To Save New Jersey Suburbs, Developers Shouldn't Think Too Big

New Jersey has large-scale problems with its demographics and its real estate, but their solutions could come at the smallest of scales.

New Jersey has been one of the 10 states in the U.S. with the most out-migration in each of the last 10 years, according to AvalonBay Communities Senior Vice President Ron Ladell.

He chalked up some of the exodus to the highest property taxes of any state by far, but New Jersey has other issues that developers can address without changes in state law.

"New Jersey is a suburban state," Tantum Real Estate founding principal Debra Tantleff said at Bisnow's New Jersey State of the Market event in Jersey City.

Tantleff, Ladell and some 15 other panelists detailed their visions for how to revitalize a state with more fading communities than resurgent ones. The urbanization of the U.S. in the past couple of decades has hurt the Garden State, but other suburban areas have managed to attain vibrancy by building density around mini-urban nodes.

A neighborhood that residents can enjoy walking around and engaging with, Tantleff and New Brunswick Development Corp. President Christopher Paladino said, is far more likely to attract and retain baby boomers and millennials — the two largest and most important population groups to real estate.

For decades, townships across New Jersey have fought tooth and nail against multifamily development, and affordable housing especially, to retain their bucolic feel. That has come to backfire on those towns, not only because vibrancy is now in vogue, but also because many of them face a court order to meet affordable housing needs, leading to unprecedented urgency.

“A lot of municipalities are being confronted with the legislative reality of having to build affordable housing," Tantleff said. "So we’re seeing an extraordinary number of projects getting developed across the state."

For some towns, like the area surrounding the Princeton Junction train station in West Windsor Township, an ambitious megadevelopment like what AvalonBay is building could be the answer, with its 850 residences, 120 hotel rooms and retail surrounding a park with an amphitheater.

West Windsor's leadership was desperate to activate what was a "dilapidated" series of office buildings, Ladell said, which gave him the leeway to swing for the fences.

“It is not that often that you get to work on a transformational project like this,” Ladell said.

For some communities, the prospect of "saving" the town can be a counterproductive one, Paladino said. Although Atlantic City is a different beast from the rest of the state, Paladino and New Brunswick DEVCO received high praise from fellow panelists for the success of development surrounding Stockton University.

“There is no silver bullet," Paladino said. "Disney is not coming to save the city, the Hard Rock [Hotel] is not going to save the city, whoever owns the Revel right now will not save the city. So we chose to ignore all that. We got Stockton to build some dorms, but we started to lay the groundwork for building a community.”

New Brunswick DEVCO used the principles it learned from building in the area surrounding Rutgers in its hometown, where a privately built, amenitized student housing building gave the street a jolt of life.

“From 6:30 in the morning to 11 at night, students were on the street,” Paladino said. "We really needed to change the tempo of the neighborhood."

If the struggles of the recent past have taught New Jersey developers anything, it is the necessity of thoughtful community planning; building so that the surrounding area benefits, rather than with the simple goal of filling units.

“The challenge is to take millennials and [members of] Generation Z who have the transient mindset of moving from place to place every year and get them to engage in the community [where they live]," Tantleff said. "And the way you do that is by creating collaborative, ground-floor uses and connecting them with community uses, programs and festivals that the city offers, with galleries and performances and restaurant life all working together to get people engaged.”

Even in thriving, urban Jersey City, the past few years have been marked by a significant increase in new residents moving in from outside Hudson County, including New York. Though a stunning number of apartments are either under construction or in the planning phase, Kushner Real Estate Group Chief Operating Officer Jeremy Kaplan believes that absorption won't become an issue because of the communities and neighborhoods being created, generating demand in a virtuous cycle.

“When you think about supply in the context of saturation, you have to think about the city as a whole, and when it’s more desirable as a place to live, people will fill in the apartments,” Kaplan said.

Just as crucial to building communities as the skyscraper builders like KRE Group have been "mom-and-pop" developers who have built low-rise apartment buildings with small unit counts and perhaps a restaurant on the ground floor.

Both large and small developments were needed to "anchor mixed-use development block by block," Michael Graves Senior Project Manager Trevor Lamb said.

“Hamilton Park and the Grove Street area used to be really separate, and now you can walk down Jersey Avenue and feel like you’re in the same neighborhood," Lamb said. "And those connections make the city feel like a better and better place to live.”

Though smaller suburbs shouldn't try to become Jersey City, that diversity of product being delivered is a lesson that they can take to create growth that doesn't just bring people in, but keeps them there long-term.

“We have to remember that there’s a difference between urban and suburban markets," Tantleff said. "The main question is, how do we 'urbanize suburbia' in a way where we can [deliver a community with] a variety of housing types, including rentals, condos, townhomes and single-family homes so that you can cycle residents through different forms of housing as they move through life.”

What New Jersey's longtime suburban residents have long valued about their towns is the sense of community and familiarity they foster — a major factor in their resistance to apartment developments. But millennials and Gen Z have so far been a transient population, moving around from building to building and place to place rather than laying down the sort of roots that tie them to a community.

Bridging the gap between baby boomers' desire for community and millennials' constant search for the ideal living space requires the variety that is so easily found in cities. But if each developer thinks of their project in the context of the surrounding community, then building that variety and vibrancy does not require a sweeping, ambitious megaproject.

“Without upfront understanding [of the community], you’re going to get it all wrong, and you’re going to pay the price for that,” Lamb said.