Government can’t keep up with social changes
Recent events in Jersey City show just how true the old adage is about closing the barn door after the horses have left.
Jersey City – which is anticipated to be the largest city in the state after the 2020 U.S. Census – has shown recently just how ill-prepared local government is for the massive demographic and technological changes underway in our society.
In what many might consider a perfect storm, Jersey City has been forced to deal with a number of the most significant changes that most other towns in the state are either facing or will soon face, such how to embrace new development without the inevitable gentrification that drives longtime residents out of the city.
For three decades, Jersey City officials believed they could have the best of all worlds, approving abatement after abatement for new housing developments to feed the municipal budget and keep municipal taxes down while allowing the rest of the state to pay most of the bills for educating Jersey City’s students.
Local leadership ignored the warning signs about the growing impatience elsewhere in the state that Jersey City was getting wealthy at their expense.
Local officials knew what they were doing, claiming the abatements benefited the city as long as the state was willing to foot the school bills.
Only when the storm approached did Jersey City ban abatements, in what some claim is a knee-jerk reaction. But this came far too late, and now hundreds of teachers face layoffs, and taxpayers are facing a hefty increase.
Chain stores can’t be banned
This week the Jersey City council rescinded its restriction on chain stores in downtown because the laws imposed by the city would violate the rights of free commerce. The idea was to protect mom-and-pop stores and retain the village-like atmosphere downtown.
But the wealth of that neighborhood makes it too attractive to the chain stores who vowed to fight the law in court. The city’s legal department determined that the law was not defensible. The council voted to abandon it, leaving downtown open for business, and small stores on their own.
The effort to help regulate Uber, Lyft, and other ride-share programs also seems to show how unprepared local government is for technological change.
The city council voted to require these services to post signs on their vehicles that make clear that they are the equivalent of taxi cabs. But the same people who promoted these unregulated ride-share programs to operate in Jersey City also imposed onerous requirements on traditional taxi services, making them even less able to compete. City government seemed to set up two sets of standards.
The rich get richer?
Perhaps the most contentious of all of the issues facing Jersey City and other municipalities around the state concerns short-term rentals such as Airbnb.
Last week the city council tried to shut off these money-making operations in order to try to curb the outrageous rise in rents for long-term rentals. But the outcry of those who are making money forced the council to backtrack and reconsider what they were proposing.
In 2015, the city passed a law opening the door for Airbnb and others by permitting them to operate in exchange for paying the city hotel tax.
Unlike Union City and other towns in Hudson County which outlawed Airbnb, Jersey City was at the time seen as a model of progressive law by allowing this $32 million a year “cottage industry” to move ahead.
This outraged some residents who see this as a way of circumventing traditional zoning laws by allowing people and real estate interests to operate hotels in parts of the city where zoning does not allow them.
Since many other municipalities throughout the state have sought to emulate the rules Jersey City has established for short-term rentals, what Jersey City does will have an impact everywhere.
But now local officials are concerned that if this trend to create short-term rentals continues it will drive up the prices of long-term rentals because it will cut down the number of overall units available.
There is also a social impact that the people who benefit most from Airbnb are also among the wealthiest people in the city, who own the most attractive properties. So, essentially, the wealthiest of the city get richer, while working poor get priced out.
What is affordable?
In an attempt to put the brakes on gentrification, Jersey City also closed some loopholes in its rent control laws that allowed landlords to increase their profits through hardship appeals.
Some landlords have warned the city that this is a Catch-22. If the city persists in imposing stricter rules and narrowing the profitability of rentals under rent control, then these units may convert to condominiums and further reduce the available housing stock.
This is complicated by the fact that new development does not fall under rent control laws, so that the mass of luxury rentals that are coming online won’t be affordable.
While Jersey City has grand plans for the development of the Bayfront property along Route 440 to create affordable housing lacking elsewhere, many housing advocates say even these will not be affordable to the population that will need them most.
This comes at a time when the city has been demolishing traditional housing projects and reducing the number of low-income housing available, such as the Montgomery Gardens complex.
The Jersey City Housing Authority argues that turning projects into mixed-use facilities may cut down the available units for poor people, but this is made up for by issuing Section 8 vouchers. Housing Advocates, however, argue that there is also a shortage of Section 8 housing as most landlords look to tap the luxury market.