Readers of REVITALIZATION already know that I (Storm Cunningham) am a big fan of New Jersey‘s Aspire Program, which brilliantly catalyzes and integrates adaptive reuse, redevelopment, neighborhood revitalization and affordable housing. And it’s not just because I was born there.
Now, that leading-edge initiative is even better.
Downtown Paterson, New Jersey.
Photo by BJT11091 via Wikipedia.
On November 17, 2023, the New Jersey Economic Development Authority’s (NJEDA) Board approved the adoption of new rules for the Aspire Program aimed to spur redevelopment and increase affordable housing in communities across the state.
The rule changes include increased per project caps, expanded eligibility for transformative projects, and increased affordability controls for residential units. The Aspire Program is a gap financing tool to support commercial, mixed-use, and residential real estate redevelopment projects.
“Since launching, the Aspire Program has supported innovative commercial projects like HELIX and affordable and mixed-income residential developments in downtowns across the state, including in Newark and Trenton,” said NJEDA Chief Executive Officer Tim Sullivan.
“The adoption of these new rules will allow the NJEDA to support even more transformative, mixed-use, transit-oriented development which will help revitalize communities and strengthen our economy. Importantly, the rules will strengthen affordable housing, increasing access to hardworking New Jersey families,” he added.
Aspire is a place-based economic revitalization program created under the New Jersey Economic Recovery Act of 2020 (ERA) to support mixed-use, transit-oriented redevelopment with tax credits to commercial and residential real estate redevelopment projects that have financing gaps.
In July, Governor Phil Murphy signed an update to the Aspire legislation in response to changing economic conditions making the program more accessible and able to support more projects that will create jobs and housing across the state.
To date, the NJEDA Board has approved 10 projects for over $500 million in Aspire awards, representing over 500,000 square feet of commercial space, 490 income-restricted units, and 1040 market-rate units.
The new rules approved by the board include:
Increased Project Awards
In response to spiking inflation, supply chain disruptions and rising interest rates, the new legislation increased caps per project according to the following schedule:
- 80 percent of eligible costs up to $120 million for Atlantic City, Trenton, and Paterson
- 60 percent of eligible costs up to $90 million for four percent Low-Income Housing Tax Credit projects, projects in a qualified incentive tract, municipality with an Municipal Revitalization Index score over 50, or an enhanced area
- 50 percent of eligible costs up to $60 million for all other eligible projects
- Transformative project caps are subject to the above percentages with a dollar cap of $400 million
Transformative Projects
Transformative projects must demonstrate special economic importance to New Jersey and leverage the state’s mass transit assets, higher education assets, and other economic development assets to attract or retain employers and skilled workers or in targeted industries by providing employment or housing.
Transformative projects must meet the following criteria:
- Minimum project costs increased from $100 million to $150 million
- Minimum commercial project size remains 500,000 square feet or
- 300,000 square feet in an enhanced area
- 200,000 square feet in Atlantic City, Paterson, or Trenton
- 250,000 square feet for film production studios
- Minimum residential project size of 700 newly constructed units
- Minimum mixed-use project of 50,000 square feet plus
- 200 residential units in Atlantic City, Paterson, or Trenton
- 300 residential units in an enhanced area
- 400 residential units in other eligible locations
Affordability Controls
For a project that includes newly constructed residential units, at least 20 percent of the units must be reserved for low- and moderate-income households.
These income-restricted units will include a minimum number of three-bedroom units and a maximum number of studios and one-bedrooms ensuring more options for families. They also include more units for very low-income and low-income households with the remainder for moderate-income.
In line with Governor Murphy and the NJEDA’s commitment to fiscal responsibility and transparency, the Aspire program rules include provisions, such as a gap financing review and excess revenue sharing requirements, to ensure tax credits are awarded responsibly.
Featured photo (by FirozAnsari via Wikipedia) shows the Great Falls of the Passaic River in Paterson, New Jersey.