Trenton has long been trying to build its commercial and residential assets — it’s the key to helping the capital city be more than just a daytime stop for those in government or doing business with it.
A new study released Monday that was commissioned by Greater Trenton, an independent 501(c)(3) nonprofit organization dedicated to promoting economic revitalization, said the Downtown Trenton residential market can support up to 1,270 new units in the next five years.
The study, done in sponsorship with Wells Fargo and New Jersey Realtors Association, was the follow up to a similar study done in 2018. It determined that the updated potential market in the Greater Downtown Trenton Study Area is a third higher than in 2018, and can support up to 1,270 new residential units, including 995 rental apartments, 200 for-sale rowhouses/townhouses and 75 for-sale condominiums over the next five years.
According to the study, the citywide annual average potential market over the next five years for new and existing housing units is 5,670 households. This annual potential market for new and existing housing units is further refined within the Greater Downtown Trenton Study Area to 2,760 younger singles and couples, empty nesters and retirees, and traditional and nontraditional families of all incomes.
Trenton Mayor Reed Gusciora welcomed the news.
“We’re excited to see continued healthy residential demand within our historic and diverse capital city,” he said. “From its unique cultural assets to its robust arts community, wonderful mix of restaurants and its tremendous highway and rail access, Trenton stands strong as an attractive destination to live, work, play and visit.”
The reasons for this are many, including:
- Impact of housing crash: The study noted that the aftermath of the housing crash continues to reverberate through the housing market nearly 15 years later, as evidenced by significant changes in market preferences from single-use subdivisions in exurban locations to mixed-use, walkable developments, particularly in downtown and intown neighborhoods.
- Generational cross-sections: New market preferences have been driven by the convergence of the preferences of the two largest generations in the history of America: the estimated 69.6 million baby boomers born between 1946 and 1964, and the estimated 72.1 million millennials, who were born from 1977 to 1996 and, in 2010, surpassed the boomers in population. The convergence of two generations of this size — simultaneously reaching a point when urban housing matches their life stage — is unprecedented.
- Desire for an urban lifestyle: The preference for urban living evidenced by both younger and older one- and two- person households has been a primary force in downtown redevelopment across the country, and continues despite media articles to the contrary, citing anecdotal pandemic-induced moves out of cites. Although this trend was notable at the onset of the pandemic, significant numbers of households who had left their urban neighborhoods have now returned or have been replaced by others, and as the coronavirus is perceived by many to be less of a threat, urban occupancies are resuming pre-pandemic levels.
- Pandemic pricing: The pandemic trend of rising single-family detached home purchases also continues across the country, reducing inventory and increasing pressure on home values, resulting in a significant decline in housing affordability. Although recent interest rate increases have had an impact on purchase volume, house prices are currently holding steady.
- Rent rather than own: Another significant shift is the millennials’ strong propensity for renting rather than owning. This is due in part because of their relative youth — many do not have sufficient funds for a down payment and many others are burdened by student debt — and, in part, because the prior collapse of the housing market made many of them skeptical about the value of owning versus renting.
Greater Trenton CEO Geroge Sowa said the numbers are key to all of this analysis.
About the study
Both the 2018 and updated 2023 studies were conducted by Zimmerman/Volk Associates Inc., which has a national reputation for innovative market analysis based on its proprietary target market methodology. To see a full copy of the study, click here.
“Trenton continues to benefit from a 7% increase in population to nearly 91,000 residents and becoming one of the Top 10 largest municipalities in the entire state,” he said. “As we look to maximize Trenton’s residential market, it will be important to focus on developing higher-density housing types while also redeveloping existing buildings in Downtown Trenton.”
New Jersey Realtors Association CEO Jarrod Grasso said the study noted that Trenton’s attraction as a place offering a highly transit-oriented location; range of affordability; vibrant arts community; rich history; and being a welcoming community, combined with the city’s high walk score, position it exceptionally well for continued growth.
“There are numerous real estate assets, both historic and modern, that enhance the attractiveness of residential living in Downtown Trenton,” he said. “Prominent attractions in Trenton, from the Old Barracks to the Cure insurance Arena to the War Memorial and others, are also complimented by Mercer County’s regional attractions, including Grounds for Sculpture, Princeton University Art Museum, Washington Crossing Historic Park and more.”