NYC and its suburbs won’t build new housing, so New Yorkers are flooding into Jersey City and driving up prices – DAVID RAUDALES

DAVID RAUDALES

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DAVID RAUDALES UK

NYC and its suburbs won’t build new housing, so New Yorkers are flooding into Jersey City and driving up prices

Lower Manhattan as seen from Jersey City, New Jersey, in August.

Gary Hershorn/Getty Images

New Yorkers are desperate for housing, and many are looking to Jersey City.The North Jersey hub has been building far more housing than the Big Apple.But prices are shooting up in Jersey City as its neighbors refuse to build.

New Yorkers have been taking notice of Jersey City real estate for years, and its popularity as an alternative to the ever-less-affordable housing market in the city is growing. These days, fans call it the sixth borough, largely thanks to Jersey City’s efforts to build a ton of new housing — and at a much faster rate than the actual five boroughs.

Between 2010 and 2018, Hudson County, which includes Jersey City, built housing at more than twice the rate that New York City did. Jersey City’s population grew by nearly 60% from 2010 to 2020. Many of the old rail yards and factories on the city’s waterfront have been replaced with luxury high-rises.

But amid the city’s home-construction boom — a “renaissance,” as the city’s mayor, Steven Fulop, previously described it to Insider — rents are rising fast. The rental platform Zumper lists Jersey City as the second-most-expensive US city to rent an apartment, and rents for a two-bedroom apartment are up 25% year over year.

Typically, a big increase in housing supply would be expected to push prices down, but the sheer magnitude of the New York metro area’s housing deficit has kept Jersey City from experiencing that. As the region suffers a severe housing-affordability crisis, North New Jersey is “carrying the entire tristate area’s housing-supply burden,” said Alex Armlovich, the senior housing-policy analyst at the Niskanen Center, a nonpartisan think tank.

“Jersey City is unique. It’s one of the YIMBY-ist cities in the country in terms of actual building permits per person,” Armlovich told Insider. “They’re one of the only reasons that New York, generally as a region, is not more unaffordable than it is.”

Jersey City is experimenting with novel ways to boost its supply of affordable housing. But tenants’ rights experts say it’s not enough, as residents who have lived in Jersey City their whole lives move to less expensive cities like Newark and Elizabeth.

Jersey City’s rapid development — and its soaring rents — are rooted in decades of policy decisions that have both supporters and critics.

A view of the Jersey City waterfront from Manhattan.

Noah Sheidlower/Insider

Jersey City can’t solve a regional crisis alone

Amy Klein and her partner were looking to buy a place in Brooklyn in 2022. When they discovered their $1 million budget would only get them a 600-square-foot one-bedroom with high building-maintenance fees, realtors and friends urged them to explore the market just across the Hudson River in Jersey City, where new housing construction was booming.

After getting to know the area, they found a three-bedroom, two-bathroom rowhouse with a small backyard within their budget. They liked that Jersey City felt a lot like downtown Brooklyn, and the commute to their offices in Manhattan’s financial district took just 25 minutes on the PATH commuter rail.

“It was very vibrant, lots of people walking around, out and about, so it still feels very similar to living in Brooklyn or in New York, but just a little bit more space for everyone,” Klein, who works in development at the pro-housing group YIMBY Action, said of the new neighborhood.

New housing in Jersey City is overwhelmingly market rate rather than being explicitly built as affordable housing for lower- and middle-income residents. Market-rate rents and home prices are sky-high, and New York City and its suburbs are in large part to blame.

Jersey City shares a housing and labor market with the Big Apple and its suburbs, meaning that people like Klein and her partner can keep their jobs in Manhattan and move across the Hudson. As the housing shortage in New York City, Westchester, Long Island, and the wider region has deepened, with many of those suburbs steadfastly resisting new housing construction, pressure on Jersey City has mounted.

But some advocates say the surge in luxury apartments and new amenities have helped push rents up in Jersey City, displacing longtime residents.

“That runaway speculation still has a detrimental effect on surrounding communities, where landlords then feel empowered to raise rents to close those rent gaps,” said Isaac Jiménez, an organizer with a nonprofit tenants’ rights group.

Research has found that housing markets abide by the laws of supply and demand, just like any other sector. Increasing the supply of market-rate housing improves affordability by satisfying demand. But in New Jersey, supply just can’t keep pace with skyrocketing demand.

“Thinking about markets in a metropolitan context, hyperlocal supply mostly can slow down displacement, but you really need that metropolitan supply to actually keep up,” Armlovich said.

Jersey City can offer some much-needed new housing, but it can’t solve a regional crisis on its own, Armlovich said. “It’s absolutely incumbent upon the entire tristate region — no one neighborhood can build their way out of a 20 million-person housing crisis,” he said. “But the 22 counties of metropolitan New York absolutely together could build our way out.”

Affordable-housing struggles and gentrification

Jersey City hasn’t just seen residential demand rise. Over the past decade, a slew of companies have relocated their headquarters to Jersey City. Financial giants like Goldman Sachs have opened up offices, citing cheaper rents and larger facilities than in New York City, earning Jersey City its “Wall Street West” nickname.

“The concentration of jobs in the metropolis has led to increased demand for housing, driving up prices,” Abdul Rehman Khan, an assistant clinical professor at Seton Hall Law’s Center for Social Justice, told Insider. “This situation places immense pressure on residents, forcing many out of the city.”

Jersey City’s spiking prices are worsening homelessness and have contributed to thousands of evictions, an August city ordinance said. This has particularly impacted Hispanic residents, Jiménez said, many of whom were priced out of downtown.

After years of advocacy, the city recently passed a law guaranteeing the right to free counsel in housing court for tenants facing eviction. The city also recently passed measures including a fee on developers to help people facing eviction pay for attorneys.

Fulop has advocated for more mixed-income housing in both new and existing buildings, including a requirement that affordable units make up 10% to 15% of new building rentals. Many older public-housing units are falling apart, so the city is also replacing some public units with market-rate units. But some tenants’ rights activists say it isn’t enough.

“That’s not nearly enough to meet the housing demand, that’s not nearly enough to meet the crisis, and those units aren’t being built,” Jiménez told Insider.

In Journal Square, Jersey City’s business district and transportation hub, only around 200 of 22,000 units built or planned — or less than 1% — are affordable housing, according to legislation introduced by Councilman Rich Boggiano.

While Jersey City’s building boom can serve as a model for the rest of the tristate area, greater New York’s housing crisis won’t be solved unless the rest of the region follows that model.

“Jersey City’s rapid development offers valuable lessons for other cities. It highlights the importance of long-term investment from both public officials and residents to create sustainable and inclusive communities,” Khan said. “The issues facing Jersey City tenants are multifaceted, but the primary concern is to guarantee housing stability.”

Read the original article on Business Insider