
Donald M. Pepe
Partner
732-568-8370 dpepe@sh-law.comFirm Insights
Author: Donald M. Pepe
Date: June 6, 2019
Partner
732-568-8370 dpepe@sh-law.comJersey City is currently considering the adoption of an inclusionary zone ordinance, which would require developers to build new affordable housing units as part of new residential projects. The mandatory affordable-housing set aside would specifically apply to all properties/developments with a residential component that are requesting an additional 5 units or 5,000 square feet of additional residential floor area, whichever is less, beyond the permitted existing zoning through a variance pursuant to N.J.S.A. 40:55D-70(C), N.J.S.A. 40:55D-70(D), or a Redevelopment Plan Amendment.
As detailed more fully in a prior post, the proposed inclusionary zoning ordinance mandates that applicable developments set aside not less than 20% of the total number (permitted plus additional) of residential units as affordable housing. However, it provides exemptions for developments of 30 units or less; any project which is to be undertaken by the Jersey City Housing Authority; and rezoning initiated by the City as a result of a Master Plan Update or Amendment. The required affordable housing units must be built on-site and integrated with the market rate units unless an exemption is granted. The various options are detailed below.
Under the ordinance, the city may permit the creation of off-site affordable units for some or all the obligation provided the following conditions are satisfied:
At the discretion of the approving authority, developers can also make a voluntary cash payment into the City of Jersey City’s Affordable Housing Trust Fund in lieu of constructing all or part of the affordable housing units required by the ordinance. However, it is important to highlight that the ordinance expressly states that Jersey City favors construction of on-site affordable units and that “[t]he opportunity to provide a payment in lieu of constructing on-site affordable housing units is not intended to be and should not be construed as a right available to developers at their sole option.”
To be eligible to make a payment in lieu of building affordable housing, the applicant must demonstrate to the approving authority that the development of on-site affordable units is not feasible or not needed. The proposed ordinance provides that the approving authority should consider the following metrics when determining if an application should be allowed to use the payment in lieu option:
The above list is not exhaustive, and the consideration of other relevant factors is permissible. The amount of the payment-in-lieu figure will be based upon a tiered payment-in-lieu system that will increase 2% every year. The boundaries of the tiered areas will be established on the map entitled “INCLUSIONARY ZONING: Payment in Lieu of Creating Affordable Housing.” The requirements for each tier are:
The approval of any payment in lieu benefit is conditioned upon the developer and the City entering into a developer’s agreement that details the manner in which the contribution will be fulfilled.
A reduction in the mandatory on-site affordable housing requirement may also be considered relative to the value of community benefits proposed by the developer. Under the proposed inclusionary zoning ordinance, the City of Jersey City will only accept community benefits in the case of a redevelopment plan amendment and acceptance will be at the discretion of the Mayor or their designee, the Jersey City Redevelopment Agency, and the City Council.
Eligible community benefits may consist of, but are not limited to, the following: construction of a public facility, such as, but not limited to, public schools, public recreational facilities, government offices, fire stations, police stations, public parking garages, public transportation systems or facilities, roads and water infrastructure, etc. The approval of any community benefit is conditioned upon the developer and the City entering into a redevelopment agreement that details the manner in which the contribution will be fulfilled.
The members of the Scarinci Hollenbeck Land Use group often provide advice and guidance regarding development and redevelopment within the requirements of Jersey City’s ever-changing zoning regulations. We will continue to track the progress of the proposed ordinance and provide updates as they become available.
If you have any questions or if you would like to discuss the matter further, please contact me, Donald M. Pepe, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
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