By Joshua Burd
For all of the uncertainty over how many new affordable housing units that municipalities will be forced to allow — whether it’s 100,000 or 300,000 — there will be another key question to answer when the state Supreme Court makes that determination.
Can the market in New Jersey support that many new homes?
Stakeholders and housing experts raised the question last week during the Rutgers Center for Real Estate’s conference on affordable housing. Ronald Ladell, a developer who moderated a panel discussion at the event, projected there would be anywhere from 200 to 250 multifamily-zoned sites across the Garden State in the next 18 months, a number that would likely catch the eye of builders who were eager to capitalize on a booming rental market.
“It’s also clear to me that, because of the liquidity that exists in the market, a lot of developers and owners are going to be compelled and incentivized — because of friends and family money or whatever it might be — to build those projects,” said Ladell, a senior vice president with AvalonBay Communities. “And … that’s too much supply and not enough demand.”
But Anthony Marchetta, executive director of the New Jersey Housing Mortgage and Finance Agency, said there was a counteracting force on the horizon. Developers depend on subsidies to build affordable housing, given that most projects have restrictions on rental rates, but with a potential rise of interest rates and looming threats to tax credit programs under the incoming Donald Trump administration, “it’s going to be hard to make the numbers work.”
He added that he disagrees with the theory that there’s not enough demand.
“I think there’s still a very significant demand,” said Marchetta, a former private-sector developer. “Every housing project that we have financed has filled very, very quickly, and I don’t see anything dropping.
“Now, if 200 were to appear on stage at the same time, of course, but you and I both know that ain’t happening,” he quipped. “It’s going to take time for us to get those necessary approvals and actually move forward with getting financing for those projects.”
Stakeholders are still waiting to learn exactly how many low- and moderate-income units that municipalities will have to zone for under the latest round of affordable housing guidelines, which date back to the Fair Housing Act of 1985. As the Rutgers conference took place last week, the state Supreme Court was reviewing an appeal on the so-called gap years, a period from 1999 to 2015 in which the state failed to produce permanent guidelines.
The case, which has pit a group of Ocean County towns against affordable housing advocates, has statewide ramifications and could mean the difference of tens of thousands units when it comes to municipalities’ obligations statewide.
Whatever happens, state Sen. Christopher “Kip” Bateman, said he hopes stakeholders kept in mind the location and the makeup of many of the towns in New Jersey. Affordable housing goes hand in hand with mass transit, he said, a luxury that many municipalities don’t have.
“I hope the demand is there, because you can’t lose sight of the people who live in these towns,” said Bateman, a former Branchburg mayor who pointed to the lack of mass transit in his own municipality. “You can get anywhere in New Jersey without a vehicle unless you’re on a New Jersey Transit line, so you have to be realistic with the numbers.”