Are you thinking of buying or investing in New Jersey real estate? Something significant is impacting everyone in the Garden State: a housing crisis stemming from a lack of inventory, a nationwide issue, but one that feels particularly acute in New Jersey. Densely populated and geographically small, the state's development possibilities are restricted. But what exactly is hindering the construction of new housing? Let's dive into New Jersey's biggest problem and explore why building more homes in the Garden State is proving difficult.

Key Factors Contributing to the Crisis

Highland Water Protection and Planning Act (2004)

This legislation limits development in the Highlands region of Northern New Jersey to protect water resources and green spaces. This protection, while crucial, significantly impacts new housing projects.

Demand and Urban Development

Despite some residents moving out, areas within 30-35 miles of New York City are experiencing an influx of new residents. This surge creates a high demand for both rental and sales properties, further exacerbating the limited supply issue.

Limited New Construction

New developments are primarily concentrated in existing urban and suburban areas, rather than in untouched spaces. These often involve transforming former industrial, warehouse, and office spaces.

Luxury Apartments Near Transit

Much of the new development is focused on luxury apartment buildings near train stations. While these projects contribute to housing, they often fail to address the critical need for affordable housing options.

Housing Cost Increases

The scarcity of urban land drives up rents and property prices in dense areas, severely limiting affordability for many residents.

Future Inventory Shifts

Over the next 10-15 years, the aging Baby Boomer population may increase housing availability as they downsize or pass on properties. This potential shift could offer some relief to the current market pressures.

Repurposing Underutilized Spaces

Developers are increasingly focusing on transforming underused areas, such as old parking lots and industrial spaces, into new residential communities. This strategy maximizes existing land resources and can help revitalize urban areas.

Examples of Redevelopment Projects in New Jersey

Stonehill at West Orange

This project involved converting former office space into 423 luxury one- and two-bedroom units. The development includes numerous amenities and renovated office spaces, highlighting the trend of repurposing commercial buildings.

Bayfront Project (Jersey City)

A large mixed-use development planned in Jersey City is expected to feature affordable housing, retail spaces, and a planned light rail extension. This project aims to provide diverse housing options and improve public transportation access.

For a more in-depth look at New Jersey's housing crisis, check out Corey Jones YouTube episode of New Jersey Living: Exposing New Jersey's Housing Crisis: Why We Can't Build More Homes.