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♪ >> This is "NJ Business Beat."

With Raven Santana.

Raven: Hello.

I'm Raven Santana.

Thanks for joining me on "NJ Business Beat."

New Jersey's housing market has been a tough landscape to navigate for both buyers and sellers for the last few years.

Soaring interest rates and home prices coupled with decreasing inventory has put buyers at a disadvantage and has left sellers with fewer offers.

According to realtor.com, annual Outlook, things may only get slightly better in 2024.

The report found total inventory is expected to decrease by 14%.

They expect the average mortgage rate to stay flat at 6.8%, compared to 6.9% in 2023, and 5.3% in 2022.

Some good news, home prices are expected to drop slightly by about 2%.

Realtor.com says rent prices will remain largely unchanged.

To get a better sense of what to expect if you are looking for a house this year, I sat down with Hannah Jones from realtor.com.

Some good news as we enter 2024 for the housing market.

There are signs the housing market is improving with mortgage rates using at-home ISIS dipping in many parts of the country.

What can we expect to see in the housing market this year?

Hannah: 2024 will bring baby steps in terms of affordability.

The housing market will get slightly easier.

We expect both prices will come down a little bit, and the mortgage rates will also come down.

Raven: Does this mean this year's housing market will get kickstarter earlier?

Hannah: It is possible.

Mortgage rates have come down significantly.

At the end of 2023, and because of that, it is likely some buyers will get excited and hop into the housing market.

Raven: Let's switch gears and talk about New Jersey.

The survey lists the New York metropolitan area, which covers North Jersey, at 75th.

You predict the region will see a 10.8% decrease in home sales and a 3% increase in sale prices.

Explain that to us.

Hannah: The New York City metro area which includes North Jersey has seen pretty low inventory levels over the past couple of years.

Because of that, that will keep upward pressure on prices.

Because prices will likely remain slightly elevated, that means we do expect sales to come down this year.

Raven: We know North Jersey tends to be very expensive for homebuyers.

Which regions of New Jersey are considered to be more affordable markets?

Hannah: If we look at the December 2023 housing data, areas in the South and South central part of New Jersey tend to be more affordable.

Those are areas like Hampden and Princeton and Trenton but are kind of on that New Jersey-Pennsylvania border.

Raven: Which are not so affordable, for people who are watching?

Hannah: The more North Jersey areas that are near the larger New York City metro area tend to be less affordable.

Raven: You feel are the biggest challenges for people are looking to buy or are starting their search for a new home?

Hannah: The large challenge is it is still relatively unaffordable to purchase a home in the U.S.

While we expect this to start to turn around in 2024, it will not be a full return to affordability.

For first-time homebuyers who are not able to leverage their existing home equity, it will be relatively difficult to get together the down payment and handle the housing payments that are required to purchase in this housing market.

Raven: I know so many people who are looking for their first home, who are looking for their dream home.

What is your advice for those who are watching or know someone who is a first-time homebuyer?

What -- when is the best time, based on the data, when is the last time or month to buy a home as we look into the 2024 season?

Hannah: It is very challenging to predict when is the perfect time for each person.

I think the best thing you can do is get really prepared, which means taking an audit of your finances, how much of a home can you afford?

And what are you looking for in a home and in what area?

Once you have that information, you can narrow down your home search and as soon as a home gets within your price range, pops on the market, can take action.

The best time to buy will be when you are financially prepared and the right home comes on the market.

We will see housing inventory pick up in the spring and then it stays relatively high through the summer, and falls back off in the fall.

Homebuyers are likely to see more options leading into the spring.

The best thing to do is to know your price range and know what you were looking for, and then you can make decisions accordingly.

Raven: Hannah Jones, realtor.com, thank you so much for joining me on "NJ Business Beat."

Finding affordable housing in New Jersey is a crisis that is not going away.

Despite the minimum wage rising to $15 an hour, advocates say too many families have to work overtime just to afford rent, let alone basic needs.

According to the annual out of reach report, the fair market rate for a one-bedroom apartment in New Jersey is just under $1500.

At minimum wage, that means a person would have to work 74 hours per week just to afford the rent.

Eric Dobson from fair share housing has worked for years to solve the housing crisis.

I sat down with him to discuss what he believes the state can do.

Late last year, they assembly housing committee approved legislation that would make sweeping changes to this 10th affordable housing system.

And enforce the Mount Laurel doctrine.

Explain why this legislation was necessary?

Eric: One of the most important things we need to understand after the 2015 Supreme Court decision, that labeled it, we have been able to produce more affordable housing than we have in the past decade.

The system is much more smoother, everybody knows what they have to do.

They are following the methodology they are aware of.

And things are moving a lot quicker.

There is pretty much no litigation.

So we have had agreements with over three Hunt -- about 350 towns.

The old process of stall, delay, going back and forth, not producing numbers, created a backlog of 10 years of housing production that affordable housing production that did not happen.

Which caused market house rating -- raisings to rise.

When you decrease the production of affordable housing, it causes the market rate housing to rise.

This housing crisis was created, we had an agency that was not doing its job, and could not do its job because of the political nature of what was happening at the time.

Raven: Despite that progression, there was some pushback.

Legislators had originally planned to push the bill into law at the end of that lame-duck session.

Are you confident the bill will become law?

There is more time to work out those kinks?

Eric: Extremely confident.

Of course I would not be fully transparent if I did not say we were disappointed that did not happen on lame-duck.

Have all of the confidence then -- in our relationships with the Senate president and the speaker, and the sponsors of the two bills, Senator Singleton who is a phenomenal senator, assemblywoman Lopez, who is a great legislator herself.

We ran out of time, all the details and the complexities of this bill, this legislation.

We ran out of time.

We have all of the confidence of the investments that Governor Murphy made in the housing and the Senate President that we will get this done.

Raven: We know there are still obstacles.

What would you say are the biggest obstacles to creating affordable housing in New Jersey?

In addition to this legislation, what else can be done to remedy the problem?

Eric: I think the biggest obstacle is people not understanding what Mount Laurel doctrine is.

It is a very complex law.

But it -- when people get to understand, tell you the truth, many of the towns who we had relationships in the past, they were hostile relationships, but when we moved into this new phase of everyone knowing what was going on, we have a better relationships and towns realized it is not this big evil animal.

We are actually striving to build racial and economic and social integration that affordable housing is for working-class people, for people who have jobs who are working that have to pass the credit reports, do credit screenings.

It is for seniors, veterans, working-class people.

Raven: It's equity.

Eric: Yes.

People don't understand that.

Once they get the opportunity to understand what affordable housing in New Jersey is, because now it is becoming way too expensive to live here.

Wait a minute, we need affordable housing, because now I can't afford to live here.

Raven: That's right.

Eric:Eric: When it hits home with people who are fighting it and they realize this is a real practical solution to building affordable housing, than they get on board.

Raven: We talk about the Mount Laurel doctrine.

Let's get into that.

For viewers who are watching who don't understand or may not be informed on it, what does that mean?

Eric: It simply means, and it is based upon the area median income.

.

These are guidelines that dictate what income folks qualify for.

It depends on what region.

Of course, if you are living in Essex County, the number is higher.

It is based upon 80%, 40%, goes down to 30% of the area median income.

These are people who are working, who have jobs, who qualify based upon their income limits.

This is something that is very simple to understand once people get a grasp of what it is.

These are people who have to apply, who have to go through screenings, they have to go through background checks, through credit checks.

These are working people who need resources to help because the cost of living is so expensive in New Jersey.

Based upon the area median income, you can qualify.

Teachers, firefighters, police officers, daycare workers, those who are working in the hospital.

Our first responders, those who are working in the kitchens in the hospitals, or serving our kids.

These are people who are serving our kids who deserve to live in the community they are serving.

We all know when you're -- when you are commuting in a hour and a half to work, you know what kind of life quality that is.

That takes a toll on your family.

If I can work and live in the community where I work, that is to quality of life for me and my family.

That is this is about.

Getting the opportunities to move New Jersey from a diverse state, but also a very segregated state, to a state that cares about not just those who are high income earners, but cares about the working-class people and low income people.

Raven: Unfortunately, I think that is just an unfair stigma that comes along when you hear the word affordable housing.

It is just an unfair stigma.

It is important to break that down.

Thank you so much for your time and joining me on "NJ Business Beat."

Eric: I appreciate it.

Thank you for having me.

Raven: The state took a major step in 2023 to address the lack of affordable housing, creating the affordable housing support initiative through New Jersey redevelopment Authority.

The program is funded with 25 million dollars from the affordable housing trust fund, through the initiative, the NJ RA will work with for-profit and nonprofit groups working to build affordable housing.

I sat down with Leslie Anderson from the NJ RA to learn more about how this program will work.

Leslie, tell me about what led to the creation of the affordable housing support initiative, and how it works.

Leslie: What led to it was a wonderful conversation with former Governor Sheila Oliver.

She was a huge fan of the work of the New Jersey redevelopment Authority.

We talked consistently about how it could play a bigger role about bringing forth and bringing to fruition affordable housing projects for municipalities within our constituency base.

So that is how the project started.

She afforded us the opportunity by providing $25 million from the affordable housing trust fund, which she allowed us to wrap around the affordable housing support initiative.

What I'm proud of about this program and working with 19, is that it is simplistic.

It does not require a lot of hoops to jump through.

It does not require the developer to do a great deal to become eligible for the money.

Raven: It makes sense Newark was chosen as the first location for this project.

When you think about 25% of residents owning homes in Newark, how is this a game changer, not just for future homeowners, but also the city as a whole?

Leslie: When you own a home in a community, you are interested in that community.

You are invested in your property.

And the reason you are invested in your property, because it is generating wealth, that only benefits you in the present.

Benefits your heirs in the future.

That is critical in our urban communities to not only look at affordable housing from rental units, but affordable housing opportunities that allow individuals to buy their home.

Our project in Newark is exciting because it is a partnership with the city of Newark and invest Newark to monetize section eight vouchers to create homeownership opportunities for people who live in public housing.

This is unheard of.

This is also a directive from the housing and urban development department for the federal government, that we need to look at this differently.

And what futuristic leak can we do to support these families that live in public housing.

I'm sorry, I want to say, invest Newark does the upfront work to identify the families, and we are providing the resources to work with emerging developers to get the house is ready so that they can be purchased by the families.

Raven: Were there other partners -- other partnerships or support?

Owning a home whether you are in Newark or not is intimidating.

Leslie: Mark has a land bank.

Through the land bake, they are -- land bank, they are turning them around for Newark residents.

That is the first step of the partnership.

The second step of the partnership is invest Newark, to your point, has partner with the local initiative support Corporation to provide training to these individuals who will ultimately become homeowners.

They are learning upfront about budgeting, about home maintenance, because if you have grown up in an apartment your whole life, you don't necessarily know how to maintain that property.

Raven: Tell me about, or if you can elaborate, other benefits to this project?

Leslie: What this does is create a pipeline for developers who are invested in these communities, and are not afraid to move into these communities, to undertake projects in some very distressed neighborhoods.

What we are doing with this initiative, and we hope the outcome would be, that as we take this upfront risk and invest in their projects, they become more bankable to the private sector.

So if they get these projects under their belt, they in turn can come back to the redevelopment Authority for some additional financing, but they can also start to go to the Wells Fargo's, the Bank's of the world.

Because they have our project under their belt.

They completed it, we underwrote it, they paid us back, they become more bankable out in the private sector.

And that is truly the ultimate goal, to create this pipeline that allows these developers to access capital.

Because that is the key to what is holding back development in a lot of communities, is that access to capital.

And we are now providing that capital.

Raven: Lastly, because I do think this has to do with equity at the end of the day, what are some other municipalities part of this program, and do you plan to expand it based on the results of what happens after this phase?

Leslie: Absolutely.

Right now, NJRA has 67 eligible communities.

We are looking at projects that are outside the city of Newark.

We are looking at projects in East Orange, looking at projects in Plainfield, looking at projects in Camden, we are looking at projects in Patterson.

So, while the initiative with the land bank and the partnership with the land bank is very exciting, we are also looking at hitting the ground running projects in communities like Jersey City that will be impacted and have the ability to change the quality of life in neighborhoods.

And that is our ultimate.

Raven: Leslie Anderson, CEO of New Jersey redevelopment Authority, thank you for making New Jersey more affordable.

And thank you for being on "NJ Business Beat."

Leslie: Thank you so much for having me.

Raven: You can't talk about housing in New Jersey without talking about our skyhigh property taxes.

The average property tax bill in the state rose to almost $9,500 in 2023.

The governor offered relief last year and the four -- in the form of a program and promised more relief this year, especially for seniors.

I sat down with NJ Spotlight News budget and finance writer John Reitmeyer, to discuss how the state's funding these programs and the potential relief, this can expect in 2024.

We know affordability is not just a top priority, it is also a major concern New Jersey.

Property taxes are among the highest in the nation, with homeowners paying about $9,500.

Homeowners and renters are coming to rely on the state's and grow payments.

What can they, including seniors, expect to see this year?

John: There were two anchor rounds of anchor payments in 2023.

We will have to see.

There is a new state budget coming out in February.

We will have to see what level of funding there is for anchor going forward.

Both for the homeowner benefits and renter benefits.

In the last round, funded through the most recent state budget, the benefit for seniors specifically was increased.

Senior homeowners, depending on your income, got an extra $250 on top of their regular anchor payment.

Then senior renters also got that $250 bump up.

We have this new budget coming out in February.

I don't expect to see much scaling back, if any, of anchor.

Because it has been such a big commitment over the last going on two years now by the governor and lawmakers.

Raven: We know about anchor.

What about senior freeze?

John: Another really popular program with a lot of New Jersey senior and disabled homeowners.

The program has been around for a while, and it is supposed to freeze your property tax bill from the moment you begin to become eligible for this program.

Incidentally, you can collect senior freezes at the same time.

I can be a big benefit.

-- that can be a big benefit.

There was a key change by lawmakers and Governor Murphy in that the program requires residency and income standards to be met.

In this new law, that will go into effect for the next round of applications, the income limit was raised significantly.

And the residency requirement was relaxed.

There is still a residency requirement but not as severe as in the past version of this program.

It should allow a bigger group of senior and disabled homeowners to qualify for these benefits, which importantly are supposed to be reimbursements -- it is supposed to reimburse you for any increase in property taxes that has occurred since he began to be eligible for the senior freeze program.

Raven: We know seniors can't afford to retire in New Jersey.

.

The governor is hoping to change that.

It calls for cutting property taxes for most seniors in half.

That is not until 2026.

What is the status of that program and will seniors ever see those payouts?

John: I think that is the big question in New Jersey going forward.

Should be clear that that program is for homeowners only.

Whereas anchor has that renter component, what they are calling stay NJ would be for senior homeowners.

And the promise is that they would cut property tax bills in half for income qualified senior homeowners up to a limit, which has been set now at $6,500 annually.

That is in the embryonic stages right now.

Raven: Do you think the state can afford, continue to fund these programs?

John: We just don't know.

It is a goal that has been stated, which is important in its own right.

Until we see the revenue collections and the latest forecast, we will not know whether there will be the money there to carry through on these promises.

Raven: John Reitmeyer, thank you for joining me on "NJ Business Beat."

John: You are welcome.

Raven: Before we leave you, here is a look at the top business headlines of the week.

Governor Murphy delivers his state at the state address and puts an emphasis on artificial intelligence.

He announced the so-called AI moonshot while calling back to President John F. Kennedy's promise.

During this space race the AI moonshot is an initiative aimed at making New Jersey the nation's leader in artificial intelligence research and development.

Governor says New Jersey has a talent and resources to be a pioneer in the field.

He explains some of the real-world applications we could soon see from AI.

>> Our state government will be a catalyst for bringing together innovators and waiters, to invest in research and development, and ultimately establish New Jersey as a home base for AI powered game changers.

From revolutionizing the discovery of new drugs in medical treatments, to creating new personalized education tools that can dramatically improve literacy rates and math skills.

Whatever the challenge, we are going to harness generative AI to unlock a new generation of possibilities.

Raven: In his speech, the governor called on the legislature to pass a package of bills aimed at protecting families from falling deep into medical debt, and require every medical bill to be clear and transparent.

New Jersey Congressman Bill Pascrell introduces a bill to ensure food safety for infants and toddlers.

The bill comes in response to the nationwide shortage of baby formula a couple years ago, when manufacturer Abbott discovered bacterial contamination in its products.

Advocates say access to safe food is critical as 9% of New Jersey's children face food insecurity.

The bill would require baby formula manufacturers to test finished baby foods, including formula, for toxic heavy metals like med, Mercury, and other contaminants.

They would also have to submit a food safety plan to the FDA, and make backers available for inspection.

That does it for us this week.

Remember to subscribe to our NJ Spotlight News YouTube channel to get alerted when we post new episodes and clips.

I'm Raven Santana.

Thanks for watching.

We will see you next week.

>> Funding for "NJ Business Beat " with provided by NJMEP, a partner to New Jersey's manufacturing industry, focused on productivity, performance, and strategic development.

More on njmep.org.

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