On certification from the Appellate Division.
For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Weintraub. For reversal -- None. The opinion of the court was delivered by Vanderbilt, C.J.
[23 NJ Page 358] This is an appeal from a judgment of the Superior Court, Law Division, holding an amendment to the building code of the Borough of Point Pleasant increasing
the fees for building permits invalid. We have certified this appeal on our own motion.
On February 17, 1956 the defendant borough passed an ordinance amending its building code, adopted in September 1945, to increase the fees charged for the issuance of building permits. The ordinance before the amendment provided for building permit fees as follows:
"For a total valuation of $500.00 or less, a $2.00 fee; for a total valuation of more than $500.00 and including $1,000.00 a $4.00 fee; and an additional fee of $2.00 for each additional $1,000.00 or fraction thereof of total valuation."
The amendment changed the method of calculating fees from the valuation of the building to the square foot contents of the new construction. For business or manufacturing construction the charge made was five cents a square foot of floor area; for additions to existing dwellings the fee was ten cents a square foot of floor area; and for new dwellings the fee was 25 cents a square foot of floor area, but with a $200 minimum in this last category.
The plaintiff is a contractor who has been engaged in the erection of homes in the borough for the past four or five years and has constructed a total of about 45 homes. The houses constructed by the plaintiff are small homes intended for sale to veterans and principally financed by federal guarantees. Generally speaking, his houses have a living area of about 836 square feet. Prior to the adoption of the February 1956 amendment, his building permit fees averaged about $18 a house. Under the new amendment the corresponding fees would be about $262. The plaintiff's houses sell for $12,000 and he testified that the total average cost is $11,108, leaving him a net profit of some $892 a house under the old building permit fee.
In the calendar year 1955, under the terms of the 1945 ordinance there were a total of 573 building permits issued by the borough, yielding gross fees of $8,875. Half of this went to the building inspector as compensation for his work in inspecting the buildings, etc., and the other half was retained by the borough. The only direct cost of operating
the building department of the borough is what is paid to the building inspector for the services that he renders. There are no other clerks, stenographers or employees, although there is proof that the building inspector does receive some incidental assistance at times from the borough clerk, the borough attorney, the tax assessor and perhaps the tax collector, but this is minimal.
The evidence strongly indicates that the purpose of increasing the building permit fees was to raise additional revenue made necessary primarily by increased school costs which were in turn caused by the increase in population resulting from the new buildings. There is proof that the mayor of the borough made these declarations at the public hearings on the ordinance and two councilmen have testified to a similar effect.
The trial judge found that the primary purpose of the ordinance before us was to raise additional revenue to meet increased school and other costs resulting from more building in the borough ...