New Jersey is experiencing its strongest housing construction surge in decades, with Central Jersey’s rail-served communities emerging as a focal point for new development, according to a recent report from Rutgers University.
The state added nearly 180,000 housing units between 2020 and 2024, marking the most productive five-year stretch since the 1980s. If current trends continue, total housing production could reach approximately 359,300 units by the end of the decade, potentially making the 2020s the most active period for residential construction in New Jersey this century.
“New Jersey’s housing production roller coaster has been defined by long-term crests and falls since the 1940s,” said James W. Hughes. “The increase in construction during the 2020s so far suggests a potential turning point that adds important context to ongoing policy discussions about housing supply in New Jersey.”
The report highlights a major shift in development patterns across Central Jersey, where communities such as New Brunswick, Elizabeth, Perth Amboy, Somerville and Rahway are seeing increased density near transit hubs.
Rather than expanding outward into undeveloped land, developers are focusing on transit-oriented projects located near rail stations, downtown districts and existing infrastructure. This approach reflects both land constraints and strong demand from commuters seeking proximity to rail access.
The trend marks a departure from mid-20th-century suburban expansion, when farmland was converted into single-family subdivisions. Today, redevelopment of built-out areas dominates, with multifamily and mixed-use projects becoming the primary drivers of growth.
Multifamily housing now accounts for more than 62% of building permits issued this decade, a significant reversal from previous decades when single-family homes dominated the market.
While statewide construction activity is robust, growth patterns vary across counties.
In Somerset County, permit activity has rebounded after decades of decline, with 1,067 permits issued so far this decade—approaching totals seen in the previous 10 years. However, annual permits have declined from 1,913 in 2020 to 678 in 2024.
Middlesex County has outpaced previous decades, recording 2,567 permits since 2020, nearly 20% higher than totals from 2010 to 2019. Union County has also seen significant gains, issuing 2,543 permits this decade compared to 1,474 in the prior decade.
Meanwhile, Hunterdon County has posted modest but steady growth, with 438 permits issued so far in the 2020s.
Across New Jersey, 35,930 residential permits have already been issued this decade, surpassing the 24,707 permits recorded between 2010 and 2019.
Despite the surge in construction, the report notes ongoing challenges tied to zoning regulations and housing affordability.
Under New Jersey’s Mount Laurel doctrine, municipalities are required to provide opportunities for affordable housing. This has led to increased use of builder’s remedy lawsuits, allowing developers to bypass local zoning restrictions in noncompliant communities and build higher-density projects that include affordable units.
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These legal and policy pressures have intensified debates among local officials, who must balance housing mandates with infrastructure capacity, traffic concerns and community opposition.
“A key question going forward is whether this production uptrend can be sustained or expanded, and whether it will be sufficient to meet growing housing demand in the state,” said Connie Hughes.
While the current pace of construction represents a significant shift, the report cautions that it remains uncertain whether the increased supply will fully address long-standing housing shortages—particularly for renters and lower-income households.
Still, early indicators suggest that rail-adjacent downtowns are entering a new phase of development, redefining how and where housing is built across Central Jersey.
Originally reported by Joe MartinoMike Deak in My Central Jersey.
