Urban Centers on Rebound
- Between 1990 and 1995, New York City accounted for 15 percent of the residential building permits issued in its larger metropolitan area. Between 2003 and 2008, however, it averaged 48 percent of the metro total.
- Philadelphia’s share of its metropolitan area’s building permit activity jumped from a mere 3 percent to 13 percent between the same two time periods. In 2008 alone, Philadelphia accounted for 16 percent of total metropolitan building permits, retaining its improved stature even in the face of the real estate downturn.
- Similar spikes in central-city permit activity in the mid-2000s occurred in many other large and mid-sized cities, including Chicago, Portland, Denver, Seattle, Milwaukee, Miami and Atlanta.
- The eight “urban centers” identified by New Jersey’s State Development and Redevelopment Plan (Newark, Jersey City, Paterson, Elizabeth, Trenton, Camden, New Brunswick and Atlantic City) accounted for only 3 percent of residential building permits issued statewide between 1990 and 1995—but jumped to 14 percent of those issued between 2003 and 2008.
Cities Experience Dramatic Increase in Residential Construction
In a recently released study, the U.S. Environmental Protection Agency examined building permit activity in the nation’s 50 largest metropolitan areas from 1990 through 2008 and compared the 2003-2008 period with the 1990-1995 period. The study, Residential Construction Trends in America’s Metropolitan Regions, found “a dramatic increase in the share of new construction built in central cities and older suburbs. Specifically, in roughly half of the metropolitan areas examined, urban core communities dramatically increased their share of new residential building permits.”
The fact that central cities and core suburbs are largely built-out from a land-development perspective necessarily implies that this residential building activity is taking place primarily as redevelopment—things like the conversion of non-residential buildings to residential use, infill development on land that has already been subdivided or demolition of older buildings, to be replaced by new housing construction on the same site.
This marked shift toward redevelopment sheds further light on the phenomenon of stabilizing—or even increasing—city populations noted by New Jersey Future last summer, and echoes a key theme of the annual New Jersey Future Redevelopment Forum last month.
A New Jersey Future analysis of building permits at the municipal level (a finer level of geography than the EPA study was able to consider) in New Jersey for the same time periods covered by the EPA study unmistakably produces the same pattern—a resurgence of activity in already-developed places. The eight “urban centers” identified in the State Plan accounted for a substantially higher percentage of total statewide building permits issued between 2003 and 2008 when compared to the early 1990s. And these gains are not limited to the major cities. Looking at all 204 municipalities that were at least 90 percent built-out as of 2002—a diverse assortment of urban centers, older suburbs, standalone towns and shore communities—these places as a group were responsible for 38 percent of all building permits between 2003 and 2008 (and 42 percent of those issued in 2008 alone), a better than three-fold increase over their 12 percent share for 1990-1995.
The resurgence can be seen throughout the state but was most dramatic in what can be thought of as the North Jersey “urban core”: Hudson, Essex, Union and Bergen counties, plus the lower neck of Passaic County (everything from Wayne east) and Middlesex County north of the Raritan River. This group of counties and county segments more than doubled its share of statewide building permits, from 16 percent in the 1990-1995 period to 34 percent in 2003-2008. Not coincidentally, Hudson, Union, Passaic and Middlesex were four of the six fastest-growing counties between 2008 and 2009, a position in which these counties had not found themselves in years—or, in some cases, decades.
No matter how we define “redevelopment” areas, the same phenomenon is apparent: After a long spell of stagnation, New Jersey’s already-built towns and suburbs are showing signs of life, in many cases outstripping the still-undeveloped fringe suburbs in terms of residential construction and population growth. Given that the market appears to be heading in the direction of redevelopment, it is clearly time for New Jersey state agencies and municipal governments to realign their growth policies to make redevelopment the default development pattern for the future.