NJFuture Redevelopment Forum 13 Creative Housing Fisher
David Fisher, PP, AICPVice President, K. Hovnanian HomesMarch 1, 2013
Overview• Background on State Planning• Policy Emphasis & Redevelopment Focus• Changing Demographics• Trends in Housing Preferences• Housing Product to Meet Future Demand• Challenges
State Plan BackgroundState PlanningFirst attempt to create some type ofstate planning authority came in 1934when Governor A. Harry Mooreestablished a temporary state planningboard. In May 1934, the first StatePlanning Act (P.L. 1934, c. 178) waspassed.Modest efforts ensued for many yearsuntil the late 1970’s when the NJ Deptof Community Affairs prepared the firstreal comprehensive plan, known as the1977 “Preliminary Draft” StateDevelopment Guide Plan.Courts began to give credence to DraftGuide Plan by tying affordable housingcompliance to areas identified in thisdocument for growth.
State Planning CommissionEstablished by 1985 State Planning Act along with Office of State Planning to prepare state planning documents, and to manage implementation and municipal ‘cross-acceptance’ of the Plan. Leads to adoption of first “State Development and Redevelopment Plan” in 1992.
State Planning Commission’sOffice of State Planning laterbecomes Office of Smart Growth(moves from Dept of Treasury toNJDCA)Plan update and 2nd round ofcross-acceptance takes place2nd State Plan adopted (2001)Preparation of third draft Planreleased in 2004; cross-acceptance process begins again,but stalls …. little progress formany years
New State Plan Vision • Abbreviated (40 p.) State Plan document simplifying state policy guidance for investments in growth, infrastructure and environment. • Creates 4-tiers of ‘investment areas’: ~ Priority Growth ~ Alternate Growth ~ Limited Growth ~ Priority Preservation • New emphasis on ‘Industry Clusters’ • Highest Priority Growth targeted for: former PA-1 areas; urban centers; UEZ’s; Redevelopment Areas; Transit Villages; higher educ campuses; and other areas key to important industries • State Strategic Plan yet to be adopted
What’s left?Planning Areas 1 and 2 and adozen or so designated‘Centers’ … minus areas being removedfrom local sewer service areasby NJDEP through amendmentsto Areawide Water Quality MgtPlans (WQMP’s)RESULT: Less land fordevelopment; greater focus onredevelopment and infill.
Demographic Realities …. Future Growth Sectors• Eco-boomer’s (children of baby-boomers) in mid-20’s to early 30’s• Aging baby-boomers / move-downs … smaller homes; near children• Foreign-born populations (Hispanic, Asian, Indian, etc.) STATISTICS • Birth rate in U.S. continues to fall … in 2011, we produced the lowest number (less than 4 million) since 1998. Nationwide, birth rates have been declining since a peak of 4.3 million in 2007. • According to the Census, over the past four decades while total population in NJ increased (from 7.1 to 8,7 million), the school-age population has declined by more than 270,000 students during that period. • Whereas in 1970, the number of school-age children represented 25% of the total population, by 2010 that percentage had dropped to 17.3%.
Changing Demographics Fewer households with children … dependent on market and locational variationsSource: Otteau Evaluation Group, 2012
NYC v. NJ … a Reversal in School Kids• Young and middle-age NYC couples Bergen County – school enrollment losses and singles with children less likely to move to NJ suburbs for schools.• North Jersey (non-urban) towns experiencing reductions in school enrollmentsBergen Co. Towns 2000 2010 % dropNorwood 320 214 .33Harrington Park 344 193 .44Franklin Lakes 703 435 .38Wayne 3,313 2,458 .26Ringwood 935 689 .26 MED. HH INCOMES Source: The Record, 2/17/2013, staff writer > $125,000 David Sheingold. $100 – 124,999 $80 – 99,999 $65 – 79,999 < $65,000
Increased Demand for Convenient Locations• Fewer Young People Want Cars: In 1995, people aged 21-30 accounted for 21% of all miles driven. In 2009, that number fell to 14%. • Walk-ability Creates Value: Homes in walkable urbanPercent of Homebuyers Wanting to Walk to: neighborhoods experienced80% less than half the decline in70% home prices (since 2006) as60%50% compared to other40% traditional/suburban locations.30%20% Sources: Otteau Evaluation Group & Brookings Institution, 201110% 0% Source: National Association of Realtors, 2011
N.J. Residential Permits & Multi-family Segment (1980 – 2012*)Source: Patrick J. O’Keefe, Jan 2013
N.J. – Household Characteristics Adjustments in Household Composition Alters Outlook and Demand for New HousingSource: Otteau Evaluation Group, 2012
Buyer Profile~ Seeking ~ Active ~ ~ Traditional ~ Affluent ~ Semi to ~ Middle ~ Wealthiestpure, basic young Active, laid middle to families, olde fully retired class adults of active adulthousing professional back middle middle- r couples lower- nearing or in segments singles & class singles upper class middle class retirement ~ adults ~ Middle to~ Price is key couples, care or couples & families Privacy, prest ~ upper class er focused families ige and ~ Prefer mid- ~ Mixture of Locations, fe adults w/ eye~ Lower upper- features ~ High rate sized ethnically atures and on retirementincome middle class important and racially communitysegments professional of home- suburban ~ diverse; feel is ownership homes ~ Custom Community, s strong ties important~ Desire ~ Adaptable often in tastes, countr ense of place ~ High home to and ability tohome- will sacrifice rural areas y club communities is important ownership w/ remain activeownership bdrms for preferences and features; ~ Affinity for strongest ~ Motivated ~ Very activebut often traditions price outdoor affinity ~ Demand to downsize and socialcredit focused on sports, rec toward new high-end ~ Only likely and have lifestylechallenged finishes; technology activities homes and to move to maintenance communities many options downsize or ~ Stylish & style -free lifestyle ~ Not locate features, new ~ Values traditionally ~ Home ~ Variety of closer to ~ Consider a construction, career features and product, yet retirement community convenience family focused community location and purchase feel are all over price size both feel are their final important important important home
Challenges• Matching housing value/price to market demand … Can we make it affordable enough to attract larger demographic groups/buyers?• Overcoming redevelopment impediments: Acquisition issues … complications of condemnation Environmental remediation Cost of labor (prevailing wage) Condition of sewer, water, stormwater infrastructure Traffic improvements• Securing incentives to acquire, remediate and/or improve properties to create opportunities• Finding properties with manageable environmental liabilities/clean-ups• Managing costs for infrastructure and site development• Financing challenges for land acquisition and for home-buyers• Need for property tax relief in certain cities/towns (PILOT?)
Thank You! For information contact: David B. Fisher, PP, AICPVice President – Governmental Affairs K. Hovnanian Homes 110 Fieldcrest Avenue, 5 th Floor Edison, NJ 08837 (732) 225-4001 firstname.lastname@example.org