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ORDINANCE OF THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK ESTABLISHING THE ACCESSORY DWELLING UNIT ASSISTANCE PROGRAM AND AUTHORIZING THE USE OF FEDERAL PRO HOUSING GRANT FUNDS.
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WHEREAS, the City of Newark (the “City”) has identified the expansion and preservation of affordable housing opportunities as a critical municipal objective; and
WHEREAS, the City has previously adopted zoning and land use regulations governing accessory dwelling units (“ADUs”) within the City of Newark; and
WHEREAS, the City recognizes that ADUs may assist low- and moderate-income homeowners in offsetting housing cost burdens through lawful rental income while simultaneously increasing the supply of safe and affordable housing opportunities within the City; and
WHEREAS, the United States Department of Housing and Urban Development (“HUD”) awarded the City grant funding under the Pathways to Removing Obstacles to Housing Program (“PRO Housing Program”); and
WHEREAS, the PRO Housing Program is authorized pursuant to Section 107 of the Housing and Community Development Act of 1974, as amended, 42 U.S.C. § 5307, and administered pursuant to applicable federal statutes, regulations, notices, waivers, and guidance, including 24 C.F.R. Part 570 and 2 C.F.R. Part 200; and
WHEREAS, the City desires to establish an Accessory Dwelling Unit Financial Assistance Program (the “Program”) to provide financial assistance to eligible property owners for the lawful construction, creation, rehabilitation, conversion, and improvement of accessory dwelling units within the City; and
WHEREAS, the Municipal Council finds that the establishment of the Program serves a valid public purpose by increasing housing availability, supporting neighborhood stabilization, promoting code-compliant residential development, and advancing the City’s affordable housing and community development objectives.
NOW, THEREFORE, BE IT ORDIANED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
Section 1. There is hereby established an Accessory Dwelling Unit Financial Assistance Program for the purpose of providing financial assistance to eligible property owners for the lawful construction, development, conversion, rehabilitation, or improvement of accessory dwelling units located within the City of Newark. The Program shall be administered by the Department of Economic and Housing Development (“EHD”), or other such department or division designated by the Mayor.
Section 2. The Program may be funded through federal funds awarded to the City under the PRO Housing Program, together with such other lawful funding sources as may be authorized by the City. Any federal funds utilized for the Program shall be administered in accordance with all applicable federal statutes, regulations, notices, and grant requirements.
Section 3. Program Assistance is limited to eligible activities, including but not limited to:
(1) construction of new accessory dwelling units;
(2) conversion of existing space into accessory dwelling units;
(3) rehabilitation or improvement of existing accessory dwelling units;
(4) code compliance improvements;
(5) utility and infrastructure connections;
(6) architectural, engineering, and permitting costs;
(7) accessibility improvements; and
(8) such other housing-related activities as may be approved by EHD and permitted by applicable law and funding requirements.
Section 4. EHD is authorized to establish eligibility criteria for participation in the Program, including but not limited to:
(1) income limitations;
(2) owner-occupancy requirements;
(3) property eligibility standards;
(4) affordability requirements;
(5) construction and code compliance standards;
(6) contractor requirements;
(7) insurance requirements; and
(8) compliance and monitoring requirements.
EHD may require applicants to execute grant agreements, loan agreements, promissory notes, mortgages, deed restrictions, affordability covenants, certifications, and such other documents as may be necessary to protect the interests of the City and ensure compliance with applicable funding requirements.
Section 5. Financial assistance under the Program may be provided in the form of grants, deferred loans, forgivable loans, reimbursement payments, or other lawful forms of assistance as determined by EHD. EHD is authorized to establish maximum assistance amounts, affordability periods, compliance periods, recapture provisions and underwriting requirements through Program Guidelines and adopted pursuant to this Ordinance.
Section 6. EHD is hereby authorized to prepare and promulgate Program Guidelines, policies, procedures, application materials, underwriting standards, compliance requirements, and administrative procedures necessary to implement and administer the Program. The Program Guidelines may be amended from time to time by EHD as necessary to comply with applicable law, HUD guidance, funding requirements, or administrative needs, provided that such amendments remain consistent with this Ordinance.
Section 7. All accessory dwelling units receiving assistance under the Program shall comply with all applicable provisions in the City of Newark Zoning Ordinance, including all regulations governing accessory dwelling units, as may be amended from time to time. Participation in the Program shall not exempt any applicant, property owner, contractor, or project from compliance with applicable zoning, permitting, site plan, historic preservation, construction code, or other land use requirements.
Section 8. To the extent Program funds are derived from the PRO Housing Program, any other HUD program or federal funding source, such funds and activities shall be administered in accordance with all applicable federal statutes, regulations, grant requirements, notices, waivers, and guidance. No federally funded Program activity shall be committed or undertaken until all applicable environmental review requirements have been satisfied. Program participates, contractors, and projects receiving federal assistance through the Program shall comply with all applicable federal requirements associated with the funding source utilized, including, where applicable:
(1) nondiscrimination and fair housing requirements;
(2) conflict of interest requirements;
(3) procurement and contracting requirements;
(4) lead-based paint requirements;
(5) labor standards requirements;
(6) record retention and audit requirements; and
(7) such other federal compliance obligations as may be required by HUD or other applicable funding authorities.
Section 9. The Mayor and/or his designee, and the Director of EHD are hereby authorized to execute all documents and take all actions necessary to implement and administer the Program, including but not limited to grant agreements, loan agreements, mortgages, notes, covenants, certifications, and related documents, subject to approval as to form and legality by the Department of Law and/or such legal counsel as may be designated by the City.
Section 10. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held invalid or unconstitutional by a court of competent jurisdiction, such decision shall not affect the remaining portions of this Ordinance.
Section 11. All ordinances or parts of ordinances inconsistent with this Ordinance are hereby repealed to the extent of such inconsistency.
Section 12. This Ordinance shall take effect upon final passage and publication in accordance with law.
STATEMENT
This Ordinance establishes the City of Newark’s Accessory Dwelling Unit Assistance Program for the purpose of providing financial assistance to eligible property owners for the lawful construction, conversion, rehabilitation, and improvement of accessory dwelling units within the City. The Ordinance further authorizes the administration of the Program in accordance with applicable federal, state, and local laws and funding requirements, including funding provided through HUD’s PRO Housing Program.