Published July 28, 2022
By Ashley Balcerzak

Coming as little surprise to families struggling to sign a new lease these days, New Jersey’s rental market continues to rank among the most expensive in the U.S. — a country where the gulf between workers’ wages and rents steadily widens nationwide, according to a nonprofit housing group report released Thursday.

The Garden State — where more than a third of residents rent — is the seventh-most-expensive in the nation, trailing Hawaii, California, Massachusetts, New York, Washington, D.C., and Washington state, according to the annual report “Out of Reach: The High Cost of Housing,” produced by the National Low Income Housing Coalition and the Housing and Community Development Network of New Jersey.

But the numbers in the report may appear low to families currently scouring Zillow or Apartments.com, because of the unprecedented rental increases in the past year.

“The picture is much worse than what we’re presenting in the data today because inflation has gone so much higher than anyone would expect,” said Arnold Cohen, senior policy coordinator for the New Jersey development network. He said the report analyzed U.S. census data that adjusted rents in the 40th percentile of an area for 2020 inflation and then modified using predictive modeling.

According to the report, a full-time worker in New Jersey on average must earn $31.32 an hour to cover the costs of a modest two-bedroom apartment at fair market rent in order to limit housing expenses to a third of her paycheck, a metric the federal government considers to be affordable.

Crunching the numbers, it would require a $65,137 annual salary to afford the monthly average $1,628 for rent and utilities statewide, though many counties’ housing prices are even more exorbitant.

Such a threshold is unreachable for a person working a minimum wage job at $13 an hour; to afford such a rental, a resident would have to juggle nearly 2½ full-time jobs.

For Tanika Moss, that number “almost seems reasonable” compared with rents she is seeing in her house hunt for herself and her four children, like a two-bedroom “in one of the worst parts of town for $2,500” per month.

Moss said she has lived in her Paterson apartment for about eight years, but the neighborhood is changing and she doesn’t feel safe letting her children play outside. But she isn’t finding an alternative she can afford that is any safer, and if anyone could find a new home, it should be Moss — she works for a women's center, counseling clients on how to find affordable housing.

“It’s one of the most discouraging things you could ever really have to go through … it seems like the most equivalent to walking on the moon at this point, it seems so far away,” Moss said. “It’s sad, because I have to leave work and go and look for an apartment and be turned away and come back to work and try to encourage these women to keep going, when I myself feel like I just want to give up.”

The nonprofit examined the median wages of New Jersey’s 30 largest occupations. Among them, 22 jobs earned less than $31.32 an hour, including teacher assistants, home health aides, food preparation workers, truck drivers and nurses' assistants.

“Housing is just brutal and it keeps getting worse, notably for working families,” said Lynne Algrant, vice president of communications for Greater Bergen Community Action, a Hackensack-based nonprofit aiming to reduce poverty. “If a family can find a place they can afford, maybe it is far from where they work, and transportation and child care becomes a huge financial barrier that eats up any savings from the more affordable apartment.”

Matt Mergel, 31, is moving in with family over the weekend as he continues his search for a new place to live. The owner of the Rahway townhouse he was renting with two roommates for $900 a month is selling the home, and Mergel hasn’t been able to find a safe apartment under a budget of $1,500 a month.

Mergel works as a doorman in New York City, and three days a week he comes home from work at 1 a.m.

“The places I can find that are semi-attainable are not in the best of areas, and I don’t want to be walking in a place that is unfamiliar to me late at night that has issues with crime,” Mergel said. “I have plans to get a car soon. I don’t want to have to worry that my car was stripped down or stolen.”

The frustrating part for Mergel is being priced out of a community where he has lived for nearly five years.

“This is most certainly the best job I’ve had throughout my working career, and I still find myself struggling to the point that I now have to go home,” Mergel said. “It’s pretty alarming to me, because it just makes me wonder what the future holds and how much more expensive it’s going to be in five years.”

According to the report, Hudson is the most expensive county in New Jersey, with a fair market rent of $1,972 for a two-bedroom rental.

That’s a fraction of what Rent.com found for a handful of individual Hudson County cities in an analysis last week, naming Jersey City the most expensive place to rent, with an average rent of $5,500 per month, up from $3,308 in 2021. Two other Hudson County cities made the “Top 100” list examining multifamily rental data of available units, including staggeringly high rents in Hoboken at $4,264 and Bayonne at $3,101.

Thursday's “Out of Reach” report found fair market rents to be $1,736 in Bergen and Passaic counties, $1,558 for Monmouth and Ocean, and $1,479 for Morris, Essex, Sussex and Union counties.

When comparing housing prices with what a typical family earns in the region, the least affordable counties to those who live there are Cape May, Cumberland and Gloucester, according to the report.

New Jersey severely lacks affordable housing, providing only 31 affordable and available rentals for every 100 families earning extremely low incomes, according to a 2022 report by the National Low Income Housing Coalition called "The Gap: A Shortage of Affordable Homes." The analysis that shows no state in the country has an adequate supply of homes for families making below the poverty line.

“I feel like I can’t help renters because there is just no stock, and it’s really agonizing,” said Lisa Goetz, a Weichert real estate agent with an office in Princeton who serves Mercer, Somerset, Hunterdon and Burlington counties. “I will spend time on the phone with them and just be a human being, suggesting ideas like putting up notices on bulletin boards, but I have no idea if that’s working.”

Many factors have contributed to the housing crisis, which disproportionately affects people of color, who are more likely to rent: historic underfunding of public assistance that subsidizes high rents, lack of housing construction, and historically racist policies with effects lasting to this day, such as restrictive covenants, redlining and predatory lending.

Real estate agents and landlords also point to the impacts of COVID-19. As New Yorkers fled the city during the pandemic, home purchase prices rose to staggering levels, driven by increased competition. Millennials and others who would have intended to buy a home no longer could find them in their budget, so they continued to rent. Sellers may have had to find short-term rentals as they waited for a home they could afford to come on the market. That limited rentals further for lower-income families.

“There’s so much pressure on so many levels,” Goetz said.

Some small landlords have told NorthJersey.com they were selling their properties because they lost income during the state eviction moratorium that kept low- and middle-income renters housed for more than a year and a half even if they couldn’t pay their rent. Institutional investors could buy properties and increase rent and other fees, and as only 100 New Jersey towns have a form of rent control, there is little stopping high increases.

Speakers at Thursday's press conference ran through a wish list of policy changes the coalition of community development organizations is pushing for in New Jersey and nationally. They said New Jersey should create a centralized application for renters to find affordable housing, and limit costs for background checks and other fees that add up quickly for prospective renters. The federal government should fully fund its voucher program that subsidizes rent for low-income renters; currently only an estimated one in four people who would be eligible based on income actually secure a voucher.

“It’s not a top 10 list that any state wants to be on … a lot of folks are facing incredible pressure,” said Staci Berger, president and CEO of the Housing and Community Development Network of New Jersey, referring to the report. “Clearly we have a lot more we can and must do so everyone can call New Jersey home.”