By Chris Kok
Newark is going through a development spurt. Downtown and the Ironbound are seeing large scale construction, while a scattering of smaller scale development is occurring throughout the other neighborhoods of the city. Downtown, in particular, saw thousands of units come onto the market in the past decade: Teacher’s Village, the Hahne Building, One Theater Square, and the Walker House. Likewise, new mid-rise apartment buildings are being constructed throughout the Ironbound, including 360 New York Ave and 325 Ferry Street, as well as conversions of existing industrial buildings like the Textile Lofts and the beautiful Murphy Varnish building. Most of these projects are marketed as luxury apartments and have provided tenants with amenities like rooftop decks, fitness rooms, communal kitchens, and local shuttle buses. But this new wave of investment and renewed interest in Newark poses the threat of rising costs and gentrification. To maintain equity and fairness in the market, the city needs to increase housing supply through small-scale incremental development.
What is causing this wave? Multiple factors. Easy access to amenities, jobs, and transit have renewed a desire for city living across multiple generations from boomers to Gen Z. High housings prices have also led to an influx of new residents from New York City, Hoboken, and Jersey City, and general population increases brought about as immigration outpaces domestic outmigration have elevated demand. All of this together has brought new energy to Newark.
But this development strategy focuses on attracting new, rich residents, rather than offering options to current Newarkers. On one hand, only a small number of entities can get the financing necessary to construct these large projects, thus limiting the benefits of these projects to a small group of wealthy individuals. On the other hand, these new projects attract not only new richer residents to the developments, but also attract the same population to the existing nearby housing stock, thus creating upward pressure on rents and making it harder for existing residents to remain in their neighborhoods.
In many ways, this is a classic conflict between short-term and long-term planning. Over the short term, new development puts Newark on the radar of more potential residents, increasing the demand for housing and driving up local rents. The larger the size and greater the number of projects, the more attention the development brings, thus inducing greater demand. But, over the long term, the only way to reduce prices is to increase housing supply. Failure to develop now will guarantee greater gentrification in the future.
If Newark is to retain any semblance of affordability, it is going to need to drastically increase its housing supply. However, the short term problem still remains. By relying on larger projects from major developers, prices are going to go up, potentially pushing out long-term residents of Newark. However, there is a solution that both addresses the short terms needs and the long term affects: encourage small-scale incremental developments, which for the purposes of this article will refer to developments with 6 or fewer apartments.
Newark has already seen a significant amount of small-scale development with the advent of the much-maligned Bayonne Boxes. In the housing boom of the 2000s, old factories were demolished, rows of these three to four family detached buildings were constructed, bringing new modern housing units into the city without bringing about the sort of attention that brings catastrophic demand and gentrification.
Small-scale incremental development still faces difficulties competing against larger developments in the current development environment. Larger buildings use land more efficiently and allow for higher densities, even with the same height limits. Once a large property is assembled under common ownership, the costs of design and construction are lower on a per apartment basis. Additionally, the permitting requirements under the City’s Zoning & Land Use Regulations ensure that a 200-apartment building is subject to the same review process as a 3-apartment building. This requirement applies not only to new construction, but even to construction of additional units within existing buildings.
In Newark, the construction of any 3 or more unit building is subject to Site Plan review by the Central Planning Board—assuming the use is permitted. This process includes completeness review for which the City has 45 days make a determination and which can take multiple submissions; scheduling of hearings, which can be delayed due to a backlog of applications, and providing professional representation, often including legal counsel, architects, and engineers to provide necessary testimony for an application. This lengthy process makes financing projects more difficult and each night a development has their professionals in attendance (regardless of whether the application is heard or is carried to a later date) the costs of the project increase. Larger projects are better able to weather these delays and increased costs since the added costs can be spread across a larger number of apartments; these costs are more likely to kill small scale development.
If the City wants to encourage small scale development, it should eliminate the requirement for site plan review for smaller projects. The Municipal Land Use Law does not require that municipalities conduct site plan reviews of developments, and it already exempts one and two family projects from site plan reviews. The City’s Zoning & Land Use Regulations largely reflects this. There is nothing preventing the city from allowing residential projects with 6 or fewer units to be constructed without site plan review. Instead, these projects could be approved administratively by the issuance of a zoning permit. By creating an administrative process for these projects, the City could reduce costs and delays associated with these projects and encourage these kinds of development.
There is definitely a place for large scale development. Particularly in downtown and near our two major transit hubs: Newark Penn Station and Broad Street Station, these large scale projects can reshape vacant and underutilized land (looking at you Edison Parking).
However, if Newark wants to make sure the benefits of its revitalization are spread more equitably and rein in the devastating effects of gentrification, it should work to make small scale development easier. Unleashing small scale development will allow Newark to increase our housing stock without attracting the same attention and demand that larger project generate. These smaller projects will not have the same luxuries (pools, rooftop decks, and door staff) that the larger projects have and will not be able to charge the same higher rents. Finally, since financing for these projects will be easier to access, a much larger pool of individuals will be able to participate in the continued development of Newark, spreading the profits among a larger population.
Chris Kok is a professional planner and is currently serving as the Township Planner for Wayne, NJ. He moved to Newark in 2013 and has been on a northward trajectory; starting in the Ironbound, and moving to James Street, before buying a home with his wife in the Upper Roseville. During his free time you can find him walking his dog in Branch Brook Park or hiding behind his camera.
Featured image by Pexels