Builders in New Jersey Launch Public Education on High Housing Costs - 10/11/2004 - Real Estate Education Training Schools Conferences

Builders in New Jersey Launch Public Education Campaign on Why Housing Costs Are Out of Sight

“New Jersey’s residents are frustrated by the cost of housing,” said the association’s president, Michael Karmatz. “The gap between homes that are affordable and what the average working residents can afford is widening. The fact is New Jersey suffers from a severe housing crisis. For years, the amount of homes allowed to be built has not met the demand. Instead, we are creating a society of the haves and have-nots.”

The Builders League is asking residents to demand action from their legislators to address the growing shortage of affordably priced housing. Among the factors Karmatz points out are driving up costs:

• To build a new home in New Jersey it typically takes a developer about five years to satisfy any number of 150 different permits at five levels of government. This excessive regulation and the time it consumes smacks a hefty $70,000 onto the cost of the home even before factoring in the cost of land, labor, materials and insurance.
• Land use policies in the state prevent developers from bringing to market the simple neighborhoods of small homes on small lots that today’s baby boomers grew up with.
• Nearly one-third of the land in the state is preserved and either can’t be developed or is severely restricted for development.
• Developers, municipalities and water purveyors throughout the region are not being issued new or extended water allocation permits, thus creating a moratorium on new development. Water is being used as a tool to stop the development of new homes without scientific proof demonstrating that there is a true water shortage. The state’s current administration has also turned a blind eye to such long-term solutions as desalinization plants and new reservoirs.

In general, New Jersey is continuing to fall behind in meeting its residents’ housing needs, with 2.5 million people in about one million households living in overcrowded or substandard homes, the Builders League says. And the state is expected to add another one million people to its population over the next 15-20 years, according to the New Jersey State Development and Redevelopment Plan.

The builders’ public education campaign notes that the median price of a new home in the state is now $380,000 and the average sales price of an existing home is more than $313,000, amounts that are far above the $160,000 price tag that is affordable for a household earning the state’s median income of $55,000 a year.

“If workers can’t afford housing within a reasonable commute of their jobs, businesses won’t be able to maintain their workforce,” said Karmatz. “That will neither help the economy nor improve the quality of life here in New Jersey.”

For the materials in the “Educate Yourself” campaign, which contain several links to further information compiled by the home builders in New Jersey, click here.