Jersey City's Mayor on How the City Built So Much Housing

Summary

Odd Lots Podcast Summary: Jersey City's Mayor on How the City Built So Much Housing

Release Date: June 5, 2025 | Host/Author: Bloomberg's Joe Weisenthal and Tracy Alloway

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Introduction: Housing Affordability Takes Center Stage

In this episode of Bloomberg's Odd Lots podcast, hosts Joe Weisenthal and Tracy Alloway delve into the pressing issue of housing affordability, a topic that has surged to the forefront of national discourse. Moving away from their usual focus on macroeconomic trends, the hosts turn their attention to local politics, highlighting Jersey City's remarkable success in housing production as a case study.

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Interview with Jersey City's Mayor, Mark Reape

[03:57] Mayor Mark Reape:
"We've been the backbone economically of the state of New Jersey. I've been the mayor here for 12 years, unapologetically pro-growth. You can see the skyline change across the river. It's been a good story and we're growing, and I'm very proud of the changes that have happened."

Mayor Reape provides an overview of Jersey City's transformative growth over the past decade, noting a 25% increase in housing stock and a significant rise in building permits—from 2% to over 10% of the state's total. His administration's pro-growth stance has been instrumental in reshaping the city's skyline and expanding its housing availability.

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Challenges in Building Affordable Housing

[04:28] Tracy Alloway:
"What's the biggest choke point or hurdle when it comes to building more affordable housing?"

Mayor Reape identifies several key obstacles:

1. Home Rule and Municipal Fragmentation:
   New Jersey's 564 municipalities each wield significant zoning control, complicating statewide housing initiatives.
   [04:50] Mayor Reape:
   "In New Jersey, we definitely have an incentive program that is complicated. We have zoning with home rule. So you have a lot of municipalities, which is problematic."

2. NIMBYism (Not In My Backyard):
   Local opposition often stalls or derails housing projects, especially those aimed at increasing affordability.
   [05:20] Mayor Reape:
   "Generally, the NIMBY sentiment monopolizing the conversation. How do you wrestle that away from them is different in each city or state."

3. Political and Bureaucratic Hurdles:
   The intertwining of politics and development creates uncertainty, deterring potential investors and developers.

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Strategies for Expanding Housing Supply

1. Revamping Tax Abatements

[08:23] Mayor Reape:
"We changed the tax abatement process to map it to census tracts based on income. This provided clearer incentives for developers to invest in underserved areas."

By aligning tax incentives with economically disadvantaged census tracts, Jersey City attracted a broader pool of developers, reducing reliance on a small, politically-connected group and fostering a more inclusive development environment.

2. Inclusionary Zoning and Set-Asides

[07:52] Mayor Reape:
"We target about 20% of a housing development to be a blended affordable component, such as workforce or low-income housing. This is tied to incentives like tax abatements from the city."

This approach ensures that new developments contribute to affordability without compromising the overall project viability. It balances market-rate housing with affordable units, addressing diverse community needs.

3. Marketing and Developer Relations

[10:27] Mayor Reape:
"We conducted a marketing campaign to brand Jersey City as a pro-growth destination, matching private investment dollars with city funds to attract new developers."

By proactively promoting the city and establishing a less political, more business-friendly environment, Jersey City successfully drew in new developers, expanding housing supply efficiently.

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Addressing NIMBYism and Municipal Resistance

[13:42] Tracy Alloway:
"How do you deal with the NIMBYs and localities that resist housing projects?"

Mayor Reape outlines a multifaceted approach:

1. Transparency and Information Sharing:
   Highlighting cooperating municipalities to set positive examples.
   [14:00] Mayor Reape:
   "Creating transparency around your municipality's progress can shift the narrative away from NIMBYism."

2. Carrot and Stick Policies:
   Providing incentives for compliance while enforcing obligations through state-level mandates.
   [15:15] Mayor Reape:
   "Tie dollars and resources to municipalities that are cooperating. Without a carrot and stick approach, mayors won't move forward."

3. Shared Services Over Consolidation:
   Focusing on shared municipal services to reduce redundancy and increase efficiency without full consolidation.
   [17:08] Mayor Reape:
   "Shared services can leverage resources across municipalities, addressing inefficiencies without forcing complete mergers."

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Improving Transit Infrastructure and Congestion Pricing

[25:10] Joe Wiesenthal:
"Are you the only candidate who supports congestion pricing, and how do you sell it?"

Mayor Reape advocates for congestion pricing as a means to fund mass transit improvements:

1. Health and Environmental Benefits:
   Highlighting reduced emissions and improved public health.
   [25:24] Mayor Reape:
   "If you care about health or the environment, you should support congestion pricing."

2. Economic Rationality:
   Emphasizing that those most likely to benefit from congestion pricing are already affluent drivers who can afford the surcharge, thereby funding broader transit benefits for the majority.
   [25:34] Mayor Reape:
   "Who is the person that drives their personal vehicle from New Jersey every day to Midtown Manhattan, paying $1,500 to park? It's not regular working-class people."

3. Regional Cooperation:
   Stressing the need for a unified approach between New Jersey and New York to effectively implement and benefit from congestion pricing.
   [25:45] Mayor Reape:
   "We need a regional conversation around mass transit. The current climate isn't productive."

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Consolidation and Shared Services as Cost-Cutting Measures

[16:40] Tracy Alloway:
"Is consolidating municipalities to cut costs a viable solution?"

Mayor Reape explains the focus on shared services rather than outright consolidation:

[17:08] Mayor Reape:
"Shared services allow municipalities to pool resources for departments like health and animal control, which don't need to be duplicated across 564 municipalities."

This strategy aims to reduce administrative overhead and improve service quality without imposing the drastic measure of merging municipalities.

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Combatting Housing Affordability in a Desirable Region

[22:14] Joe Wiesenthal:
"Is worsening affordability in highly desirable areas inevitable?"

[23:13] Mayor Reape:
"You could definitely slow the growth of rental increases. We've seen that in Jersey City by increasing supply. However, regional solutions involving New York are essential since Jersey City is impacted by NYC's lack of housing construction."

While acknowledging the challenges posed by high demand in desirable locations, Mayor Reape believes that strategic supply expansion can mitigate some of the affordability pressures, albeit within the larger context of regional housing dynamics.

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Replicability of Jersey City's Model

[38:36] Tracy Alloway:
"How replicable is the Jersey City model for places like New York or Hoboken?"

Mayor Reape responds by emphasizing the unique municipal landscape of New Jersey and the importance of state-level leadership with municipal experience:

[39:00] Mayor Reape:
"As governor, understanding leverage points at the municipal level is crucial. Jersey City's success stems from its specific strategies, but broader application requires tailored approaches based on each city's context."

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Conclusion: Navigating Political and Structural Barriers

Throughout the episode, Mayor Reape underscores the importance of political will, structural reforms, and innovative policy solutions in addressing housing affordability. By tackling zoning complexities, reducing political interference, and fostering collaborative relationships with developers, Jersey City serves as a potential blueprint for other municipalities grappling with similar challenges.

[41:17] Tracy Alloway:
"The big question is still how replicable this is elsewhere, especially in areas with fewer vacant lots like Manhattan."

[41:39] Joe Wiesenthal:
"The degree to which other cities can emulate Jersey City's success depends on their starting points and specific local conditions."

The discussion closes with an acknowledgment of the complexities involved in replicating Jersey City's achievements but remains optimistic about the potential for strategic policy interventions to improve housing affordability nationwide.

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Notable Quotes

• Mayor Mark Reape on Pro-Growth:
  "We've been the backbone economically of the state of New Jersey. I've been the mayor here for 12 years, unapologetically pro-growth." [04:07]

• On Overcoming NIMBYism:
  "How do you wrestle that away from them is different in each city or state." [05:28]

• Regarding Tax Abatements and Census Tracts:
  "We mapped it to the census tract, which seemed like a reasonable way to map it towards income." [08:23]

• On Congestion Pricing Benefits:
  "Who is the person that drives their personal vehicle from New Jersey every day to Midtown Manhattan, paying $1,500 to park? It's not regular working-class people." [25:34]

• On Shared Services:
  "Shared services allow municipalities to pool resources for departments like health and animal control." [17:08]

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Final Thoughts

This episode of Odd Lots provides an insightful exploration into the intricate challenges and innovative solutions surrounding housing affordability. Mayor Mark Reape's experiences in Jersey City offer valuable lessons on navigating political fragmentation, incentivizing development, and balancing market-rate with affordable housing—all crucial for other cities aiming to replicate similar successes.

Listeners gain a comprehensive understanding of how local leadership, when combined with strategic policy reforms, can drive significant progress in housing production and affordability, even amidst broader regional constraints.

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For more detailed discussions and insights on housing policy and economic trends, visit Bloomberg's Odd Lots and subscribe to their newsletter or Discord community.

Transcript

[Mark Reape]

This is an iHeart podcast.

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[Mark Reape]

When.

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[Bloomberg]

Bloomberg Audio Studios Podcasts Radio News.

[Joe Wiesenthal]

Hello, and welcome to another episode of the Odd Lots podcast. I'm Jill Wiesenthal.

[Tracy Alloway]

And I'm Tracy Alloway.

[Joe Wiesenthal]

Been covering a little local politics these days, Tracy. It's not our normal beat, but sometimes there's a little intersection.

[Tracy Alloway]

We're going local, not macro. Micro.

[Joe Wiesenthal]

We're going micro. So it's interesting because we did a recent episode listeners may remember was one of the candidates for the mayorship here in New York City, Zoran Mamdani. And he sort of talked about his vision for affordability actually backing up for a second. It feels like housing affordability is, is suddenly swamping everything. Is the issue almost regardless of your perspective, that is like on top of many people's minds these days.

[Tracy Alloway]

Well, also, we've talked about this before, but it also seems like a bipartisan issue.

[Mark Reape]

Right.

[Tracy Alloway]

And like, you don't get a lot of bipartisan things nowadays. I'll just put it that way.

[Joe Wiesenthal]

No, but it's interesting. Like, you know, at one point it was like health care and sometimes climate. Other times right now it just feels like there is such a so much anxiety about housing affordability and all this stuff. And it feels like it's a nationwide thing. Within the Democratic Party, there are different wings of how people talk about it. So we obviously talk to the socialist candidate for mayor. There's also what people would call like the sort of like more liberal abundance view that, you know, the answer is just we just need more and use whatever levers to pull to like get more in some way. So, you know, even within one party, though, although everyone sort of agrees on rent and affordability, not a lot of consensus on the path there.

[Tracy Alloway]

Yeah. So the overall goal is very Clear. But I guess like the levers that you're gonna pull to get there are very complicated. And I have to say that's one thing that I kind of struggle with in this topic. It just seems like there are so many different things that you could do and all of them seem very like bureaucratic, very technical tax abatements, all these incentives, rent control. And it's interesting to me how you choose between them.

[Joe Wiesenthal]

Yeah.

[Tracy Alloway]

About what's gonna be most effective.

[Joe Wiesenthal]

Can I just say, by the way, I think a lot of these debates are very part of the reason they exist is cuz the media is very heavily represented in New York and San Francisco. I mean, I don't think there's an affordability crisis in like Davenport, Iowa to the same degree. And I think that's important to acknowledge. I also think like New York and you know, San Francisco are some of the best places in the world. So I get why people pay a lot of money for them. Anyway, it turns out one of the best cities over the last several years and in the entire country for housing production is our neighbor, Jersey City, right across the water. I really like Jersey City. I've spent a little bit of time there. And their mayor, Stephen Phillip, is running for governor in the Democratic primary right now. So we have the perfect guest to talk about Jersey City housing production. Stephen Phillip, thank you so much for coming on Oplatz.

[Mark Reape]

Thanks for having me. I appreciate being here.

[Joe Wiesenthal]

For those people who don't know you've been the mayor of Jersey City for how long? I think I saw it was like in the last 10 years housing stock has increased by 25%. Something like that.

[Mark Reape]

Yeah. I mean we used to be maybe 2 of the state's building permits. We're upwards of 10% now. I mean we've been the backbone economically of the state of New Jersey. I've been the mayor there for 12 years. I've been unapologetically, very, very pro growth. You could see the skyline change across the river. So it's been a good story and we're growing and I'm very proud of the changes that have happened.

[Tracy Alloway]

What's the biggest choke point or hurdle when it comes to building more affordable housing? Because everyone seems to have a different answer to this and different things that they would put emphasis on. But in your view, what's number one?

[Mark Reape]

What do other people say, out of curiosity, are the two.

[Tracy Alloway]

Well, people say like zoning and things like that, incentivizing the developers to build something other than luxury high rises, that sort of thing.

[Mark Reape]

I'D point to a couple things. I mean, in New Jersey, we definitely have an incentive program that is complicated. We have, obviously, zoning with home rule. So you have a lot of municipalities, 564 municipalities, which is problematic, and home rule. So how do you overcome that? Which I think we have some solutions for. And I think that generally speaking, across the country, you have kind of the NIMBY sentiment monopolizing the conversation. And how do you wrestle that away from them is different in each city or state. But in New Jersey, I think we've done a pretty good job of kind of creating a dynamic where the people that are pro growth can also have a voice there.

[Joe Wiesenthal]

You've been pretty unapologetic in your view that market rate housing benefits everyone. That there's supply and demand, you expand supply, it filters down, et cetera. You talk about, quote, affordable housing, unquote. But give us your general philosophy of housing and making it more affordable and why you believe that a lot of the solution is essentially liberalizing and supply and demand.

[Mark Reape]

Yeah, I think letting people build what.

[Joe Wiesenthal]

They want, where they want.

[Mark Reape]

Yes. I think that when you put more restrictions around housing growth, so, you know, rent control sounds like a good buzzword, but when you're too restrictive around that stuff, you. You're gonna create a situation where you're not seeing supply being increased. We've seen in Jersey City pressure when New York City isn't growing on our housing prices. And when we've grown a lot, you've seen the demand still high, but the rent increases subside. So it leads you to the conclusion that the market rate component of housing is as important to the conversation as the affordable conversation. And, you know, look, a lot of people push back for a variety of reasons. Sometimes it's rooted in racism. I mean, people have a different reaction if you use the word affordable housing versus hous that's affordable. They have a different kind of thought process around that. But the reality of the situation is that market rate housing helps you build more affordable housing or housing that's affordable, and they have to work together to be successful. And that's how we've approached it in Jersey City, and it's generally been successful.

[Tracy Alloway]

So one of the criticisms of market rate is that you end up with those developers just building the luxury apartments because they can wring more money out of those. How do you address, I guess, the balance between luxury housing versus, I don't know, housing for the middle class or housing? That's further down the spectrum.

[Mark Reape]

Yeah. So in Jersey City, we do have this Kind of set asides or inclusionary zoning ordinances, and those are important. We've gone back and forth with the advocacy groups on what's actually achievable. And we've actually come to a place that's pretty successful. And we generally target about 20% of a housing development to be a blended affordable component. So that could be workforce housing, that could be low income housing, which is obviously more stressful on the overall project. So you got to factor some that stuff in. But we do have, you know, a specific minimum requirement when they do get a specific incentive like a tax abatement from the city.

[Joe Wiesenthal]

What specific levers? So, okay, you've been the mayor of Jersey City for 12 years. Is objectively true that the skyline has changed a lot. It's objectively true that the housing stock has grown. I'm sure it's benefited just from the fact that, you know, Manhattan and New York City has been fairly dismal about expanding housing supply. And so people look elsewhere. But versus before you came into office now, what are the specific levers that you've pulled to expand production? And how can you like attribute, you know, when you do an attribution of the housing stock, what can you say to what you've done?

[Mark Reape]

So when I came into office, the tax abatement or incentive program was very political in nature. And it seemed to be by right for the developers that were pursuing it. And there were two problems with that. The politics of it created kind of uncertainty and apprehension about people investing in a market if they weren't familiar with the politics about it. And the uncertainty of how the process worked was problematic as well. So we came in and we changed the policy entirely. And people said we wouldn't see the amount of growth. But I viewed it at the time that it was such a given that you would get these tax abatements, that it didn't necessarily incentivize more growth. It was already factored into the seller's price and the buyer's price and the private transaction. So we had to recalibrate that market a little bit. And so what I did was we changed the tax abatement process where we mapped it to census. Tracts based on poor census were automatically entitled to a steeper incentive. And what you've gradually saw was people moving away from the waterfront and investing money because it seemed more certain the process and it seemed to have a clearer advantage if you were moving to certain areas. And we mapped it to the census track, which seemed like a reasonable way to map it towards income. Where you're trying to instigate development. And so that worked. And I think that that clarity really helped people invest and attracted new developers to the area. So we were no longer relying on the same small pool of developers. And I think the certainty was very good because, you know, New Jersey has a history of political corruption and feeling that, you know, there was some process around this, that it wasn't necessarily predicated on what lawyer or architect you hire created a better climate for business.

[Tracy Alloway]

So you mentioned widening the pool of developers, and this is something that Joe and I are really interested in. We went down to North Carolina and learned that towns and cities really have to make pitches to developers to get them to come in. What's the process of, I guess, working with a developer, talking to them actually? Like, what are the things that they are looking for specifically?

[Mark Reape]

Well, look, I think that they are interested in an administration that seems less political in nature and more focused or aligned in a pro growth mentality that recognizes that they are in the business of providing housing and there's mutually beneficial outcomes if we work together. When I became the mayor of Jersey City, one of the things that I did with the existing developer pool was I recognized the fact that we needed to market the city better to the surrounding areas. I knew that, you know, not necessarily soho or tribeca wasn't a comparison to Jersey City. Somebody wasn't making the choice, should I live in tribeca or Jersey City, but certainly with Brooklyn and Queens and the outer boroughs. So we got most of the larger developers at that point together. And what I said to them was that we would do a marketing campaign where the city's economic development corporation would match match the private dollars, one for one. And it would be targeted in these areas that we think that we can attract new residents and new developers. And I was very deliberate that it would not be political in nature. Like, I would not appear in this, my voice would not be a part of it. It was going to be focused on branding the city in a different way that ultimately led to more interest, more demand, more developers. And I think that that was a very, very helpful step that we did out of the gate. The politics is always problematic, and people are apprehensive about that.

[Tracy Alloway]

Wait, what do you mean by political exactly?

[Mark Reape]

Well, the political is in most places, at least in New Jersey, it's been a history of who you know and a very small cadre of relationships that have allowed you entree into the process. And in a place like New Jersey, where a lot of the rules are codified in A very, very loose way you feel obligated that you gotta have a certain type of relationship and the more you can remove that towards the business climate, the more likely people are to invest in that. And I feel like that's been a kind of a big change in Jersey City overall.

[Joe Wiesenthal]

This is super interesting. I don't think this dimension of housing unaffordability or the challenges to production has come up. But when you look at still today, Jersey overall you're running for governor, do you still see like outside of Jersey City a general tendency towards it's going to be difficult to get approvals and so forth if you aren't with the right architect, if you aren't with the right paver and so forth. Is that still an endemic problem in New Jersey at constraining the supply of housing?

[Mark Reape]

I think it's a cultural issue in New Jersey. I mean we had a senator that is about to go to jail for gold bars. I mean that's a example of the political culture of how people perceive New Jersey. I think that any reasonable person would estimate that you're in the 200,000 unit shortage range for the state of New Jersey now, maybe given a little. And the production of affordable units is roughly only like 3,000 a year. So you're looking at close to 70 years to cure the backlog that you have today. It's quite significant. And there is a sentiment that municipality by municipality has a disproportionate amount of control over the outcomes of housing production. And part of the job as governor will be to kind of change that narrative. So the NIMBYs, not my backyard or the not monopolizing the conversation. And there's a lot of ways that I think a governor can do that.

[Tracy Alloway]

Well, let's talk about that. How do you deal with the NIMBYs.

[Joe Wiesenthal]

And the localities who fight it? Because there must be tension between state versus local.

[Mark Reape]

Yeah, I think there's a couple of things you could do. So New Jersey has a fair share housing requirement which has been litigated for 30, 40 years where every municipality is going to have some sort of obligation on housing. And a lot of the municipalities push back. If it's a suburban municipality, they say, well you're obligating us to this 200 affordable units and they come under an 8020 rule. So the 200 units equates to roughly a thousand units overall, which is kind of. The mayors would say it's taxing on their infrastructure, which is true. So the NIMBYs then co op the conversation and drag these out in court for some period of time. So Trenton A I think can do a better job of creating transparency around your municipality where it is in the process today that doesn't exist. So for example, if Westfield use that as example of a municipality is cooperating and doing a good job, there's no transparency to that. So the NIMBYs generally control the conversation at the planning boards because of the fact that there's a lack of information. So I think Trent being helpful in that is part of it. Number two is that if you have an objective to build new housing, which New Jersey does, and when a mayor or council people say that you're going to make us build these thousand units, but added children in the schools, added needed infrastructure, I do think Trent needs to tie dollars and resources to those municipalities that are cooperating. You do need a carrot and stick approach. Otherwise you're never going to get mayors to actually move in a place that has home rule like New Jersey.

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[Mark Reape]

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[Tracy Alloway]

Municipalities and infrastructure, one of your proposals is consolidating some of those municipalities so that you don't have a doubling or I guess triplicating, quadruplicating. Is that a thing of services in order to cut costs? And I get that cutting government services and costs is obviously very hot right now, but what particular benchmarks or targets are you looking at here and how do you ensure, I guess, quality of service as you consolidate?

[Mark Reape]

Yeah. So I think the way that we start this is more focused on shared services than absolute consolidation. And from a mayoral standpoint, knowing that, again, New Jersey has 564 municipalities, a lot of municipalities for a very, very small area, all with home rule, and all have departments that are not necessarily important by municipality for municipality. Just to put in perspective, 75% of those 564 municipalities have less than 20,000 people. 50% of them have less than 10,000 people. So a lot of very small municipalities that all have offices, like health departments, which should probably be at the county, animal control should be at the county, things like that. And so I think that we've outlined the process to create leverage over the municipalities via referendum and to force kind of shared service once Trenton has leverage. And I think that's the way you got to get there, because nobody's going to voluntarily give up parts of their government unless you have Trenton creating leverage on that.

[Tracy Alloway]

Why hasn't this been done before? Because when I think about animal control, for instance, it does seem kind of crazy that you have hundreds, dozens of municipalities that are all running their own animal control services. But, like, I imagine there must be a challenge in doing some of this.

[Mark Reape]

I think that for the most part, mayors and council people are reluctant to give up departments or relationships. Often the people that work in these small municipalities or large municipalities are personal relationships. You may know the person's family. They've been there for a long time. And so just the bureaucracy and stagnation is what ends up getting you into this place of not wanting to make any change. People have talked about it for 20 years about some sort of consolidation. The difference in how we're approaching it is that we are using kind of the referendum process around bonding for municipalities to create leverage over the municipalities to force it. Absent forcing it, you're never going to get it to happen. That's the truth. And so it's a little bit of a different approach. I could tell you that the League of Municipalities, which is the advocacy group for all 564 municipalities in New Jersey, hates what I say, which probably tells you that I'm right about it, to be honest with you. But that's kind of where we are.

[Joe Wiesenthal]

Jersey City, I think, in 2022, approved something where developers, on a voluntary basis, can expand the number of units in a plot in exchange for some level of affordable units commitment. Is that being utilized? Like, what does the math work? It's voluntary to include more affordable units, and then they get to expand the number of. Is that being utilized?

[Mark Reape]

It's used, actually, A lot. So it's a little bit different than the inclusionary zoning ordinance, which was you get an approval and let's say 20% has to be inclusionary zoning, depending on the zoning changes. This was an overlay zone that we put in place that basically what it said is that within the existing envelope of the building. So from an outside, you could just add more density in there. It is being used because what you see in. In Jersey City is you see a lot of these smaller units in these larger buildings and they trade at roughly in the downtown area, let's say $100,000 a door on approval. So it's of high value to do that for us from the city standpoint.

[Joe Wiesenthal]

What does that mean, traded?

[Mark Reape]

Like if you sell. Let's say, if you. Let's say you were building is approved for 10 units, you would. It's roughly. It would be a million dollars. Okay. So. And that math is exponential for if you have a 3, 400 unit building. From our standpoint, it was the best way to approach a need for affordable housing without changing the aesthetics or the scale of the building on the outside, which is problematic off into kind of the community group, so to speak. So it is being used, I would probably say it's being used as much, if not more than the inclusionary zoning ordinance that we have in place. And it's just been another tool to kind of increase affordable housing production.

[Tracy Alloway]

Since you mentioned aesthetics, I find this really interesting because aesthetics doesn't always come into the conversation on affordable housing. And it is an issue for a lot of people. And I think about the look of Jersey City versus, I don't know, a Hoboken or something like that. They're very different. How important are aesthetics in your conversations? And I guess how do you address some of those issues?

[Mark Reape]

We have a good planning department and we've gotten better at it as we've gotten more sophisticated developers into Jersey City. It's allowed us to be more aggressive with the aesthetics and push developers a little bit more.

[Tracy Alloway]

So you can dictate what things will look like.

[Mark Reape]

We can to some degree. And I think that as the marketplace has become more competitive, the natural outcome of the private sector is that they're pushing each other to better products that look better, feel better, better amenities, whether it's a pool or a kind of a little golf range or whatever they got going on in there, it's changed over time. A little bit better. And because we've grown so much, everybody's thinking about how to make their building more competitive. The Buildings are being absorbed into the market as quickly as we're building them. They would tell you that that's largely because of New York's lack of construction, which is a bigger problem, but it also has benefited us from the aesthetic standpoint, for sure.

[Joe Wiesenthal]

So here's a big picture thought that I have.

[Mark Reape]

Go for it.

[Joe Wiesenthal]

And I kind of hinted at the beginning, but New York City and our neighbors on the other side of the water, greatest place to live in the entire world, in my opinion. The economic opportunities for an individual here are extraordinary. The culture opportunities are extraordinary. I understand intuitively why rents here or mortgages are so expensive. Because it's the best place in the entire world. Jersey City has expanded the housing stock quite a bit, but also affordability has worsened over the last decade or so. Is that inevitable? Because it's just so good people want to live in the best place in the world, and so it's going to get more expensive because this is where they're sort of like, when I talk to a lot of the Yimbys, I understand, like, expanding production, that's good for the economy, et cetera. I'm less convinced that market housing, or any housing can actually make these places cheaper because they're so good, they're so desirable. Well, can you actually, like, solve affordability or do you just have a lot more people here and that's good enough.

[Mark Reape]

You could definitely slow the growth of rental increases. Okay, so whether you're going to have a massive rental decrease, I don't know, but you could definitely slow the growth. And we've seen that in the last year, two years, whereas Jersey City was consistently ranked as very, very steep rent increases, and it was problematic. That has slowed because of the supply conversation. Specifically, though, for Jersey City, I think, yes, we have been a victim of our success in many ways and a victim of New York's lack of construction. So if you are going to have a regional solution, New York, and particularly Manhattan needs to carry its weight, which is not happening today.

[Tracy Alloway]

Just on this beggar thy neighbor issue, I guess. Do you talk to other cities and other towns about, like, what they should be doing and I guess how replicable is the Jersey City model for a place like New York or. Or Hoboken or wherever?

[Mark Reape]

Well, I think there's a lot of good things that have happened in Jersey City, and some of the mayoral candidates do reference the amount of housing production because it's been pretty astronomical in Jersey City. It kind of speaks to the lack of production again in New York. I think as governor, there's a lot of things that you can do to change the climate in New Jersey around housing production. And one of the challenges that we've had in New Jersey is you haven't had a governor with municipal experience in 20 years. You know, Phil Murphy came from being an ambassador and Chris Christie was a use of terms and Jon Corzine was a US Senator and et cetera, et cetera. So I do think understanding the touch points, the leverage points, how to motivate somebody at the municipal level is very, very important to being a governor in a place like New Jersey.

[Joe Wiesenthal]

Actually, speaking of politics, I think in this race, are you the only candidate in the race that supports the congestion pricing scheme? All right. As a resident of Manhattan who doesn't drive much in the city, I think congestion pricing is great. But I'm not a, you know, I'm.

[Mark Reape]

Not asking why am I as a New Jersey resident thinking that it's, well.

[Joe Wiesenthal]

How do you sell it? How do you sell it?

[Mark Reape]

Well, look, people ask me, and this.

[Joe Wiesenthal]

Is like, also gets to some of the other questions around housing, which is that some of these benefits are diffused long term and not immediate. So how do you sell it?

[Mark Reape]

So. So first of all, if you care about the health issues or the environment issues or mass transit issues, then obviously you should be supportive of the concept of congestion pricing to begin with. I say secondly to people, if you take a step back and get away from kind polling data, which people would say, I don't like the idea of an additional surcharge. If you ask yourself, who is the person that drives their personal vehicle from New Jersey every day to midtown Manhattan, then pays $1,500 to park their car in Midtown Manhattan. It's not regular working class people. Regular people take the trains and buses to the Port Authority or to Penn Station and then they use the MTA system. Wealthy people drive their personal vehicle every day. The point is that you need to invest in mass transit and we need to get past this kind of concept of New Jersey versus New York, because New York does rely on New Jersey transit to service a lot of the workforce here in New York. And we rely on the MTA to move us around here once we get here. Ultimately, when I'm the governor or hopefully get there, want to get to a place of a regional conversation more around mass transit, I don't think the current climate of conversation is productive. And the leverage tool to get New York back to the table is probably posturing around some sort of similar tax on New Yorkers eventually to get them to the table. So you could have a kind of a holistic regional plan around transportation. That's really where you got to go if you're going to get the region to actually move in the right direction.

[Tracy Alloway]

Why does New Jersey transit suck so much?

[Mark Reape]

I mean, that's like the question I get in every single meet and greet. It's probably just because a lack of interest from trend for some period of time. I mean, you have buses that have been privatized for a long time, so I think that's problematic. You have a train system that doesn't have a dedicated revenue source, and you have administrations that have not really cared for it so much. So it's not only that it's problematic with the existing service. It hasn't built out any real infrastructure at all. So when you look at economic development in the southern parts of New Jersey, you would see that there is no mass transit. And the reason that you haven't been able to attract jobs the same way or housing construction is directly related to the lack of mass transit infrastructure.

[Joe Wiesenthal]

Actually, I want to talk about this a little bit further because the quality of public services is something that probably transcends both the sort of more center and left side of the Democratic Party that like, where is the future of any sort of public provision of goods if people don't think it's good? And so if the widespread perception is that New Jersey transit is terrible, it's one thing to say, okay, yeah, they haven't taken it seriously, fine, but this seems to be a widespread phenomenon. People in New York obviously have the same issues with the subway and they come up with their stories. And people in the Bay Area have the same issues with the BART and otherware. They don't have the same issues because their government just didn't build out anything in the first place or whatever. But what is your plan for actually making it a good quality product that people are like, yeah, I don't need a car. I really like the transit?

[Mark Reape]

Yeah. Let me just say I think that the reason that you've seen what you've just outlined is largely because you have wages that haven't increased at the same rate as costs for government. And that disconnect has forced a lot of choices, which ultimately has led to less services. Okay, on New Jersey transit, But we've outlined kind of a couple things that are really big priorities for me on the funding. And it doesn't rely on the federal government, and we could do it ourselves. Last year, Phil Murphy put in place a corporate business tax. It was our idea actually on companies with $10 million plus he gave us credit for it. He put it in place for five years only. It's problematic only because a you have to come back and to fix it and B, you can't bond against the five year revenue which you need to do because if you're going to make New Jersey Transit better, you got to invest in the stations and bus stations so people feel they're clean and modern and safe. So got to fix that. Number one, we would do that right away. Number two is the largest infrastructure project in the state of New Jersey is really this turnpike widening project which goes into the Holland Tunnel. And it doesn't make a lot of sense because it's a $12 billion project and the Holland Tunnel is still two lanes. So it doesn't matter if you make 20 lanes coming into it. Right. You have that same bottleneck and you know, similar to what the governor of Maryland did and some of the others, we would reallocate those dollars towards mass transit, in particular light rail, exp South Jersey and in Bergen County. And then I do think it's a priority to go away from privatizing the buses.

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[Joe Wiesenthal]

Which is worse, Tracey going into the Holland Tunnel from the Jersey side or exiting the Holland Tunnel in the New City side. Miserable in both directions. I see no upside unless you're gonna radically rethink that and spending one more dollar on that process.

[Tracy Alloway]

Anyway, I have a horror story about this which I will tell you after this recording. I suspect a lot of people have horror stories about this, but I wanna go back to housing for a second.

[Mark Reape]

We love housing.

[Tracy Alloway]

We touched on tax abatements and obviously tax abatements are a classic tool for building more affordable units. But they're not free. Right. You're sacrificing revenue in order to do this. And presumably you need to offset that lost revenue through tax increases elsewhere. So where does that offset actually come from?

[Mark Reape]

So first of all, let's talk about how to change the tax abatement or pilot program payment in lieu of taxes. So that way it actually makes sense. In New Jersey today. In New Jersey, a short term tax abatement is by right. So developer can fill out a program and a piece of paper and they get a five year tax abatement. The long term tax abatements for 20 or 30 years are the ones that become political circus. I do think to increase housing supply, you need to change the long term tax abatements to be somewhat more like the five year tax abatements by rights. And the way that we would see this move forward, assuming get elected is that a city council or mayor would approve an initial ordinance. So you'd have a public process around what that tax abatement process for that administration would look like. What is the census tracks, what are the affordability components, what are the community givebacks, Is it union labor, Whatever those are, once it's approved, it should go to Trenton to get approved there by the dca. And then at that point I do believe it should be by right. So you could expedite some of this construction components of it. In New Jersey you have again a lot of municipalities and the taxes are divided up between the school district, between the municipality and the county. The school district and the municipality are obviously priorities. The county less so it's another layer of government that you probably need some consolidation long term. And most of these buildings are newfound revenues. They're not true tax payments where the developer is not paying. It's a payment in lieu of taxes. So it is found money. Maybe not as much as you would make, but there still are a lot of inefficiencies in government and you could figure out that offset through that process.

[Joe Wiesenthal]

There's a lot of inefficient use of land around train stations. You notice it where it's like there's just like lots of parking and stuff. It's like this seems like it should be like prime places for like really tall buildings so that someone can walk five minutes to a train that they take to New York City. Why is that?

[Mark Reape]

Why is that a Lot of that is owned by New Jersey Transit, actually. And so you have a disconnect in New Jersey where the zoning is controlled by the local municipality. And New Jersey Transit, who owns the property, perceives that the opportunity or land value is different than what the existing zoning is. That disconnect has created a lot of or no movement really.

[Joe Wiesenthal]

I just don't understand like, like if why does Jersey Transit feel the need to like hold all this land? It could be extremely valuable for real estate right there and leave it for cars rather than people.

[Mark Reape]

We will use executive orders around that to kind of override some of the, just the Transit Oriented Development restrictions that you have. So the goal is to really use that land and circumvent the existing language in the home rule municipalities that are problematic.

[Tracy Alloway]

I want to channel NIMBYs right now. I'm putting on my NIMBY hat and obviously, you know, I haven't been able to go to like a Jersey City town hall to get like a real sense of it, but I did the next best thing, which is I went to the Jersey City subreddit.

[Mark Reape]

Okay.

[Tracy Alloway]

There's a lot of criticism on there of, I guess, gentrification.

[Mark Reape]

Sure, right.

[Tracy Alloway]

And people are complaining that all these new high rises are making things very different to how they used to be. And you're actually getting rent increases and hike taxes and things like that. How do you address those concerns?

[Mark Reape]

I mean, look, rent increases, unfortunately, you know, is a byproduct again of the pressure because of New York. And we're a victim of our success. There's no question about that. You've seen the population increase in Jersey City. So when people point to the fact that people are being displaced, the data doesn't necessarily support that. And the diversity in the city has remained relatively constant. I think that when you see a lot of the new buildings that are going up, those are often on vacant properties that didn't exist before anything. Parking lots or empty lots near Journal Square. So you're not talking about displacement to the same degree. People are talking about change is uncomfortable for people. That's the truth. And you're always going to have people that remember what a city looked like 15, 20 years ago that might have been a little bit more grittier, a little bit less safe, and they still like it because of the way it was. But I think most people would tell you that Jersey City's change has been beneficial. I'm the first three term elected mayor there in 70 years, so somebody likes me. And I think that the changes for the most Part have been helpful. Not to say that we don't have an affordability crisis, but it's a regional issue. It's not just a Jersey City issue.

[Joe Wiesenthal]

I do think you make a good point, and this gets to my point about why rents have in fact gone up now that it's gotten more dense. And there are all those great restaurants at the bottom of the buildings. Right. When you get off of the PATH train, it's more desirable. I'll pay more. I'll pay more for it today than I would have paid in equivalent dollars 15 years ago when there was probably tumbleweed or whatever. It was true. I know it wasn't a T. And I think this gets. Are you an abundance Democrat?

[Mark Reape]

You know what? I didn't even know until six months ago what that terminology was, to be honest with you.

[Joe Wiesenthal]

But do you think that's a useful answer Question. But do you think that's a useful flag? Could that be. Is that.

[Mark Reape]

I don't know. I don't know. I mean, I don't think it's a useful political term, truthfully, because I don't think a normal person would read Ezra Klein in the book like we would read it. But I don't think by and large a independent voter, which is what Democrats need to move ultimately to be successful, is gonna understand. When you say I'm an abundance Democrat.

[Joe Wiesenthal]

To be fair, I don't know if anyone's saying that or proposing that anyone should say that, but I'm just curious about the. The resonance of this label, this word.

[Mark Reape]

I think there is validity to the argument that we put a lot of layers and restrictions in place to get anything accomplished. And that's not necessarily only Democrats, it's everybody in this country. And I do think that we need to kind of move forward on stuff. I don't know if the term. I mean, it's kind of like, I guess the last couple months, you hear it more and more often. We'll see if it sticks around, you.

[Joe Wiesenthal]

Know, more and more people saying it these days. Stephen Fullett, mayor of Jersey City, candidate for the Democratic Party's nominee for governor, thank you so much for coming on. Envelope.

[Mark Reape]

Thanks for having me. It was really great. Thank you both.

[Tracy Alloway]

Thanks so much.

[Joe Wiesenthal]

That was great. That was a lot of fun. I will say, Tracy, that, you know, I always get so nervous talking to politicians because I worry that they're just gonna be so canned, you know, and we don't do a ton of them.

[Tracy Alloway]

They tend to be very on message.

[Joe Wiesenthal]

Very on message. Talking to Steven talked like Just talking to like a very normal person about issues. I mean, you know, I'm sure people would disagree with him about his characterizations of things. It felt like a real conversation.

[Tracy Alloway]

Yeah, I mean, he definitely had a lot of policies that he could point to. I guess the big question is still how replicable this is elsewhere. And for instance, you know, he talked about, on the gentrification issue that you're not displacing existing buildings, you're building on primarily empty lots and things like that. There aren't many empty lots in places like Manhattan.

[Joe Wiesenthal]

No. And there probably aren't many empty lots left in Jersey City either. And so part of the question. So that's, you know, we were talking about like what specific mechanisms and I believe that they exist. But today it's a very different city than it was 15 or 20 years ago. And so the degree to which, okay, well, this is just Manhattan spillover or maybe Brooklyn or whatever. Spillover. People who weren't going to live in Manhattan in the first place. But then the easy pickings have been gone. Certainly strikes me as a real possibility.

[Tracy Alloway]

The starting points were different.

[Joe Wiesenthal]

Yeah, totally.

[Tracy Alloway]

You mentioned tumbleweeds, Joe. Yeah. Did you know that tumbleweeds come from Russia and they're an invasive species in the U.S. really? Yes.

[Joe Wiesenthal]

I did not know that.

[Tracy Alloway]

Speaking of housing, have you ever seen the pictures of like houses being absolutely like swamped by tumbleweeds?

[Joe Wiesenthal]

No.

[Tracy Alloway]

You've got to look at that.

[Joe Wiesenthal]

They introduced them from Russia in the 1870s. They arrived in South Dakota likely in flaxseed from Russia. These plants are known also as Russian thistle. That's super interesting. Yeah, they're cool looking. So I don't mind that they got here. I mean, I guess it's not good if houses are swamps.

[Tracy Alloway]

No, it's cool. No, they're actually a big problem.

[Joe Wiesenthal]

Oh, it's a serious problem. One other thing though, that we only got into it a little bit. It does seem like because of the sort of disorganization of American government, you get a lot of really silly things like the New Jersey transit owning a bunch of land that it could be, you know, worth hundreds of millions of dollars if you just put a bunch of apartments on there. And people would presumably kill to live in a nice high rise apartment a two minute walk from a train station that would take them right into to New York City.

[Tracy Alloway]

I would love that.

[Joe Wiesenthal]

And instead it's just parking. And yet because of like the zoning and it just seems like, let's get it together, come on, let's get it's just really annoying.

[Tracy Alloway]

Well, there's a lot of stasis in policy. Yeah, I think we've learned that over and over again.

[Joe Wiesenthal]

You know, one last thing too, because it took me a minute. I think it took both of us a minute. When Steven was talking about, oh, housing being very political and what he meant by that was super interesting. Like, we've definitely not talked about the idea that that, well, one barrier to housing could be essentially corruption, which is a word he used. But even like polite forms of corruption is very interesting.

[Tracy Alloway]

Yeah. All right, shall we leave it there?

[Joe Wiesenthal]

Let's leave it there.

[Tracy Alloway]

This has been another episode of the Odd Lots podcast. I'm Tracee Alloway. You can follow me at Tracy Alloway.

[Joe Wiesenthal]

And I'm Joe Wiesenthal. You can follow me hestalwart. Follow our guest Stephen Fullop. He's eevenfullup. Follow our producers Carmen Rodriguez, Erminarman, Dashiell Bennett at dashbot and Cale Brooks at Kalebrooks Brooks. For more Odd Lots content, go to bloomberg.com oddlots where we have a daily newsletter and all of our episodes and you can chat about all of these topics. Plenty of stuff in there about housing 247 in our Discord Discord GG oddlots.

[Tracy Alloway]

And if you enjoy Odd Lots, if you like it when we talk about housing policy and the origins of tumbleweeds, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes. Episodes absolutely ad free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

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[Joe Wiesenthal]

Power.

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[American Express]

Awards this is an iHeart podcast.