Construction Spending - THE RIDGEWOOD BLOG.

MAY 4, 2015 LAST UPDATED: MONDAY, MAY 4, 2015, 1:21 AM
BY KATHLEEN LYNN
STAFF WRITER |
THE RECORD

Home construction in New Jersey has gotten off to a slower start this year, with builders starting 5,352 units in the first quarter, down 8.3 percent from a year earlier.

But Patrick O’Keefe, an economist with CohnReznick in New York and Roseland, expects builders to rev up construction later this year, giving the homebuilding sector “its best performance since 2006.” O’Keefe is forecasting that about 30,000 housing units will be started in the Garden State in 2015, compared with 28,119 in 2014.

Multifamily activity will continue to provide momentum for home construction in the state, O’Keefe said. In the first quarter, multifamily construction made up 59 percent of the building permits issued in New Jersey.

“We will be looking at multifamily as the dominant driver,” he said. For the past several years, well over half the construction in the state has been in multifamily projects — especially rentals, concentrated in Bergen, Hudson and other northeastern New Jersey counties.

One example is Hudson Lights in Fort Lee, a mixed-use project being built just south of the George Washington Bridge. Its first stage, expected to be finished at the end of this year, will include 276 rental units. A second stage, expected to be completed in 2018, will include 201 housing units.

The developer, Chicago-based Tucker Development Corp., sees continuing demand for rentals, especially in neighborhoods where stores, restaurants and transit are within walking distance.

Young people starting out in their careers want “the ability to be more mobile,” said CEO Richard Tucker.

Economists also note that many younger adults are renting, rather than buying, because it’s difficult to qualify for mortgages and because they are wary about investing in a home after seeing values crater during the housing crash.

Adding to the demand for rentals, Tucker said, are empty nesters who decide they don’t need large houses anymore.

The national homeownership rate is 63.7 percent, the lowest level since 1993. The rate had exceeded 69 percent in 2004 as mortgage lenders loosened their credit standards and lent to many people who couldn’t afford the payments and ended up losing their homes.

Homebuilders’ slow start this year is only temporary, O’Keefe said, citing the complex planning and approval process involved in multifamily projects.

https://www.northjersey.com/news/business/n-j-home-building-is-off-to-a-slow-start-1.1324886

By Kelly Waldron April 14, 2015 5:18 AM

If you have traveled around the state lately, chances are you have come across construction of some kind.

According to the State Department of Labor and Workforce Development, there has been a spike of 10,000 construction jobs in 2014 and an increase of 7,900 during January and February of this year.

One housing and economics expert said there are five main factors driving the construction increase.

“The first is higher education which is the result of the bond issue and universities and colleges are leveraging those funds in public/private partnerships,” said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

The second is demographically driven.

“The real growth in the population is millennials and aging baby boomers who are resizing in the housing market. So, we have almost record high numbers of multifamily construction. The multifamily rental housing sector is now about 60 percent where historically, it’s been about 30 percent,” Hughes said.

New Jersey is also the third largest warehouse distribution center in the country, a sector that has been growing very rapidly as a result of e-commerce.

“Instead of building conventional warehouses, what are now being erected are very large fulfillment centers, like the one for Amazon in Robbinsville. With people shopping on the Internet, a lot of space is needed to store items before they are shipped,” Hughes said.

Data centers are a significant factor to the increase in construction as well, namely because of New Jersey’s geography.

“In many cases, the big New York brokerage houses need vast data centers to store their information and they want them on a different power grid than the main headquarters, but they can’t be too far away from the major trading centers because those milliseconds are very important in high-speed trading. New Jersey is in a good location for that,” Hughes said.

NJ home-building starts off slowly in first quarter

Construction Spending Surges in New Jersey