Challenge for NJ Cities: Gentrify Without Driving Out Less-Affluent Residents

Published December 13, 2018
By Colleen O'Dea

Newly minted report advises local and state officials on how to attract new residents and businesses without decimating older communities

As they continue to grow in popularity, New Jersey’s cities are perched on a tightrope, trying to attract economic growth and pricey new high rises while not forcing less-affluent residents out of the communities they have called home for decades.

The Housing and Community Development Network of New Jersey released a new report on Wednesday that advises officials on how to strike the right balance. Their formula: Encourage change that brings new opportunities to urban areas that have struggled for decades while ensuring people are not driven out of their homes. Thriving Cities: A New Urban Agenda is the result of a yearlong series of discussions to draft recommendations for “equitable revitalization” that will both help cities grow and avoid displacing residents.

“New Jersey should support development while ensuring our cities provide opportunities for long-term residents to thrive,” said Staci Berger, president and chief executive officer of the network. “No one should be priced out of their neighborhood in the name of progress.”

Millennials moving in
With millennials, and even aging baby boomers, seeking more compact living in walkable communities with mass transit, several of New Jersey’s cities are experiencing construction booms that include new office buildings and housing. But some places, like Jersey City, have already seen lifelong residents displaced from gentrifying neighborhoods that have become too expensive for them to afford.

The report offers dozens of suggestions in 13 wide-ranging areas that include economic growth and workforce development; protecting homebuyer, homeowner, and tenant rights; increasing government and civic leadership; transportation; and natural disaster and emergency preparedness. There are recommendations for state officials, municipalities and others.

“There is no single answer, nor are there two, or three, or four,” the report states. “Only a comprehensive set of plans will get the job done.”

The work is more complicated, the report states, because New Jersey has been moving “in the wrong direction” for the past decade. “New Jersey’s failure to make the public investment needed for real, grassroots, community development left matters to the market — and the market alone isn’t enough. Our foreclosure crisis continues to be an albatross around the necks of neighborhoods and residents in some of the same places that now witness shiny new, market-rate developments.”

Among the report’s major recommendations are:

  • Strengthen and expand the Neighborhood Revitalization Tax Credit Program and such state-level incentives as Urban Enterprise Zones and the New Jersey Urban Fund.
  • Increase state funding for lead-poisoning prevention and weatherization of homes and encourage municipalities to adopt cumulative health-impact assessments for major developments.
  • Create a statewide legal assistance fund for tenants facing eviction and prohibit the use of credit scores in determining who can rent dedicated affordable units.
  • Allow municipalities to impose additional taxes and fees to raise local revenue and restore financial and technical support for nonprofit developers.
  • Create a director of homelessness within the governor’s office with the authority to manage decisions across departments and provide shelter funding based on actual homeless population.

Making homes affordable
A host of recommendations are meant to maintain or increase the affordability of homes in urban areas receiving new construction or that may be gentrifying. These include enacting local zoning to require all new developments set aside at least 20 percent of units as affordable; providing tax credits to developers who build developments where at least half of homes are affordable; requiring the replacement of every affordable development lost through redevelopment; and adopting policies like property-tax freezes or deferrals so that long-time residents are not forced out by tax hikes resulting from gentrification.

The report is an update of one the network issued before the onset of the Great Recession, which officially ended in mid-2009. Much of that report was not implemented, and network members and stakeholders including the Ironbound Community Corp., John S. Watson Institute for Public Policy of Thomas Edison State University, and New Jersey Urban Mayor's Association worked to revise recommendations in light of the changed economic situation.

“As some areas of our state begin to recover from the foreclosure crisis and market collapse, far too many New Jersey communities and neighborhoods are still mired in the crisis,” said Wayne T. Meyer, president of New Jersey Community Capital. “This report provides a roadmap for helping those families and individuals in need begin to thrive and recommends ways to keep even more New Jerseyans from suffering the dire consequences of economic growth and prosperity that is not equitable or sustainable.”

Already under consideration
Some of the proposals are already on the radar of state or local officials.

For instance, one recommendation for ending the foreclosure crisis includes enabling municipalities to create land banks to facilitate moving problem properties into productive use. Not a bank in the traditional sense, a land bank typically would be a nonprofit or redevelopment agency that would maintain a database of foreclosed, municipally owned and vacant properties and facilitate the resale or redevelopment of such properties. Land-banking legislation (A-3797/S-1214) has cleared committees and now awaits final passage in the Senate and Assembly.

Newark has taken a number of steps recently that align with several of the report’s recommendations. Over the summer, McCarter & English announced its creation of a pro bono fellowship to help Newark residents with legal issues, initially those facing eviction. Newark Mayor Ras Baraka recently issued the Newark Forward report, whose goal is “equitable opportunity and growth so that all residents in all of our neighborhoods” benefit from investment and development in the city. And last week, he announced the creation of the Equitable Growth Advisory Commission to help ensure that gentrification in the city does not displace low-income residents.

The report notes that the cities should welcome the new investments coming in as opportunities to help them revitalize and rebuild, but also recognize that development brings challenges, particularly for long-time residents.

“We can and must do better to include the long-term residents of neighborhoods undergoing rapid change in the decision making that dramatically affects their homes,” it states. “For that to happen, New Jersey’s local and state leaders need to enact policies so that everyone has a seat at the table — and provide the financial resources it takes for those policies to work.”