New Jersey’s housing market has become increasingly unaffordable, with high foreclosure rates, the nation’s highest property taxes, and some of the steepest housing costs in the country. Home prices and rents continue to rise, making it difficult for many residents to find suitable housing—whether they are looking to buy their first home or upgrade to a larger space. Some find it hard even to afford to stay where they are. While affordability concerns often focus on low-income households—who are at significant risk of displacement, particularly in high-demand areas like North Jersey—middle-income earners are also struggling to find housing that meets their needs.
For decades, restrictive zoning laws and limited housing development have left the middle class few options. The types of housing that once provided affordability—townhomes, duplexes, triplexes, and small apartment buildings—are now rare. Instead, New Jersey’s housing market has largely focused on luxury high-rises or subsidized low-income units, leaving middle-class buyers and renters priced out or stuck in homes that no longer meet their needs.
To tackle the crisis, Gov. Phil Murphy signed Senate Bill S50, a landmark housing bill, into law in March 2024. S50 expands the housing supply by allowing for greater density and streamlined development processes in key areas. The law replaces the previous court-driven process for determining affordable housing obligations with a more structured system under the Mount Laurel doctrine, a legal mandate requiring New Jersey towns to provide their fair share of affordable housing based on regional needs. This new system establishes a clearer method for calculating each municipality’s housing requirements and sets up a faster dispute resolution process to address challenges. These changes are intended to make it easier for towns to meet their obligations while ensuring that more affordable housing gets built across the state.
Yet, despite these advancements, the new law has faced strong opposition. A coalition of 27 suburban towns has filed a lawsuit to block the law, claiming that it imposes an unfair burden on their communities by requiring development without sufficient infrastructure support. These arguments highlight common misconceptions about zoning reform.
The role of public opinion in housing resistance
Public meetings play a key role in shaping housing policy at the local level. However, these meetings are often dominated by voices of opposition that do not represent the broader community. Research from the American Journal of Political Science analyzed 40,000 public comments at municipal meetings and found that participants are disproportionately wealthier, older, and more likely to be homeowners than their communities’ average demographics. This is significant because homeowners, compared to renters, are more likely to oppose new housing, especially when proposed in their neighborhoods.
This pattern is evident in the same lawsuit filed by 27 towns seeking to overturn the housing law in New Jersey. These municipalities argue they are being forced to accept an unfair share of housing while urban areas are exempt. However, courts have repeatedly denied their attempts to delay implementation, ruling that they did not provide sufficient legal grounds to justify pausing the law while their case is decided. These towns make up fewer than 5% of all municipalities in New Jersey, but their concerns reflect broader debates about zoning reform and housing policy.
Opponents may incorrectly assume that affordable housing will drastically change suburban communities for the worse. Public meetings often become echo chambers for opposition, with discussions centering around exaggerated fears of overcrowding, crime, and declining property values. However, research has consistently shown that allowing more housing—especially middle housing like townhomes and duplexes—helps stabilize costs and prevent displacement. The alternative is stagnation: Housing shortages continue, prices rise, and more middle-income families leave New Jersey for more affordable areas elsewhere.
Common misconceptions about zoning
A major obstacle to housing reform is the widespread misunderstanding of zoning laws and their impact. Many believe that zoning regulations help protect neighborhoods, prevent overcrowding, and ensure orderly development.
While zoning can serve these purposes, research shows that it is also frequently used to block housing growth and maintain artificial housing scarcity, which drives up costs.
Here are some of the most common zoning misconceptions:
Zoning prevents overburdened infrastructure. Many towns argue that increasing housing density will overwhelm roads, schools, and utilities. In reality, restrictive zoning does not stop population growth—it simply pushes it elsewhere. This leads to longer commutes, increased traffic congestion, and urban sprawl, ultimately affecting the towns resisting development. Workers are forced to live farther away, so they still rely on the same regional infrastructure—driving on local roads, using nearby hospitals, and straining transportation networks. Managing services and infrastructure for growing populations is a fundamental responsibility of local governments, and many towns across the country have successfully adapted. When municipalities claim they cannot accommodate growth, it often reflects governance challenges rather than an inherent inability to provide services.
Zoning preserves community character. This phrase is often used to justify opposition to new housing. Still, it usually serves as a cover for exclusionary policies that keep certain groups—frequently lower-income residents—out of specific neighborhoods. Many zoning laws were initially designed to segregate communities by race and class, and today, they continue to disproportionately impact renters and middle-income families by limiting affordable housing options. These restrictions also infringe on property rights by preventing owners from selling, renting, or modestly increasing density on their land, using government power to enforce stagnation rather than allowing market choices.
New housing will lower property values. Homeowners frequently oppose new development, fearing that their property values will decline. Housing shortages create volatility—when demand surges but supply remains stagnant, prices skyrocket, making homes unaffordable and increasing the risk of sharp market downturns. This kind of instability can hurt homeowners in the long run. A steady supply of new housing helps prevent these extreme price swings, keeping property values more predictable and sustainable.
Restrictive zoning protects quality of life. While zoning can help separate industrial uses from residential areas, overly restrictive zoning limits housing choices and forces workers to live far from their jobs. This leads to longer commutes, increased transportation costs, and reduced economic opportunity. In contrast, allowing more housing diversity—such as duplexes and townhomes—creates more walkable, vibrant communities.
What’s at stake: The cost of not building enough housing
New Jersey is already one of the most expensive states for renters. According to the National Low Income Housing Coalition, a full-time worker in New Jersey must earn $38.07 per hour to afford a two-bedroom apartment at fair market rent—far beyond what many middle-class workers make. A minimum-wage worker would have to work 84 hours a week just to afford a one-bedroom apartment.
Prospective homeowners face just as severe challenges. The median home price in New Jersey now exceeds $535,000, and in North Jersey, costs are even steeper. In Hoboken, the average home value is approximately $780,000, showing a 2.9% increase over the past year. In Jersey City, the average home value is $620,800, marking a 6.7% rise in the same period.
Despite these rising costs, demand remains high. Even as affordability forces some residents to leave, North Jersey continues to attract new arrivals drawn by its proximity to New York City. But the housing crisis is not just about affordability—it’s about availability. Without enough housing to meet demand, prices will keep rising, pushing middle-income families out of the state and forcing low-income renters into housing instability.
The lawsuit brought by 27 towns in New Jersey highlights the ongoing resistance to housing reform despite clear evidence that increasing supply is the only sustainable solution. While opponents argue that the new law places an unfair burden on their communities, the reality is that restrictive zoning and development barriers have fueled the affordability crisis that is displacing residents across the state. With home prices and rents continuing to rise, New Jersey cannot afford to stall progress. The longer municipalities resist reform, the worse the crisis will become—forcing more middle-income families out, deepening economic inequality, and making stable housing even harder to find. Addressing these challenges requires a commitment to policies that expand housing options, lower costs, and keep the state livable for all residents—not just those who can afford it.