From left: David Brogan, executive director of the New Jersey Apartment Association; Brad Ingerman, CEO and president of Ingerman Management; Stephen Waters, senior vice president with Morgan Properties; and Eric Witmondt, CEO of Woodmont Properties.
By Joshua Burd
The growth of New Jersey’s apartment sector over the past decade has brought not only new construction jobs, but new long-term career opportunities for those who work at the properties.
Just ask owners such as Eric Witmondt.
“Years ago, when you worked as a maintenance supervisor or in leasing, it was a very transient position,” said Witmondt, CEO of Woodmont Properties. “(Today), you can build a career and continue up the ranks of that organization, either on that project or moving to different projects.
“It’s become extremely competitive and we’re amazed at the level of sophistication that we see across the board with everyone that’s working at the property level.”
Witmondt’s feelings were echoed by Stephen Waters, senior vice president with Morgan Properties, and Ingerman Management CEO and President Brad Ingerman, all of whom were on hand Tuesday as part of a panel discussion hosted by the New Jersey Apartment Association. The roundtable kicked off the NJAA’s annual conference and expo in Atlantic City, in what is the industry’s largest annual gathering in the state.
The panelists spoke about the growth and breadth of the multifamily sector in New Jersey, but that was clear enough from the crowd that had assembled at the conference. More than 1,600 industry executives, vendors and other professionals had registered for this year’s event, packing the Atlantic City Convention Center for the two-day session.
Still, the NJAA is fixed on educating state lawmakers and the public about the impact of the state’s apartment industry. NJAA Executive Director David Brogan, who moderated the panel, said the industry supports 50,000 jobs and produces billions of dollars in annual tax revenue and economic activity.
“It’s important that we get that message out,” Brogan said.
Those numbers have grown as new multifamily construction continues to surge in the state and as demographics shift increasingly toward rental housing. Waters said that the industry and its employees have grown in stature, adding that “it’s become one of the hardest things to keep really good talent.”
“And the room for advancement is great in our industry now,” said Waters, the NJAA’s president-elect. “So a lot has changed within a short amount of time, where now you see there’s a much higher respect level in the world today for maintenance technicians, for leasing agents, property managers, supervisors. And the sky is the limit as far as advancement.”
The roundtable tackled a host of other issues tied to both the growth of the apartment sector and the challenges it continues to face. Brogan pointed to the upcoming gubernatorial election this fall and asked the panelists what they would ask of the incoming governor.
Ingerman said he would look to fix an inspection system in which — especially in smaller or midsized communities — building departments “really are not equipped, either in terms of manpower or knowledge, to deal with the product that we’re building.” He added that the process is complicated by the fact that local building inspectors essentially answer to the state Department of Community Affairs, rather than the municipal government.
Another threat to the industry comes in the form of proposed changes to the state’s redevelopment and tax abatement laws, Witmondt said. He pointed to new legislation that would require a project to have prevailing wage — essentially, union labor — in order to obtain a payment in lieu of taxes and take advantage of the redevelopment statute.
“Prevailing wage costs for a wood-frame construction project basically eliminates the benefit of what a PILOT and a redevelopment would otherwise present,” Witmondt said, adding that it will kill the prospects of redevelopment projects that aren’t already underway.
“It would, I think, cripple the growth of our economy in New Jersey,” he said. “And our economy in New Jersey certainly needs real estate to be a growth driver in order to sustain itself.”
Waters said his recommendation to a new governor would be rather simple: “Don’t touch anything unless it does something to heal New Jersey.”
That could include issues such as affordable housing, another topic tackled by Tuesday’s panel. After years of resistance by local officials, growing oversight by the state judiciary over the past two years has pushed more than 100 municipalities to reach agreements with developers and housing advocates, potentially paving the way for thousands of new affordable housing unit.
But Ingerman said a lack of government subsidies and financing programs — namely, the 9 percent Low-Income Housing Tax Credit program — could hinder efforts to meet those obligations. Without the subsidy, he said the financing gap is roughly $50,000 to $70,000 per unit when it comes to affordable housing.
“The only way that’s going to happen is that you’re going to have to have municipalities doing tax-exempt bond issuance … to fulfill their obligation to build affordable housing,” said Ingerman, whose Collingswood-based firm specializes in affordable housing. “And that’s going to be expensive.”
Witmondt said that, without financing tools, he fears that municipalities would become overly reliant on market-rate developers to satisfy those obligations through 15 percent set-asides within their projects. That could result in hundreds of thousands of new market-rate units being delivered every year, which he said would create a problem of oversupply.
“Something needs to be done with affordable housing in the form of tax-exempt bonds or 9 percent credits,” Witmondt said. “Otherwise, municipalities are going to be forced to allow an overdevelopment of apartments, which is going to hurt our market.
“We need to have supply constraint. … That is a real problem that’s facing our industry.”
