Political Physics: Accuse Me of Gentrification if You Like
a blogumn by Monique King-Viehland
Last week I got into a heated debate with a colleague about whether or not the City of Trenton needed anymore affordable housing. My colleague was arguing that given the high cost of housing in Mercer County (Trenton is located in Mercer County) and the State of New Jersey, the City of Trenton needed more affordable housing. I argued that Trenton had enough affordable housing and that all new housing built in the City should be market rate. My colleague rolled her eyes. I continued by explaining that the average rental rate in the State of New Jersey is $804 and the average housing value is $358,400. The Mercer County numbers are pretty comparable to the State, with an average rental rate of $770 per month and an average housing value is $304,600. But the City of Trenton is much lower with an average rental rate of $544 per month and an average housing value of $120,000. In comparison to Mercer County and the State, the entire City is affordable. Trenton is devalued enough.
My colleague then said that she was disappointed because she could not believe I was advocating for the gentrification of the City.
The Merriam-Webster Dictionary defines gentrification as “the process of renewal and rebuilding accompanying the influx of middle-class or affluent people into deteriorating areas that often displaces poorer residents.”
Gentrification is a dirty word and the mere use of the word can spawn heated arguments with folks on both sides of the issue. There have been hundreds of articles, studies, reports and books on the subject. People point to Harlem in NYC, Park Slope in Brooklyn, Hoboken in New Jersey and Mill Hill right here in the City of Trenton. I do not want to revisit the debate, but I do want to address my colleague’s assertion in light of my stance on housing development in Trenton.
Trenton is the Capital of the State of New Jersey. It is a very small City at 7.5 square miles, but is plagued with many of the issues of urban cities two and three times it’s size. According to the 2005-2007 American Community, the median income for a household in the city is $34,321, and the median income for a family is $40,528. The per capita income for the city was $16,591 and about 20.6% of families and 22.1% of the population are below the poverty line. The unemployment rate is about 9.4%.
But these are not the most important numbers. In terms of understanding the City’s dynamic, you need to know that as the Capital City, the State owns a little more than 50% of the property in the City making that property is non-taxable. The major revenue generator for municipalities is property taxes, so the City’s tax base is significantly impacted. This is a major reason why the City is currently facing a $28 million structural budget deficit.
Building only market rate housing will bring higher income households into the City. More households with higher incomes result in increased real estate values with higher associated rent, home prices, and property taxes. The City’s current annual operating budget is approximately $200 million yet the City only generates about $55 million in property taxes. Potential budget reductions notwithstanding, the current tax base is insufficient and the only way to build that base is by bringing in increasing the number of high value, tax generating properties.
In addition, housing redevelopment that focuses on higher valued housing tends to drive retail and commercial development in the area as well. And new businesses means more jobs available in the City – with a 9.4% unemployment rate Trenton could use those jobs.
Listen, I am not advocating for the displacement of poorer residents in the City, but I recognize that focusing on building only market rate housing could have the unintended consequence of displacement. I acknowledge that yes, the increases in rent and the increase property taxes (due to increased property values) may cause lower income residents to seek less expensive housing options outside of the community. However, for the City of Trenton, this could truly mean the difference between building a fiscally sustainable City or turning the keys over to the State of New Jersey.
So I am going to continue to advocate for all new housing built in the City to be market rate, even though I recognize that this may not be a popular opinion.
If that means I will be accused of gentrification, so be it.