A day after unveiling an ambitious economic development plan, Gov. Phil Murphy and members of his administration gave some details on several new programs that would provide tax credits to help revitalize communities and build much-needed housing.
Speaking in Atlantic City yesterday to several hundred attendees at the annual Governor’s Conference on Housing and Economic Development, Murphy stressed the importance of ensuring that actions to improve the state’s economy include building homes affordable to New Jerseyans.
“Economic development cannot be skewed to mean only that which benefits shareholders,” Murphy said. “We can have strong economic growth and safe, affordable housing options for families. We can have strong and diverse communities.”
Murphy’s remarks were part of a different tone at this year’s conference, his first as governor. Administration officials talked about a number of state programs and initiatives to help officials with economic development dilemmas. Sometimes the programs offer financial incentives and other times technical assistance. For many in the housing community, the fact that Murphy turned up at the conference to discuss his plans showed the importance he places on developing local economies.
“I know you hear from the governor every year at this event,” Murphy joked to murmurs and laughter, making a reference to former Gov. Chris Christie’s absence from prior conferences.
Murphy: ‘We must have bigger goals’
“We have a new mindset on what ‘economic development’ means,” he continued. “We’re not going to gauge our success simply by the number of new businesses we create or the amount of capital flowing into New Jersey … We must have bigger goals. A more diverse and inclusive economy, with hundreds of thousands more jobs at better wages, especially for women and minorities, and a significantly lower urban poverty rate.”
Murphy went on to discuss four of the planks of his day-old economic plan, which by 2025 seeks to create 300,000 new jobs, many in the innovative technology sector, and use a $500 million state-led venture capital fund for investments. The plan seeks to overhaul New Jersey’s major economic-development tax-incentive programs to jump-start growth in communities statewide.
“We’re excited,” said Leslie Anderson, president and CEO of the New Jersey Redevelopment Authority during the opening session of the conference. “We’ve never seen anything like this.”
Three of these programs envision the use of state tax credits, although the administration has not provided any estimates of the costs. Officials said on Monday that the tax credits will be so targeted and carefully limited by caps that they will generate enough revenue growth to more than pay for the forgiven tax liabilities. All these programs would need legislative approval.
One of these is a revamped program to reclaim and redevelop brownfields, which are vacant commercial and industrial sites that either have or are suspected of having some sort of environmental contamination. The new program would include a “more timely” remediation and development tax credit, as well as a dedicated loan fund available through the state Economic Development Authority.
Tax credits for a range of investments
“Sites that were part of our economic past can be part of our future — where new and affordable housing can replace a barren lot, connecting a community rather than separating it,” Murphy said.
A second program called NJ Aspire would provide tax credits for investments in commercial, residential, and mixed-use development in cities, downtowns and suburban neighborhoods served by mass transit. The EDA’s Economic Redevelopment and Growth Program, or ERG, fulfills a similar purpose currently.
“NJ Aspire can help facilitate the conversion of surface parking lots, vacant and abandoned lots, and other underutilized properties into the cornerstones of inviting, thriving, and diverse communities where new residents will flock, and where the arts and culture, and small businesses, can flourish,” Murphy said.
The third tax credit would be available for historic preservation projects and be modeled on a federal program that Murphy said has provided a nearly 30-percent return on investment at the same time as it created jobs and gave older structures a new purpose.
“Let’s put returns like this to work for our state,” Murphy said.
Federal program for distressed neighborhoods
The fourth plank, and one on which the state is placing a lot of emphasis, would not involve significant state spending. New Jersey is hoping for big returns from the new federal Opportunity Zone program, which is meant to bring new private investment into distressed neighborhoods by giving investors preferential tax treatment for spending in those areas. New Jersey has designated 169 census tracts across the state as zones.
“It is into these communities — overlooked areas where significant numbers of residents live in persistent poverty — that we will aim to direct new private capital investment, to create jobs and restore economic vitality,” Murphy said.
The state has created a zone mapping tool and agencies are working to provide information to municipal officials and identify projects that are “ready to go” so that once final rules are in place they might take advantage of potential investments. Additionally, the EDA is working on a “digital marketplace” to make it easier to help businesses and entrepreneurs find zones for their investments. A conference session on the zones was so popular that there was even no room for standing inside.
Leaders of the key state agencies involved in economic development and housing discussed other projects in the works to help struggling communities and, in many cases, provide homes for those with low incomes. Among them:
Murphy: Not going to let plan ‘sit on a shelf’
“We are starting on the road at the micro level to enact what the governor announced yesterday in a real way,” said Charles Richman, executive director of the New Jersey Housing and Mortgage Finance Agency.
Murphy lauded the state’s efforts in economic development and housing and vowed to see the ideas in his plan to fruition.
“The plan we unveiled yesterday is not something we’re going to let sit on a shelf,” he said. “We’re going to put it to work for our communities and our state.”
As such, Murphy provided a new mission for the annual conference.
“This cannot be just an annual chance for us to get together to talk about the challenges facing our state that never seem to get fixed,” he said. “We must instead make this an annual check-in, to gauge our progress from the year before in tackling our challenges, and in moving our state forward as one.”