Economic Opportunity Abundant with Affordable Housing

Whitney Crescent | Multi-Family Housing NJ

Affordable housing should be looked upon as a catalyst for economic opportunity. As a redevelopment professional in New Jersey for more than 25 years, I have been fortunate to see good urban policy enable cities to flourish, as well as bad public policy that thwarts urban revitalization. Right now, we may be in a worse state because, realistically, there is no urban or redevelopment policy for smaller communities.

The Economic Opportunity Act is a wonderful first step in setting priorities for investment in urban centers, yet many communities dealing with vacant main streets and abandoned industrial areas still lack the tools to attract meaningful redevelopment activities.

Early in my career, I served as the president of Devco in New Brunswick. I saw the city struggle to stabilize neighborhoods and attract investment into the center business district. When you look at the redevelopment of New Brunswick today, it’s hard to imagine that struggle. But in the early 90s, the economy was in a recession, and we needed to focus on the institutional presence of Rutgers and Robert Wood Johnson Hospital as the major catalysts for downtown development. We were lucky because most municipalities don’t have a state university, Fortune 100 company headquarters or expanding health system in their five square-mile town.

So what can urban and older suburban communities look to for redevelopment opportunities? The answer is affordable housing.

When used correctly, affordable housing can provide great economic development opportunities. For example, in the midst of the economic crash of 2008, Lawrence Township expected to build a mixed-use project in a redevelopment area on a major corridor. The town was hoping for retail and high-end condominiums that would stabilize an older part of the township.

With the meltdown of the capital markets, the real estate market crashed, and the hopes of redevelopment crashed along with it. I approached the town to consider an affordable housing project on the site. It wasn’t exactly what the town had hoped for, but we soon proved it could be an economic development opportunity.

Now, we have 70 seniors living on a major corridor in Lawrence, with average monthly expenditures in the community larger than a comparable market development.  These seniors frequently eat at the diner across the street, visit a doctor’s office on the ground retail floor, use local taxis, and shop in the supermarket. Overall, their small, but consistent, expenditures feed right into the local economy.

In comparison, a market rate project would produce very little during the daytime retail hours. Many meals would be consumed in nearby Princeton, and incidental purchases – like dry cleaning and drugstore purchases – would be done close to work or on the drive home. The local businesses and economy would see little of those expenditures supporting small neighborhood businesses.

So why are more communities not looking at this option today?

The tools are not available. The low-income tax credit program rules have been amended, making it nearly impossible for urban and older suburban senior projects to score enough points to win an allocation.

We must look to what has worked in the past and adapt those strategies to the current demands. As the attention now focuses on what we should do and how we should address the need for affordable housing in our state, projects that can be a catalyst for economic development should be front and center in the debate.