Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.
Speaker 3: I'm Jill Whysenthal and I'm Tracy Alloway.
Speaker 2: Been covering little local politics these days. Tracey, it's not
Speaker 2: our normal beat, but sometimes there's a little intersection.
Speaker 3: We're going local, not macro micro.
Speaker 2: We're going micro. So it's interesting because we did a
Speaker 2: recent episode. Listeners may remember it was one of the
Speaker 2: candidates for the mayorship here in New York City's are
Speaker 2: on Mom Donnie and he sort of talked about his
Speaker 2: vision for affordability. Actually backing up for a second, it
Speaker 2: feels like housing affordability is suddenly swamping everything is the
Speaker 2: issue almost regardless of your perspective, that is like on
Speaker 2: top of many people's minds these days.
Speaker 3: Well also, so we've talked about this before, but also
Speaker 3: seems like a bipartisan issue, right and like you don't
Speaker 3: get a lot of bipartisan things nowadays. I'll just put
Speaker 3: it that way.
Speaker 2: No, but it's interesting, like you know, at one point
Speaker 2: there is like healthcare and sometimes climate other time. Right now,
Speaker 2: it just feels like there is such a so much
Speaker 2: anxiety about housing affordability and all this stuff, and it
Speaker 2: feels like it's a nationwide thing. Within the Democratic Party,
Speaker 2: there are different wings of how people talk about it,
Speaker 2: so we obviously talked to the socialist candidate for mayor.
Speaker 2: There's also what people would call like this sort of
Speaker 2: like more liberal abundance view that you know, the answer
Speaker 2: is just we just need more and use whatever levers
Speaker 2: to pull to like get more in some way. So,
Speaker 2: you know, even within one party though, although everyone sort
Speaker 2: of agrees on rent and affordability, not a lot of
Speaker 2: consensus on the path there.
Speaker 3: Yeah, so the overall goal is very clear, but I
Speaker 3: guess like the levers that you're going to pull to
Speaker 3: get there are very complicated, And I have to say
Speaker 3: that's one thing that I kind of struggle with in
Speaker 3: those topics. It seems like there are so many different
Speaker 3: things that you could do, and all of them seem
Speaker 3: very like bureaucratic, very technical tax abatements, all these incentives
Speaker 3: rent control, and it's interesting to me how you choose
Speaker 3: between them about what's going to be most effective.
Speaker 2: Can I just say, by the way, you know, I
Speaker 2: think a lot of these debates are very part of
Speaker 2: the reason they exist because the media is very heavily
Speaker 2: represented in New York and San Francisco. I mean, I
Speaker 2: don't think that there's a no affordability crisis in like Devenport,
Speaker 2: Iowa to the same degree, and I think that's important
Speaker 2: to acknowledge. I also think like New York and you know,
Speaker 2: San francisc are some of the best places in the world,
Speaker 2: so I get why people pay a lot of money
Speaker 2: for them. Anyway, it turns out one of the best
Speaker 2: cities over the last several years in the entire country
Speaker 2: for housing production is our neighbor, Jersey City, right across
Speaker 2: the water. I really like Jersey City. I've spent a
Speaker 2: little bit of time there, and their mayor, Stephen Phillip,
Speaker 2: is running for governor in the Democratic primary right now,
Speaker 2: so we have the perfect guest to talk about Jersey
Speaker 2: City housing production.
Speaker 4: Stephen Phllip.
Speaker 2: Thank you, Thank you so much for coming on odd Laws.
Speaker 4: Thanks for having me. I appreciate being here.
Speaker 2: For those people who don't know, you've been in the
Speaker 2: mayor of Jersey City for how long I think I
Speaker 2: saw it was like in the last ten years, housing
Speaker 2: stock has increased like twenty five percent something like that.
Speaker 5: Yeah, I mean, we used to be maybe two percent
Speaker 5: of the state's building permits. We're upwards of ten percent now.
Speaker 5: I mean, we've been the backbone economically the state of
Speaker 5: New Jersey. I've been the mayor there for twelve years.
Speaker 5: I've been unapologetically very very pro growth. You could see
Speaker 5: the skyline change across the river. So it's been a
Speaker 5: good story and we're growing and I'm very proud of
Speaker 5: the changes that have happened.
Speaker 3: What's the biggest choke point or hurdle when it comes
Speaker 3: to building more affordable housing? Because everyone seems to have
Speaker 3: a different answer to this and different things that they
Speaker 3: would put emphasis on. But in your view, what's number one?
Speaker 4: What do other people say? Out of curiosity?
Speaker 3: The people say like zoning and things like that, incentivizing
Speaker 3: the developers to build something other than luxury high rises,
Speaker 3: that sort of thing.
Speaker 4: I'd point to a couple of things.
Speaker 5: I mean, in New Jersey, we have definitely have an
Speaker 5: incentive program that is complicated. We have obviously zoning with
Speaker 5: home rules, so you have a lot of municipalities five
Speaker 5: hundred and sixty four municipalities, which is problematic and home rule,
Speaker 5: So how do you overcome that, which I think we
Speaker 5: have some solutions for and I think that generally speaking,
Speaker 5: across the country you have kind of the Nimby sentiment
Speaker 5: monopolizing the conversation. And how do you wrestle that away
Speaker 5: from them is different in each city or state, But
Speaker 5: in New Jersey, I think we've done a pretty good
Speaker 5: job of kind of creating a dynamic where the people
Speaker 5: that are pro growth.
Speaker 4: Can also have a voice there.
Speaker 2: You've been pretty unapologetic in your view that market rate
Speaker 2: housing benefits everyone, that there's supply and demand, you expand supply,
Speaker 2: it filters down, et cetera. You talk about quote affordable
Speaker 2: housing unquote, but give us your general philosophy of housing
Speaker 2: and make it more affordable and why you believe that
Speaker 2: a lot of the solution is essentially liberalizing and supply
Speaker 2: and demand.
Speaker 5: Yeah, I think people build what they want with there. Yes,
Speaker 5: I think that when you put more restrictions around housing
Speaker 5: growth so you know, rent control sounds like a good buzzwords,
Speaker 5: But when you're too restrictive around that stuff, you're going
Speaker 5: to create a situation where you're not seeing supply being increased.
Speaker 5: We've seen in Jersey City pressure when New York City
Speaker 5: isn't growing on our housing prices, and when we've grown
Speaker 5: a lot, you've seen the demand still high, but the
Speaker 5: rent increase is subside.
Speaker 4: So it leads you to the.
Speaker 5: Conclusion that the market rate component of housing is as
Speaker 5: important to the conversation as the affordable conversation. And you know, look,
Speaker 5: a lot of people push back for a variety of reasons.
Speaker 5: Sometimes it's rooted in racism. I mean, people have a
Speaker 5: different reaction if you use the word affordable housing versus
Speaker 5: housing that's affordable. They have a different kind of thought
Speaker 5: process around that. But the reality of the situation is
Speaker 5: that market rate housing helps you build more affordable housing
Speaker 5: or housing that's affordable, and they have to work together
Speaker 5: to be successful. And that's how we've approached it in
Speaker 5: Jersey City and it's really been successful.
Speaker 3: So one of the criticisms of market rate is that
Speaker 3: you end up with those developers just building the luxury
Speaker 3: apartments because they can ring more money out of those.
Speaker 3: How do you address I guess the balance between luxury
Speaker 3: housing versus I don't know, housing for the middle class
Speaker 3: or housing that's further down the spectrum.
Speaker 5: Yeah, so in Jersey City, we do have kind of
Speaker 5: set asides or inclusionary zoning ordinances and those are important.
Speaker 4: We've gone back and forth with the.
Speaker 5: Advocacy groups on what's actually achievable, and we've actually come
Speaker 5: to a place that's pretty successful. And we generally target
Speaker 5: about twenty percent of a housing development to be a
Speaker 5: blended affordable component. So that could be workforce housing, that
Speaker 5: could be low income housing, which is obviously more stressful
Speaker 5: on the overall project. So you got to factor some
Speaker 5: of that stuff in. But we do have, you know,
Speaker 5: a specific minimum requirement when they do get a specific
Speaker 5: incentive like a tax abatement from the city.
Speaker 4: Well specific lever.
Speaker 2: So, Okay, you've been the main of Jersey City for
Speaker 2: twelve years. Is objectively true that the skyline has changed
Speaker 2: a lot, Is objectively true that the housing stock has grown.
Speaker 2: I'm sure it's benefited just from the fact that, you know,
Speaker 2: Manhattan and New York City has been fairly dismal about
Speaker 2: expanding housing supply, and so people look elsewhere. But versus
Speaker 2: before you came into office, Now, what are the specific
Speaker 2: levers that you've pulled to expand production and how can
Speaker 2: you like attribute you know, when you do an attribution
Speaker 2: of the housing stock, what can you say to what
Speaker 2: you've done.
Speaker 4: So.
Speaker 5: When I came into office, the tax abatement or incentive
Speaker 5: program was very political in nature, and it seemed to
Speaker 5: be by right for the developers that were pursuing it.
Speaker 5: And there were two problems with that. The politics of
Speaker 5: it created kind of uncertainty and apprehension about people investing
Speaker 5: in a market if they weren't familiar with the politics
Speaker 5: about it. And the uncertainty of how the process worked
Speaker 5: was problematic as well. So we came in and we
Speaker 5: changed the policy entirely, and people said it we wouldn't
Speaker 5: see the mount of growth. But I viewed it at
Speaker 5: the time that it was such a given that you
Speaker 5: would get these tax abatements that it didn't necessarily incentivize
Speaker 5: more growth. It was already factored into the seller's price
Speaker 5: and the buyer's price and the private transaction. So we
Speaker 5: had to recalibrate that market a little bit. And so
Speaker 5: what I did was we changed the tax abatement process
Speaker 5: where we mapped it to census. Tracts based on poor
Speaker 5: census were automatically entitled to a steeper incentive. And what
Speaker 5: you've gradually saw was people moving away from the waterfront
Speaker 5: and investing money because it seemed more certain the process,
Speaker 5: and it seemed to have a clear advantage if you
Speaker 5: were moving to certain areas. And we mapped it to
Speaker 5: the census track, which seemed like a reasonable way to
Speaker 5: map it towards income where you're trying to instigate development,
Speaker 5: and so that worked, and I think that that clarity
Speaker 5: really helped people invest and attracted new developers to the area.
Speaker 5: So we were no longer relying on the same small
Speaker 5: pool of developers. And I think the certainty was very
Speaker 5: good because you know, New Jersey has a history of
Speaker 5: political corruption, and feeling that there was some process around
Speaker 5: this that it wasn't necessarily predicated on what lawyer or
Speaker 5: architect you hire created a better climate for business.
Speaker 3: So you mentioned widening the pool of developers, and this
Speaker 3: is something that Joe and I are really interested in.
Speaker 3: We went down to North Carolina and learned that towns
Speaker 3: and cities really have to make pitches to developers to
Speaker 3: get them to come in. What's the process of, I guess,
Speaker 3: working with a developer talking to them actually like, what
Speaker 3: are the things that they are looking for specifically?
Speaker 5: Well, look, I think that they are interested in an
Speaker 5: administration that seems less political in nature and more focused
Speaker 5: or aligned in a pro growth mentality that recognizes that
Speaker 5: they are in the business of providing housing and there's
Speaker 5: mutually beneficial outcomes if we work together. When I became
Speaker 5: the mayor of Jersey City, one of the things that
Speaker 5: I did with the existing developer pool was I recognized
Speaker 5: the fact that we needed to market the city better
Speaker 5: to the surrounding areas. I knew that, you know, not
Speaker 5: necessarily Soho or Tribeco was in a comparison to Jersey City.
Speaker 5: Somebody wasn't making the choice should I live in Tribeca
Speaker 5: or Jersey City, but certainly with Brooklyn and Queens and
Speaker 5: the outer boroughs. So we got most of the larger
Speaker 5: developers at that point together, and what I said to
Speaker 5: them was that we would do a marketing campaign where
Speaker 5: the city's Economic Development Corporation would match the private dollars
Speaker 5: one for one, and it would be targeted in these
Speaker 5: areas that we think that we can attract new residents
Speaker 5: and new developers. And I was very deliberate that it
Speaker 5: would not be political in nature, like I would not
Speaker 5: appear in this, My voice would not be a part
Speaker 5: of it. It was going to be focused on branding
Speaker 5: the city in a different way that ultimately led to
Speaker 5: more interests, more demands, more developers, and I think that
Speaker 5: that was a very very helpful step that we did
Speaker 5: out of the gate. The politics is always problematic and
Speaker 5: people are apprehensive about that.
Speaker 3: Wait, what do you mean by political exactly?
Speaker 5: Well, the political is in most places, at least in
Speaker 5: New Jersey, it's been a history of who you know
Speaker 5: and a very small cadre of relationships that have allowed
Speaker 5: you entree into the process. And in a place like
Speaker 5: New Jersey where a lot of the rules are codified
Speaker 5: in a very very loose way, you feel obligated that
Speaker 5: you got to have a real certain type of relationship.
Speaker 5: And the more you can remove that towards the business climate,
Speaker 5: the more likely people are to invest in them. And
Speaker 5: I feel like that's been the kind of a big
Speaker 5: change in Jersey City overall.
Speaker 2: This is super interesting. I don't think this dimension of
Speaker 2: housing unaffordability or the challenges to production has come up.
Speaker 2: But when you look at still today Jersey overall, you're
Speaker 2: running for governor, do you still see, like outside of
Speaker 2: Jersey City a general tendency towards it's going to be
Speaker 2: difficult to get approvals and so forth, if you aren't
Speaker 2: with the right architect, if you aren't with the right paper,
Speaker 2: and so forth. Is that still an endemic problem in
Speaker 2: New Jersey at constrainings and the supply of house.
Speaker 5: I think it's a cultural issue in New Jersey. I mean,
Speaker 5: we had a senator that is about to go to
Speaker 5: jail for gold bars. I mean that's a example of
Speaker 5: the political culture of how people perceive New Jersey. I
Speaker 5: think that any reasonable person would estimate that you're in
Speaker 5: the two hundred thousand unit shortage range for the state
Speaker 5: of New Jersey, now maybe given a little and the
Speaker 5: production of affordable units is roughly only like three thousand
Speaker 5: a year, so you're looking at close to seventy years
Speaker 5: to cure the backlog that you have today. It's quite significant,
Speaker 5: and there is a sentiment that, you know, municipality by
Speaker 5: municipality has this disproportionate amount of control over the outcomes
Speaker 5: of housing production. And part of the job as governor
Speaker 5: will be to kind of change that narrative. So the
Speaker 5: nimbi's not my backyard, are the not monopolizing the conversation?
Speaker 5: And there's a lot of ways that I think a
Speaker 5: governor can do that.
Speaker 3: Well, let's talk about that. How do you deal with
Speaker 3: the nimbi's.
Speaker 2: And the localities fight it because there must be tension
Speaker 2: between state versu.
Speaker 5: Local Yeah, I think there's a couple of things you
Speaker 5: could do. So New Jersey has a fair share housing
Speaker 5: requirement which has been litigated for thirty forty years, where
Speaker 5: every municipality is going to have some sort of obligation
Speaker 5: on housing, and a lot of the municipalities push back.
Speaker 5: If it's a suburban municipality, they say, well, you're obligating
Speaker 5: us to this two hundred affordable units and they come
Speaker 5: under an eighty twenty rule, So the two hundred units
Speaker 5: equates to roughly one thousand units overall, which is kind
Speaker 5: of The mayors would say its taxing on their infrastructure,
Speaker 5: which is true. So the nimbi's then co opt the
Speaker 5: conversation and drag these out in court for some period
Speaker 5: of time.
Speaker 4: So trentd.
Speaker 5: A I think, can do a better job of creating
Speaker 5: transparency around your municipality where it is in the process
Speaker 5: today that doesn't exist. So for example, if Westfield to
Speaker 5: use that as an example of municipality is cooperating and
Speaker 5: doing a good job. There's no transparency to that. So
Speaker 5: the nimbi's generally control the conversation at the planning boards
Speaker 5: because of the fact that there's a lack of information.
Speaker 5: So I think TREND being helpful in that is part
Speaker 5: of it. Number two is that if you have an
Speaker 5: objective to new housing, which New Jersey does, and when
Speaker 5: a mayor or council people say that you're going to
Speaker 5: make us build these thousand units but added children in
Speaker 5: the schools, added needed infrastructure, I do think TREND needs
Speaker 5: to tie dollars in resources to those municipalities that are cooperating.
Speaker 5: You do need a carrot and stick approach, otherwise you're
Speaker 5: never going to get mayors to actually move in a
Speaker 5: place that has home rule like New Jersey.
Speaker 3: Okay, so speaking of municipalities and infrastructure, Yeah, one of
Speaker 3: your proposals is consolidating some of those municipalities so that
Speaker 3: you don't have a doubling or I guess triplicating quadruplicating
Speaker 3: is that a thing of services in order to cut costs?
Speaker 3: And I get that cutting government services and costs is
Speaker 3: obviously very hot right now, But what particular benchmarks or
Speaker 3: targets are you looking at here, and how do you
Speaker 3: ensure I guess, quality of service as you consolidate.
Speaker 5: Yeah, so I think the way that we start this
Speaker 5: is more focused on shared services than absolute consolidation. And
Speaker 5: from a mayoral standpoint, knowing that again, New Jersey has
Speaker 5: five hundred and sixty four municipalities, a lot of municipalities
Speaker 5: for a very very small area, all with home rule,
Speaker 5: and all have departments that are not necessarily important by
Speaker 5: municipality for municipality. Just to put in perspective, seventy five
Speaker 5: percent of those five hundred and sixty four municipalities have
Speaker 5: less than twenty thousand people. Fifty percent of them have
Speaker 5: less than ten thousand people. So a lot of very
Speaker 5: small municipalities that all have offices like health departments which
Speaker 5: should probably be at the county, animal control should be
Speaker 5: at the county, things like that. And so I think
Speaker 5: that we've outlined the process to create leverage over the
Speaker 5: municipalities via referendum and to force kind of shared service
Speaker 5: once try has leverage, and I think that's the way
Speaker 5: you got to get there, because nobody's going to voluntarily
Speaker 5: give up parts of their government unless you have trend
Speaker 5: creating leverage on.
Speaker 3: That why hasn't this been done before? Because when I
Speaker 3: think about animal control, for instance, it does seem kind
Speaker 3: of crazy that you have hundreds, dozens of municipalities that
Speaker 3: are all running their own animal control services. But like
Speaker 3: I imagine, there must be a challenge in doing some
Speaker 3: of this.
Speaker 5: I think that for the most part, mayors and council
Speaker 5: people are reluctant to give up departments or relationships. Often
Speaker 5: the people that work in these small municipalities or large municipalities,
Speaker 5: or personal relationships. You may know the person's family, they've
Speaker 5: been there for a long time, and so just the
Speaker 5: bureaucracy and stagnation is what ends up getting you into
Speaker 5: this place of not wanting to make any change. People
Speaker 5: have talked about it for twenty years about some sort
Speaker 5: of consolidation. The difference in how we're approaching it is
Speaker 5: that we are using kind of the referendum process around
Speaker 5: bonding for municipalities to create leverage over the municipality is
Speaker 5: to force it. Apps In forcing it, you're never going
Speaker 5: to get it to happen. That's the truth, and so
Speaker 5: it's a little bit of a different approach. I could
Speaker 5: tell you that the League of Municipalities, which is the
Speaker 5: advocacy group for all five hundred and sixty four municipalities
Speaker 5: in New Jersey hates what I say, which probably tells
Speaker 5: you that I'm right.
Speaker 4: About it, to be honest with you, but that's kind
Speaker 4: of where we are.
Speaker 2: Jersey City, I think at twenty to twenty two approve
Speaker 2: something where developers, on a voluntary basis can expand a
Speaker 2: number of units in a plot in exchange for some
Speaker 2: level of affordable uni eskumitment. Is that being utilized, like
Speaker 2: what is the math work? It's voluntary to include more
Speaker 2: affordable units and then they get to expand.
Speaker 5: The number of Is that being utilized? It's used actually
Speaker 5: a lot. So it's a little bit different than the
Speaker 5: inclusionary zoning ordinance, which was you get an approval and
Speaker 5: let's say twenty percent has to be inclusionary zoning depending
Speaker 5: on what the zoning changes. This was an overlay zone
Speaker 5: that we put in place that basically what it's said
Speaker 5: is that within the existing envelope of the building, so
Speaker 5: from an outside you could just add more density in there.
Speaker 5: It is being used because what you see in Jersey
Speaker 5: City is you see a lot of these smaller units
Speaker 5: in these larger buildings and they trade it roughly from
Speaker 5: the downtown area, let's say one hundred thousand dollars a.
Speaker 4: Door on approval.
Speaker 5: So it's of high value to do that for us
Speaker 5: from the city standpoint.
Speaker 2: Wait, that mean trade at all?
Speaker 5: Like if you sell Let's say, if you let's say
Speaker 5: you were a building is approved for ten units, you
Speaker 5: would say it's roughly would be one hundred, would be
Speaker 5: a million dollars, okay, So and that math is exponential
Speaker 5: for if you have a three four hundred unit building.
Speaker 5: From our standpoint, it was the best way to approach
Speaker 5: a need for affordable housing without changing the esthetics or
Speaker 5: the scale of the building on the outside, which is
Speaker 5: problematic off into kind of the community group, so to speak.
Speaker 5: So it is being used. I would probably say it's
Speaker 5: being used as much, if not more than the inclusionary
Speaker 5: zoning ordinance that we have in place, and it's just
Speaker 5: been another tool to kind of increase affordable housing production.
Speaker 3: Since you mentioned aesthetics, I find those really interesting because
Speaker 3: esthetics doesn't always come into the conversation on affordable housing,
Speaker 3: and it is an issue for a lot of people.
Speaker 3: And I think about the look of Jersey City versus
Speaker 3: I don't know a Hoboken or something like that. They're
Speaker 3: very different. How important are aesthetics in your conversations? And
Speaker 3: I guess how do you address some of those issues.
Speaker 5: We have a good planning department and we've gotten better
Speaker 5: at it as we've gotten more sophisticated developers into Jersey City.
Speaker 5: It's allowed us to be more aggressive with the aesthetics
Speaker 5: and push developers a little bit more.
Speaker 3: So you can dictate what things will look.
Speaker 5: We we can to some degree, and I think that
Speaker 5: as the marketplace has become more competitive, the natural outcome
Speaker 5: of the private sectors that they're pushing each other to
Speaker 5: better products that look better, feel better, better amenities, you know,
Speaker 5: whether it's a pool or a kind of a little
Speaker 5: golf range or whatever they got going on in there.
Speaker 5: It's changed over time a little bit better. And because
Speaker 5: we've grown so much, everybody's thinking about how to make
Speaker 5: their building more competitive. The building are being absorbed into
Speaker 5: the market as quickly as we're building them. They would
Speaker 5: tell you that that's largely because of New York's lack
Speaker 5: of construction, which is a bigger problem, but it also
Speaker 5: has benefited us from the aesthetic standpoint.
Speaker 4: For sure.
Speaker 2: So here's a big picture thought that I have go
Speaker 2: for it, and I kind of hinted at the beginning,
Speaker 2: But New York City and our neighbors on the other
Speaker 2: side of the water greatest place to live in the
Speaker 2: entire world.
Speaker 4: In my opinion.
Speaker 2: The economic opportunities for an individual here are extraordinary. The
Speaker 2: cultural opportunities are extraordinary. I understand intuitively why rents here
Speaker 2: or mortgages are so expensive because it's the best place
Speaker 2: in the entire world. Jersey City has expanded the housing
Speaker 2: stock quite a bit, but also affordability has worsened over
Speaker 2: the last decade or so. Is that inevitable because it's
Speaker 2: just so good. People want to live in the best
Speaker 2: place in the world, and so it's going to get
Speaker 2: more expensive because this is where they're sort of like
Speaker 2: when I talk to a lot of the yimbi's, I
Speaker 2: understand like expanding production there's good for the economy, et cetera.
Speaker 2: I'm less convinced that market housing or any housing can
Speaker 2: actually make these places cheaper because they're so good, they're
Speaker 2: so desirable. Well like, can you actually like solve affordability
Speaker 2: or do you just have a lot more people here?
Speaker 5: And that's good enough, you could definitely slow the growth
Speaker 5: of rental increases. Okay, so whether you're going to have
Speaker 5: a massive rental decrease, I don't know, but you could
Speaker 5: definitely slow the growth. And we've seen that in the
Speaker 5: last year two years, whereas Jersey City was consistently ranked
Speaker 5: as very very steep rent increases and it was problematic
Speaker 5: that has slowed because of the supply conversation. Specifically though
Speaker 5: for Jersey City, I think that yes, we have been
Speaker 5: a victim of our success in many ways and a
Speaker 5: victim of New York's lack of construction. So if you
Speaker 5: are going to have a regional solution, New York and
Speaker 5: particularly Manhattan needs to carry its weight, which is not
Speaker 5: happening today.
Speaker 3: Just on this beggar thy neighbor issue. I guess, do
Speaker 3: you talk to other cities and other towns about like
Speaker 3: what they should be doing? And I guess how replicable
Speaker 3: is the Jersey City model for a place like New
Speaker 3: York or Hoboken or wherever.
Speaker 4: Well.
Speaker 5: I think there's a lot of good things that have
Speaker 5: happened in Jersey City, and some of the mayoral candidates
Speaker 5: do reference the amount of housing production because it's been
Speaker 5: pretty astronomical in Jersey City. It kind of speaks to
Speaker 5: the lack of production again in New York. I think
Speaker 5: as governor there's a lot of things that you can
Speaker 5: do to change the climate in New Jersey around housing production.
Speaker 5: And one of the challenges that we've had in New
Speaker 5: Jersey is you haven't had a governor with municipal experience
Speaker 5: in twenty years, you know, you know, Phil Murphy came
Speaker 5: from being ambassador, and Chris Christy was a use attorney,
Speaker 5: and John Corzin was you a senator, and et cetera,
Speaker 5: et cetera. So I do think understanding the touch points,
Speaker 5: the leverage points, how to motivate somebody at the municipal
Speaker 5: level is very, very important to being a governor in
Speaker 5: a place like New Jersey.
Speaker 2: Actually, speaking of politics, I think in this race, are
Speaker 2: you the only candidate in the race that supports the
Speaker 2: congestion pricing sea?
Speaker 4: All Right?
Speaker 2: As a resident of Manhattan who doesn't drive much in
Speaker 2: the city, I think congestion pricing is great. But I'm
Speaker 2: not you know, I'm not.
Speaker 5: Using why am I as a New Jersey resident thinking
Speaker 5: that it's all how do you sell it?
Speaker 4: How do you sell it? Well, look, people ask me
Speaker 4: in a lot.
Speaker 2: This is like also gets to some of the other
Speaker 2: questions around housing witches that some of these benefits are
Speaker 2: diffused the long term and not meet it.
Speaker 5: So how do you sell So first of all, if
Speaker 5: you care about the health issues, or the environment issues,
Speaker 5: or mass transit issues, then obviously you should be supportive
Speaker 5: of the concept of congestion pricing to begin with. I say,
Speaker 5: secondly to people, if you take a step back and
Speaker 5: get away from kind of polling data which people would
Speaker 5: say I don't like the idea of an additional search charge.
Speaker 5: If you ask yourself, who is the person that drives
Speaker 5: their personal vehicle from New Jersey every day to midtime
Speaker 5: Manhattan then pays fifteen hundred dollars to park the car
Speaker 5: in midtowm Mahaanan. It's not regular working class people. Regular
Speaker 5: people take the trains and buses to the port Authority
Speaker 5: or to Penn Station and then they use the MTA system.
Speaker 5: Wealthy people drive their personal vehicle every day. The point
Speaker 5: is that you need to invest in mass transit and
Speaker 5: we need to get past this kind of concept of
Speaker 5: New Jersey versus New York, because New York does rely
Speaker 5: on New Jersey transit to service a lot of the
Speaker 5: workforce here in New York, and we rely on the
Speaker 5: MTA to move us around here once we get here. Ultimately,
Speaker 5: when I'm the governor or hopefully get there, want to
Speaker 5: get to a place of a regional conversation more around
Speaker 5: mass transit. I don't think the current climate of conversation
Speaker 5: is productive, and the leverage tool to get New York
Speaker 5: back to the table is probably posturing around some sort
Speaker 5: of similar tax on New Yorkers eventually to get them
Speaker 5: to the table. So you could have a kind of
Speaker 5: a holistic regional plan around transportation. That's really where you
Speaker 5: got to go if you're going to get the region
Speaker 5: to actually move in the right direction.
Speaker 3: Why does New Jersey transit suck so much?
Speaker 5: I mean, that's like the question I get in every
Speaker 5: single meet greets. It's probably just because there's a lack
Speaker 5: of interest from trend for some period of time. I mean,
Speaker 5: you have buses that have been privatized for a long time,
Speaker 5: so I think that's problematic. You have a train system
Speaker 5: that doesn't have a dedicated revenue source, and you have
Speaker 5: administrations that have not really cared for it. It is so
Speaker 5: much so It's not only that it's problematic with the
Speaker 5: existing service, it hasn't built out any real infrastructure at all.
Speaker 5: So when you look at economic development in the southern
Speaker 5: parts of New Jersey, you would see that there is
Speaker 5: no mass transit, and the reason that you haven't been
Speaker 5: able to attract jobs the same way or housing construction
Speaker 5: is directly related to the lack of mass transit infrastructure.
Speaker 2: Actually, I'll talk about this a little bit further because
Speaker 2: the quality of public services is something that probably transcends
Speaker 2: both the sort of more center and left side of
Speaker 2: the Democratic Party. That like, where is the future of
Speaker 2: any sort of public provision of goods if people don't
Speaker 2: think it's good. And so, if you know, the wide
Speaker 2: spread perception is that New Jersey transit is terrible, it's
Speaker 2: one thing to say, Okay, yeah, they haven't taken it's
Speaker 2: seriously fun. But like I mean, this seems to be
Speaker 2: a widespread phenomenon. It's people in New York obviously have
Speaker 2: the same issues with the subway and they come up
Speaker 2: with their stories, and people in the Bay Area have
Speaker 2: the same issues with the bart and otherwhere they don't
Speaker 2: have the same issues because their government just didn't build
Speaker 2: out anything in the first place or whatever, But like,
Speaker 2: what is your plan for actually making it a good
Speaker 2: quality product that people are like, Yeah, I don't need
Speaker 2: a car, I really like the transfer.
Speaker 4: Yeah.
Speaker 5: Let me just say I think that the reason that
Speaker 5: you've seen what you've just outlined is largely because you
Speaker 5: have wages that haven't increased at the same rate as
Speaker 5: costs for government, and that disconnect has forced a lot
Speaker 5: of choices, which ultimately has led to less services. Okay,
Speaker 5: on New Jersey Transit, we've outlined kind of a couple
Speaker 5: of things that are really big priorities for me on
Speaker 5: the funding, and it doesn't rely on the federal government
Speaker 5: and we could do it ourselves. Last year film or
Speaker 5: if you put in place a corporate business tax, it
Speaker 5: was our idea actually on companies with ten million dollars plus.
Speaker 4: He gave us credit for it. He put it in
Speaker 4: place for five years.
Speaker 5: Only it's problematic only because a you have to come
Speaker 5: back and to fix it, and b you can't bond
Speaker 5: against a five year revenue, which you need to do
Speaker 5: because if you're going to make New Jersey Transit better,
Speaker 5: you got to invest in the train stations and bus stations.
Speaker 5: So people feel they're clean and modern and safe. So
Speaker 5: got to fix that. Number one, we would do that
Speaker 5: right away. Number two is the largest infrastructure project in
Speaker 5: the state of New Jersey is really this turnpike widening
Speaker 5: project which goes into the Holland Tunnel. And it doesn't
Speaker 5: make a lot of sense because it's a twelve billion
Speaker 5: dollar project and the Holland Tunnel is still too late,
Speaker 5: So it doesn't matter if you make twenty lanes coming
Speaker 5: into it, right you have that same bottleneck. And you know,
Speaker 5: similar to what the governor of Maryland did and some
Speaker 5: of the others, we would reallocate those dollars towards mass transit,
Speaker 5: in particular light rail expansion in South Jersey and in
Speaker 5: Bergen County. And then I do think that it's a
Speaker 5: priority to go away from privatizing the buses.
Speaker 2: I don't know which is worse, Tracy going into the
Speaker 2: Holland Tunnel from the Jersey side or exiting the Holland
Speaker 2: Tunnel in the New yth City side. Miserable in vote directions,
Speaker 2: I see no upside unless you're going to radically rethink
Speaker 2: that and spending one more dollar on that process.
Speaker 3: Anyway, I have a horror story about this, which I
Speaker 3: will tell you after this recording. I suspect a lot
Speaker 3: of people have horror stories about this, but I want
Speaker 3: to go back to housing for a second.
Speaker 4: Love housing.
Speaker 3: We touched on tax abatements, and obviously tax abatements are
Speaker 3: a classic tool for building more affordable units, but they're
Speaker 3: not free, right. You're sacrificing revenue in order to do this,
Speaker 3: and presumably you need to offset that lost revenue through
Speaker 3: tax increases elsewhere. So where does that offset actually come from?
Speaker 5: So first of all, let's talk about how to chain
Speaker 5: change the tax abatement or pilot program payment and lieu
Speaker 5: of taxes so that way it actually makes sense in
Speaker 5: New Jersey today. In New Jersey, a short term tax
Speaker 5: abatement is by right, so developer can fill out a
Speaker 5: program and a piece of paper and they get a
Speaker 5: five year tax abatement. The long term taxibatements for twenty
Speaker 5: or thirty years are the ones that become political circus.
Speaker 5: I do think to increase housing supply, you need to
Speaker 5: change the long term tax abatements to be somewhat more
Speaker 5: like the five year tax abaytmance by right, and the
Speaker 5: way that we would see this move forward, assuming get elected.
Speaker 4: Is that city council.
Speaker 5: Or mayor would approve an initial ordinance, so you'd have
Speaker 5: a public process around what that tax abatement process for
Speaker 5: that administration would look like.
Speaker 4: What is the census.
Speaker 5: Tracks, what are the affordability components? What are the community
Speaker 5: give backs? Is a union labor whatever those are. Once
Speaker 5: it's approved, it should go to Trent and to get
Speaker 5: approved there by the DCA, and then at that point
Speaker 5: I do believe it should be by right so you
Speaker 5: can expedite some of this construction components of it. In
Speaker 5: New Jersey have again a lot of municipalities, and the
Speaker 5: taxes are divided up between the school district, between the
Speaker 5: municipality and the county. The school district and the municipality
Speaker 5: are obviously priorities, the county less. So it's another layer
Speaker 5: of government that you probably need some consolidation long term.
Speaker 5: And most of these buildings are new found revenues. They're
Speaker 5: not true tax payments where the developer is not paying.
Speaker 5: It's a payment in lieu of taxes. So it is
Speaker 5: found money, maybe not as much as you would make,
Speaker 5: but there still are a lot of inefficiencies in government,
Speaker 5: and you could figure.
Speaker 4: Out that offset through that process.
Speaker 2: There's a lot of inefficient use of land around train
Speaker 2: stations in you notice it where it's like there's just
Speaker 2: like lots of parking and stuff. It's like, this seems
Speaker 2: like it should be like prime places for like really
Speaker 2: tall buildings so that someone can walk five minutes to
Speaker 2: a train that they take to New York City.
Speaker 4: Why is that?
Speaker 5: Why is that a lot of that is owned by
Speaker 5: New Jersey Transit actually, and so you have a disconnect
Speaker 5: in New Jersey where the zoning is controlled by the
Speaker 5: local municipality and New Jersey Transit, who owns the property,
Speaker 5: perceives that the opportunity or land value is different than
Speaker 5: what the existing zoning is. That disconnect has created a
Speaker 5: lot of or no movement.
Speaker 2: Really, I just don't understand, like why does Jersey Transit
Speaker 2: feel the need to hold all this land part it
Speaker 2: could be extremely valuable for real estate right there and
Speaker 2: leave it for cars.
Speaker 5: We will use executive orders around that to kind of
Speaker 5: override some of the just a transit oriented development restrictions.
Speaker 4: That you have. So the goal is to really use.
Speaker 5: That land and circumvent the existing language in the home
Speaker 5: rule municipalities that are problematic.
Speaker 3: I want to channel Nimbi's right now, I'm putting on
Speaker 3: my Nimbi hat. And obviously, you know, I haven't been
Speaker 3: able to go to like a Jersey City town hall
Speaker 3: to get like a real sense of it. But I
Speaker 3: did the next best thing, which is I went to
Speaker 3: the Jersey City subreddit. Okay, there's a lot of criticism
Speaker 3: on there of I guess gentrification. Sure, right, people are
Speaker 3: complaining that all these new high rises are making things
Speaker 3: very different to how they used to be, and you're
Speaker 3: actually getting rent increases and hip taxes and things like that.
Speaker 3: How do you address those concerns?
Speaker 5: I mean, look, rent increases, unfortunately, you know, as a
Speaker 5: byproduct again of the pressure because of New York, and
Speaker 5: we're a victim of our success.
Speaker 4: There's no question about that.
Speaker 5: You've seen the population increase in Jersey City. So when
Speaker 5: people point to the fact that people are being displaced,
Speaker 5: the data doesn't necessarily support that, and the diversity in
Speaker 5: the city has remained relatively constant. I think that when
Speaker 5: you see a lot of the new buildings that are
Speaker 5: going up, those are often on vacant properties that didn't
Speaker 5: exist before anything, parking lots or empty lots near Journal Square,
Speaker 5: So you're not saying about displacement. It's the same degree
Speaker 5: pece people are talking about. Change is uncomfortable for people.
Speaker 5: That's the truth, you know. And you know you're always
Speaker 5: going to have people that remember what a city looked
Speaker 5: like fifteen twenty years ago that might have been a
Speaker 5: little bit more grittier, a little bit less safe, and
Speaker 5: they still like it because of the way it was.
Speaker 5: But I think most people would tell you that Jersey
Speaker 5: City's change has been beneficial. On the first three term
Speaker 5: elected mayor there in seventy years, so somebody likes me,
Speaker 5: and I think that the changes for the most part
Speaker 5: have been helpful. Not to say that we don't have
Speaker 5: an affordability crisis, but it's a regional issue. It's not
Speaker 5: just a Jersey City issue.
Speaker 2: I do think you make a good point, you know,
Speaker 2: And this gets to my point about why rents have
Speaker 2: in fact gone up now that it's gotten more dent
Speaker 2: and there are all those great restaurants at the bottom
Speaker 2: of the buildings right when you get off of the
Speaker 2: path tren it's more deserrable.
Speaker 4: I'll pay more percent.
Speaker 2: I'll pay more for it today than I would have
Speaker 2: paid an equivalent dollars fifteen years ago when there was
Speaker 2: a you know, probably tumbleweed or whatever it was. You know,
Speaker 2: I know it wasn't a tumbleweed, And I think this good.
Speaker 2: Are you an abundance Democrat?
Speaker 4: You know what?
Speaker 5: I didn't even know until six months ago what that
Speaker 5: terminology was, to be honest with you, So, but do
Speaker 5: you think that's like.
Speaker 2: A useful answer question? But do you think that's like
Speaker 2: a useful flag?
Speaker 4: Could that be?
Speaker 3: Like?
Speaker 4: Is that like I don't know the political I don't know.
Speaker 5: I mean, I don't think it's a useful political term, truthfully,
Speaker 5: because I don't think a normal person would read ezracline
Speaker 5: in the book like we would read it. But I
Speaker 5: don't think by and large a independent voter, which is
Speaker 5: what democrats need to move ultimately to be successful, is
Speaker 5: going to understand when you say I'm an abundance Democrat.
Speaker 2: And to be fair, I don't know if anyone is
Speaker 2: saying that or proposing that anyone should say that, But
Speaker 2: I'm just curious about I think the resonance of this label.
Speaker 5: I think there is validity to the argument that we
Speaker 5: put a lot of layers and restrictions in place to
Speaker 5: get anything accomplished. And that's not necessarily only Democrats, it's
Speaker 5: everybody in this country. And I do think that we
Speaker 5: need to kind of move forward on stuff. I don't
Speaker 5: know if the term I mean, it's kind of like
Speaker 5: I guess the last couple of months, you hear it.
Speaker 4: More and more often. We'll see if it sticks around,
Speaker 4: you know.
Speaker 2: Or people saying it these days. Stephen Fillip, mayor of
Speaker 2: a Jersey City candidate for the Democratic Party's nominee for governor.
Speaker 4: Thank you so much for coming on for having me.
Speaker 4: It was really great. Thank you both.
Speaker 3: Thanks so much.
Speaker 4: That was great.
Speaker 2: It was a lot of fun. I will say Tracy
Speaker 2: that you know, I always get so nervous talking to
Speaker 2: politicians because I worry that there's gonna be so canned.
Speaker 2: You know, we don't do a ton of those.
Speaker 3: They tend to be very on message, very on message.
Speaker 2: Talking to Steven talked like just talking to like a
Speaker 2: very normal person about issues. I mean, you know, I'm
Speaker 2: sure people would disagree with him about his characterizations something.
Speaker 2: It felt like a real conversation.
Speaker 3: Yeah, I mean, he definitely had a lot of policies
Speaker 3: that he could point to. I guess the big question
Speaker 3: is still how replicable this is elsewhere? And for instance,
Speaker 3: you know he talked about on the gentrification issue that
Speaker 3: you're not displacing existing buildings, you're building run primarily empty
Speaker 3: lots and things like that. There aren't many empty lots
Speaker 3: in places like Manhattan.
Speaker 2: No, in the primary are many empty lots left in
Speaker 2: Jersey City? Yeah, and so part of the question. So
Speaker 2: that's how you know, we were talking about like what
Speaker 2: specific mechanisms, and I believe that they exist. But today
Speaker 2: it's a very different city than it was fifteen or
Speaker 2: twenty years ago. And so the degree to which Okay,
Speaker 2: well this is just Manhattan spillover or maybe Brooklyn or
Speaker 2: you know whatever spillover people who did work going to
Speaker 2: live in Manhattan in the first place, but then the
Speaker 2: easy pickings have been gone certainly strikes.
Speaker 3: Me as the real starting points were different.
Speaker 4: Yeah, totally.
Speaker 3: You mentioned tumble weeds, Joe. Yeah, did you know that
Speaker 3: tumble weeds come from Russia and there are an invasive
Speaker 3: species in the US?
Speaker 4: Really?
Speaker 3: Yes, I did not know that. Speaking of housing, have
Speaker 3: you ever seen the pictures of like houses being absolutely
Speaker 3: like swamped by tumbleweeds?
Speaker 2: No, Russia in the eighteen seventies. They arrived in South
Speaker 2: dakoted a likely inflat seed from Russia. These plants are
Speaker 2: known also as Russian thistle. That's super interesting. Yeah, they're
Speaker 2: cool looking. So I don't mind that they got here.
Speaker 2: I mean, I guess it's not good. Houses are swamped
Speaker 2: in it.
Speaker 3: No, it's cool. They're actually a big problem.
Speaker 4: It's a serious problem.
Speaker 2: One other thing though, that we only got into it
Speaker 2: a little bit. It does seem like because of the
Speaker 2: sort of disorganization of American government, you get a lot
Speaker 2: of really silly things, like the New Jersey Transit owning
Speaker 2: a bunch of land that it could be, you know,
Speaker 2: worth hundreds of millions of dollars if you just put
Speaker 2: a bunch of apartments on there, and people would presumably
Speaker 2: kill to live in a nice high rise apartment a
Speaker 2: two minute walk from a train station that would take
Speaker 2: them right into New York City, and instead it's just parking.
Speaker 2: And yet because of like the zoning, and it just
Speaker 2: seems like, let's get it together, come on, let's get
Speaker 2: it's just really annoying.
Speaker 3: Well, there's a lot of stasis in policy.
Speaker 4: Yeah, it seems so.
Speaker 3: I think we've learned that over and over again.
Speaker 2: You know, one last thing too, because it took me
Speaker 2: a minute. I think it took both of us a
Speaker 2: minute when Stephen was talking about, oh, housing being very
Speaker 2: political and what he meant by that, yeah, was super interesting,
Speaker 2: Like we've definitely not talked about the idea that, well,
Speaker 2: one barrier to housing could be essential corruption, which is
Speaker 2: a word he used, but you know, even like polite
Speaker 2: forms of corruption.
Speaker 4: It's very interesting.
Speaker 3: Yeah, all right, shall we leave it there.
Speaker 4: Let's leave it there.
Speaker 3: This has been another episode of the oud Loots podcast.
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway and.
Speaker 2: I'm Jill Wisenthal. You can follow me at the Stalwart.
Speaker 2: Follow our guest Stephen Phillip. He's at Stephen Phullip. Follow
Speaker 2: our producers Kerman Rodriguez at Kerman armand dash Ol Bennett
Speaker 2: at Dashbot and Kilbrooks at Keil Brooks. From odd Lots content,
Speaker 2: go to bloomberg dot com slash odd Lots. We have
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Speaker 2: can chat about all of these topics. Plenty of stuff
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