New Jersey and the United States don’t have enough homes that families can afford.
A long list of reasons contribute to the shortage, including inadequate public assistance, building and housing costs that are rapidly outstripping wages, low inventory, historically racist restrictive zoning and housing policies, high property taxes and more.
“A constrained housing supply has been exacerbated by resistance to creating more homes, and that’s made it very expensive — for renting or buying — and it’s getting almost unattainable for most families,” said Zoe Baldwin, New Jersey director of the nonprofit Regional Plan Association.
Because the crisis is so complex, it can’t be solved by one magic bullet, housing advocates say.
“No single policy or agency will solve all housing problems,” said Martha Valdez, executive director of the Housing Solutions Lab at New York University. The lab works with cities using data to identify their problems — such as who is paying too much for their rent and how can housing be created to reach them — and posts policy case studies that could be used as inspiration.
There are an array of ideas floating in the state Legislature, or already implemented in other regions, that New Jersey or the federal government could explore to create more homes that New Jerseyans could afford.
Change zoning rules
New Jersey could transform into housing a resource they have plenty of: large strip malls, office parks and commercial centers.
“There’s a huge imbalance in zoning in New Jersey, and if that were changed, it would make a huge difference,” said Adam Gordon, executive director of the nonprofit Fair Share Housing Center.
Strip malls located amid residential areas and office parks adjacent to neighborhoods would make sense from a planning perspective to convert to affordable housing, but they are not currently zoned for residential use, Gordon said.
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One bill in the New Jersey Legislature, A1294, would allow what it calls “stranded assets” such as certain office parks and retail centers to be rezoned into mixed-use developments, with 20% of new apartments reserved for low- to moderate-income housing. Sen. Louis Greenwald, D-Camden, has introduced the bill for the last six years; this session it was voted out of committee by both chambers, and would require a vote by the full Legislature and the governor’s signature to become law.
“This could be the New Jersey version of eliminating single-family zoning,” Gordon said, referring to regulations that make it illegal to build multi-family dwellings on a plot of land, such as duplexes, apartments or other structures with multiple tenants. The restrictions can be traced back to the early 1900s in Berkeley, California, and were used by the city to prevent a Black-owned dance hall from opening in a majority-white neighborhood.
A handful of cities and states, including Minneapolis, Oregon and California, have recently passed measures that essentially ban single-family zoning. The rules don’t ban single-family homes but allow more units in areas that previously restricted them from being built.
A New York Times investigation found that in many major American cities, it is illegal to build anything other than a single-family home in 75% of those cities’ residential zones.
Expand community land trusts
A community land trust is a nonprofit that owns land on behalf of a community for a variety of purposes such as gardens, civic centers and affordable housing. The ownership of the home and the land that it is on is separated. The trust owns the land but offers low-income family homeowners long-term ground leases and puts measures in place to keep the property affordable going forward, such as requiring the home be sold to another low- or moderate-income family. The model reduces the size of the mortgage and lowers monthly payments for the homeowner.
The U.S. has more than 225 community land trusts, according to the Grounded Solutions Network, an Oakland, California-based nonprofit focusing on inclusive housing issues.
Allow accessory dwelling units
Accessory dwelling units are secondary apartments on a single-family lot, such as a converted basement, attic or garage apartment, or a cottage or small structure built in a backyard, which could generate rental income to the homeowner and provide more housing options in an area with fewer available apartments.
“To deal with the housing crisis, we need to look at every available tool,” said Baldwin, of the Regional Plan Association. So while accessory dwelling units “won’t fix this in and of itself, they’re a great way to keep elderly parents close to home but with privacy, or boomerang kids coming back.”
Many New Jerseyans currently live in unzoned basement or attic apartments, or “illegal apartments” where landlords do not have certificates of occupancy and tenants face dangers because their apartments have not passed safety inspections. For instance, such homes might not have windows or fire escapes, providing no way to flee in an emergency.
“We need to make sure that if families are living in basement or attic apartments, they are regulated and inspected,” Baldwin said. “No one in New Jersey should be worried they are renting somewhere that is unsafe.”
Connecticut passed a law that allows accessory dwelling units, and Boston provides gap financing with zero-interest loans for homeowners who provide such units. Princeton passed an ordinance allowing them, and Maplewood is weighing a similar change. A handful of bills in the state Legislature also address legalizing such units.
Transform publicly owned land
New Jersey could target properties that the state or municipalities own but are not using, and see if they could be sites for new affordable housing.
“We have all these sites where New Jersey was going to build freeways that never got built, owned by the Department of Transportation and just sitting there,” Gordon said.
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Cities such as Newark are using land banks to redevelop publicly owned vacant or foreclosed properties into affordable housing.
“This is an alternative to taking properties the city has liens on and selling it to the highest bidder as a flip or investment,” Gordon said. New Jersey has one of the highest foreclosure rates in the country.
A report from the Rutgers Center on Law, Inequality and Metropolitan Equity proposed that Newark should allow certified nonprofit developers to be first in line to buy city-owned and vacant land. The report also suggests that the city should ban sellers at foreclosure auctions from lumping properties together to sell to a single buyer, instead offering single properties to individual families who plan to live in the home. The center’s analysis showed a trend of corporate buyers purchasing residential homes, driving up housing prices and pushing out longtime Black residents.
More homebuyer assistance
New Jersey should create first-time homebuyers’ programs, targeted specifically for families of color, who own homes at rates far lower than white families, the Newark-based nonprofit Institute for Social Justice has recommended.
For instance, Boston’s first-time homebuyer program provided up to $5,000 in matching funds to income-eligible first-generation homebuyers who saved $2,500; three-quarters of those who won the grants were Black. New Jersey should offer more than the present $10,000 down payment assistance, ISJ recommends; New York City offers up to $100,000 for low-income first-time buyers.
New Jersey lawmakers have introduced bills that would make buying a home more affordable. The New Jersey American Dream Act, S1446, sets aside $25 million for down payment and home repair assistance to low- and moderate-income first-time homebuyers. A2246 sets up a first-time homebuyer tax credit program lasting two years, providing eligible buyers with a refundable tax credit of up to $15,000 or 5% of the home purchase price, whichever is lower.
“The average price of a home in New Jersey has risen dramatically in recent years, and rising interest rates have made it more difficult to become a homeowner,” said Jeff Kolakowski, CEO of the New Jersey Builders Association, a trade group. “The financial assistance incentives currently making their way through the Legislature will help many families accumulate the wealth and stability they desire.”
Increase money for existing programs
Housing Choice Vouchers — also known as Section 8 — subsidize the rent of eligible families and tenants. Those who hold such a voucher pay about 30% to 40% of their income on rent, and the voucher makes up the rest using federal funding.
But because of inadequate funding, only one in four families that are eligible for vouchers actually receive the assistance, according to the Center on Budget and Policy Priorities, a Washington-based research group. If all families eligible for a voucher received one, 9 million people could be lifted out of poverty, according to a study from the Center on Poverty and Social Policy at Columbia University.
Rapidly rising rents and inflation make finding an apartment where the voucher can be used difficult. The program has limits on rent levels, and can be much lower than the realistic market rent in an area, said Robert Silverman, a professor of urban and regional planning at the State University of New York at Buffalo.
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Affordable housing trust funds
Over the last decade, New Jersey governors drained or diverted more than $300 million from the state Affordable Housing Trust Fund, a pot of money intended to construct housing for low-income families, according to an analysis by NJ Spotlight.
“The fact that governors raided the Affordable Housing Trust fund slowed down a lot of developments,” Gordon said.
In his budget address, Murphy proposed setting aside $305 million in federal funds to finish 50 fully affordable housing projects already in the works and create 3,300 new units, an idea Gordon said should be expanded in future years.
A coalition of housing advocates is urging state lawmakers and the Murphy administration to use $975 million of American Rescue Plan federal stimulus on housing programs, including a $200 million infusion into the trust fund.
The Rutgers CLiME study suggested new fines and fees to fund its local trust fund, such as taxing unreasonably steep rent increases or properties that stay vacant, or imposing fees on landlord registration.
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The federal government provides states low-income housing tax credits, which reduce the federal taxes that developers owe, as a way to help offset the cost, construction and rehabilitation of affordable rentals.
“There is much more demand for these tax credits than availability, even though it’s a multibillion-dollar program in the U.S. right now,” Silverman said. “A strategy could be to expand that program so more affordable housing could be developed.”
New Jersey housing advocates are also pushing to increase the state’s Neighborhood Revitalization Tax Credit, an incentive to businesses that invest in low- and moderate-income neighborhoods by building housing or through economic development measures. The program offers $15 million per year, according to the Department of Community Affairs.
Ashley Balcerzak is a reporter covering affordable housing and its intersection of how we live in New Jersey. For unlimited access to her work, please subscribe or activate your digital account today.