Changes To Developer Fees Approved By Ocean City Council

OCEAN CITY, NJ - Ocean City Council approved three pieces of legislation related to their affordable housing obligation Thursday night, including one proposal that drew some criticism from council members at its introduction.

That proposal called for an update to city legislation that requires developers to pay fees into the affordable housing trust fund by changing references to the Council On Affordable Housing (COAH) with references to the court; increasing the residential development fee from 1 percent up to 1.5 percent; exempting owner-occupied homes that were destroyed by fire, flood or other natural disaster from paying a development fee; and reflecting that the city will monitor the fees.

Ocean City Solicitor Dorothy McCrosson said this proposal was important for spreading the burden for the cost of development beyond the taxpayers. At introduction, Councilman Michael DeVlieger asked how many projects this proposal would impact in a given year.

On Thursday night, McCrosson said there were 66 projects that happened last year that would’ve been impacted, and 68 so far this year. She also provided some examples.

“There was a commercial lot that was demolished and sub-divided into two single-family homes,” McCrosson said. “In that case, you take the value of the whole property at the time of the demolition and compare it to the value of the property after the new construction and apply the fee to the difference. That difference then gets put into the Affordable Housing Trust Fund.”

She also referred to the example of one single-family home being replaced by two single-family homes on the same lot, with the fee only being applied to the new unit. There were several examples that carry different percentages, but the 1.5 percent proposed is on residential units. She didn’t immediately know how many of the 66 and 68 units were residential, but said she can provide that information upon request.

The proposal was passed 5-0. Council Vice President Tony Wilson, who voted against the proposal on introduction, and Councilman Keith Hartzell were both absent. The other proposals that were approved on final reading by 5-0 votes are as follows:

No. 18-20 – An Ordinance Amending Chapter XXV, Article 100, Section 25-107 of the Ocean City Zoning and Land Development Ordinance to Revise the Definition of “Municipal Uses” to Include City-Sponsored Affordable Housing.

McCrosson previously said it's cheaper to build affordable housing on city owned land. This proposal would make city-sponsored construction of affordable family units a “municipal use.” This would enable affordable housing to be built in every zone of the city, that it is not all concentrated in one area.

There are some proposed locations that were named in the settlement agreement, but those are tentative. If the city identifies other properties they would like to build on, it could do so if it's a permitted use, McCrosson said. The city can also add to an existing space, including an existing office space, which McCrosson said the city is considering in the downtown business district.

No. 18-21 – An Ordinance Replacing the Entire Contents of the Existing Fair Share Ordinance of the Revised Ordinances of Ocean City, Cape May County, New Jersey (Article 2000 of the Ocean City Zoning and Land Development Ordinance) to Address the Requirements of the Fair Housing Act and the Uniform Housing Affordability Controls (UHAC) Regarding Compliance with the City's Affordable Housing Obligations and Repealing All Ordinances Heretofore Adopted, the Provisions of which are Inconsistent Herewith.

This ordinance would incorporate details of the settlement into the existing ordinance. The settlement is mandated by the state, but aspects of it have been tailored specifically for Ocean City, McCrosson said.

Two court decisions in the 1970s established that municipalities must have an affordable housing aspect included in their master plans. Two rounds of obligations were met statewide, but there has been a long stall as it relates to the third round of affordable housing requirements.

The number of required affordable housing units in municipalities statewide has been in dispute, and often in litigation, since 1999. In 2015, authority concerning setting affordable housing requirements for municipalities throughout the state fell on the courts.

The Fair Share Housing Center, a public interest group established in 1975 to monitor, enforce and expand guidelines for affordable housing requirements, has acted as an intervenor on the issue throughout the state.

Fair Share Housing and Ocean City reached an agreement on 1,687 units based on Ocean City's prior need of 411 units and the third round need of 1,276 units. These units must be built by 2025.

Read more here: Ocean City Reaches Agreement On Affordable Housing Obligation

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