The Nation Comes to J.C.

Here is my piece from the New York Post on real estate in my adopted hometown of Jersey City.

City Dwellers

The New York Post

By Dan Ackman

August 14, 2005

The land rush under way in Jersey City is attracting some surprise players — the nation's largest homebuilders, much more accustomed to earning their profits in the greener pastures of suburbia.

But as large, profitable tracts on less crowded land are harder to come by, Pulte Homes, Toll Brothers and Centex have moved their equipment into urban landscapes for the first time.

They join a fourth builder, Hovnanian Enterprises, which had already made the move.

The new developments are part of what the companies call "urban infill" — a return to older cities.

Nowhere is the emerging business model for the publicly traded homebuilders more evident than just across the Hudson, in Jersey City and neighboring Hoboken.

Pulte Homes, based in Bloomfield Hills, Mich., and Hovnanian, based in Red Bank, N.J., both have projects in Jersey City's tony Paulus Hook section.

Dallas-based Centex is building on the west side of town overlooking Newark Bay, where Hovnanian is adding a new phase to an existing project. Toll Brothers, based in Horsham, Pa., just broke ground on condos near the Holland Tunnel exit on the Hoboken border, adding to a pair of developments in Hoboken itself.

Two causes are sharpening the companies' focus more on urban locales.

First, there is increasing demand for homes that afford an urban lifestyle that is entirely dependent on the car.

Second, suburban communities are starting to rebel at perceived overdevelopment by implementing tighter building and zoning restrictions. To maintain their heady growth rate, the companies are being forced to come back to land that has long been developed and create new types of homes attractive to couples and young families as well as empty-nesters.

The latest arrival in Jersey City is Centex, which is building 120 town homes and loft-style apartments at Westside Station, the first of which are scheduled for delivery late this year.

Robert Forniadis, a senior vice president and director of land acquisition, says the proximity to Manhattan and the desire of buyers for more traditional communities are the reasons Centex has come to Jersey City.

While Centex and others have long been in the business of building planned developments, Forniadis concedes, "We call them neighborhoods, but they're really not." Jersey City, while less dense than the five boroughs, is closer to the real thing. More of their customers want shorter commutes and homes closer to entertainment, "not McMansions where you have to drive to get to the mailbox."

At the opposite end of town, Toll Brothers is building a 230-unit condominium called 700 Grove. While prices in Jersey City and Hoboken are still not at Manhattan — or even north Brooklyn — levels, Benjamin Jogodnik, a Toll Brothers vice president, says prices on their existing Hoboken projects have gone up by about 40 percent in two years.

Hovnanian, whose headquarters are just an hour's drive south, started its first Jersey City project called Society Hill in 1985. But it has ramped up its interest in the city recently. Not only is it adding 380 town homes in a development called Droyers Point, but it is building town homes and one- and two-bedroom condos in Paulus Hook, a historic section across the river from Manhattan's financial district.

Doug Fenischel, a spokesman for Hovnanian, says the regulatory process in suburban areas has made building there more difficult. But building in urban areas has become easier, at least in the sense that new technology has made land cleanup more feasible. The combination of factors has made returning to land long occupied often by factories, or even waste dumps, more attractive for builders and home-buyers alike.

Fenischel allows that no more than 5 percent of Hovnanian's business is urban. "But we expect that to increase dramatically."