CLiME in the News

Newark, New Jersey officials will limit yearly rent increases on newer construction and owner-occupied units to 5% – testing the limits of a state law that bans “unconscionable” rent spikes but doesn’t define how much is too much.

The new ordinance comes amid a boom in new city development and an affordability crisis fueled by inflation and rising rents.

“The affordability crisis in Newark is getting worse and likely to get much worse over time,” David Troutt, founding director of the Rutgers Center on Law in Metropolitan Equity, said during a City Council hearing on the ordinance this month.

Newark, NJ – March 20, 2023 – The City of Newark has issued a Request for Qualifications (RFQ) to enable it to choose experienced contractors, developers, and non-profits to participate in a major new equitable growth housing initiative. The new initiative will help increase affordability and build wealth through creating or renovating multi-family buildings and homes that residents can own, expanding opportunities for Minority/Women-owned Business Enterprise (MWBE) developers and contractors, and providing jobs and job training for Newark residents.

The initiative, “Equitable Investments in Newark Communities” is a response to reports by the Rutgers Center on Law, Inequality and Metropolitan Equity (CLiME) and the NJ Institute for Social Justice that document the enormous wealth gap between white and black/brown families in New Jersey. The reports also show that homeownership, the major path for families to build wealth, is being eroded in Newark by the widespread purchase of residential properties by corporate buyers. Links to the two reports are given below.

With rents rising across the state, Newark — New Jersey’s largest city — is taking steps to give families a chance to own a decent, affordable home. The city council recently passed an ordinance that requires housing developed on formerly city-owned properties to remain affordable for 30 years. The aim of the ordinance is to stop a trend of large investors snatching up properties that could instead be turned into low-cost housing. The measure also gives nonprofit housing developers a chance to match the offers from other developers, giving them a leg up in the bidding process.

“That was very important to us, because sometimes people gain a property here in the city through the proper process and then they sell it, flip it, rent it out for a large amounts of rent, where they sell it for a large amount as well. So we have no control over the property once we sell it to the buyer. Putting this new deed restriction in place for the city is really, really remarkable. It’s really a healthy step to trying to slow down gentrification and put some guidelines to it,” said Councilwoman LaMonica McIver, president of the Newark Municipal Council.

A New Jersey-based bank accused by the Justice Department of redlining to avoid making loans in predominantly Black and Latino neighborhoods agreed on Wednesday to create a $12 million homeownership fund, in one of the largest federal settlements of its kind.

Lakeland Bank admitted no wrongdoing as part of a consent decree brokered by the U.S. Department of Justice, which had been investigating the bank’s lending practices between 2015 and last year. But Lakeland has agreed to open two new branches, including one in Newark, and to increase mortgage lending in underserved communities of color in three northern New Jersey counties.

One part of the solution is to help families preserve home ownership after foreclosure and provide them with a chance to compete with institutional investors who have dominated the real estate market since the great recession.

A bill that Gov. Murphy conditionally vetoed last week does exactly that, but his response was measured and thoughtful. And his CV message reflected an understanding that a house is more about a family’s sanctuary than extracting equity and moving on to the next investment, so with thousands of New Jersey homeowners facing such peril every month, we urge lawmakers to get a revised bill back on the governor’s desk quickly.

New Jersey may make it easier for family members, lower income bidders and community nonprofits to purchase foreclosed homes under a bill sent to Gov. Phil Murphy on Wednesday reworking the sheriff's sale process to prioritize these buyers and discourage large investors from flipping those properties.

Under the “Community Wealth Preservation Program," New Jerseyans who have experienced foreclosure or their next of kin would get the first shot when the property goes up for auction, or the right of first refusal at the bid price.

And if a distressed homeowner can’t secure financing, they or a family member can request that a community development group buy the property and the nonprofit would have the second right of refusal, or second shot, at the bid price. If a housing nonprofit wins the bid on a foreclosed property, it would be required to restore and sell the house to a low-income family making no more than 120% of the county’s median income, or else rent the home to a family making below 100% of the county’s median income.

NEWARK, NJ – Newark officials want to make sure that as affordable housing units become available in the city, residents will be able to access and locate them.

In order to better serve residents seeking affordable housing, city officials announced this week the launch of NewarkHousingSearch.com, an online housing site locator that enables prospective tenants to find affordable units in the city. The online tool, which can be used free of charge, provides users the ability to search listings along with a variety of potential specs including, but not limited to, photographs, bedroom size and types, rental costs, eligibility and requirements.

NEWARK, NJ — U.S. Department of Housing and Urban Development (HUD) Secretary Marcia Fudge was pithy in her message to area officials during her visit to Newark on Monday to not let a windfall of federal dollars aimed to expand housing opportunities go by the wayside.

“The money’s there, but it’s not going to be there for a long time because Congress is already trying to claw back some of those resources,” Fudge told officials and community leaders during a roundtable discussion hosted at the Donald M. Payne Sr. School Of Technology in Newark. “We have more resources available to us today than we have received over the last few years that we’ll never have again. If you do not take advantage of it today, you will lose it.”

NEWARK, NJ — Newark officials are investing $20 million into multiple development projects through an initiative to make affordable housing more accessible to families earning less than the area median income.

Standing in front of the dilapidated Aspen Stratford Apartments located on the border of the city’s Central and South wards, Newark Mayor Ras Baraka announced plans to renovate the vacant building as part of a string of projects that will make headway under “Affordable Newark,” an initiative to provide quality affordable housing targeted at families earning $32,000 or less - 30% of the AMI for a family of four. The program is backed by the American Rescue Plan Act federal and local housing trust fund dollars.

The housing initiative falls in line with Baraka’s goal of building 3,000 new homes across Newark’s five wards by 2026 and to create or preserve thousands of affordable housing units for the city’s lowest-income residents.

NEWARK, NJ — There's a disheartening new trend developing in Newark. And it may be a big reason why the cost of renting a home is rising in New Jersey's largest city, a new study says.

Earlier this week, the Rutgers Center on Law, Inequality and Metropolitan Equity (CLiME) released a report that highlighted a startling statistic: nearly half of Newark's residential property is owned by corporations. It's the highest rate in the nation, researchers said.

"What has happened in other cities is happening in Newark, but on a scale unmatched anywhere in the country," the report states.

NEWARK, NJ — During the past three years Newark resident Deborah Smith-Gregory has been bombarded with daily phone calls urging her to sell her home.

“It’s been calling at all times of the day and night - both cellphone and landline. They say, ‘Are you interested in selling your property? We’ve been looking at your home, and we can offer you cash,’” said Smith-Gregory, a resident of the South Ward for about 30 years. “It’s all day to the point that I don’t even answer the phone if I don’t recognize the number.”

The problem doesn’t end for Smith-Gregory after she hangs up. Outside her front door, she sees “We Buy Houses For Cash” signs posted throughout her ward in the city’s Weequahic neighborhood and flyers posted on residents’ lawn railings and mailboxes.

Purchases of residential properties in Newark by corporate entities has caused rents to rise and owner-occupancy to fall, according to a new Rutgers study, prompting city officials to announce countermeasures.

The action includes transparency requirements for buyers and a surcharge on rent increases even for houses and apartments not subject to rent control.

The trend, which largely involves single-family and 2, 3 and 4-unit houses or apartment buildings, is alarming, researchers say, because rising rents in the distressed areas of Newark where it’s focused puts added pressure on renters struggling with lingering unemployment or economic slowdown linked to the pandemic. Officials said those added pressures could lead to increased homelessness, dislocation, and other forms of neighborhood and housing instability.

Newark, NJ – May 4, 2022 – Mayor Ras J. Baraka today announced a wide-ranging package of proposed measures to mitigate the effects of the purchase of owner-occupied homes by large-scale investors in a press conference at City Hall. The proposed initiatives are in addition to the Mayor’s numerous programs to increase homeownership, prevent evictions, avoid gentrification, and make housing in Newark more equitable.

The COVID-19 pandemic accelerated this decade-long national trend in residential real estate which results in rapidly rising rents, decreased homeownership, reduced availability of affordable housing, renter displacement, and less stable communities.

Mayor Baraka praised “Who Owns Newark,” a research report authored by David D. Troutt, Distinguished Professor of Law; Director of the Rutgers Center on Law, Inequality and Metropolitan Equity (CLiME) and a member of the City’s Equitable Growth Advisory Commission for providing data and recommendations to inform the City’s response. The City will work with the Equitable Growth Advisory Commission to address issues raised by “Who Owns Newark.”

NEWARK, New Jersey (WABC) -- Newark Mayor Ras Baraka on Wednesday announced wide-ranging initiatives to combat large corporations from purchases of private homes.

The proposed initiatives are in addition to the mayor's numerous programs to increase homeownership, prevent evictions, avoid gentrification and make housing in Newark more equitable.

Baraka said the COVID-19 pandemic accelerated a dangerous decade-long national trend in residential real estate, and in cities and suburbs, corporations are buying up millions of owner-occupied homes and turning them into rentals.

NEWARK, NJ — An extensive list of accomplishments Newark Mayor Ras Baraka felt he’s achieved during his eight years in office took center stage at his annual State of the City Address.

Baraka delivered his eighth State of the City Address to a crowd of at least 900 people at the New Jersey Performing Arts Center Tuesday in downtown Newark just five months after his last State of the City Address in October 2021, where he spent a lengthy portion of that event touting the city’s coronavirus pandemic response.

During Tuesday’s address, Baraka again highlighted the city’s pandemic response while pointing to other notable achievements by his administration in various sectors such as economic development, employment, and public safety. A full transcript of the mayor's speech can be viewed here.

Newark, NJ-March 8, 2022- At today’s Newark Municipal Council meeting, Mayor Ras J. Baraka introduced amendments to the City’s Inclusionary Zoning Ordinance (IZO) targeted to increase the supply of housing that residents can afford and ensure that Newark is an equitable city. As required by law, the Council voted to refer the amendments to the Central Planning Board for review.

The Newark IZO, originally adopted on October 4, 2017, is one of the strongest in the nation, requiring developers of City projects of 30 units or more to set aside 20% of their units to be affordable for low-and-moderate-income families over a range of incomes, from below $40,000 annually to $80,000 for families of four. The amendments strengthen the original ordinance by expanding the number of developments required to participate.

NEWARK, NJ — The City of Newark’s ability to distribute federal Emergency Rental Assistance Program (ERAP) funds during a housing crisis spurred by the coronavirus pandemic was lauded as a “success story” compared to other large New Jersey cities, according to a recent study by the New Jersey State Policy Lab at Rutgers University.

The study, “The New Jersey Housing Crisis in a COVID Era: Mapping Strategic Processes,” looked at the impact and challenges faced by local governments seeking to dole out rental assistance during the pandemic, particularly in urban cities where housing shortages and evictions existed before March 2020. Alongside Newark, the study focused on the efforts of four municipalities to disburse federal aid in Jersey City, Trenton, Elizabeth and Camden.

The New Jersey State Policy Lab at Rutgers University released a study of challenges faced by local governments seeking to quickly distribute emergency rental assistance during the COVID-19 pandemic, citing the city of Newark as a success story. Although housing shortages and evictions were a problem before March of 2020, they became a crisis when lockdowns and shuttered businesses resulted in job and income loss, an impact that has been especially severe in urban communities.

“The pandemic revealed what is an ongoing emergency for far too many New Jerseyans,” said David Troutt, founding director of the Newark-based Rutgers Center of Law, Inequality and Metropolitan Equity (CLiME), and lead author of this study. The report focuses on the efforts of five municipalities to disperse federal Emergency Rental Assistance Program (ERAP) funds: Newark, Jersey City, Trenton, Elizabeth, and Camden.

PLEASANTVILLE — A local pastor brought his Black History Month teach-ins to a close by discussing strategies for combating residential segregation and inequality and creating a better future.

Mount Zion Baptist Church hosted its fourth and final Black History Month symposium last Wednesday. The event further explored the series’ overarching theme of applying the lessons of Black history to reduce racial inequality and segregation in modern-day America. It centered on a discussion among Mount Zion senior pastor Willie Francois III and several academics who specialized in topics studying history, law and race.

EAST ORANGE, NJ - With the erection of large market rate buildings with high rents, and homes with large price tags for sale, report says housing options in East Orange and Orange are becoming increasingly unaffordable.

Under the guidance of David Troutt, the founding director of the Rutgers Center on Law in Metropolitan Equity (CLiME), and Katharine Nelson, Senior Research Fellow, a report was published exploring the issues of housing in the Oranges and beyond titled, "Housing Gaps in Cities of Color: Affordability Trends in Newark's Inner-Ring Suburbs of Irvington, Orange and East Orange."

NEWARK, NJ — More affordable housing projects are planned in Newark to meet the demand of residents after the city this week announced the first seven projects to be built under “Affordable Newark,” a new housing initiative targeted to families earning $32,000 and less.

Affordable housing has been a key focus for Newark Mayor Ras Baraka’s administration after he laid out his plans earlier this year to build 3,000 new homes across the city’s five wards by 2026 and to create or preserve at least 6,000 affordable housing units for its low-income residents.