The Real Zoning Code Is on Wall Street (NJ‑10 & NJ‑11 edition)
Zoning and parking reform alone aren’t going to make housing more affordable, and you know that
At some point, we are going to have to ask urbanism about its obsessions with zoning. Are you folks ignorant or insincere?
Ask why Montclair can’t stabilize school funding without lurching from crisis to crisis—or why apartments near transit remain a political third rail in Essex and Morris—and you’ll be told it’s “what the zoning allows.” Urbanism will have a day-long conference on zoning and parking as if those two things alone will magically manifest affordable housing.
In some ways, I do understand why neoliberalism developed urbanism as a separate field, divorcing it from geography and the political economy, because then you get an army of ill informed sycophants who never engage in critical thinking because they are essentially in a cult.
The real limits on functional urbanism are not just in the codebook; they are in finance and power. There is a thing I like to call the spreadsheet logic of municipal finance, meaning property‑tax dependence and bond‑market discipline. This finance operating framework rewards exclusion and punishes inclusion. It also subsidizes sprawl and penalizes proximity—and it does so across Districts 10 and 11, from Newark to Bloomfield to Parsippany. [en.wikipedia.org], [en.wikipedia.org]
How the money shapes critical geographies
Let’s look at Montclair’s March 10 special election, a two‑question referendum to plug a deficit and shore up the schools. One question has passed, and the second one, well, we still aren’t quite sure yet. This is an ongoing explicit lesson on how property taxes are a harmful way to fund schools, especially when costs outpace the tax base due to over a decade of underfunding. In the best-case scenario, it justifies austerity measures with math, and in the worst-case scenario, it is extremely regressive, punishing those who can least afford it, with high taxes or horribly underfunded schools. The Yes/Yes pro‑campaign highlighted a hard truth: there will be cuts regardless, the question is how severe they will be and who decides. And this, my friends, is what governing by property tax looks like on Main Street. [newjerseyglobe.com], [montclairlocal.news], [themontclairgirl.com], [savemontcl...chools.com]
Now look at the bond market’s fingerprints nearby:
Bloomfield high ratings let the city borrow at lower interest rates, potentially saving the city millions of dollars in borrowing costs.Bloomfield just sold $16.2 million in tax‑exempt bond anticipation notes (BANs) and $7.3 million in taxable parking utility notes, winning Moody’s MIG 1 (top short‑term) and an affirmed A1 issuer rating—excellent news and incentivizes traditional practices: keep assessments up, keep reserves stable, and lean on“predictable” revenues. (Note that parking‑utility debt remains a favored, financeable asset class, while parking‑light infill remains hard to pencil.) [munihub.com], [bloomfieldtwpnj.com], [patch.com]
East Orange saw S&P assign SP‑1+ to its 2025 GO BANs and affirm A+ long‑term—explicitly citing the city’s base trajectory, reserve volatility, and elevated liabilities. Ratings logic calls this neutral “risk”; in practice, it nudges policy toward ratables and away from renter‑heavy inclusion. Just going by market metrics, gentrifying this city would raise their credit rating. Removing people with low income would raise the credit rating and make capital cheaper.This is not saying you should do that, but saying that if you live in East Orange and you feel like you’re being pushed out, you’re not imagining things, it is happening and this is why. [munihub.com], [emma.msrb.org]
Moody’s upgraded Newark to Baa1 in late 2024 (from Baa2). It will have lower borrowing costs in the future, but the same report notes high poverty and low resident income relative to US medians; this is completely out of Newark’s control. Moody’s and other credit agencies use a suite of factors, and income and median housing prices count for 30%. So even if everything else were fine, a historically hypersegregated city would be lower-rated, which is precisely why the cost of capital matters so much for inclusive investment. [ebs.publicnow.com], [patch.com]
Parsippany‑Troy Hills moved ahead with a new $8.75 million bond ordinance for capital, on top of a 2025 sale that combined $36.7 million in long‑term bonds with $50.2 million in BANs (MIG 1). The pattern is familiar: routine capital relies on routine borrowing—disciplined by ratings criteria and the promise of future assessments. [parsippanyfocus.com], [munihub.com], [emma.msrb.org]
Meanwhile, Morris County—the financial hegemonic backbone of NJ‑11—continues to enjoy AAA at both Moody’s and S&P for the 50th straight year, a testament to wealth and reserves that translate directly into the cheapest cost of capital in the region. That’s wonderful for taxpayers who can live in Morris; it also widens the financing gap with working‑class D10 that face higher costs to borrow for the very projects that would build equity and climate sanity. [morriscountynj.gov], [i-dealprospectus.com], [main.prosp...global.com]
Zooming out to view District 10/11 as one unit shows that the “neutral” rules of credit are not neutral. Cheaper capital (funding with lower interest rates) to already‑wealthy places and costlier capital to places serving renter and racialized residents. In most of “urban” NJ‑10, the cost of capital follows racialization and socioeconomic class geographies from Newark and East Orange to portions of Jersey City and Irvington. In most of “suburban” NJ‑11, it rewards the high‑income tax bases across Morris and suburban Essex. This is not a natural “market” outcome; it’s hegemonically favored law‑shaped credit allocation. [en.wikipedia.org], [en.wikipedia.org]
PILOTs: the accountant’s version of spot zoning
Layer on New Jersey’s PILOT regime (Payment in Lieu of Taxes), heavily used in Hudson and Essex. By statute and practice, PILOT payments generally bypass school budgets. This encourages cities to greenlight revenue‑positive luxury projects that typically don’t advance housing affordability or school stability, especially as they tend to be in areas they are trying to move from hypersegregated to “young and hip” (remove Black people, just so you’re not confused). Those aren’t hegemony’s kids, so who cares. Jersey City’s ongoing school‑aid battles illustrate the structural tension. When your “fix” to a narrow tax base is abatements that starve schools, that isn’t a fix, it is limousine liberalism brought in on an austerity road. [eisneramper.com], [jcboe.org]
“For long-term tax abatements, there is a significant tax loss to the school district and county. Under the long-term tax abatement statute, the county receives 5% of the Payment in Lieu of Tax (PILOT) and the local school district receives nothing from the PILOT.” ---Planet Princeton
From a Law and Political Economy (LPE) perspective, a PILOT is not a neutral market tool but a state-created contract that replaces democratically governed tax obligations with private negotiations. To put it plainly, it is an agreement between a municipality and a developer that allows the developer to pay a negotiated fee instead of standard property taxes, often under the guise of redevelopment or blight.
“We’re doing you a favor! Look at all these Black people!”
(They do talk like this.)
This shift from public law to private ordering means that decision-making moves from, in theory, accountable public processes to closed-door deals among power. It structurally alters who bears risk and who retains a fiscal voice.
With this “trick,” and it is a trick, we get socialization of risk alongside the privatization of profit. While a standard typical property tax system requires developers to experience market risk and allows rising property values to fund public goods like schools, PILOTs grant developers predictable and below-market rates. It is neoliberalism in the classic sense. They offload long-term risks such as inflation, infrastructure wear, and service demands onto the municipality.
These agreements essentially steal from school districts and counties. It is regressive, forcing working-class residents into fees, higher rents, and increased reliance on homeowners, who use their homes to live, not as income-generating property.PILOTs ultimately maintain low tax burdens for large property owners while intensifying economic extraction from labor.
Property taxes and bond markets become zoning by other means
This other means impacts the ability to do functional AFFORDABLE density
Property‑tax dependence incentivizes towns to protect high assessments and encourages uses that don’t add children (class‑A office, warehouse, luxury)—not mixed‑income apartments near transit. It is a moral failing, but it’s also the spreadsheet. This IS a choice. [eisneramper.com]
Ratings criteria reward “predictable” revenue and large reserves. If a local politician wants to be “fiscally responsible” they avoid reforms that the market reads as “risky.” What is risky? Eliminating parking minimums, legalizing missing‑middle housing, and expanding tenant protections. To finance those types of activities despite offering the opportunity, long‑run fiscal resilience is risky. It looks risky on a spreadsheet. It looks bad for a media that is becoming more and more ignorant on how the political economy works. I’m amazed at people who call themselves “reformist” but still touting supply side economics metrics? How does that work? East Orange’s and Bloomfield’s reports—like Newark’s upgrade—spell out the core inputs: fund balance, assessed growth, leverage.The criteria are racist and outcome‑segregating. [munihub.com], [munihub.com], [ebs.publicnow.com]
The cheap money goes where wealth already is. High ratings let a city borrow at lower interest rates, potentially saving the City millions of dollars in borrowing costs. Morris County can routinely finance at AAA; the areas that were traditionally redlined pay more to borrow for the very inclusive projects that would narrow the gap and that folks is how a bond table becomes a map of sprawl. [morriscountynj.gov], [main.prosp...global.com]
A LPE agenda for NJ‑10 & NJ‑11: change the funding, change the geography
Definition
Laws and Political Economy (LPE): Power thrives by recasting corporate theft as freedom and liberation for you. Do you feel free yet? Didn’t think so. LPE shows this is not the case, at least non for the working class. The markets are legal constructs and “deregulation” is never neutral: its regulation redesigned to privatize gains and socialize risks onto, you, the working class.
For affordable housing near public transit, functional climate density, and integrated good schools, we need to stop acting like we don’t understand how this works. This isn’t about tweaking building codes and zoning. This is about REWRITING THE MONEY (and power, but that is a different essay).
Enable a Land Value Capture option and backfill schools with state aid, and when we get past this interesting timeline, federal aid.
Let towns shift part of the capture from buildings to land. This taxes unearned location value such as speculation, without punishing apartments or renovations. Combine this with circuit breakers and senior deferrals; use progressive state and federal revenues to cover school‑aid gaps so quality and a good or bad education isn’t determined by zip codes or racialization.
Stand up a New Jersey public infrastructure bank with equity screens.
Develop social housing with streets that are accessible for people (bicycling, wheelchairs, walking, frequent public transit) with below‑market loans in municipalities that align with climate and social inclusion goals.Replace “creditworthiness” with social usefulness and use Vehicle Miles Travel reduction as explicit underwriting criteria.
Reform ratings criteria—at least for State programs.
Through the Economic Development Authority (EDA) and Treasury, define a State overlay (the state would create an extra layer of rules—run through the EDA and the state Treasury—that changes how risk is judged) that recognizes housing stability, tenant protections, diversified revenue streams, and climate resilience as risk-reducing factors. If a town abolishes parking minimums near rail, its borrowing costs should go down, not up.
End the PILOT. Protect schools. Rigging the market for developers in historically disinvested neighborhoods is a bad deal for everyone.
Social housing is infrastructure.
Let’s make non‑market housing (co‑ops, CLTs, public developers) eligible for the same tax‑exempt financing we use for garages. If we can float taxable notes (floating rate notes can offer investors a way to stay ahead of interest rate swings) for parking utilities (as Bloomfield just did), we can finance a four‑story walk‑up over a grocery store near trains where teachers and nurses and other NORMAL people can live. [munihub.com]
Tie state aid and preferential borrowing to pro‑housing reforms.
Parking remains favored because it offers low-yield, low-risk stability that satisfies bond markets and insulates politicians from the perceived risk of change. To reverse this, cities must use LPE strategies to securitize the efficiency of infill—turning the absence of parking (and the resulting density, tax base, and infrastructure savings) into a measurable, stable, and financeable asset class that can compete with, and eventually replace, parking-utility debt.
Local issues right now
NJ‑10 (Rep. LaMonica McIver’s district): Newark, East Orange, Orange, Irvington, and portions of Jersey City deserve cheaper and fairer capital. The interest rates are eating them. If urbanism claims to want more inclusive, affordable, social housing and accessible streets. Urbanism can’t just advocate for neoliberalism, letting developers do whatever they want, we need to fix the money. Newark’s upgrade shows cautious progress; state‑backed, equity‑screened credit could and should add to it. [mciver.house.gov], [ebs.publicnow.com]
NJ‑11 (vacant seat; special election pending): Morris’ AAA world and suburban Essex’s transit towns (Bloomfield, Montclair, Maplewood, Millburn, Livingston, etc.) can lead by pairing zoning reform with finance reform—e.g., parking‑free overlays near rail bundled with preferential loans for mixed‑income infill. [en.wikipedia.org], [morriscountynj.gov]
School finance local example (Montclair): One‑off referendums are a stopgap and they won’t save our schools. This is a structural issue. Supporting our schools will involve derisking the operating budget with state and federal backstops (government-provided guarantee or financial mechanism intended to stabilize) and moving away from the property‑tax funding of schools. According to Politifact in most advanced countries, the central government plays a larger role in financing public education, and local governments play less of one. The March vote is a reminderit’s’s not whether to cutit’s’s whether the institutional rules force you to choose between kids and credit.[newjerseyglobe.com], [themontclairgirl.com]
The idea that there is only one way to do political economics is fiction. The Chicago School is not the only theory we can employ to engage in good governance and competent public administration. As market-based theory uses the law through the L&E framework, people-based theory can use the LPE framework. We need to stop allowing spreadsheets and the market to harm us. We need to use finance to support what is valuable to our people and our natural world, and then build the infrastructure to support it.