Page 28 - RE-NJ

26 JANUARY 2025
GUEST
COLUMN
A NEW APPROACH
TO HOUSING POLICY
WHERE EVERYONE WINS
By David Brogan
As New Jersey’s gubernatorial race
heats up, housing remains a critical
issue. Everyone agrees that we need
more market-rate and affordable
housing to meet demand, and there
is also a consensus that housing
prices in New Jersey are too high.
But what can the government
do differently to address these
issues? Policymakers and our next
governor need to acknowledge that
current government policies are
exacerbating these problems, not
solving them.
New Jersey needs to shift from
a process-based strategy to a
solutions-based approach. More
directly, we need to stop creating
layer upon layer of regulation that
results in housing scarcity and
drives up costs and, instead, move
toward an approach that increases
supply and reduces upward pressure
on prices. Furthermore, if we stop
demonizing housing providers and
those who invest in the rehabilitation
or construction of housing, and view
them as partners with a common
goal, we will start to address both
the supply-demand imbalance
and improve the quality of life for
tenants. Regardless of who wins
next November, a gubernatorial
candidate who recognizes the fl aws
in our current housing policies
will be better equipped to move
in a different and more effective
direction.
LOCAL, STATE AND FEDERAL POLICIES
THAT DRIVE UP HOUSING COSTS
New Jersey stands out as a
distinctive and diverse state.
Geographically, it benefi ts from
its location between two major
metropolitan areas. Beyond that,
it boasts intangible attributes such
as a highly educated workforce
and a unique character that makes
us proud to call New Jersey home.
However, our state has had a
somewhat contradictory approach
to housing policy. While government
encourages development with
subsidies, it simultaneously
constrains developable land
through restrictive zoning and
environmental regulations.
Landlords are often scapegoated
and blamed for evictions, while
government continues to advocate
for lower screening standards that
allow people to get into housing
they cannot afford. There is a need
for more affordable housing and
increased rental assistance, but
resources to fund these initiatives
are always lacking. By taking a
closer look at local, state and federal
policies that affect housing, we begin
to see what’s working and what isn’t,
and we can chart a course toward
housing policies that will result in
meaningful progress.
To better understand some of the
problems we face today, let’s look
at the policies put in place over
the past four years. During the
pandemic, both state and federal
governments imposed eviction
moratoria that drove many small
landlords out of the rental housing
business and fi nancially burdened
larger, more established housing
providers. While some argue in
favor of the initial implementation
of the moratoria given that we were
in the beginning stages of a global
pandemic and trying to curb the
spread of the virus, others believe
it was kept in place far too long.
Just as government wouldn’t expect
employers to have their employees
work for 21 months without pay, it
shouldn’t have expected property
owners to house tenants rent-free
for that same duration. Adding insult
to injury, while the government
forcibly restricted rental income,
tax obligations remained in place.
Policymakers must recognize that
the eviction moratoria reduced
the supply of housing, fi nancially
impaired housing providers who
were grappling with the same
burdens as every other business
during the pandemic and set the
stage for higher prices.
Then came infl ation. Just as every
American felt the pinch of higher
prices in their wallet or purse, so
too did owners and developers of
multifamily housing. Every input
that goes into developing and
operating multifamily properties
rose dramatically, including labor,
materials, appliances and utilities.
Additionally, to say that insurance
rates rose dramatically would be
an understatement. Some NJAA
members saw their insurance rates
double over the past four years. All
these factors contributed to higher
prices.
At the same time, New Jersey’s land
use policies continue to restrict
developable land throughout our
state. Municipal governments keep
restrictive zoning policies in place,
and the state government continues
to impose a growing number of
onerous environmental regulations
that limit the amount of developable
land. In the end, restrictive land
use policies create scarcity,
undermining the goal of addressing
the supply-demand imbalance, and
driving prices higher.
Policymakers must also consider
that every government mandate has
a cost. Whether it is a development
mandate such as electric vehicle
charging stations or an operational
mandate such as higher fees or
layer upon layer of state and local
inspections, there is always a price
to pay. This is why our rental housing
costs are higher in New Jersey
compared to other states. Yet we see