NEWARK, NJ — Newark is currently facing an enormous gap in its housing stock to provide affordable units for low-income residents, according to a report issued by The Rutgers Law School Center for Law, Inequality and Metropolitan Equity (CLiME).
More development and engagement from city officials and state legislators to address the issue and a call for more than 15,000-plus units to be provided at a more attainable rent for low-income residents is part of a solution, according to CLiME Director David Troutt and Katharine Nelson, a senior research fellow, who conducted the report.
“Residents need to know that their pain is real and that their frustration has been quantified,” Troutt told TAPinto Newark. “Things are just as difficult as they seem."
CLiME, a multidisciplinary research and advocacy center based in the Rutgers Law School - Newark that addresses issues of inequality through public engagement, embarked on a study of Newark’s affordable rental stock, not only as a central mission of CLiME, but to focus on issues related to structural inequality and housing in one of the country’s poorest cities.
“In Newark, the question is just how affordable is it and does it meet the needs of a particularly low-income population?” Troutt said.
During the study, the team focused particularly on conversations of housing policy that Newark is currently facing and the relentless impact of the COVID-19 pandemic.
“Everything that we had been seeing as indications of crisis for Newark families over the last few years have accelerated,” Troutt said. “It became increasingly important to us to be able to document the dimensions of the problem so that we can more effectively address the problem through policy initiatives.”
The report indicates the city currently falls short to provide adequate affordable housing for low-income residents by 16,234 units, renting for about $750 per month. The director explained that half of Newark residents have incomes of $30,000 or less, leaving a majority of residents in need of affordable housing at some level.
While noting the affordable housing situation in the city is acute, Troutt said what’s less clear is where those units are lacking, by how much and what sorts of targets the city should be formulating within its powers.
The report highlights that each of the North, South, West, and East wards have a gap of more than 3,000 low-cost units that rent for less than $900 with little demand for additional affordable housing that cost between $900 and $1,250 per month. The greatest need for very-low-cost units (less than $500 per month) is in the North, West and East wards.
When the group calculated a Newark Median Affordable Rent (NMAR) — which shows what Newark households can actually afford —it found that it totaled $763 per month, which is $330 less than the city’s actual median market rent, and more than $600 less than what is considered Fair Market Rent by the U.S. Department of Housing and Urban Development.
As Newark officials move to implement policy in the future related to affordable housing, the CLiME director said that there is a need to watch the numbers.
"Our analysis suggests that 'affordable units' constructed using available public subsidies may in fact exacerbate Newark’s rent burden because, remarkably, these new units are often more expensive than what many Newark renters can afford," the report states.
The group developed a methodological innovation to integrate the city’s rental housing subsidies into the affordability analysis in order to provide a “much closer picture of affordability” in a city where at least 28% of all units are subsidized.
“You have to see the use of subsidies as part of your overall governing strategy of equitable growth,” the director said. “You have to see these housing markets connected… how different sectors of housing inventory in Newark are moving in one direction and others are moving in another, which has serious implications for the shape of the city in the future.”
One affordable housing project before Newark officials that could be the benefactor of subsidies is the Kawaida Towers building property on Halsey Street, which the city authorized the sale of last month for nearly $24,000.
The applicants for the project proposed to build a 100% affordable, energy-efficient building consisting of 66 units. In addition to the project, the developer is also calling on the city to provide several subsidies such as $5 million in community development block grant funds and a tax abatement.
Although Troutt explained that the city should use every available resource to encourage affordable housing projects that may come before the city, ones that rent apartments at $1,200-1,400 a month and dubbed “affordable” for a population whose affordability needs are pegged at closer to $736, won’t address the affordable housing stock shortage.
“Part of what is important in the message that we send in our report is that the metrics on affordability are wrong for Newark, and that projects that are called ‘affordable’ because they are 60% of [area median income] may be hundreds and hundreds of dollars out of reach for the typical Newark household in need of affordable housing.”
The director explained that CLiME plans to host a meeting this Wednesday with the city's Equitable Growth Advisory Commission to bring awareness to the issue and provide more accurate data to encourage more effective policy decisions when housing projects come before the city to bring attention to the depth of the urgency and to give specific numbers to the task of policy goal-setting.
The city confirmed the meeting and had no comment at this time.
Troutt is also calling on the city to review what state legislators can do to assist Newark with its affordable housing shortage.
“Using HUD’s median income standard, the rents could be $400-700 out of reach, beyond what would be deemed affordable under a Newark median area rent,” he said. “Beyond its power, the city needs to know if we set these goals and use the kinds of subsidies and other leverage available to us, how do we make up for the difference? What kinds of appeals should we be making to state authorities? Exactly, how should the federal government step in to help a city like Newark meet its tremendous need?
“The city has to be the engine of last resort in fueling a market that no one wants to touch. That is housing affordable to very low-income people,” he said.
Newark officials working with a community network of development corporations around the city and the recently announced Land Bank initiative, which aims to increase homeownership and create affordable and market-rate housing, are advantageous to reach future "affordable housing" goals, Nelson said.
“Given the limitation on those resources, we suggest in our report that the city do all that it can to think creatively about leveraging those resources that it does have," Nelson said.