Research Center Offers Strategies for Turning New Jersey’s Distressed Properties into Community Assets in New Report

By Tom McLaughlin

Recovery from the historic numbers of distressed properties in New Jersey – especially in South Jersey, which bears the brunt of the burden – may be possible through a coordinated effort of multisector stakeholders, according to a new report from Rutgers University–Camden.

“Through such efforts, these ‘toxic liabilities’ can become community assets by repurposing them as residential properties and fulfilling a demand for affordable workforce housing,” says Darren Spielman, executive director of the Senator Walter Rand Institute for Public Affairs.

Spielman explains that distressed properties can become community assets.

The Rand Institute report, titled “An Investigation of the Foreclosure Problem in South Jersey and Proposed Strategies for Turning Toxic Liabilities into Community Assets,” details the foreclosed housing challenge in South Jersey and the lack of “workforce housing” in the region – entry-level housing, within reach of working-class and middle-income residents. Furthermore, it proposes a set of efficient solutions to return these abandoned and foreclosed properties to the market.

“These solutions will alleviate the negative impact of abandoned properties on neighborhoods, municipalities, and the region, and help to meet this workforce-housing need,” explains Spielman.

Among the key findings of the report, which was done in partnership with Land Dimensions and the Financial Wellness Institute:

  • New Jersey consistently ranks first or second in foreclosure rates across the United States.
  • The average percentage of renters in Atlantic, Burlington, Camden, Cumberland, Gloucester, and Salem counties that pay more than 30 percent of their gross income on housing cost is 57.4 percent, while homeowners in these counties pay 42.4 percent of their gross income.
  • Historically, home building has been an economic driver in South Jersey. The home-building industry in New Jersey has not recovered from the collapse of the real estate market.
  • The 78 homes examined in this report dropped an average of $83,439 in market value, an average decrease of 49 percent.
  • New Jersey’s inability to address issues that increase the cost of living, including property tax, transportation cost, median-housing cost, and health-care cost, plays a role in the large number of foreclosures in the state.

Based on research and public feedback, the report proposes several strategic solutions, including:

  • Convene a group of stakeholders, including elected officials and representatives from financial institutions, to discuss the foreclosure process and its effect on the housing market and local economies.
  • Work with tax-lien holders and municipalities to acquire and rehabilitate vacant and abandoned properties, and repurpose these properties for owner occupancy or rental.
  • Create a South Jersey Revolving Loan Fund to provide nonprofit organizations with capital to acquire and rehabilitate real-estate-owned, abandoned, and vacant properties.
  • Enact legislation to create land banks – governmental entities or nonprofit corporations that are focused on acquiring and developing vacant, abandoned, and tax-delinquent properties for future development.

The Senator Walter Rand Institute for Public Affairs at Rutgers University–Camden addresses public policy issues impacting southern New Jersey through applied research, community engagement, and organizational development.

Posted in: Community Outreach

Comments are closed.