Historically slow growth in New Jersey’s housing supply is seriously inhibiting the state economy and job growth, according to a new study.
The report, from the nonprofit New Jersey Future in Trenton, comes as Gov. Mikie Sherrill, the Legislature and local governments are urgently looking for ways to boost home and apartment construction.
“New Jersey is not building enough homes. We have been suffering from housing underproduction since the Great Recession (2007-09), putting upward pressure on prices as demand for homes outstrips new supply,” statistician Tim Evans, the organization’s research director, writes in “Is New Jersey’s Housing Shortage Stifling Our Economic Growth,” which was published in May.
The nonprofit’s mission is to “promote sensible and equitable growth, redevelopment and infrastructure investments.”
Evans maintains in the report that even if an employment opportunity might attract or retain workers, potential employees will pass on the job if they cannot find a home near where they would work.
An inadequate housing supply affects both workers considering moving to the state and young New Jersey workers considering settling in their home state to pursue their careers.
The report cites U.S. Census Bureau American Community Survey data from 2024 showing that New Jersey ranks first in the nation in the percentage of 18- to 34-year-olds living with their parents. The ACS estimated that 44% of the age group lived at their parents’ home compared with 32.5% nationally.
“Such a high percentage suggests that many young adults struggle to find housing options they can afford on their own,” the report states. That lack of options may prompt them to leave New Jersey and go elsewhere when they’re ready to form their own households.
Evans also cites Census Bureau data showing New Jersey has the fourth-highest outflow of residents to other states in the nation. The top three outflows from 2020 to 2025 were in California, New York, and Illinois.
The New Jersey outflow would have been larger if not for a substantial net inflow of new residents from New York State – some of whom ironically may have made the move in search of available housing.
“New Yorkers may be contributing to the displacement of New Jersey residents by adding a substantial out-of-state component of housing demand to a New Jersey market that is already underproducing,” according to the report.
Evans writes that if the state’s housing production continues to lag, recruiting employees from elsewhere or from the state’s population will be “increasingly difficult.”
“New Jersey may also lose existing workers to lower-cost markets, as some households see their incomes fail to keep pace with rising rents, while others find themselves unable to afford more spacious homes to accommodate growing families,” Evans writes.
