The news probably wasn’t particularly surprising to the New Jersey business leaders who participated in PlanSmart NJ’s Economic Development and Land Use conference last month in New Brunswick, NJ. Nor was it a surprise to those who participated in an earlier PlanSmart NJ focus group held in April with business leaders from key sectors of New Jersey’s economy.
The findings of this business focus group are captured in our recent report, What’s Land Use Got to Do with It? Examining the Connections Between New Jersey’s Economic Prosperity and its Land Use Patterns. Business leaders are well aware of the facts contained in the report:
- In April 2011, New Jersey’s private sector employment levels were at the same level as they had been in September 1998. In 2008 and 2009, New Jersey lost 226,000 jobs.
- From 2003 to 2007, prior to the “Great Recession”, New Jersey only captured 1.3% of the national market share of job growth. According to Dean Hughes of the Bloustein School of Planning and Public Policy, New Jersey’s “fair share” of employment growth should be around 3%.
- A net 53,744 households left the state in 2009, as part of a net out migration.
- In 2010, only 23 new corporations started or expanded facilities in New Jersey, compared with 168 in New York, 337 in Pennsylvania, and 424 in Texas.
So, what do business leaders have to say about what New Jersey should do to help them support job growth in the Garden State?
As you might expect, there is a chorus of voices from all industry sectors urging government at every level to lower taxes and other costs for business, to simplify New Jersey’s complex regulatory environment, and to create a more predictable development approval process.
What might surprise you is New Jersey’s business leaders’ intuitive understanding of the linkages between regional land use planning and their ability to grow their business. When asked about the greatest challenges facing their companies, these leaders raised some unexpected themes:
1. High housing costs and skyrocketing property taxes are a barrier to worker attraction and retention. There is wide recognition that New Jersey’s fragmented, locally-driven system of planning and zoning regulations have led to high property taxes and a shortage of varied housing options near employment centers and to high housing costs. Business leaders in PlanSmart NJ’s focus group emphasized the dearth of multi-family moderately priced housing for entry level workers and young educated families seeking to move to New Jersey’s suburbs.
In the words of one business leader:
“We can’t afford any kids, so we can’t build any houses. What we need is apartments…and nobody wants them because it’s going to bring the kids in and…nobody wants that. So you chase the ratables…I think the funding of public education, K through 12, is what is impacting the housing market.”
This theme was echoed last week with the release of a Rowan University study that found that from 1986 – 2007, municipalities in the study area of Somerset and Monmouth Counties approved far more commercial than residential development; the residential development that was approved was overwhelmingly single-family large lot zoning on an acre or more of land.
2. Long commutes and few transportation options make it difficult for workers to get to jobs. Business leaders are keenly aware that long commutes and overreliance on the car as the sole transportation option is expensive for workers and reduces workers’ quality of life, as they spend ever more time stuck in traffic. New Jersey’s sprawling development patterns and separation of residential and business uses have created a commuting nightmare for workers. Businesses understand that the solutions to this dilemna include investment in our transportation infrastracture, including investment in public transit options, AND building compact, livable communities that create options for employees to live closer to their work.
3. New Jersey businesses are trying to attract today’s younger generation of workers, who want to live in vibrant, 24/7 communities. New Jersey’s business leaders face challenges in recruiting younger business professionals to New Jersey’s communities. These workers are attracted to “denser places, more urban places, where there’s more walkability, more amenities, more of everything,” according to one prominent business leader. Business leaders at PlanSmart NJ’s conference concurred that New Jersey has not done a good job of creating these types of 24/7 livable communities.
So, what can we do to help businesses grow in New Jersey?
The answer lies in sound land use planning and adherence to a state strategic planning process that considers all components of the equation: economic growth, transportation infrastructure, environmental protection, community quality of life, and the location of housing near jobs.
It is not enough to offer incentives to businesses to locate in New Jersey. We as a state must create a favorable land use climate for businesses and the quality labor force upon which they depend. What does this mean?
Foster Industry Growth Clusters in Strategic Growth Areas
We need a state strategic planning process that sets goals for economic expansion in key growth sectors of New Jersey’s economy. But the state strategic planning process needs to look not just at what jobs we need in New Jersey, but where and how we want to foster geographic industry growth clusters.
We will need to redevelop our cities AND identify centers of suburban growth where we want these industry growth clusters to take hold. And then we will need to ensure that regulatory and land use barriers to growth are removed in these locations. These locations should be strategically selected and be compatible with environmental protection goals. In other words, they should be urban and suburban places where we have general consensus that growth should be encouraged. State agencies should then direct meaningful resources to these areas.
Invest in our Transportation Infrastructure
We desperately need to invest in our transportation infrastructure by upgrading our highway corridors and investing in new light rail lines and expanded rail service. It’s also time to look at economical yet desirable public transportation options such as Bus Rapid Transit (BRT), which has been successfully implemented in cities such as Pittsburgh and Cleveland as an upscale bus equivalent to light rail. We also need to bring our freight capacity and shipping capacity up to par through such measures as expanding our rail capacity for freight and expanding our container shipping capacity, as the Port Authority of New York and New Jersey is doing through its decision to lift the Bayonne Bridge.
Zone for Mixed Use Development and Housing Near Jobs
New Jersey will not be able to attract and retain a competitive workforce unless we provide more housing choices near jobs. Our current system of property taxation puts municipalities in a no-win position where the only strategies they have to contain property taxes are the commercial ratables chase and low-density residential zoning and zoning for age-restricted housing.
This is not the way to build the 24/7 communities that businesses need to attract and retain a vibrant workforce.
Only through structural changes to our system of property taxation and substantial modifications to our system of local zoning will we begin to address these challenges and get our economy back on track.
These are just some of the ideas that will help New Jersey’s economy recover and our businesses and residents to thrive. They are all rooted in the concept that through regional land use planning, we can create communities and regions that are economically competitive and meet the needs of businesses seeking to attract a quality workforce.
Stay tuned for future editions of Speaks Out where we will delve deeper into the land use solutions that can help New Jersey regain its competitive edge.
