From the NJ Herald:
A nationwide slowdown in the housing market has stalled the borough’s Main Street renewal plan.
With new home sales down 17 percent across the country, developer K. Hovnanian has decided to pull out of two proposed housing projects in the borough, including one at the former zinc mining site that officials view as the cornerstone of their Main Street revitalization plans.
More than 50 years since the New Jersey Zinc Co. facilities closed and businesses started heading to Route 23, the Hovnanian project was seen as the force that would bring new life to the barren downtown and help reduce the burden on borough taxpayers.
“What’s down here right now? Nothing,” said Franklin Mayor Douglas Kistle, who recently saw six Main Street properties go up for sale. “They’re moving out because there’s nothing there in town to entice them.”
Hovnanian’s departure reflects an ongoing trend among home builders scaling back on their production in response to a slowing housing market. In Green Township, Toll Brothers recently dropped plans for a 45-unit development because the economics no longer made sense.
“Builders are pulling back because there’s an oversupply of houses on the market,” said Walter Molony, a senior public affairs associate for the National Association of Realtors. “Unless builders can be assured of healthy profits, there’s hesitancy there.”
Franklin, Hovnanian had proposed building 546 age-restricted units on a 103-acre parcel along Munsonhurst Road, and creating a mix of residential and commercial development on the former zinc mining site. The developer has withdrawn its two-year-old request for a zoning change at the Munsonhurst Road site, where only one home per three acres is currently allowed.
The cost of purchasing land, combined with New Jersey’s strict regulatory procedures, has forced Hovnanian to abandon several projects around the state and cut some of its staff, company spokesman Doug Fenichel said.
If the developer went forward with its Franklin projects, it might not make a profit when the homes are sold or, looking to make a profit, the homes would be overpriced and not sell, Fenichel said.
“We’d love to be building in Sussex County. We think there’s tremendous opportunities there,” Fenichel said. “We need to find deals that remain economically viable.”