Good stuff over at NJ Spotlight:
Analysts, developers, and academicians all saw hopeful signs, however faint, for New Jersey’s economy and housing market, but told a state conference in Atlantic City that the highly suburbanized state is poorly adjusted for longer-term changes.
Attendees at the Governor’s Conference on Housing and Economic Development heard a sprinkling of numbers that should bring comfort — although not joy — to Gov. Chris Christie and President Barack Obama.
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Hughes pointed to “transformative” demographic changes that should shape policy in housing and elsewhere. Some fallout already is apparent in the office market, he said. Hughes pointed to formerly “iconic” exurban business campuses like the now vacant BASF building in the Mt. Olive foreign trade zone, or Merck’s Whitehouse Station headquarters, being phased out for a reconsolidation to Summit.Those sort of sprawling business centers are rapidly becoming relics, “along with the McMansions and starter-castles scattered across our countryside,” Hughes said.
Transportation costs, salary pressures, the sparseness of surrounding communities. and changes in personnel priorities are all pushing against the suburban patterns that have reshaped America since World War II, he said.
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That is particularly a challenge in a state generally considered with Connecticut as the most suburbanized in the nation. Such state rankings can vary by population, land area or other factors, but as Newgeography.com put it last year, “New Jersey virtually defines suburbanization in the United States.”Just as significantly, the rising “millennial” generation born after 1977 is burdened by student debt, and the poor job climate is more attracted to urban areas with cheaper housing and nearby amenities, Hughes said. For purposes of the housing market, they also could be labeled the “Renter Generation,” he said.
“One of the big questions is qualifying for a mortgage,” agreed Peter Reinhardt, president of the Kislak Real Estate Institute at Monmouth, sharing a panel with Hughes. Mortgage borrowing standards have become tougher, and some lenders are far less active, than before the recession, he said. He cited a recent study by the John Burns Consulting Group of San Diego that the number of first-time home buyers had dropped 20 percent in three years.
“Federal student loans now account for about 18 percent of all consumer credit” outstanding, equivalent to 6 percent of U.S. gross domestic product, he said.
But as baby boomers speaking to an audience largely of similar age, Reinhart and others were not entirely inclined to let the younger generation off the hook for its economic predicament.
While their parents were generally in better financial shape at the same age, some of that is millennials finding other ways to dispose of their money, Reinhardt said, “gym memberships, premium cable TV, iPhones, iPhone apps, and most importantly, the cost of a latte.”
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Many of America’s cities are already coming back from the doldrums of the late 20th Century, but in a place like New Jersey, “remaking the suburbs is going to be the greatest revitalization project we have ever seen.”Again, various panel discussions anticipated him. Otteau surprised many in his audience by pointing out that only 30 percent of the state’s households now have children living at home. That figure drops when scanned for two-parent households.
That is another demographic change that undermines the suburban development pattern that has marched across New Jersey, according to Hughes. While well suited for a boom in child-rearing by parents in a stable economy, sprawl is less suited to current times, he said.