The Recent Urban Revitalization Boom in Downtown Newark,New Jersey

Nexis said:

Well there are thousands of apartment underway as we speak...so you can't go by history anymore. Those are market rate units..

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I'm encouraged to hear about the thousands of units actually under construction -- do we have a neighborhood breakdown?

- downtown: about 600 I can think of not counting the honors dorm

- Ironbound?

- University Heights?

- elsewhere?(sorry about my bias)

felsonj said:

I'm encouraged to hear about the thousands of units actually under construction -- do we have a neighborhood breakdown?

- downtown: about 600 I can think of not counting the honors dorm

- Ironbound?

- University Heights?

- elsewhere?(sorry about my bias)

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My development map in my signature has a list of the number of apartments from projects I could find at that time. The map is color coded by construction progress at that point, and the approximate properties of the buildings. There are many more in the South and West Wards that are not on the map, especially recently. At that point, in December of 2015, I had found 1201 residential units under construction and 1872 approved by the Planning Board, meaning construction would like take a year or two to begin from that point on. Many of the projects actually occurred, and many more started showing up along Springfield Avenue and in Downtown. It is not broken down by neighborhood as the edges of the neighborhoods are quite fuzzy.

felsonj said:

What are people's thoughts about the affordable housing set aside bill that the Council will vote on tomorrow ? I was surprised to receive a mailer about it -- maybe it's intended more as a reminder to voters that Baraka is behind it (?)

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It's a joke and will set Newark back. No one is being displaced with the new developments.

dacunha213 said:

It's a joke and will set Newark back. No one is being displaced with the new developments.

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I think these set asides are generally bad public policy. I'm not opposed to the government subsidizing low-income housing but I think this is the wrong way to do it. First, it leads to higher taxes levied arbitrarily on one group -- developers and/or new residents. If politicians want to generate more money for subsidized housing they should raise taxes more broadly. Requiring developers to sacrifice X units isn't a principled means of taxation.

It's also a highly inefficient way to increase the stock of more affordable housing in the city. New buildings tend to be relatively higher end than the existing stock. Capping the rent of X% of units in such buildings produces relatively few affordable units at higher cost. Why not simply tax the developer and use the money to build more units in a less expensive locale?

felsonj said:

What are people's thoughts about the affordable housing set aside bill that the Council will vote on tomorrow ? I was surprised to receive a mailer about it -- maybe it's intended more as a reminder to voters that Baraka is behind it (?)

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Its a great idea but they should give an incentive to include the affordable units like a density boost, such that the affordable units do not count against the scale of the building. A 5th floor in an area with a 4 floor limit would allow them to get more money out of the same project for a relatively small increase in construction costs. Once you are already buying a site, designing a building, going through the approvals process, getting financing, and actually constructing the building with all of its mechanical systems, the cost of actually building one additional floor is minuscule.

If the developers are not given any incentive at all, I predict a lot of 29-unit buildings coming up, as the change only affects developments with 30 or more units.

Overall, it is necessary, as the developers only seem to be interested in building $1500-$2000 units while affordable units need to be about $1000 or less. The city has enormous amounts of affordable housing, but much of it is old and decaying, and there is an astronomical waitlist for affordable housing, with 25,000 applicants for 8,000 or so public housing units. If the private developers can provide the units themselves, it will reduce the load on the NHA.

felsonj said:

Facade work on the garage next to the vacant 12-story 1160 Raymond has me wondering whether the hotel project will get underway there sometime in the next ... anyone have info?

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I think it is 1150 Raymond and there was a plan to turn it into a Home2Suites extended stay hotel. As far as I am aware, the facade work is only for the low-slung parking deck and they stopped right at the edge of the 12 story tower on both sides.

felsonj said:

It would be interesting to know what percent of hotel occupancy in Newark is budget-minded visitors to NYC. To that end, perhaps hotel financing has become harder to obtain in Newark given the hotel boom in NYC that kept a lid on prices there.

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I think at least a portion of it is overflow from the Newark Airport. Instead of being isolated at the airport hotel, some are crossing over to Downtown for a similar cost room and all of the amenities like the bars and restaurants as well as the Ironbound shopping. However that is still being held up by the stubbornly sour outlook on safety in Newark as a whole. It is hard to attract tourists to Downtown when the shootings and robberies in the outer wards are being broadcast regularly on the news. Despite NYC's similar problem, many tourists are actually able to comprehend that East Queens is not the same place as Midtown Manhattan. For Newark, the whole place is perceived to look like the area around the scrapyards along Frelinghuysen Avenue, primarily because that is what is seen from the highways. The highways themselves are the primary public image of the city, and that is where the scrap yards and smashed windows are.

As far as NYC is concerned, no matter how fast they build those hotels, they still can't keep up with demand!!!
This is a market analysis of NYC hotels.
https://www1.nyc.gov/assets/planning/download/pdf/plans-studies/m1-hotel-text/nyc-hotel-market-analysis.pdf?r=1

According to that, there are 115,000 hotel rooms in New York City, and a different site said 4500 rooms were added last year, with just under 42,000 added since 2007. During that time period, overnight tourism visits have increased from 47 Million to 60.3 Million. In 2014, the most recent listed, average hotel occupancy across the whole city is 84.7% year-round, far higher than the national average of 64.4% the same year. In NYC alone, that rate had increased to 85.9% in 2016. The average hotel room cost also ranged from $251 to $269 per night! That alone could give incentive Newark hotels to be slightly cheaper in exchange for longer travel to Manhattan, still only 20-25 minutes by NJ Transit. All that is left is the tourism and PR campaign to promote Newark hotels to NYC tourists.