Monday, March 16, 2015

Apartment Boom Raises Questions


Resident Tom Kaercher asked a number of questions in a comment on the new development maps.

I do not have the expertise to answer them all comprehensively, but I will give my perspective and I welcome further comments and responses from readers.
Note: In his March 13 newsletter, Mayor Adrian O. Mapp credited Assistant Zoning Officer Ron Johnson with creation of these maps. If you have not yet asked to be on the newsletter list, call the mayor's office at (908) 753-3310 and submit your email address. 

It seems as though all the new development is in new apartments, all which will contribute Plainfield's already overburdened infrastructure (schools, roads, etc.)

Yes, nearly all the proposed development currently is for residential units. Ironically, that was the trend suggested in a 2012 report on best uses for the Muhlenberg campus, which residents roundly condemned. By contrast, a decade or so ago a strategic plan for the city called for a 10 percent reduction in tenants, who comprised about half of Plainfield households, based on a notion that tenants are less desirable than homeowners. Now apartments, especially along the Raritan Valley Line, are deemed the key to revitalization.

Hearings on development applications often include projections of the impact on infrastructure, but the fact that cities already have sewer systems and streets is considered favorable in contrast to development where infrastructure must be created. On the other hand, the sewer system is more than a century old and many roads here were built in an age when the "horseless carriage" was just coming into use.

The PMUA just increased its sewer connection fee per unit, so there should be some offset for repairs and upkeep of the sewer system. The real dilemma may be providing parking for tenants. A downtown parking garage has been proposed, but it is unclear who will pay for it.

 Are there any new industrial developments underway that would bring permanent jobs to the City instead of just transitory construction jobs?

I do not recall any major industrial development coming in. I think one premise of transit-oriented development is that residents can more easily commute to jobs throughout the area. It appears that the city will continue to rely largely on housing stock for tax revenues. A lot of new city residents take public transportation or vans to nearby industrial jobs.

What, if anything, has been said about how the influx of all the new apartments will impact the tax base?

So far most of the apartments (Park Avenue, East Fourth Street) have been created in existing buildings. I don't know whether changing from commercial to residential use affects the tax rate. Replacing older or smaller buildings with new construction (East Second Street, South Avenue) should bring in more taxes. That is probably something for the Finance Director to discuss, especially if developers are seeking tax breaks.

 Is there sufficient demand for apartments in the city or are they destined to become more low income housing once the developers make their profit from constructing them?

I think only time will tell on that one. My concern is that once these apartments are developed, there must be landlords or managers to operate and maintain them. Bad management will drive market-rate renters elsewhere.  It is too early to say how it will play out, as only a few dozen new apartments have been occupied so far. One hopes some lessons were learned from the Connolly story, where one company acquired most of the multifamily buildings and then failed. Just as block associations look out for neighborhood concerns, there may need to be tenant organizations to uphold renters' rights, or perhaps some advocacy from City Hall. 

--Bernice

14 comments:

  1. *Are there any new industrial developments underway that would bring permanent jobs to the City?
    Why would there be? The train line is people only. No highways are close. Land is still cheaper further west and south. Commercial space is being given away across New Jersey so why settle for outdated and out of the way in Plainfield?
    * Is there sufficient demand for apartments in the city?
    You mean for market rate apartments, right? Yes and no. There's plenty of demand along the rail line: witness Fanwood, Cranford etc, but also to the west in Bound Brook, Somerville and Raritan. The questions is what will make Plainfield stand out from the competition? Diversity? Most of the world just pays lip service to diversity and for white New Jersey "diversity" is a dog whistle that means "stay away". School system? Nope. Shopping? Mainstream restaurants? Entertainment? No, no and no (although it seems that Landmark is betting on being able to reverse the trend.) So who, exactly, is the market for market rate apartments in Plainfield? I have no answer for that question and I'm not confident that the developers do either.

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  2. A full-court press involving healthcare professionals to determine the components needed to reopen Muhlenberg as a specialty hospital would have been advisable. Unfortunately, time was wasted with a zoning study and efforts to tie JFK's hands instead of developing a workable formula with the right participants. It still may be that that Muhlenberg can be resurrected as a unique service provider in Central Jersey, and the city's largest employer.

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  3. On the industrial corridor there are sidings for trains. The only problem is the main line cant handle freight any more. Too bad city doesn't look into that aspect.

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  4. The question about tax benefits to the City from the redevelopment of commercial properties to residential should be viewed from the perspective that these properties are, for the most part, vacant commercial properties and have been so for many years. The old telephone building on East Fourth Street, for example, had some commercial uses after the phone company left years ago but these uses slowly faded away leaving the property vacant.

    When a commercial property is vacant, the savvy owner will speak to the tax assessor and get the property's assessment reduced. NJ property taxes are based on market value, and a vacant commercial property has significantly less market value than one that is open and, for want of a better word, thriving. Many municipal tax appeals are from commercial property owners seeking reduced value and therefor lower taxes.

    It is fair to assume that the owners of vacant commercial property in Plainfield have had their property assessments reduced and are therefor paying lower taxes. With the redevelopment of these properties into residential uses, the assessed values of the properties will increase, resulting in increased tax revenues to the City.

    There is no point in speculating on whether commercial development would be better for tax revenues, because there is no expectation that all of the commercial property will be redeveloped as commercial. Some will, some won't. Not all property will be redeveloped as residential. When transit-oriented development is successful, then other property owners develop commercial properties for businesses that support the needs of the people in these properties.

    As part of the evaluation of proposed development, especially development requiring density variances, an analysis should be required to show the impact of the development on municipal services. But that type of analysis is best done in the Master Plan review, when the Planning Board and ultimately the City Council decide on the path of future development in the City. If you allow or encourage residential development, you can expect the demand for services to increase. Properly planned, the development of residential property and associated commercial property will more than off-set the increased expenses for municipal services.

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  5. JFK tied their own hands. The City should do a title search. Does not cost that much.

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  6. Does anyone else remember when people drowned to death on Richmond Street? Other towns have been building on the flood plain and a lot more of the mountains have been paved over. South Avenue already impacts a sewer system that has long been an issue without increased capacity. Are developers going to have to upgrade the sewer system?

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  7. Hi Bernice,

    I hope the new administration is allowed by the City Council to have enough building and health inspectors to do the job and make sure the building managers are keeping the buildings up. Under the previous administration it was diffifult to get the mayor's attention and it took a petition and the news outlets to force things to move forward. Let's hope the city has what it needs. Jobs pay less than they did even five years ago and fewer people can afford to buy a house, so times are changing and I hope Plainfield can move forward and we can see the City Council working towards a fully staffed City Hall so the residents of Plainfield are protected.

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  8. Both New Brunswick and JC have enough industry, retail, medical facilities and office jobs. NB has a Hugh parking garage right across the street from a direct train line to the NYC and it’s all in waking distance to upscale eateries and entertainment venues. Jersey City has it all, including a short light rail ride to NYC. Both of these cities can accommodate a booming rental business. Plainfield should not be compared to either. With all the new residential rentals, the end result for Plainfield will be a very small city environment (6 sq miles) where the homeowners (who will be outnumbered by renters) will shoulder the burden of the taxes due to the need to increase our public safety departments; Including more ware and tear on the road, etc.. On any given weekend, the parks are already at full capacity, so where would all these new tenants gather in warm weather? No one should be given a tax abatement for any rental developments, they should pay their fair share from the start. I’ve said it numerous times before, every new construction in Plainfield cannot and should not be residential apartments.

    Robin B.

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    1. Not sure you are really connecting all the dots - including the fact that there is no light rail between jersey city and NYC. I seriously doubt that renters will outnumber private homes in plainfield and I really think that people should assume less and attend meetings more if they want all the facts. Plainfield has been behind the growth curve for years and there is no reason fanwood, garwood etc. should get benefits of one-seat ride (be it full or partial service) while Plainfield continues its age-old habit of feeling undeserving and then picking every opportunity apart to the point of developers losing interest. Its important to look at these things carefully and its also important to move the ball forward for the city.

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    2. Exactly how is residential rentals moving the city forward? Maybe you should check your facts because renters are already close to out pacing homeowners.

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    3. Well if you are looking at census data you are reading it quite literally as multi unit includes rental and condo. Either way, the issue at hand is a single word "progress" - it isn't easy, it isn't always pretty and there are typically a large number of people that have to be dragged to the future kicking and screaming. Like it or not we are competing with other communities - just like a business - if we do not progress in a meaningful way we will continue to just talk about what plainfield used to be "back in the day".

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    4. Don't get me wrong, I am all for change, but you have to agree all change is not good change. When you talk about progress I still don't see how building a city full of renters and not much else is “progress”. After it's all said and done, all you have is a city full of low income renter and nothing else. I would imagine that we would start with bringing in some mainstream businesses that can be a magnet for renters of all income brackets. Unless your vision for Plainfield is to create a very ethnic city that will only cater to a certain demographics.

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  9. Hi Bernice,

    Thank you for responding to my questions so publicly and generating such great input. I appreciate all the information. Hopefully, the Administration, Council, and Planning Board are developing comprehensive, detailed assessments, plans, and provisions for the impact s of each of these projects on City Services, infrastructure, Parking, Schools, and taxes to ensure they have a positive impact on Plainfield in both short and long term time frames, long after the developers are gone.

    The City’s track record has not been very good in doing this kind of planning. All too often, the City has taken a short-term benefit without adequately taking into account the long-term obligations that come with it and which become a permanent responsibility that end up costing the city far more than the short-term benefit it received. The sewer facilities fee settlement, the plethora of non-ratable charity group homes, and other communities’ Mt Laurel housing responsibilities come mind as examples. Hopefully, things will be different this time.

    Thanks again,

    Tom Kaercher

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  10. Sounds like we need to hire another Con$ultant who is politically connected.

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