opinion

Opinion: On high taxes, dying malls and millennials leaving Jersey

Let’s discuss the thriving suburban office park and shopping mall market in New Jersey.

It wouldn’t be a particularly long conversation; though we were once the wealthiest state in the nation and a benchmark of suburban growth for the generation following World War II, suburbia is no longer the first place today’s generation of millennials want to live, work and play.

According to PlanSmart NJ, New Jersey is the most exited state in the nation, with owner-occupied home ownership down by 100,000 in the years since the Great Recession. We need a new policy approach, one prepared to grapple with the following realities: New Jersey has five new renters for every three homeowners; New Jersey has 14 million square feet of empty office space; New Jersey has 7 million square feet of empty retail. At our current rate of absorption, it will take more than 20 years to re-tenant these stranded assets.

Millennials who are headed for the suburbs aren’t looking for what their parents wanted. They are looking for integrated live, work and play environments. They want close-in suburbs that have been designed – or redesigned – to look as much like urban neighborhoods as possible. They want housing options that emphasize affordability and they want one car instead of two because Uber or Lyft are viable alternatives.

June Williamson, an architecture professor at City University of New York, estimates that a decade ago there were about 80 projects in the country that fit this description. Today, she thinks, there are more than 1,500. Many have been built on the ruins of conventional dying suburban office parks and shopping malls of the 1970s and 80s.

While no one has the illusion that these developments actually recreate traditional city neighborhoods, what they do offer is very different than today’s typical suburb:

They have outdoor shopping districts with multiple options for dining.

They have apartments and condominiums above and adjacent to the retail centers.

They are often, though not always, easily accessible by train.

Furthermore, their rising property values suggest that they are attracting a sizable share of millennials willing to leave the city but unwilling to tolerate a long exurban commute, according to Alan Ehrenhalt of Governing magazine.

While repurposing these dying office parks or grayfields is a completely logical approach to helping revive the properties and provide property tax relief to local homeowners, the process has been far too slow in New Jersey. Empty office parks are nothing but a drag on our economy and make an already tax-expensive state more prohibitive to current and prospective residents.

So what must New Jersey do to break the home rule deadlock that makes these projects so difficult to move forward?

First, we need legislative action, either to amend the Municipal Land Use Law or to create a new tool for planning boards such as S2577, passed in 2009, which allowed for the conversion of age-restricted housing units into non-restricted housing units if it met certain statutory requirements.

Second, we should facilitate development approvals that include a combination of lifestyle land uses and create incentives for municipalities to do so.

Third, we should look to the affordable housing obligations under Mt. Laurel as an opportunity for both developer and municipality. Creating opportunities for all tenants and purchasers, including workforce housing, enhances price point diversity for prospective employers looking to stay or relocate here while using the conversions for inclusionary affordable development focuses development in areas where it facilitates access to highways, transit, jobs and other resources.

Smart, creative planning builds on existing regional assets and transportation options; offers price point diversity and variety and choice of housing stock for all income levels; provides new open space opportunities for residents; and enhances a municipality's tax base. We just need our state leaders to have the foresight to move forward.

Carl Goldberg serves as co-chair for the Center for Real Estate at Rutgers University and is a managing member of Canoe Brook Investors.