How to fix the biggest issue in the fight to bring companies to N.J.

Q&A with Carl Goldberg of Canoe Brook Associates on need to create rules to force more ‘workforce housing’

By Tom Bergeron
Roseland | Sep 21, 2017 at 10:19 am

Carl Goldberg is a founder and managing member of Canoe Brook Associates and serves as the co-chair of the executive committee of the Rutgers Center for Real Estate.

Throughout his distinguished career, Goldberg has specialized in developing housing in New Jersey and throughout the Northeast.

More than that, Goldberg has been regarded as a leader in the real estate development community — someone always willing to tell it like it is and lead change as needed.

So, when the issue of “workforce housing” entered the conversation in regard to New Jersey’s ability to land companies such as Amazon, we went to Goldberg to get an expert’s view on the issue.

Here’s how he sees the problem — and how he thinks the state can solve it.

ROI-NJ: A few municipalities in the state appear to meet Amazon’s general requirements to land its second headquarters. But it’s the ability to fill a need that’s not on the RFP — affordable workforce housing — that has some people in New Jersey worried. Bring us up to date on what is called ‘workforce housing.’

Carl Goldberg: Workforce housing is typically defined as housing that is affordable to people who make between 80 and 120 percent of the median income, in some cases up to 140 percent. It is designed to be middle-class housing.

In regard to attracting companies like Amazon, that housing-point component, that price-point diversity, becomes critical. That’s the kind of house people who make $80,000 to $120,000 a year in our geography need. That’s the type of house many of the employees Amazon wants to bring to the state will need. And that portion of our population currently is not really serviced by housing that’s available in the state of New Jersey.

ROI: You’re talking about it; is anyone else?

CG: My contention is that it is one of the things the gubernatorial candidates should be talking about. The next governor needs to understand this housing price-point diversity, what I call housing affordability, is of paramount importance.

Massachusetts has understood it, as have other states in our region. If we’re going to be competitive, we need to be able to provide quality shelter for people at all income levels, not just the very wealthy and the people construed to be income-eligible, but people in the middle of that spectrum who provide a significant percentage of our workforce. That’s why in Massachusetts, they coined the moniker, ‘workforce housing.’

ROI: Makes sense. But so does this: Conventional wisdom says the more restrictions a developer is put under, the harder it will be to get a deal done. Do you think there would be any pushback from the development community if workforce housing becomes a requirement for new projects?

CG: You would think it would be, but that’s not the case. For developers, it’s all about predictability and understanding ahead of time that that is an obligation you need to tend to. The biggest problem in New Jersey is that there is complete uncertainty, complete unpredictability. The courts have been slow to respond to the need. Municipalities have been almost unwilling to address the need. So, no one has factored this into their cost to build.

In Massachusetts, since you know ahead of time all the things you need to do, it is factored into what you pay to acquire to land and, thereby, the predictability gives the development community the opportunity to respond. It’s all about understanding ahead of time.

ROI: That sounds reasonable. But, this is New Jersey, a state that hasn’t been able to define its so-called ‘affordable housing’ component for more than three decades. How can you expect the state to handle this issue if it can’t handle the Mount Laurel decision?

CG: I’m a realist (he says with a laugh). So, I know it appears that this is not achievable in the state of New Jersey. But, in most other states in our region, there isn’t an overwhelming preponderance of home rule, where each municipality makes its very site-specific land-use decisions.

What this requires is a regional or a statewide approach to a housing policy that, because of the strength of local government, would be hard to implement here. In Maryland, for instance, local government isn’t involved in this. All of these decisions are made at the county level or higher. So, the development community understands the ground rules before making an investment.

ROI: So, what could the next governor do?

CG: I don’t think there’s any realistic ability to redress home rule in New Jersey. I’m not that delusional (he laughs again).

That being said, I think there can be a legislative approach with the support of a new governor to a rational housing policy, where there are densities and incentives that are built into the land-use process that not only allow, but motivate, the development community to provide a wider range of price-point opportunities for the citizens of the state.

So, the answer to the question is, yes. This is not rocket science. They do it in other places. If they can do it in Massachusetts and Maryland, why can’t they do it in New Jersey?

ROI: Which leads us back to Amazon. How do the state’s housing issues impact any bid?

CG: If we expect New Jersey to be competitive, we need to think outside the box and be willing to do things that allow New Jersey to be competitive. If we want companies like Amazon to come to New Jersey because of our geography and say, ‘This is a really wonderful place to locate your company,’ we have to be able to give them and their employees shelter options that make sense.

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Carl Goldberg is a founder and managing member of Canoe Brook Associates, a family-owned real estate consulting and development company in Roseland.

Prior to founding Canoe Brook in 2014, Goldberg co-founded and operated as a principal for 20 years at Roseland Property Co., a full-service real estate organization with a focus on large-scale, multifamily luxury residential rental communities across the Northeast that was acquired by Mack-Cali Realty Corp.

Goldberg has a long history of political and industrywide activism in New Jersey in his career, beginning in 1992 with his election as president of the Community Builders Association of New Jersey. He currently serves as the chair of the New Jersey Builders Association’s political action committee and as co-chair of the executive committee of the Rutgers Center for Real Estate.