Jersey City's Mayor on How the City Built So Much Housing
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Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal. And I'm Tracy Alloway. Been covering a little local politics these days, Tracy. It's not our normal beat, but sometimes there's a little intersection. We're going local, not macro, micro. We're going micro. So it's interesting because we did a recent episode, listeners may remember, with one of the candidates for the mayorship here in New York City, Zaran Mamdani. And she was a member of the New York City Mayor's Office.

And he sort of talked about his vision for affordability. Actually, backing up for a second, it feels like housing affordability is suddenly swamping everything. It's the issue, almost regardless of your perspective, that is like on top of many people's minds these days.

Well, also, we've talked about this before, but it also seems like a bipartisan issue, right? And like, you don't get a lot of bipartisan things nowadays. I'll just put it that way. No, but it's interesting. Like, you know, at one point it was like health care and sometimes climate. Other times, right now, it just feels like there is such a...

so much anxiety about housing affordability and all this stuff. And it feels like it's a nationwide thing. Within the Democratic Party, there are different wings of how people talk about it. So we obviously talked to the socialist candidate for mayor. There's also what people would call like the sort of like more liberal abundance view that, you know, the answer is just

We just need more and use whatever levers to pull to get more in some way. So even within one party, though, although everyone sort of agrees on rent and affordability, not a lot of consensus on the path there. Yeah. So the overall goal is very clear. But I guess the levers that you're going to pull to get there are very complicated. And I have to say, that's one thing that I kind of struggle with in this topic. It just seems like there are so many different things.

that you could do. And all of them seem very like bureaucratic, very technical tax abatements, all these incentives, rent control. And it's interesting to me how you choose between them about what's going to be most effective. Can I just say, by the way, you know, I think a lot of these debates are very part of the reason they exist is because the media is very heavily represented in New York and San Francisco. I mean, I don't think there's an affordability crisis in like Davenport, Iowa.

to the same degree. And I think that's important to acknowledge. I also think like New York and, you know, San Francisco are some of the best places in the world. So I get why people pay a lot of money for them. Anyway, it turns out one of the best cities over the last several years in the entire country is

for housing production is our neighbor, Jersey City, right across the water. I really like Jersey City. I've spent a little bit of time there. And their mayor, Stephen Fulop, is running for governor in the Democratic primary right now. So we have the perfect guest to talk about Jersey City housing production. Stephen Fulop, thank you so much for coming on Oplots. Thanks for having me. I appreciate being here.

For those people who don't know, you've been the mayor of Jersey City for how long? I think I saw it was like in the last 10 years, housing stock has increased by 25%, something like that. Yeah, I mean, we used to be maybe 2% of the state's building permits. We're upwards of 10% now. I mean, we've been the backbone economically of the state of New Jersey. I've been the mayor there for 12 years. I've been unapologetically very, very pro-growth. You could see the skyline change across the river. So it's been a good story and we're growing and I'm very proud of the changes that have happened.

What's the biggest choke point or hurdle when it comes to building more affordable housing? Because everyone seems to have a different answer to this and different things that they would put emphasis on. But in your view, what's number one? What do other people say out of curiosity? Well, people say like zoning and things like that, incentivizing the developers to build something other than luxury high rises, that sort of thing. Right.

I'd point to a couple of things. I mean, in New Jersey, we definitely have an incentive program that is complicated. We have obviously zoning with home rules. So you have a lot of municipalities, 564 municipalities, which is problematic and home rules. So how do you overcome that, which I think we have some solutions for. And I think that generally speaking across the country, you have kind of the NIMBY sentiment monopolizing the conversation. And how do you wrestle that away from them?

is different in each city or state. But in New Jersey, I think we've done a pretty good job of kind of creating a dynamic where the people that are pro-growth can also have a voice there.

You've been pretty unapologetic in your view that market rate housing benefits everyone, that there's supply and demand. You expand supply, it filters down, et cetera. You talk about, quote, affordable housing, unquote, but give us your general philosophy of housing and making it more affordable and why you believe that a lot of the solution is essentially housing.

liberalizing and supply and demand. Yeah, I think- Letting people build what they want where they want. Yes, I think that when you put more restrictions around housing growth, so rent control sounds like a good buzzwords, but when you're too restrictive around that stuff-

you're going to create a situation where you're not seeing supply being increased. We've seen in Jersey City pressure when New York City isn't growing on our housing prices. And when we've grown a lot, you've seen the demand still high, but the rent increases subside. So it leads you to the conclusion that the market rate component of housing is as important to the conversation as the affordable conversation is.

And, you know, look, a lot of people push back for a variety of reasons. Sometimes it's rooted in racism. I mean, people have a different reaction if you use the word affordable housing versus housing that's affordable. They have a different kind of thought process around that. But the reality of the situation is that market rate housing helps you build more affordable housing or housing that's affordable, and they have to work together to be successful. And that's how we've approached it in Jersey City, and it's generally been successful. So,

So one of the criticisms of market rate is that you end up with those developers just building the luxury apartments because they can wring more money out of those. How do you address, I guess, the balance between luxury housing versus, I don't know, housing for the middle class or housing that's further down the spectrum?

Yeah, so in Jersey City, we do have this kind of set asides or inclusionary zoning ordinances, and those are important. We've gone back and forth with the advocacy groups on what's actually achievable, and we've actually come to a place that's pretty successful. And we generally target about 20% of a housing development to be a blended affordable component. So that could be workforce housing, that could be low-income housing, which is obviously more stressful on the overall project. So you got to factor some of that stuff in.

But we do have a specific minimum requirement when they do get a specific incentive like a tax abatement from the city. What specific levers? So, okay, you've been the mayor of Jersey City for 12 years. It is objectively true that the skyline has changed a lot. It is objectively true that the housing stock has grown. I'm sure it's benefited just from the fact that Manhattan and New York City has been fairly dismal about expanding housing supply. And so people...

look elsewhere, but versus before you came into office now, what are the specific levers that you've pulled to expand production and how can you like attribute, you know, when you do an attribution of the housing stock, what can you say to what you've done? So when I came into office, the tax abatement or incentive program was very political in nature and it seemed to be by right for the developers that were pursuing it.

And there were two problems with that. The politics of it created kind of uncertainty and apprehension about people investing in a market if they weren't familiar with the politics about it. And the uncertainty of how the process worked was problematic as well. So we came in and we changed the policy entirely. And people said that we wouldn't see the amount of growth, but I viewed it at the time that it was

such a given that you would get these tax abatements that it didn't necessarily incentivize more growth. It was already factored into the seller's price and the buyer's price in the private transaction. So we have to recalibrate that market a little bit.

And so what I did was we changed the tax abatement process where we mapped it to census tracts. Based on poor census, we're automatically entitled to a steeper incentive. And what you gradually saw was people moving away from the waterfront and investing money because it seemed more certain the process.

And it seemed to have a clear advantage if you were moving to certain areas. And we mapped it to the census tract, which seemed like a reasonable way to map it towards income where you're trying to instigate development. And so that worked.

And I think that that clarity really helped people invest and attracted new developers to the area. So we were no longer relying on the same small pool of developers. And I think the certainty was very good because, you know, New Jersey has a history of political corruption and feeling that, you know, there was some process around this that it wasn't necessarily predicated on what lawyer or architect you hire created a better climate for business.

So you mentioned widening the pool of developers. And this is something that Joe and I are really interested in. We went down to North Carolina and learned that towns and cities really have to make pitches to developers to get them to come in.

What's the process of, I guess, working with a developer, talking to them actually like? What are the things that they are looking for specifically? Well, look, I think that they are interested in an administration that seems less political in nature and more focused or aligned in a pro-growth mentality that recognizes that they are in the business of providing housing and there's mutually beneficial outcomes if we work together.

When I became the mayor of Jersey City, one of the things that I did with the existing developer pool was I recognized the fact that we needed to market the city better to the surrounding areas. I knew that, you know, not necessarily Soho or Tribeca wasn't a comparison to Jersey City. Somebody wasn't making the choice, should I live in Tribeca or Jersey City, but certainly with Brooklyn and Queens and the outer boroughs.

So we got most of the larger developers at that point together. And what I said to them was that we would do a marketing campaign where the city's economic development corporation would match the private dollars one for one. And it would be targeted in these areas that we think that we can attract new residents and new developers. And I was very deliberate that it would not be political in nature. Like I would not appear in this. My voice would not be a part of it. It was going to be focused on branding the city in a different way.

That ultimately led to more interest, more demands, more developers. And I think that that was a very, very helpful step that we did out of the gate. The politics is always problematic and people are apprehensive about that. Wait, what do you mean by political? Exactly. Well, the political is in most places, at least in New Jersey, it's been a history of who you know and a very small cadre of relationships that have allowed you entree into the process.

And in a place like New Jersey, where a lot of the rules are codified in a very, very loose way, you feel obligated that you gotta have a certain type of relationship. And the more you can remove that

towards the business climate, the more likely people are to invest in that. And I feel like that's been a kind of a big change in Jersey City overall. This is super interesting. I don't think this dimension of housing unaffordability or the challenges to production has come up. But when you look at still today, Jersey overall, you're running for governor. Do you still see like

outside of Jersey City, a general tendency towards it's going to be difficult to get approvals and so forth if you aren't with the right architect, if you aren't with the right paver and so forth. Is that still an endemic problem in New Jersey at constraining the supply of housing? I think it's a cultural issue in New Jersey. I mean, we had a senator that is about to go to jail for gold bars. I mean, that's a example of the political culture of how people perceive New Jersey.

I think that any reasonable person would estimate that you're in the 200,000 unit shortage range for the state of New Jersey now, maybe given a little. And the production of affordable units is roughly only like 3,000 a year. So you're looking at

close to 70 years to cure the backlog that you have today. It's quite significant. And there is a sentiment that, you know, municipality by municipality has disproportionate amount of control over the outcomes of housing production. And part of the job as governor will be to kind of change that narrative. So the NIMBYs, not my backyard or the not monopolizing the conversation. Yeah.

And there's a lot of ways that I think a governor can do that. Well, let's talk about that. How do you deal with the NIMBYs? And the localities who fight it because there must be tension between state versus local. Yeah, I think there's a couple of things you could do. So New Jersey has a fair share housing requirement, which has been litigated for 30, 40 years, where every municipality is going to have some sort of obligation on housing.

And a lot of the municipalities push back. If it's a suburban municipality, they say, well, you're obligating us to these 200 affordable units. And they come under an 80-20 rule. So the 200 units equates to roughly 1,000 units overall, which is kind of the mayors would say it's taxing on their infrastructure, which is true. So the NIMBYs then co-opt the conversation and drag these out in court for some period of time.

So Trenton, A, I think can do a better job of creating transparency around your municipality where it is in the process. Today, that doesn't exist. So for example, if Westfield, use that as an example of a municipality, is cooperating and doing a good job, there's no transparency to that. So the NIMBYs generally control the conversation at the planning boards because of the fact that there's a lack of information. So I think Trenton being helpful in that is part of it.

Number two is that if you have an objective to build new housing, which New Jersey does, and when a mayor or council people say that you're going to make us build these thousand units, but added children in the schools, added needed infrastructure, I do think Trent needs to tie dollars and resources to those municipalities that are cooperating. You do need a carrot and stick approach. Otherwise, you're never going to get mayors to actually move in a place that has home rule like New Jersey.

This episode is brought to you by Charles Schwab. When is the right time to sell a stock? How do you protect against inflation? Are you taking the right risks with your portfolio? Financial decisions can be tricky, and often your own cognitive and emotional biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab, can help. Join host Mark Riepe as he offers practical solutions to help you.

to help overcome the cognitive and emotional biases that may affect your investing decisions. Listen at schwab.com slash financial decoder. Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? Financial services and generosity programs are combined to help you build the financial roadmap for the future.

while also creating opportunities to give back along the way. Visit Thrivent.com to learn more. Thrivent, where money means more. Okay, so speaking of municipalities and infrastructure, one of your proposals is consolidating some of those municipalities so that you don't have a doubling or I guess triplicating, quadruplicating, is that a thing, of services in order to cut costs. And I get that cutting government

services and costs is obviously very hot right now. But what particular benchmarks or targets are you looking at here? And how do you ensure, I guess, quality of service as you consolidate? Yeah. So I think the way that we start this is more focused on shared services than absolute consolidation. And from a mayoral standpoint, knowing that, again, New Jersey has 564 municipalities, a lot of municipalities for a very, very small area. And

all with home rule and all have departments that are not necessarily important by municipality for municipality. Just to put in perspective, 75% of those 564 municipalities have less than 20,000 people. 50% of them have less than 10,000 people. So a lot of very small municipalities that all have offices like health departments, which should probably be at the county, animal control should be at the county, things like that.

And so I think that we've outlined the process to create leverage over the municipalities via referendum and to force kind of shared service once Trenton has leverage. And I think that's the way you got to get there, because nobody's going to voluntarily give up parts of their government unless you have Trenton creating leverage on that. Why hasn't this been done before? Because when I think about animal control, for instance, it does seem kind of crazy that you have...

hundreds, dozens of municipalities that are all running their own animal control services. But like, I imagine there must be a challenge in doing some of this. I think that for the most part, mayors and council people are reluctant to give up departments or relationships. Often the people that work in these small municipalities or large municipalities are personal relationships. You may know the person's family. They've been there for a long time. And so just the bureaucracy and stagnation is what ends up getting you into this place of

not wanting to make any change. People have talked about it for 20 years, about some sort of consolidation. The difference in how we're approaching it is that we are using kind of the referendum process around bonding for municipalities to create leverage over the municipalities to force it. Absent forcing it, you're never going to get it to happen. That's the truth.

And so it's a little bit of a different approach. I could tell you that the League of Municipalities, which is the advocacy group for all 564 municipalities in New Jersey, hates what I say, which probably tells you that I'm right about it, to be honest with you. But that's kind of where we are.

Jersey City, I think in 2022, approved something where developers on a voluntary basis can expand the number of units in a plot in exchange for some level of affordable units commitment. Is that being utilized? Like, what is the math work? It's voluntary to include more affordable units, and then they get to expand the number of units.

Is that being utilized? It's used actually a lot. So it's a little bit different than the inclusionary zoning ordinance, which was you get an approval and let's say 20% has to be inclusionary zoning, depending on what the zoning changes. This was an overlay zone that we put in place that basically what it said is that within the existing envelope of the

building. So from an outside, you could just add more density in there. It is being used because what you see in Jersey City is you see a lot of these smaller units in these larger buildings, and they trade at roughly from the downtown area, let's say $100,000 a door on approval. So it's of high value to do that for us from the city standpoint. Wait, what does that mean, trade at $100,000? Like if you sell, let's say you were to, a building is approved for 10 units,

It's roughly would be a million dollars. So, and that math is exponential for if you have a three, 400 unit building. From our standpoint, it was the best way to approach a need for affordable housing without changing the aesthetics or the scale of the building on the outside, which is problematic often to kind of the community group, so to speak. So it is being used.

I would probably say it's being used as much, if not more, than the inclusionary zoning ordinance that we have in place. And it's just been another tool to kind of increase affordable housing production. Since you mentioned aesthetics, I find this really interesting because aesthetics doesn't always come into the conversation on affordable housing. And it is an issue for a lot of people. And I think about the look of Jersey City versus, I don't know, a Hoboken or something like that. They're very different.

How important are aesthetics in your conversations? And I guess, how do you address some of those issues? We have a good planning department and we've gotten better at it. As we've gotten more sophisticated developers into Jersey City, it's allowed us to be more aggressive with the aesthetics and push developers a little bit more. So you can dictate what things will look like. We can, to some degree. And I think that as the marketplace has become more competitive, we're

the natural outcome of the private sector is that they're pushing each other to better products that look better, feel better, better amenities, whether it's a pool or a kind of a little golf range or whatever they got going on in there. It's changed over time a little bit better.

And because we've grown so much, everybody's thinking about how to make their building more competitive. The buildings are being absorbed into the market as quickly as we're building them. They would tell you that. That's largely because of New York's lack of construction, which is a bigger problem. But it also has benefited us from the aesthetic standpoint for sure. So here's a big picture thought that I have. Go for it. And I kind of hinted at the beginning. But New York City and our neighbors on the other side of the water

Greatest place to live in the entire world, in my opinion. The economic opportunities for an individual here are extraordinary. The cultural opportunities are extraordinary. I understand intuitively why rents here or mortgages are so expensive because it's the best place in the entire world.

Jersey City has expanded the housing stock quite a bit, but also affordability has worsened over the last decade or so. Is that inevitable because it's just so good? People want to live in the best place in the world and so it's going to get more expensive? Because this is where there's sort of like when I talk to a lot of the Yimbys, I understand like expanding production that's good for the economy, etc. I'm less convinced that market housing or any housing can actually make these places cheaper, right?

Because they're so good. They're so desirable. Can you actually solve affordability or do you just have a lot more people here and that's good enough? You could definitely slow the growth of rental increases. So whether you're going to have a massive rental decrease –

I don't know, but you could definitely slow the growth. And we've seen that in the last year, two years, whereas Jersey City was consistently ranked as very, very steep rent increases and it was problematic. That has slowed because of the supply conversation. Specifically though for Jersey City, I think that

Yes, we have been a victim of our success in many ways and a victim of New York's lack of construction. So if you are going to have a regional solution, New York and particularly Manhattan needs to carry its weight, which is not happening today. Mm-hmm.

Just on this beggar thy neighbor issue, I guess, do you talk to other cities and other towns about like what they should be doing? And I guess how replicable is the Jersey City model for a place like New York or Hoboken or wherever? Well, I think there's a lot of good things that have happened in Jersey City. And some of the mayoral candidates do reference the amount of housing production because it's been pretty astronomical in Jersey City.

It kind of speaks to the lack of production, again, in New York. I think as governor, there's a lot of things that you can do to change the climate in New Jersey around housing production. And one of the challenges that we've had in New Jersey is you haven't had a governor with municipal experience in 20 years. You know, Phil Murphy came from being ambassador and Chris Christie was a U.S. attorney and John Corzine was a U.S. senator and et cetera, et cetera.

So I do think understanding the touch points, the leverage points, how to motivate somebody at the municipal level is very, very important to being a governor in a place like New Jersey.

Actually, speaking of politics, I think in this race, are you the only candidate in the race that supports the congestion pricing scheme? All right. As a resident of Manhattan who doesn't drive much in the city, I think congestion pricing is great, but I'm not, you know, I'm not running. You're asking why am I as a New Jersey resident thinking that it's a tech? Well, how do you sell it?

How do you sell it? Well, look, people ask me in a lot of this. Because this is like also gets to some of the other questions around housing, which is that some of these benefits are diffused in the long term and not immediate. So how do you sell it? So first of all, if you care about the health issues or the environment issues or mass transit issues, then obviously you should be supportive of the concept of congestion pricing to begin with. Okay.

I say secondly to people, if you take a step back and get away from kind of polling data, which people would say, I don't like the idea of an additional surcharge. If you ask yourself, who is the person that drives their personal vehicle from New Jersey every day to Midtown Manhattan and pays $1,500 to park their car in Midtown Manhattan? It's not regular working class people. Regular people take the trains and buses everywhere.

to the Port Authority or to Penn Station, and then they use the MTA system. Wealthy people drive their personal vehicle every day. The point is that you need to invest in mass transit, and we need to get past this kind of concept of New Jersey versus New York, because New York does rely on New Jersey transit to service a lot of the workforce here in New York. And we rely on the MTA to move us around here once we get here. Ultimately, when I'm the governor, or hopefully get there,

Want to get to a place of a regional conversation more around mass transit. I don't think the current climate of conversation is productive. And the leverage tool to get New York back to the table is probably posturing around some sort of similar tax on New Yorkers eventually to get them to the table. So you could have a kind of a holistic conversation.

regional plan around transportation. That's really where you got to go if you're going to get the region to actually move in the right direction. Why does New Jersey transit suck so much? I mean, that's like the question I get in every single meet and greet. It's probably just because a lack of

interest from Trenton for some period of time. I mean, you have buses that have been privatized for a long time, so I think that's problematic. You have a train system that doesn't have a dedicated revenue source, and you have administrations that have not really cared for it so much. So it's not only that it's problematic with the existing service, it hasn't built out any real infrastructure at all. So when you look at economic development in the southern parts of New Jersey,

you would see that there is no mass transit. And the reason that you haven't been able to attract jobs the same way or housing construction is directly related to the lack of mass transit infrastructure. Actually, I want to talk about this a little bit further because the quality of public services is something that probably transcends both the sort of more center and left side of the Democratic Party. That like, where is the future of any sort of public provision of goods if people don't think it's good?

it's good. And so if, you know, the widespread perception is that New Jersey transit is terrible, it's one thing to say, OK, yeah, they haven't taken it seriously. Fine. But like, I mean, this seems to be a widespread phenomenon. It's people in New York obviously have the same issues with the subway and they come up with their stories and people in the Bay Area have the same issues with the BART and other where they don't have the same issues because their government just didn't build out anything in the first place or whatever.

But like, what is your plan for actually making it a good quality product that people like? Yeah, I don't need a car. I really like the transit. Yeah. Let me just say, I think that the reason that you've seen what you've just outlined is largely because you have wages that haven't increased at the same rate as costs for government. And that disconnect has forced a lot of choices, which ultimately has led to less services. Right.

Okay, on New Jersey transit, we've outlined kind of a couple of things that are really big priorities for me on the funding. And it doesn't rely on the federal government and we could do it ourselves. Last year, Phil Murphy put in place a corporate business tax.

It was our idea, actually, on companies with $10 million plus. He gave us credit for it. He put it in place for five years only. It's problematic only because, A, you have to come back and fix it, and B, you can't bond against the five-year revenue, which you need to do because if you're going to make New Jersey transit better, you've got to invest in the train stations and bus stations so people feel they're clean and

modern and safe. So got to fix that, number one. We would do that right away. Number two is the largest infrastructure project in the state of New Jersey is really this turnpike widening project, which goes into the Holland Tunnel. And it doesn't make a lot of sense because it's a $12 billion project and the Holland Tunnel is still two lanes. So it doesn't matter if you make 20 lanes coming into it, right? You have that same bottleneck.

And, you know, similar to what the governor of Maryland did and some of the others, we would reallocate those dollars towards mass transit in particular, light rail expansion in South Jersey and in Bergen County. And then I do think that's a priority to go away from privatizing the buses.

This episode is brought to you by Charles Schwab. When is the right time to sell a stock? How do you protect against inflation? Are you taking the right risks with your portfolio? Financial decisions can be tricky, and often your own cognitive and emotional biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab, can help. Join host Mark Riepe as he offers practical solutions to your financial crisis.

to help overcome the cognitive and emotional biases that may affect your investing decisions. Listen at schwab.com slash financial decoder. Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? Financial services and generosity programs are combined to help you build a financial roadmap for the future while also creating opportunities to give back along the way. Visit Thrivent.com to learn more. Thrivent.

Where money means more. I don't know which is worse, Tracy, going into the Holland Tunnel from the Jersey side or exiting the Holland Tunnel in the New York City side. Miserable in both directions. I see no upside unless you're going to radically rethink that and spending one more dollar on that process.

Anyway, I have a horror story about this, which I will tell you after this recording. I suspect a lot of people have horror stories about this, but I want to go back to housing for a second. I love housing. We touched on tax abatements and obviously tax abatements are a classic tool for building more affordable units, but they're not free, right? You're sacrificing revenue in order to do this. And, and,

presumably you need to offset that lost revenue through tax increases elsewhere. So where does that offset actually come from? So first of all, let's talk about how to change the tax abatement or pilot program payment in lieu of taxes so that way it actually makes sense in New Jersey.

Today, in New Jersey, a short-term tax abatement is by right. So a developer can fill out a program and a piece of paper and they get a five-year tax abatement. The long-term tax abatements for 20 or 30 years are the ones that become political circus. I do think to increase housing supply, you need to change the long-term tax abatements to be somewhat more like the five-year tax abatements by right. And the way that we would see this move forward, assuming get elected, is that

city council or mayor would approve an initial ordinance. So you'd have a public process around what that tax abatement process for that administration would look like. What is the census tracts? What are the affordability components? What are the community givebacks? Is it union labor? Whatever those are. Once it's approved, it should go to Trenton to get approved there by the DCA. And then at that point, I do believe it should be by right. So you could expedite some of this construction components of it.

In New Jersey, you have, again, a lot of municipalities and the taxes are divided up between the school district, between the municipality and the county. The school district and the municipality are obviously priorities.

The county less so. It's another layer of government that you probably need some consolidation long term. And most of these buildings are new found revenues. They're not true tax payments where the developer is not paying. It's a payment in lieu of taxes. So it is found money, maybe not as much as you would make, but there still are a lot of inefficiencies in government. And you could figure out that offset through that process.

There's a lot of inefficient use of land around train stations. Yes. You notice it where it's like there's just like lots of parking and stuff. It's like this seems like it should be like prime places for like really tall buildings so that someone can walk five minutes to a train that they take to New York City. Why is that?

Why is that? A lot of that is owned by New Jersey Transit, actually. And so you have a disconnect in New Jersey where the zoning is controlled by the local municipality. And New Jersey Transit, who owns the property, perceives that the opportunity or land value is different than what the existing zoning is. That disconnect has created a lot of

or no movement, really. I just don't understand. Why does Jersey Transit feel the need to hold all this land that could be extremely valuable for real estate right there and leave it for cars rather than people? We will use executive orders around that to kind of override some of the just transit-oriented development restrictions that you have. So the goal is to really use that land and circumvent the existing language in the home rule code.

municipalities that are problematic. I want to channel NIMBYs right now. I'm putting on my NIMBY hat and obviously, you know, I haven't been able to go to like a Jersey City town hall to get like a real sense of it, but I did the next best thing, which is I went to the Jersey City subreddit. Okay. And

There's a lot of criticism on there of, I guess, gentrification. Sure. Right? And people are complaining that all these new high rises are making things very different to how they used to be. And you're actually getting rent increases and hike taxes and things like that. How do you address those concerns? I mean, look.

Rent increases, unfortunately, is a byproduct again of the pressure because of New York and we're a victim of our success. There's no question about that. You've seen the population increase in Jersey City. So when people point to the fact that people are being displaced, the data doesn't necessarily support that. And the diversity in the city has remained relatively constant.

I think that when you see a lot of the new buildings that are going up, those are often on vacant properties that didn't exist before anything, parking lots or empty lots near Journal Square. So you're not talking about displacement to the same degree people are talking about

change is uncomfortable for people. That's the truth, you know? And, you know, you're always going to have people that remember what a city looked like 15, 20 years ago that might have been a little bit more grittier, a little bit less safe, and they still like it because of the way it was. But,

But I think most people would tell you that Jersey City's change has been beneficial. I'm the first three-term elected mayor there in 70 years, so somebody likes me. And I think that the changes, for the most part, have been helpful. Not to say that we don't have an affordability crisis, but it's a regional issue. It's not just a Jersey City issue.

I do think you make a good point. You know, and this gets to my point about why rents have, in fact, gone up now that it's gotten more dense and there are all those great restaurants at the bottom of the buildings right when you get off of the PATH train. It's more desirable. I'll pay more for it. I'll pay more for it today than I would have paid in equivalent dollars 15 years ago when there was, you know, probably tumbleweed or whatever it was. You know, I know it wasn't tumbleweed. And I think this gets... Are you an abundance Democrat? You know,

You know what? I didn't even know until six months ago what that terminology was, to be honest with you. So, so. But do you think that's like a useful answer question? But do you think that's like a useful flag? Could that be like, is that like a useful political term? I don't know. I mean, I don't think it's a useful political term, truthfully, because I don't think a normal person would read Ezra Klein in the book like we would read it. But I don't think.

by and large, a independent voter, which is what Democrats need to move ultimately to be successful, is going to understand when you say I'm an abundance Democrat. To be fair, I don't know if anyone is saying that or proposing that anyone should say that, but I'm just curious about the resonance of this label, this word. I think there is validity to the argument that we put a lot of layers...

and restrictions in place to get anything accomplished. And that's not necessarily only Democrats. It's everybody in this country. And I do think that we need to kind of move forward on stuff. I don't know if the term, I mean, it's kind of like, I guess, the last couple of months, you hear it more and more often. We'll see if it sticks around, you know. More and more people saying it these days. Stephen Fulop, mayor of Jersey City, candidate for the Democratic Party's nominee for governor. Thank you so much for coming on. Thanks for having me. It was really great. Thank you both. Thanks so much. That was great. That was a lot of fun.

I will say, Tracy, that, you know, I always get so nervous talking to politicians because I worry that they're just going to be so canned, you know, and we don't do a ton of them. They tend to be very on message. Very on message. Talking to Stephen talked like just talking to like a very normal person about issues. I mean, you know, I'm sure people would disagree with him about his characterizations of things. It felt like a real conversation.

Yeah, I mean, he definitely had a lot of policies that he could point to. I guess the big question is still how replicable this is elsewhere. And for instance, you know, he talked about on the gentrification issue that you're not displacing existing buildings, you're building on...

primarily empty lots and things like that. There aren't many empty lots in places like Manhattan. No, and there probably aren't many empty lots left in Jersey City either. And so part of the question, so that's how, you know, we're talking about like what specific mechanisms, and I believe that they exist, but

But today it's a very different city than it was 15 or 20 years ago. And so the degree to which, OK, well, this is just Manhattan spillover or maybe Brooklyn or, you know, whatever spillover. People who weren't going to live in Manhattan in the first place. But then the easy pickings have been gone certainly strikes me as a real possibility. The starting points were different. Yeah, totally. You mentioned tumbleweeds, Joe. Yeah. Did you know that tumbleweeds come from Russia and they're an invasive species in the U.S.? Really?

Yes. I did not know that. Speaking of housing, have you ever seen the pictures of houses being absolutely swamped by tumbleweeds? No. No.

You've got to look those up. Introduced from Russia in the 1870s, they arrived in South Dakota likely in flaxseed from Russia. These plants are known also as Russian thistle. That's super interesting. Yeah. They're cool looking, so I don't mind that they got here. I mean, I guess it's not good if houses are swamped. No, it's cool. No, they're actually a big problem. Oh, it's a serious problem. One other thing, though, that we only got into it a little bit. It does seem like...

because of the sort of disorganization of American government, you get a lot of really silly things like the New Jersey transit owning a bunch of land that it could be worth hundreds of millions of dollars if you just put a bunch of apartments on there. And people would presumably kill to live in a nice high-rise apartment, a two-minute walk from a train station that would take them right into New York City. I would love that. And instead, it's just parking. And yet, because of the zoning, it just seems like...

Let's get it together. Come on. It's just really annoying. Well, there's a lot of stasis in policy. Yeah, it seems tough. I think we've learned that over and over again. You know, one last thing, too, because it took me a minute. I think it took both of us a minute when Stephen was talking about, oh, housing being very political.

and what he meant by that was super interesting. Like we've definitely not talked about the idea that, well, one barrier to housing could be essentially corruption, which is a word he used. But even like polite forms of corruption is very interesting. Yeah. All right. Shall we leave it there?

Let's leave it there. This has been another episode of the Odd Lots podcast. I'm Traci Allaway. You can follow me at Traci Allaway. And I'm Jill Wiesenthal. You can follow me at The Stalwart. Follow our guest, Stephen Fulop. He's at Stephen Fulop. Follow our producers, Carmen Rodriguez at Carmen Arman, Dashiell Bennett at Dashbot, and Cale Brooks at Cale Brooks. For more Odd Lots content, go to Bloomberg.com slash Odd Lots, where we have a daily newsletter and all of our episodes.

And you can chat about all of these topics, plenty of stuff in there about housing, 24-7 in our Discord, discord.gg slash oddlots. And if you enjoy Oddlots, if you like it when we talk about housing policy and the origins of tumbleweeds, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes.

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