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Are NJ rent and house prices so high because we have too many school districts?

school busesWhen people gripe about New Jersey having so many school districts, with more educational systems than municipalities, it’s generally to complain about paying for too many administrators.

But one land-use expert says it’s also contributes to why there’s an undersupply of homes.

Tim Evans, the research director for New Jersey Future, said that fragmentation encourages the ‘ratable chase’ in which cities and towns crave commercial properties but try to avoid residential development, in many cases regardless of whether it contains an ‘affordable housing’ component.

“What happens is every place wants a mall and an office park, and nobody wants housing because they don’t want the school kids that they’re going to have to raise taxes to pay for,” Evans said.

Without new homes added to the supply, the cost for existing homes is driven up. Statewide, the average sales price for a home this year is $394,426, as of last week, according to the state Treasury Department. The average is over $500,000 in 123 municipalities, nearly 22 percent of the state’s towns.

New Jersey has some of the nation’s most expensive housing, with 42 percent of homeowners with mortgages paying more than 30 percent of their incomes toward housing costs, a threshold at which the costs are considered over-burdensome. The share is even higher for renters.

Evans believes areas would be more welcoming of new homes if school districts were larger.

“I think that would go the farthest towards neutralizing the resistance to housing – if our school districts were geographically larger, if we consolidated the school districts, so that you’re paying for public education over a wider geographic area, with a wider variety of properties contained in the boundary,” Evans said. “There’s a limited number of malls and office parks to go around. With larger districts, you’re sharing those resources more equally.”

NJ property taxes up $700M in 2016 — See how your bill compares

Statewide, commercial and industrial properties account for almost 18 percent of assessed value. But only 35 percent of towns are above that average – with just as many towns below 10 percent for nonresidential property value, pushing their tax burden disproportionately onto homes.

“In a lot of other states, the school districts are big enough that each district has its fair share of malls and office parks,” Evans said. “In New Jersey, they’re so small that the mall opens, the one little district that has the mall in it wins, and all of the other districts where the shoppers live, but they don’t have a mall, their taxes go up because they’ve got to pay for all the school kids but that don’t have the big commercial property to generate the tax revenue.”

There’s talk in Sussex County of consolidating districts in a countywide system, with Green Township, Newton Town and Sussex Borough passing resolutions in favor of a feasibility study.

It’s seen there as a way to reduce administrative spending, in a county where public-school enrollment has dropped for 13 straight years, by 28 percent, from 28,436 in 2003-04 to 20,512 last year.

An idea was floated in 2012 for a countywide district in Hunterdon County, but that went nowhere. A year later, Lambertville, Stockton and West Amwell, which already shared a high school, merged their K-8 schools into a single South Hunterdon Regional School District.

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New Jersey: Decoded cuts through the cruft and gets to what matters in New Jersey news and politics. Follow on Facebook and Twitter.


Michael Symons is State House bureau chief for New Jersey 101.5 and the editor of New Jersey: Decoded. Follow @NJDecoded on Twitter and Facebook. Contact him at michael.symons@townsquaremedia.com

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