Newark’s Next Decade: Growth, Housing and What Comes Next

Newark is building again

Newark is growing. The 2020 census counted more than 311,000 residents, the most the city has had in decades, and the city has been approving new housing at a pace it hasn’t seen in years.

Since 2020, Newark has approved 6,783 housing units. That’s 61% more than it approved in the thirteen years from 2007 through 2019 combined, according to NJ Transit Village research based on New Jersey Department of Community Affairs data.

Very little of that new housing looks like the homes most Newark families actually live in.

The homes Newark is built on

Walk down almost any residential block in Newark and you’ll see two- and three-family houses. For generations, that’s how families here built a life. The owner lived on one floor and rented out the other, and the rent helped pay the mortgage.

A few numbers describe the city’s housing today:

• 68% of Newark’s housing units are rented, according to the Regional Plan Association.
• Nearly half (48.5%) were built before 1960.
• More than 58% of renter households spend more on housing than they can comfortably afford.

Almost nobody builds them anymore

Before 2008, nearly half (49.3%) of Newark’s new housing was single-family homes. Since then, single-family homes have made up about 13.6% of new units, roughly one in seven. Most of the rest has been large apartment buildings, much of it downtown. The Regional Plan Association found that buildings with five or more units made up the bulk of new permits even before the pandemic.

The reason is money. Land, permits, environmental work and legal fees cost roughly the same whether a developer builds twelve apartments or three hundred. Spread across three hundred units, those costs are small per apartment. Spread across three, they can sink the project. So builders go big, and the smaller homes the city’s neighborhoods were built on mostly don’t get built.

The houses Newark already has are getting older

That leaves Newark with the small homes it already has, and almost nobody is adding to them. Many of those houses need more work than a typical buyer can take on. Roofs, wiring, plumbing and heating systems wear out, and some houses can’t pass inspection in their current condition.

A family looking to buy a two-family house may not be able to finance a major renovation on top of the purchase. An owner who’s lived in the house for decades may not be able to afford the repairs either. When nobody can take on the work, the house sits, and the block loses a home.

What it takes to bring a house back

Bringing an older two- or three-family house back is a project with a lot of moving parts:

1. Inspect the systems first. The roof, electrical, plumbing, heating and foundation decide most of the budget.
2. Get the permits. Major work on a Newark house goes through the city’s permit and inspection process before tenants can move in.
3. Do the work in order. Structure and systems come before kitchens and finishes, because the inspections happen in that order too.
4. Pass inspection and lease the units. The house is back once it’s safe, up to code and housing a family.

Each step takes time and money, and that’s why so many of these houses sit. A typical buyer often can’t fund the purchase and the renovation at once. A firm that does this work every week can.

Where Leverage Companies focuses

Most of the money in real estate goes to big new towers. Leverage Companies focuses on the overlooked middle.

We buy these homes, fix them up and rent them to Newark residents, on the same blocks people already call home. The firm has been based in Newark since 2019, at 50 Park Place downtown, and it manages more than $60 million in real estate today.

That work happens one house at a time. It keeps the neighborhoods that make Newark what it is, and every house that comes back is one more family with a place to live in the city.

What to watch over the next decade

Three things will shape whether Newark’s growth reaches its neighborhoods:

1. Whether approvals turn into finished buildings. Approvals are well above anything Newark saw in the decade after 2008, and completions will show how much of that housing actually gets built.
2. Whether the city’s two- to four-family homes stay livable. The city can’t easily replace them, so keeping them in good repair matters as much as anything being built new.
3. Whether rents keep pace with incomes. With most residents renting and many already stretched, the supply of decent, affordable rentals in the neighborhoods will matter more every year.

Newark’s next decade depends on the towers going up downtown and on the houses already standing on its blocks. We’re investing in the second.