Op-Ed: Is Jersey City missing an affordable housing opportunity on city-owned land?

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In an editorial, Jersey City residents Eric Allen Conner and Dario Gutierrez question two recent construction plans approved by the local redevelopment agency.

A file photo of the Jersey City Redevelopment Agency.

Jersey City has led the region in housing construction, adding 26,000 new homes over the past 15 years. Much of that housing production has been market-rate “luxury” apartment rentals.

Economists have found overwhelming evidence that even market-rate housing supply keeps rents down for existing units.

Still, demand remains sky high and vacancy rates have reached lows not seen for generations due to insufficient construction in neighboring cities and towns.

The Regional Plan Association estimates that Jersey City needs to build an additional 27,000 to 36,500 units by 2032 beyond what’s already been approved in order to meet demand.

Affordability has become the watchword bandied about by politicians, housing advocates, and YIMBYs and NIMBYs alike. 

Affordable housing is effectively non-market-rate housing that has household income restrictions based on the Area Median Income (“AMI”) that determine if an applicant qualifies for an affordable housing unit.

In Jersey City, affordable housing ranges extend from very low-income at 30% of AMI to moderate income levels at 80% of AMI.

These units are sought after because their rental cost is cheaper than the prevailing market rate for new construction while still being in new buildings and having the same amenities and finishes as “luxury” units.

In the past several months, there have been several promising updates and plans for increased affordable housing in Jersey City.

The Jersey City Council adopted an affordable housing ordinance for Journal Square that requires 10% affordable housing for buildings with 30 or more units in certain zones and grants bonuses up to 20 floors for providing more affordable housing.

Developers broke ground on a new development with affordable housing on West Side Avenue and cut the ribbon on new affordable housing in McGinley Square.

And the new Hudson County Enterprise building is poised to provide over 100 new affordable housing for individuals with disabilities in Ward F.

Despite this progress, the region clearly has a long way to go in producing sufficient housing – market-rate or otherwise – to meet high demand.

We were naturally puzzled when we found that the Jersey City Redevelopment Agency (“JCRA”) passed two resolutions this past December to develop housing on two city-owned properties – one at 468-480 Manila Avenue downtown and the other at 168 Sip Avenue in Journal Square – without pushing for the maximum floor area ratio (“FAR”) permitted by current zoning.

The failure of the JCRA to negotiate for the maximum FAR not only reduces the height and density of development but it also limits the amount of affordable housing possible on those properties. 

The Manila Avenue project, proposed by BNE Acquisitions (a developer whose portfolio is mostly suburban mid-rise apartments) will turn an old parking lot previously used by first responders into a six-story mid-rise with 38 units,40 parking spots taking up virtually the entire ground floor.

Zero affordable housing units were included. Here, existing zoning for the site and the Affordable Housing Overlay passed by the city council allow for a building of up to 13 stories with approximately 130,000 square feet of interior space.

This translates into roughly 150 units, 23 of which would be affordable. By entering into an agreement for a six-story building, Jersey City is missing out on over 112 new apartments and adding no affordable housing in a prime location downtown.

The missed opportunity on Sip Avenue is not quite as glaring but still leaves substantial affordable housing on the table.

The JCRA passed a resolution allowing TAG Development – a prominent player in high-rise construction in Jersey City and Newark – to “build a 30-story luxury rental apartment building with 713 rental units,” 10% of which would be affordable under the Journal Square 2060 plan.

For a property owned by the city, we would expect any redevelopment plan to maximize the creation of new affordable housing as part of the deal.

On Sip Avenue, the affordable housing bonus passed last August by the City Council would allow 17 more floors above the currently planned 30 stories and add around 400 more units.

In exchange, the city could have realistically pushed for a further 40 to 80 affordable housing units at no cost to the JCRA or city taxpayers.

The difference between the current and the maximalist plan is perplexing when affordability and net new housing supply have been critical topics of conversation.

To provide an example of the financial costs, the White Castle on Newark Ave recently sold for $13 million and is subject to the same zoning as the Sip Avenue property.

Given the sale price per buildable square foot for that site, we estimate the city is foregoing at least $4 million in revenue by agreeing to a smaller development.

The JCRA may have good reasons for entering into agreements that do not produce the maximum amount of affordable housing.

But we must ask, “Why is the JCRA so eager to dispose of land owned by Jersey City without getting the best redevelopment deal for city taxpayers? Is BNE the right partner to develop the Manila Avenue project?

Was there a competitive process to review development proposals for city-owned lots? Is the city doing the most it can to incentivize more affordable housing production?”

As part of our research into these resolutions, we noted that the leadership of both BNE and TAG contribute to local political campaigns.

BNE leadership has donated to Mayor Steven Fulop’s gubernatorial bid and former Governor Jim McGreevey’s mayoral bid; TAG’s CEO, on the other hand, is less active but has made past contributions to Newark Mayor Ras Baraka and Hudson County Commissioner Bill O’Dea, who is also running for mayor.

No campaign donations have been made to council members Daniel Rivera and Denise Ridley, who are the chairman and vice chair of the JCRA.

As an autonomous city agency for real estate and economic development, the JCRA should explain why they are not pushing for larger developments with affordable housing as envisioned by previous city council ordinances.

We think it is imperative to enter into agreements that build the most housing possible under the current height and density limits, maximize revenue for the city, and reduce the property tax burden for city residents

The JCRA has a responsibility to get the best deal for Jersey City and must offer an explanation whenever it falls short of that goal.


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