Jersey City's Mayor on How the City Built So Much Housing

To some extent, at least in big cities, it feels as though the cost of housing is enveloping almost everything else in terms of politics right now. Booming areas that drive GDP have gotten incredibly expensive in large part thanks to rent, and even the well paid residents are forced to turn over a significant share of their income over to their landlord. So can anything be done about it? Can rent come down by liberalizing supply and making it easier to build? And can that scale? And what about developers that only want to build luxury-rate housing? On this episode of the podcast, we speak to Steven Fulop, the mayor of Jersey City, which sits directly across the river from NYC. Fulop is a candidate for the Democratic Party's nomination for governor and he says his time in office in Jersey City proves cities can turn the dial on housing supply. We talk about why Jersey City has added so much to its housing stock, what can be attributed to his policies, and what he thinks can be accomplished at the state level both in terms of housing and improving public infrastructure. See omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Finance is increasingly being built on digital rails. But as the adoption of virtual assets, tokenization and stable coins grows, can regulation not only keep pace but help accelerate it? Find out more later in the podcast.

• 0:16Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 0:58Speaker 01

  and hiring practices, but according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at chatgpt.com.

• 1:41Speaker 01

  Bloomberg Audio Studios. Podcasts, radio, news.

• 1:57Joe Weisenthal?

  Hello and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

• 2:02Tracy Alloway?

  And I'm Tracy Alloway.

• 2:04Joe Weisenthal?

  Been covering a little local politics these days, Tracy. It's not our, it's not our normal beat, but sometimes there's a little intersection.

• 2:09Tracy Alloway?

  We're going local, not macro, micro.

• 2:12Joe Weisenthal?

  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 is Aaron Mumdani, 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 is the issue almost regardless of your perspective that is like on top of many people's minds these days.

• 2:38Tracy Alloway?

  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.

• 2:48Joe Weisenthal?

  No, but it's interesting. Like, you know, at one point, there's like healthcare and sometimes climate, other times, right now, it just feels like there's 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 like get more in some way. So, you know, even within one party, though, although everyone sort of agrees on rent and affordability, not a lot of consensus on the path there.

• 3:27Tracy Alloway?

  Yeah. So the overall goal is very clear, but I guess like 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.

• 3:54Joe Weisenthal?

  Yeah.

• 3:54Tracy Alloway?

  About what's going to be most effective.

• 3:56Joe Weisenthal?

  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 that 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 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 Philip, is running for governor in the Democratic primary right now. So we have the perfect guest to talk about Jersey City housing production. Stephen Philip, thank you so much for coming on Outlots.

• 4:41Speaker 04

  Thanks for having me. I appreciate being here.

• 4:42Joe Weisenthal?

  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.

• 4:51Speaker 04

  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.

• 5:11Tracy Alloway?

  What's the biggest choke point or hurdle when it comes to building more affordable housing? Cause 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?

• 5:24Speaker 04

  What do other people say out of curiosity?

• 5:25Tracy Alloway?

  Well, people say like zoning and things like that, incentivizing the developers to build something other than luxury, high rises, that sort of thing.

• 5:34Speaker 04

  I'd point to a couple of things. I mean, in New Jersey, we have 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.

• 6:12Joe Weisenthal?

  You've been pretty unapologetic in your view that market rate housing benefits everyone, that there's.

• 6:20Joe Weisenthal?

  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 make it more affordable. And why you believe that a lot of the solution is essentially liberalizing and supply and demand.

• 6:39Speaker 04

  Yeah, I think-

• 6:40Joe Weisenthal?

  Letting people build what they want where they want.

• 6:41Speaker 04

  Yes, I think that when you put more restrictions around housing growth. So, you know, rent control sounds like a good buzzwords. But when you're too restrictive around that stuff, you're gonna 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's 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. 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.

• 7:24Speaker 04

  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.

• 7:40Tracy Alloway?

  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?

• 7:59Speaker 04

  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 gotta factor some of that stuff in. But we do have, you know, a specific- Minimum requirement when they do get a specific incentive like a tax abatement from the city?

• 8:36Joe Weisenthal?

  Well, it's 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, you know, Manhattan and New York City has been fairly dismal about expanding housing supply. And so people look elsewhere. But versus what 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?

• 9:06Speaker 04

  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 and the private

• 9:49Speaker 04

  transaction. So we had 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 where it 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

• 10:34Speaker 04

  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.

• 10:49Tracy Alloway?

  So you mentioned widening the pool of developers.

• 10:51Speaker 04

  Yes.

• 10:52Tracy Alloway?

  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?

• 11:11Speaker 04

  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

• 11:55Speaker 04

  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.

• 12:30Tracy Alloway?

  Wait, what do you mean by political? Exactly.

• 12:33Speaker 04

  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've got to 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.

• 13:03Joe Weisenthal?

  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?

• 13:31Speaker 04

  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 municipality by municipality has disproportionate amount of control over the outcomes of housing production.

• 14:14Speaker 04

  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. And there's a lot of ways that I think a governor can do that.

• 14:25Tracy Alloway?

  Well, let's talk about that. How do you deal with the? The NIMBYs.

• 14:29Joe Weisenthal?

  And the localities who invite it because there must be tension between state versus local.

• 14:32Speaker 04

  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 this 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 taxing on their infrastructure, which is true. So the NIMBYs then co-op 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

• 15:17Speaker 04

  example, if Westfield, use that as example of 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 1,000 units, but added children in the schools, added needed infrastructure, I do think Trenton 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.

• 16:18Speaker 00

  What's next for virtual assets? I'm Jacob Grease, host of Economy Scale, a series exploring growth in key global sectors. And this episode, we're diving into the digital forces shaping finance. Sean McHugh from Dubai-based Virtual Assets Regulatory Authority has this to say.

• 16:34Speaker 05

  We're seeing a lot of institutional players come in, digital asset, dedicated hedge funds, high frequency traders and that sort of thing, and folks who service institutional clients.

• 16:42Speaker 00

  As more capital enters the market, adaptive regulation is likely to become increasingly key. Rhys Merrick of Ripple says.

• 16:50Speaker 06

  A lot of regulators globally would like to keep the industry at arm's length. That's the opposite here. I think also what you'll find is that regulation and frameworks can come out, but some of them are maybe a slight iteration on some 80-year-old policy and not actually in line with what the technology can do and offer. And again, that's very different in Dubai.

• 17:09Speaker 00

  Listen to the full episode wherever you get your podcasts. This series is brought to you by Bloomberg Media Studios and the Dubai Department of Economy and Tourism.

• 17:20Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices.

• 18:03Speaker 01

  But according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company. And Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at chatgpt.com.

• 18:42Tracy Alloway?

  Okay, so speaking of municipalities and infrastructure,

• 18:46Speaker 04

  Yes.

• 18:46Tracy Alloway?

  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?

• 18:56Speaker 04

  Yes.

• 18:57Tracy Alloway?

  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?

• 19:13Speaker 04

  Yeah, so I think the way that we start this is more focused on shared services than absolute consolidation. And from a mayor's standpoint, knowing that, again, New Jersey has 564 municipalities, a lot of municipalities for a very, very small area, 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 a process

• 19:56Speaker 04

  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 that 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.

• 20:12Tracy Alloway?

  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.

• 20:27Speaker 04

  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.

• 20:50Speaker 04

  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.

• 21:23Joe Weisenthal?

  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. Is that being utilized?

• 21:42Speaker 04

  It's used, 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.

• 22:21Joe Weisenthal?

  Wait, was that mean traded?

• 22:22Speaker 04

  Like, if you sell, let's say, if you, let's say you were to, a building is approved for 10 units, you would, it's roughly would be a hundred, it would be a million dollars.

• 22:31Joe Weisenthal?

  Keep going.

• 22:31Speaker 04

  So, and that math is exponential for if you have a 300, 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 groups, 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 the affordable housing production.

• 23:01Tracy Alloway?

  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?

• 23:23Speaker 04

  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.

• 23:37Tracy Alloway?

  So you can dictate what things will look like?

• 23:39Speaker 04

  We can, to some degree. And I think that as the marketplace has become more competitive, the natural outcome of the private sector is that they're pushing each other to better products that look better, feel better, better amenities. You know, 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.

• 24:17Joe Weisenthal?

  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 YIMBs,

• 25:01Joe Weisenthal?

  I understand like expanding production that's good for the economy, et cetera. I'm less convinced that market housing or any housing can actually make these places cheaper. Because they're so good. They're so desirable.

• 25:12Speaker 04

  Well.

• 25:12Joe Weisenthal?

  Like, can you actually, like, solve affordability? Or do you just have a lot more people here and that's good enough?

• 25:18Speaker 04

  You could definitely slow the growth of rental increases. Okay, 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.

• 25:57Tracy Alloway?

  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?

• 26:12Speaker 04

  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, you know, Phil Murphy came from being ambassador and Chris Christie was a US attorney and John Corzine was a US 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.

• 26:57Joe Weisenthal?

  Actually, speaking of politics, I think in this race, are you the only candidate in the race that supports the congestion pricing?

• 27:06Speaker 04

  Yes.

• 27:06Joe Weisenthal?

  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 a, you know, I'm not running.

• 27:15Speaker 04

  Why am I, as a New Jersey resident, thinking that it's?

• 27:18Joe Weisenthal?

  Well, how do you sell it? How do you sell it?

• 27:20Speaker 04

  Well, look, people ask me in a lot of

• 27:21Joe Weisenthal?

  This is like, also gets to some of the other questions around housing, which is that some of these benefits are diffused at long term and not immediate. So how do you sell it?

• 27:28Speaker 04

  So, 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. 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 to the Port Authority or to Penn Station, and then they use the MTA system. Wealthy people drive their personal vehicle every day.

• 28:11Speaker 04

  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, 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 regional plan around transportation. That's really where you gotta go if you're gonna get the region to actually move in the right direction.

• 28:56Tracy Alloway?

  Why does New Jersey Transit suck so much?

• 28:59Speaker 04

  I mean, that's like the question I get in every single meet and greet. It's, it's probably just because a lack of interest from trend 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.

• 29:41Joe Weisenthal?

  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? And so if, you know, the widespread perception is that New Jersey Transit is terrible, it's one thing to say, okay, 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 governments just didn't build out anything in the first place or whatever.

• 30:23Joe Weisenthal?

  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.

• 30:30Speaker 04

  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. 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.

• 31:10Speaker 04

  It's problematic only because A, you have to come back and to 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 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 too lane. 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

• 31:54Speaker 04

  in South Jersey and in Bergen County. And then I do think that it's a priority to go away from privatizing the buses.

• 32:18Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 32:59Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company. And Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 33:40Joe Weisenthal?

  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.

• 33:54Tracy Alloway?

  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.

• 34:03Speaker 04

  We love housing.

• 34:04Tracy Alloway?

  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 presumably you need to offset that lost revenue through tax increases elsewhere. So where does that offset actually come from?

• 34:26Speaker 04

  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 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 a 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?

• 35:11Speaker 04

  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 abatements where the developer's not paying. It's a payment in lieu of taxes.

• 35:53Speaker 04

  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.

• 36:02Joe Weisenthal?

  There's a lot of inefficient use of land around train stations. And 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?

• 36:18Speaker 04

  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.

• 36:42Joe Weisenthal?

  Yeah, I just don't understand. Like, why does Jersey Transit feel the need to like, hold all this land? That could be extremely valuable for real estate right there and leave it for cars rather than people.

• 36:55Speaker 04

  We will use executive orders around that to kind of override some of the, just the 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 municipalities that are problematic.

• 37:12Tracy Alloway?

  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.

• 37:29Speaker 04

  Okay.

• 37:30Tracy Alloway?

  There's a lot of criticism on there of, I guess, gentrification.

• 37:35Speaker 04

  Sure.

• 37:36Tracy Alloway?

  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?

• 37:51Speaker 04

  I mean, look, rent increases unfortunately, you know, 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?

• 38:33Speaker 04

  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 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, uh, and I think that the changes, for the most part, have been helpful. Not to, not to say that we don't have an affordability crisis, but it's a regional issue. It's not just the Jersey City issue.

• 39:01Joe Weisenthal?

  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?

• 39:22Speaker 04

  True.

• 39:22Joe Weisenthal?

  I know it wasn't a Tumbleweed, and I think this gets... Um, are you an abundance Democrat?

• 39:27Speaker 04

  You know what? I didn't even know until six months ago what that terminology was, to be honest with you. So, so...

• 39:32Joe Weisenthal?

  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?

• 39:39Speaker 04

  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."

• 39:58Joe Weisenthal?

  I mean, 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.

• 40:06Speaker 04

  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?

• 40:27Joe Weisenthal?

  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.

• 40:35Speaker 04

  Thanks for having me. It was really great. Thank you both.

• 40:37Joe Weisenthal?

  Thanks so much. That was great. It was a lot of fun.

• 40:51Joe Weisenthal?

  I will say, Tracy, that, you know, I always get so nervous talking to politicians because I worry that they're just gonna be so canned, you know, and we don't do a ton of them.

• 40:59Tracy Alloway?

  They tend to be very on message.

• 41:01Joe Weisenthal?

  Very on message. Talking to Stephen, 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.

• 41:12Tracy Alloway?

  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.

• 41:34Joe Weisenthal?

  No, and there probably aren't many empty lots left in Jersey City either. And so part of the question, so that's like, you know, we're talking about like what specific mechanisms, and I believe that they exist. But today, it's a very different city than it was 15 or 20 years ago. And so the degree to which, okay, well, this is just Manhattan spillover, or maybe Brooklyn, or, you know, whatever spillover, people who weren't gonna live in Manhattan in the first place. But then the easy pickings have been gone certainly strikes me as a real possibility.

• 42:00Tracy Alloway?

  The starting points were different.

• 42:01Joe Weisenthal?

  Yeah, totally.

• 42:02Tracy Alloway?

  You mentioned tumbleweeds, Joe.

• 42:03Joe Weisenthal?

  Yeah.

• 42:04Tracy Alloway?

  Did you know that tumbleweeds come from Russia and they're an invasive species in the US?

• 42:09Joe Weisenthal?

  Really?

• 42:10Tracy Alloway?

  Yes.

• 42:10Joe Weisenthal?

  I did not know that.

• 42:11Tracy Alloway?

  Speaking of housing, have you ever seen the, uh, the pictures of like houses being absolutely like swamped by tumbleweeds?

• 42:19Joe Weisenthal?

  No.

• 42:20Tracy Alloway?

  You gotta look those up.

• 42:21Joe Weisenthal?

  Introduced from Russia in the 1870s, they arrived in South Dakota likely in flaxseed from Russia.

• 42:27Tracy Alloway?

  Hmm.

• 42:27Joe Weisenthal?

  They're, these plants are known also as Russian thistle. That's super interesting.

• 42:31Tracy Alloway?

  Yeah.

• 42:31Joe Weisenthal?

  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 and then...

• 42:36Tracy Alloway?

  No, it's cool. No, they're actually a big problem.

• 42:38Joe Weisenthal?

  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, you know, 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.

• 43:06Tracy Alloway?

  I would love that.

• 43:07Joe Weisenthal?

  And instead it's just parking. And yet because of like the zoning and it just seems like, let's get it together. Come on, let's get, it's just really annoying.

• 43:15Tracy Alloway?

  Well, there's a lot of stasis in policy.

• 43:17Joe Weisenthal?

  Yeah.

• 43:18Tracy Alloway?

  I think, I think we've learned that over and over again.

• 43:20Joe Weisenthal?

  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.

• 43:28Tracy Alloway?

  Yeah.

• 43:29Joe Weisenthal?

  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.

• 43:37Tracy Alloway?

  Who you know.

• 43:38Joe Weisenthal?

  Even like polite forms of corruption is very interesting.

• 43:40Tracy Alloway?

  Yeah. All right. Shall we leave it there?

• 43:42Joe Weisenthal?

  Let's leave it there.

• 43:43Tracy Alloway?

  This has been another episode of the Odd Lots Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 43:49Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at the Stalwart. Follow our guest, Stephen Philip. He's at Stephen Philip. Follow our producers, Carmen Rodriguez, at Carmen Armin, Dashal Bennett, at Dashbot, and Kale Brooks, at Kale Brooks. For more Odd Lots content, go to Bloomberg.com/oddlots, 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/oddlots.

• 44:14Tracy Alloway?

  And if you enjoy Odd Lots, 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 absolutely ad free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

• 45:07Speaker 07

  If you're a business owner, you need a card that can keep up. With the Delta SkyMiles Reserve Business American Express Card, everyday purchases transform into miles you can use towards future travel. So business as usual can lead to a well-deserved getaway. And for a limited time, card members can earn 200,000 bonus miles, the highest miles offered this year. Whether you're traveling for business or planning your next adventure, now's a great time to make every purchase go further. Apply today at www.delta.com/podcast. Offer ends November 4th. Minimum spending requirements and terms apply.

• 45:43Speaker 05

  This message comes from Edward Jones, where they believe rich is about more than saving and investing. It's also taking care of what gives your life meaning. That's why your dedicated financial advisor meets you where you are with personalized financial strategies that help protect what matters so you can preserve your progress while creating a path forward. The key to being rich is knowing what counts. Edward Jones. Member SIPC.