WHAT ARE THE FUTURE FACTS OF APARTMENTS IN NEW JERSEY

New Jersey is one of the most expensive places to reside in compared to the rest of the country. The high property costs are one of the main reasons young individuals move out from New Jersey to other states.
There needs to be work done in this regard, and New Jersey should consider essential factors for property-purchasers that will effect further intrigue into buying apartments in this state. We have witnessed that the housing costs and housing incomes have a directly proportionate relationship. The higher the income level of a particular state, the higher the property costs.
Through this blog, we aim to discuss what the future has in store for apartments in New Jersey and how they will impact the demand and supply of property and, subsequently, the pricing.

DIFFICULTY IN PURCHASING APARTMENTS

For individuals who have a lower income, it is challenging for them to purchase their own apartment due to high apartment prices. As a result, a majority of these individuals end up leasing apartments instead of purchasing. This also plays a role in the high rates of young adults residing with their parents even when they are well over 18 years old, and even into their late-20’s and early-30’s.
Factually speaking, New Jersey has one of the highest percentage (45%) of people between the age bracket of 18-34-year-olds still living with their parents amongst all the 50 states. Individuals who face soaring apartment prices must delay purchasing and make the most practical living situation. Some times this means forgoing spending rent on a unit to live with available family members for a lower cost of living.
This ongoing issue needs to be dealt with, among other societal issues but in respect to this particular article, we need to find a solution, otherwise this will remain an issue for future home buyers.

YOU WILL END UP PAYING A PRICE YOU CAN NOT AFFORD

The more accessible option individuals have is to stay with their parents after graduating, save up a decent amount so that they are not extensively burdened when they move out. In contrast, many individuals would not prefer this option as they want to move out first thing after graduation.
New Jersey has the 4th highest gross income spending rate on property; 30% of their total income is spent on property expenses, also known as ‘housing-cost burdened.’ The percentage is relatively higher for rental properties than property owners due to higher carrying costs of multiple families under one roof. Statistically speaking, approximately 48% of rented households are cost-burdened, compared to 21% of homeowner households.
New Jersey stands out because of its high cost-burdening percentage among homeowners, which sits at 28.9%. This results from the strenuous taxation costs landowners have to incur, which are one of the highest in the country. According to new data, New Jersey homeowners paid an average property tax bill of $9,112… That’s up nearly $160, or 1.8%, compared to 2019 figures.

This leaves potential buyers often confused – should they buy a property and face the unfair taxation charges, or should they lease an apartment and bear the high rental costs to offset high property and carrying costs. If these aspects are not taken care of in the near future, we will witness empty-forclosed homes, a higher homeless population, and other negative effects on the housing market.

WHAT SHOULD NEW JERSEY BE DOING TO MAKE HOMES MORE AFFORDABLE?

The most apparent solution to the problem is increasing the supply, which meets the demand; hence the prices would be lowered. This solution seems pretty straightforward, but that is not the case. Increasing the supply is not that simple. There is a limited land area to use, plus the government has specific zoning regulations. In addition, this solution is not optimal for all scenarios. Some New Jersey areas have such a high demand that increasing the supply will not significantly affect the property’s price.
Nowadays, people want a short-distanced property from restuarants and shopping and they do not want to travel miles to reach these and other amenities. They are more interested in apartments built above stores, duplexes, and apartment buildings. Even older generations are moving away from traditional quiet suburbs to city and town centers that aren’t as secluded from bustling communities.
This usually entails reducing impediments to the manufacturing of different residential units so that providers can strive to keep up with the growing demand while also exploring to build sustainable and affordable property for people with lower incomes.

STEPS NEW JERSEY CAN TAKE:

• Reduction of Parking Space
As we all know, parking takes up a lot of unnecessary space which can be put to better use. Rather than leaving the area for parking, we can use it and the money to build more suitable properties that match the requirements of New Jersey residents. Subsequently, shared parking spaces can be made in highly saturated areas, resulting in lower construction costs and property pricing.
• Modification of the Zoning Regulations
If we want to increase property supply, it must comply with the zoning regulations of the local and state government. Suppose the constructors are not bound by one type of structure. In that case, there will be flexibility to provide individuals with property alternatives that can be cost-effective.
• Construction of ADU’s (Accessory Dwelling Units)
A lot of wasted area can be better used through enabling the construction of ADU’s, for example, apartments built above garages on lots of single families. Accessory Dwelling Units would also help residents to continue staying in their chosen communities as they grow older, and perhaps there could be an incentive to comply.
The state of Los Angeles is a solid example of the construction of ADU’s which they recently allowed, and it has resulted in a lot of unused space to be optimized for constructive use.

CONCLUSION

We hope that this clears ambiguities you may have had regarding the future facts of apartments in New Jersey. We have discussed the type of apartments residents seek, what hinders them from purchasing property, the possible solutions to the problems and more.
We want the state of New Jersey to work in a direction where residents don’t shun away from it due to burdening costs and taxation. Specific critical steps must be taken to overcome these obstacles.

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