New Law Authorizes Conversion of Age Restricted Housing

September 9, 2009

On July 2, 2009, a new statute became effective which permits developers to convert age-restricted residential developments to non-age-restricted developments (“converted development”), N.J.S.A. 45:22A-46.3 et seq. Under the terms of the law, for a developer to be eligible for the conversion from age-restricted to converted development, the developer must set aside 20 percent of the units for affordable housing. The law provides that the units that are set aside for affordable housing will count toward a municipality’s affordable housing obligation. However, none of the units in the development will generate growth share obligation under the Fair Housing Act. An application seeking amended approval must include documentation that the parking, recreational facilities, water supply system and wastewater system will be adequate to serve the converted development. If the approved facilities are not adequate to meet the needs of the converted development, and if any such need is not able to be met by adding additional parking, recreational facilities, water supply or sewer capability, then the number of dwelling units are required to be reduced accordingly. If additional parking is provided and increases the amount of impervious cover by more than one percent, the storm water system calculations and improvements must be revised accordingly. A dwelling unit in a converted development must conform to all the requirements as to size and square footage imposed pursuant to the approving board’s original approval. The floor plans of the units may be revised without any further review or board approval. The layout of a subdivision or site plan also may be reasonably revised to accommodate additional parking, recreation improvements, infrastructure enhancements, a needed reduction in the number of units, height requirements, revision to dwelling footprints that do not modify square footage of the development or the individual dwellings, or a needed change to construct the affordable units as attached housing. Changes to the size, heights, floor area ratio, number of bedrooms and total square footage of buildings established as part of an age-restricted development shall not be increased, but may be decreased for a converted development. However, the number of bedrooms for the affordable units only may be increased within the footprint to meet the bedroom distribution requirements as established in the Uniform Housing Affordability Controls. In order to change an age-restricted development into a converted development, a developer must file an application with the Planning Board or Board of Adjustment that originally approved the application. Additionally, a developer must file notice of the application with the municipal clerk of the municipality in which the development is located and provide notice of the approving board hearing as required by the Municipal Land Use Law. The law requires that the proposed converted development be considered a permitted use and does not require a use variance. Application for conversion to a non age-restricted development must be filed with the approving board by August 1, 2011. The approving board can extend this time period until August 1, 2013 if it finds that poor economic conditions continue to adversely affect the real estate market. The approving board has thirty days from the time of the submission of an amended application in which to determine completeness. Within 60 days of a determination of application completeness, the board is required to render a decision on an application for a converted development, unless the time frame is extended by the applicant. If no decision is rendered within the time period, the application will be deemed approved. If the approving board determines that the requirements of the law have been met and the conversion can be granted without substantial detriment to the public good and with no substantial impairment to the intent and purpose to the zone plan and zoning ordinance, then the law requires that the application for conversion be approved. There is no application fee, however, reasonable escrow fees may be charged. After the development has been converted, the developer must file a copy of the revised subdivision or the site plan approval with the municipal engineer. These documents will provide a base for calculations of any required inspection escrow accounts, and performance and maintenance guaranties. In the event that an approving board denies an application for a converted development or imposes conditions that are unacceptable, an applicant may, within 30 days of the receipt of the decision, appeal the decision to a court in a summary manner. In considering an appeal, the court is required to consider the reasonableness of the approving board’s decision and if it finds that the conversion should have been approved, will order the Board’s approval along with any reasonable conditions of approval. For more information, please contact William F. Harrison. This alert is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. It is recommended that readers not rely on this publication but that professional advice be sought for individual matters.