Economic development is a serious topic of conversation in the state of New Jersey. New Jersey was one of the largest office markets in the country, and the economic growth of the state depended on commercial spaces and warehouses. Since the turn of the 21st century, the market has changed and capital mobility has caused industrial and corporate sites to relocate, leaving behind a vast amount of vacant office and warehouse parks. Blue collar jobs relocate with them. It is imperative that the state provide solutions to repurpose the vacant areas and establish new programs to incentivize new markets to relocate in place of these vacancies. Urban renewal is the basis of the solution and the state continuously works to new ways to rebuild economic local autonomy. Through the creation and implementation of New Jersey economic development programs such as the Grow New Jersey Program and the Urban Enterprise Zone Program, and the NJCDC, the Community Development Corporation, New Jersey is taking steps to solving the economic crisis many cities are facing.
The Grow New Jersey assistance program is described on the official website as a “powerful job creation and retention incentive program that strengthens New Jersey’s competitive edge in the increasingly global marketplace”. The program is consolidated by the New Jersey Economic Development Authority (NJEDA). Through providing tax credits to businesses that create or retain jobs in the state of New Jersey, the program incentivizes businesses to open/remain and provide employment to the residents in their area. The corporate business or project must be located in a priority or incentive area to qualify. These areas generally house the lowest median income in the state, and are urban transit hubs or counties in desperate need of redevelopment. This program specifically encourages “Mega Projects” that create 1,000 or more jobs and the involvement of corporations that bring high capital investment levels. However, there are benefits/incentives available for small and mid sized businesses as well. In Passaic county, where many warehouses stand abandoned and forgotten and many blue collar workers are out of jobs, this program works to remedy a large-scale unemployment problem that leads to urban blight.
Paterson, New Jersey, coined the “Silk City”, is the third largest city in New Jersey. It is located in Passaic county, and is also one of the twenty-seven Urban Enterprise Zones in the state. The Urban Enterprise Zone Program (UEZ) was enacted in 1983 and is based on the new federalism approach to economic recovery for blighted areas in the state. This program allows certified businesses to take advantage of the Economic Recovery Tax Act of 1981 with additional bonuses such as lowered individual tax rates, various tax credit options, subsidized unemployment insurance, sales tax reduction, and even certain tax-free purchases.These perks incentivize small and large businesses to relocate and invest in these zones. This program encourages businesses to come to blighted areas and contribute to the local economic growth, through “public and private investments”. Through financial incentives, these urban enterprise zones are meant to attract capital and new jobs to a designated area. This program encourages entrepreneurship at every level and works to grow the local economy.
Community Development Corporations (CDC) are aimed toward rebuilding local economic autonomy in low-income areas. The NJCDC works to revitalize communities, such as Paterson, New Jersey. Paterson is a major area of focus for NJCDC. They provide social services, as well as opportunity for collective ownership (or partnership) of work, housing, and money in the public and private sectors. There is also an active community advisory board that serves as a council made up of city residents. The NJCDC encourages residents to take part in the growth of their local economy. Collective ownership is one approach. Some examples of collective ownership that serves the community are Employee Stock Ownership Plans and Workers Cooperatives. In summary, they allow workers to own a share of the company, leading to a heightened morale and productivity because the workers feel connected to the success of the corporation. The same goes for community land trusts, or housing cooperatives. Residents own a share of the housing in which they reside, making them shareholders / owners. The tenants therefore feel more attached and responsible for the condition of their housing. Another type of housing plan that NJCDC provides is affordable housing that offer social services to help rehabilitate the unemployed, the homeless, the disabled and the mentally ill to be able to put these people back into society as productive members. Community outreach helps make this possible, and the community as a whole reaps the benefits. CDC’s take the approach of self determination and local efforts to re-grow a local economy.
Urban economic development in very low-income areas require active community involvement and development programs. The programs New Jersey has in place are aimed to revitalize vacant infrastructure, rebuild local autonomy, and get investors of the private and public sectors, as well as the community, involved in economic redevelopment. In theory, the economic development efforts of the state should resolve many of the issues low income communities face; unfortunately this is not the case. “Affordable” rent continues to be economically determined and worsened by gentrification. Sales and property taxes in the state are still too high for the current residents. Small businesses are pushed out by economic factors, making it harder for residents to engage in entrepreneurship in their community. Grow NJ and UEZ’s seem to focus on bringing in big, outside projects instead of revitalizing the businesses that already exist. The programs give large tax credits and cuts to mega corporations, but barely give the same level of benefits to the owners of your local bakery. The reality is a large population of residents continue to struggle economically, and the help given through these programs barely reaches these people. I personally see the most value in Community Development Corporations. Rebuilding local autonomy should require an active council of locals who understand the issues the community struggles with. Community Development Corporations depend on the community’s involvement to be successful, which is why I believe it is the most hands-on solution of the three economic development efforts described in this post.
- “Grow NJ Assistance Program.” NJEDA, New Jersey Economic Development Authority, www.njeda.com/financing_incentives/Programs/grow_nj.
- “Urban Enterprise Zone Program.” NJ Department of Community Affairs, State of New Jersey, http://www.nj.gov/dca/affiliates/uez/.
- “What We Do.” NJCDC, New Jersey Community Development Corporation, www.njcdc.org/.
(blog post #4)