As home construction costs keep rising, there’s a dispute in the proposed state budget over how to fund affordable housing.
New Jersey lawmakers will vote to approve the state’s new fiscal year 2026 spending plan later this evening. The $58 billion budget is about 2.5% higher than last year’s spending plan.
One point of contention in the proposed budget is a $10,000 increase in Jersey’s real estate transfer fee for homes costing more than $1 million…
Why is housing so expensive?
Rutgers University economist James Hughes, dean emeritus of the Edward J. Bloustein School of Planning and Public Policy, said New Jersey is the most densely populated state in the nation, and that land is scarce, expensive and extremely regulated.
“All these regulations are needed in terms of environmental protection, public health and the like, but at the end of the day, they have a significant cost attached to them,” Hughes said.
He said between 1950 and 1970, a million housing units were constructed because land was abundant and cheap throughout the Garden State and very few environmental regulations were in effect, but that almost the exact opposite situation exists today.
New Jersey housing costs could go from bad to worse
Hughes said if federal immigrant deportations continue, home construction costs could soon rise even higher in the Garden State.
“The builders are heavily dependent on immigrant labor, particularly roofing, so they’re facing significant labor shortages,” he said.
He said tariffs could also cause housing price increases, depending on how they ultimately wind up.
“We import a lot of lumber, we import a lot of drywall, a lot of washing machines, appliances and the like,” Hughes said.
WHYY, June 27, 2025