office of Union County. A copy of the filed document shall be provided to the Administrative Agent within 30 days of the receipt of a certificate of occupancy.

(3)

A restricted rental unit shall remain subject to the affordability controls of this chapter despite the occurrence of any of the following events:

(a)

Sublease or assignment of the lease of the unit;

(b)

Sale or other voluntary transfer of the ownership of the unit; or

(c)

The entry and enforcement of any judgment of foreclosure on the property containing the unit.

Rent restrictions for rental units; leases.

(1)

A written lease shall be required for all restricted rental units and tenants shall be responsible for security deposits and the full amount of the rent as stated on the lease. A copy of the current lease for each restricted rental unit shall be provided to the Administrative Agent.

(2)

No additional fees or charges shall be added to the approved rent (except, in the case of units in an assisted living residence, to cover the customary charges for food and services) without the express written approval of the Administrative Agent.

(3)

Application fees (including the charge for any credit check) shall not exceed 5% of the monthly rent of the applicable restricted unit and shall be payable to the Administrative Agent to be applied to the costs of administering the controls applicable to the unit as set forth in this chapter.

(4)

No rent control ordinance or other pricing restriction shall be applicable to either the market units or the affordable units in any development in which at least 15% of the total number of dwelling units are restricted rental units in compliance with this chapter.

Tenant income eligibility.

(1)

Tenant income eligibility shall be in accordance with N.J.A.C. 5:80-26.13, as may be amended and supplemented, and shall be determined, as follows:

(a)

Very low-income rental units shall be reserved for households with a gross household income less than or equal to 30% of median income;

(b)

Low-income rental units shall be reserved for households with a gross household income less than or equal to 50% of median income; and

(c)

Moderate-income rental units shall be reserved for households with a gross household income less than 80% of median income.

(2)

The Administrative Agent shall certify a household as eligible for a restricted rental unit when the household is a very low-income household, a low-income household or a moderate-income household, as applicable to the unit, and the rent proposed for the unit does not exceed 35% (40% for age-restricted units) of the household's eligible monthly income as determined pursuant to N.J.A.C. 5:80-26.16, as may be amended and supplemented; provided, however, that this limit may be exceeded if one or more of the following circumstances exists:

(a)

The household currently pays more than 35% (40% for households eligible for age-restricted units) of its gross household income for rent, and the proposed rent will reduce its housing costs;

(b)

The household has consistently paid more than 35% (40% for households eligible for age-restricted units) of eligible monthly income for rent in the past and has proven its ability to pay;

(c)

The household is currently in substandard or overcrowded living conditions;

(d)

The household documents the existence of assets with which the household proposes to supplement the rent payments; or

(e)

The household documents reliable anticipated third-party assistance from an outside source such as a family member in a form acceptable to the Administrative Agent and the owner of the unit.

(3)

The applicant shall file documentation sufficient to establish the existence of the circumstances enumerated in this subsection with the Administrative Agent, who shall counsel the household on budgeting.

Maximum rents and sales prices:

(1)

In establishing rents and sales prices of affordable housing units, the Administrative Agent shall follow the procedures set forth in UHAC, utilizing the regional income limits established by COAH or a successor entity.

(2)

The maximum rent for restricted rental units within each affordable development shall be affordable to households earning no more than 60% of median income, and the average rent for restricted rental units shall be affordable to households earning no more than 52% of median income.

(3)

The developers and/or municipal sponsors of restricted rental units shall establish at least one rent for each bedroom type for both low-income and moderate-income units, provided that at least 10% of all low- and moderate-income rental units shall be affordable to very low-income households, earning 30% or less of the regional median household income.

(4)

The maximum sales price of restricted ownership units within each affordable development shall be affordable to households earning no more than 70% of median income, and each affordable development must achieve an affordability average of 55% for restricted ownership units; in achieving this affordability average, moderate-income ownership units must be available for at least three different sales prices for each bedroom type, and low-income ownership units must be available for at least two different sales prices for each bedroom type.

(5)

In determining the initial sales prices and rent levels for compliance with the affordability average requirements for restricted units other than assisted living facilities and age-restricted developments, the following standards shall be used:

(a)

A studio shall be affordable to a one-person household;

(b)

A one-bedroom unit shall be affordable to a one-and-one-half-person household;

(c)

A two-bedroom unit shall be affordable to a three-person household;

(d)

A three-bedroom unit shall be affordable to a four-and-one-half-person household; and

(e)

A four-bedroom unit shall be affordable to a six-person household.

(6)

In determining the initial sales prices and rents for compliance with the affordability average requirements for restricted units in assisted living facilities and age-restricted developments, the following standards shall be used:

(a)

A studio shall be affordable to a one-person household;

(b)

A one-bedroom unit shall be affordable to a one-and-one-half-person household; and

(c)

A two-bedroom unit shall be affordable to a two-person household or to two one-person households.

(7)

The initial purchase price for all restricted ownership units shall be calculated so that the monthly carrying cost of the unit, including principal and interest (based on a mortgage loan equal to 95% of the purchase price and the Federal Reserve H.15 rate of interest), taxes, homeowner and private mortgage insurance and condominium or homeowners' association fees do not exceed 28% of the eligible monthly income of the appropriate size household as determined under N.J.A.C. 5:80-26.4, as may be amended and supplemented; provided, however, that the price shall be subject to the affordability average requirement of N.J.A.C. 5:80-26.3, as may be amended and supplemented.

(8)

The initial rent for a restricted rental unit shall be calculated so as not to exceed 30% of the eligible monthly income of the appropriate size household, including an allowance for tenant-paid utilities, as determined under N.J.A.C. 5:80-26.4, as may be amended and supplemented; provided, however, that the rent shall be subject to the affordability average requirement of N.J.A.C. 5:80-26.3, as may be amended and supplemented.

(9)

The price of owner-occupied low- and moderate-income units 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 Administrative Agent be lower than the last recorded purchase price.

(10)

The rent of low- and moderate-income units may be increased annually based on the permitted 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 housing tax credit regulations shall be indexed pursuant to the regulations governing low-income housing tax credits.