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New Jersey Builders Defang Governor’s Anti-Housing Tool with Economic Impact Study

An anti-housing tool advocated by New Jersey Gov. James E. McGreevey as a plan for smart growth has fallen to a challenge by the New Jersey Builders Association.

Known as the Blueprint for Intelligent Growth (BIG) map, it placed about 80% of New Jersey’s developable land off limits for new housing, which would have been concentrated in the remaining 20%.

The statewide development control tool was unveiled during McGreevey’s State of the State address last January and then posted on the New Jersey Department of Environmental Protection (DEP) Web site.

The map disappeared from the site and is no longer available to the public after New Jersey builders subjected the proposal to economic scrutiny and municipal planners and state legislators found it wanting.

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New Jersey builders started their campaign against the McGreevey plan this fall with a study developed by NAHB’s Housing Policy Department on the “Economic Impacts of the New Jersey Department of Environmental Protection’s BIG Map.” The study, which took five months to complete, found that the DEP plan would eliminate 42,800 jobs, cost state and local governments $4.6 billion in lost revenue and cut personal income by $17.1 billion over the course of 10 years.

In addition, the average price of a new home would increase from $362,258 to $483, 247 and the average monthly rent for a typical new multifamily unit would rise from $1,865 to $2,080, according to the NAHB study. The study also indicated that annual new home construction would fall 15% — by 4,543 single-family homes and 379 multifamily units.

The NAHB study, which estimated the damage of the BIG map on the state and its nine major metropolitan areas, was released at a press conference in Trenton, the state capital, on Nov. 12.

“With the exception of the DEP regulations, the proposal has been stymied,” said Patrick O’Keefe, executive vice president of the New Jersey Builders Association (NJBA). “The media gave the NAHB study extraordinarily high attention. This was the first time the economic impact of the administration’s plan had been examined,” he said, adding that the state never produced or made public its own economic impact study.

“We were able to mobilize and respond to their plan to the point where a growing number of people began to see the administration’s proposal as cynical politics, not a valid proposal,” O’Keefe added, while noting that DEP is still using the regulatory process to impose its restrictions on development.

Home building in New Jersey already is subjected to more than 150 regulations that involve five different levels of government, according to O’Keefe. A study commissioned prior to the BIG map found that inconsistencies in the regulatory process added $60,000 to the price of a new home in the state, he added.

The NAHB report details economic impacts in construction as well as 16 other industries, including retail and wholesale trade and other local market oriented industries.

The report estimated:

  • The current impact of the single-family and multifamily homes built in a typical year’s production
  • The lost production that would result from the development restrictions and resulting reduction in housing affordability
  • The economic activity lost due to reduced production

“The BIG map would force a much greater number of people and jobs into a much smaller area, and prices would inevitably rise,” O’Keefe said. “It’s simple supply and demand and it would push the price of land and housing beyond what the workforce can afford.”

In addition to the study, NAHB President Kent Conine sent several letters to McGreevey, one in April and one at the time of the November press conference, rebuking the BIG map.

O’Keefe said McGreevey devoted about one-third of his State of the State address to “regulations that say ‘no’ to development.” He added that he expected McGreevey to return to the subject of restrictions on development in his upcoming State of the State address in mid-January.

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