Newark for Newark: Strengthening Communities Through Housing Ownership
Members of the Jegna Council have developed pieces to highlight areas of their work that intersect with the Foundation’s priorities in New Jersey. Each of the articles reflect members’ thoughts on different areas that contribute to health inequities and ways that we can create a more equitable healthcare workforce, expand housing options, expand community research, and improve maternal health outcomes.
The following article was authored by Jegna Council Member Jorge Cruz, Regional Vice President for Community Development, Citizens Bank
An Introduction by Maisha Simmons
In New Jersey, such discriminatory policies and practices as redlining and restrictive covenants over the years have thwarted people of color as they seek an affordable place to live in a neighborhood of their choosing. Many programs and policies now in place to promote home ownership and remedy past inequities fall short because they are not rooted in equity, ineffectively implemented, and often not enforced and monitored to ensure intended impact and sustainability. Below, Jorge Cruz describes efforts being taken in Newark to change the landscape.
Maisha Simmons, RWJF senior director of New Jersey Grantmaking
The quest for quality, affordable housing in Newark gained an important ally with the 2022 launch of the city’s Acquisition Fund. Leveraging a $15 million allocation from the American Rescue Plan Act, Newark has committed to raising an estimated $100 million to purchase distressed assets, repurpose vacant or abandoned sites as affordable housing, and help homeowners on the brink of mortgage default remain in their homes. Mayor Ras Baraka’s new initiative and his ongoing commitment to revitalize the city’s neglected neighborhoods deserve vigorous applause and deep support. They should serve as a springboard to do more.
The Acquisition Fund is an important step back from a housing crisis steeped in a legacy of racist zoning practices, urban disinvestment, predatory lending, and a vast wealth gap that has left Black and Brown families behind. A recent surge of investments from institutional buyers with deep pockets and shallow interest in the communities where they purchase properties is a fresh assault. In “Who Owns Newark?,” the Rutgers Law School Center for Law, Inequality, and Metropolitan Equity reports that almost half the residential properties sold in the city over the past few years went to corporate buyers. The result of their often opaque and speculative practices in communities of color, says the report, is a “quiet capture of the real estate market by groups of anonymous investors [that] frustrates the city’s goals of greater homeownership, more affordable rental housing as well as the American Dream of communities stabilized by the collective power of stakeholdership.”
With the nation confronting its worst housing crisis since the Great Depression, Newark is not unique in the depth of its challenges. Leaders in both state and local positions have made commitments to affordable housing, offering new momentum for strategies that do not have profit as their sole aim. The city has a singular opportunity to use and piggyback on the Acquisition Fund and other initiatives to leverage additional resources and acquire, redevelop, or preserve housing.
New Jersey’s Fair Housing Act of 1985 and subsequent amendments provide a crucial legal framework for action—if existing laws are vigorously enforced. The state is unique in its sweeping requirements that all municipalities provide their “fair share” of affordable housing, as delineated in a series of court decisions known as the Mount Laurel Doctrine. As of 2008, any housing developed with state assistance has been mandated to set aside 20 percent of its units as affordable. But time and again, costly litigation has been necessary to force developers to meet their statutory obligations. In its report, “Untapped Resources: How New Jersey Can Leverage State Financing and Land for Affordable Housing,” the Fair Share Housing Center proposes measures to reinforce the intentions of existing legislation and broaden state obligations.
Likewise, three dedicated funding pools can be modified to realize their full potential. The Affordable Housing Trust Fund supports small-sale rental and homeownership projects in New Jersey (25 or fewer units) that have the potential to strengthen neighborhoods and stimulate economic development. The state’s Neighborhood Revitalization Tax Credit Program promotes community-driven neighborhood planning and partnerships across private, public, and nonprofit entities. The Low-Income Housing Tax Credit, the primary federal resource for affordable housing, provides tax credits to developers who acquire, rehabilitate, or build rental housing. None of these resources are being used to optimal effect in the state, reflecting a decade of political and fiscal decision-making that deprioritized affordable housing, undermined oversight and enforcement, and created burdensome bureaucratic hurdles.
The result has been to stack the deck against nonprofit developers and small developers of color. In Newark, large corporate purchasers have the capital to acquire properties swiftly and can afford to hold them off the market until they appreciate in value (meanwhile, generating no benefit to neighborhoods hungry for housing). Smaller, cash-constrained players who rely largely on the fees, subsidies, and other financing capital that flow from development do not have the same luxury to bankroll delays.
To compete successfully, values-driven developers need incentives, set-asides, and other intentional engagement strategies. The early-stage property acquisition capital made possible by the city’s Acquisition Fund is an exciting move in the right direction. “Who Owns Newark?” also recommends giving affordable housing developers the right of first refusal when city-owned property is sold. Streamlining the cumbersome building approval process, which invariably involves multiple permits from multiple offices at different levels of government, each with complex paperwork requirements and hefty fees, is another priority. Otherwise, for-profit developers who can hire expeditors or pay staff to work their way through this costly morass gain unfair advantage.
A talent shortage also needs to be addressed. In recent years, the lack of viable projects in the nonprofit sector has left housing professionals with few employment options outside the corporate sphere. The result is that even when property acquisition and development opportunities begin to flow, the affordable housing sector will lack crucial capacity. To draw experts with vital knowledge back to the field, they will need peer support, a community of practice, and training opportunities.
Together, these steps can give the people of Newark an ownership stake in their hometown. Local developers, homeowners, residents who need housing, and neighborhood activists and political leaders working to strengthen the fabric of the city can meet on common ground. With affordability and racial and economic equity as watchwords, significant progress on the housing front is possible.
The views expressed here do not necessarily reflect the views of the Robert Wood Johnson Foundation.
