What if the next new house on your block was a 2-family?
This multi-generational housing aspiration is still very real for many of us in North Jersey, especially given the cost of housing and childcare, have parent nearby to watch the kids offers additional time and cost savings afterall. For generations, this is how working families got their start, two families split the cost of owning, kept family close and turned renters into owners.
Today that path is getting harder to find.
Drive through almost any town around here and you will see older, modest single and multi family homes torn down to be replaced with beautiful new construction featuring 5 bedrooms and 4 bathrooms, all at a very big price tag.
The lag in new construction is the very reason inventory in North Jersey is so tight and as a result, your aunt's 1000 sqft cape cod in Verona with a 1970s kitchen is still selling for at least $700K.
So... Can building more 2-family homes actually resolve the housing inventory and affordability challenge in NJ?
Imagine some of these areas were re-zoned to allow for new construction of not a 5BR, 4TH single family mansion, but instead, for a 2-family home.
If more single-family homes could be torn down and converted into 2-family houses, I have a theory (that is not fully flushed out) that we would add housing to the market as well as bring back more multi-generational opportunities to create more housing affordability, whether someone wanted to live in one unit and rent out the other to a tenant or have their parents living in the other unit.
But, one of the big building challenges here in NJ is the zoning.
How NJ zoned out the two-family
About 85% of residential land in the tri-state area is zoned for single-family homes only. Over the decades, many towns rezoned neighborhoods once full of two-families. The existing homes were grandfathered. But when one comes down, often only a single-family can go back up.
Lyndhurst is a good example. Its code divides residential land into one-family, one-and-two-family, and multifamily districts.
A legal two-family sitting in a one-family zone can stay. Rebuild it, and the rules change.
Other towns show the same pattern. Last year, Garfield introduced an ordinance to remove multifamily development from its R-2 zone, pointing to a surge of it and the goal of keeping those neighborhoods at one and two families. Even down the shore, where there used to be a ton of multi-families, Point Pleasant Beach, a couple who owned an existing two-family in a single-family zone needed a variance just to tear it down and rebuild it as a two-family.
The density paradox
Part of the re-zoning of these areas was due to concerns around density, less strain on schools, parking etc. I could also see the socioeconomic aspect of homeowners wanting fewer renters in the area, whether that is fair or not. But, here is the part that doesn't add up....
While towns restrict homeowners from adding a single unit, large rental complexes keep going up, often with long-term tax breaks attached. In Hackensack, a debate over those tax deals put about 650 luxury apartments in question. One major developer has said most residential redevelopment today simply doesn't work without a PILOT.
So the homeowner who wants to add one unit hits a wall. The big developer adding hundreds of units gets a tax break.
If the goal was less density, a single 400-unit complex adds far more cars, more school demand, and more turnover than a few two-families scattered across town ever could.
And if the goal was fewer absentee landlords, the owner-occupied two-family is the answer, not the problem. The landlord lives downstairs. They see the lawn. They know the neighbors. They have every reason to rent to someone responsible, because that person lives above their own family.
That's the irony.
The housing type many towns zoned out is the one that best matches what they said they wanted: invested owners, stable blocks, and gentle growth.
So... Let's give small builders a real shot.
Large developers get tax abatements, redevelopment designations, and dedicated attention from town hall. The local builder trying to put up one or two homes usually gets a variance hearing and a long wait.
What if we flipped that? New Jersey already allows five-year tax abatements for smaller projects. Towns could point those at new two-families. A short tax phase-in could help the numbers work for a small builder and keep prices within reach for buyers. ( I do not know the full rules about how abatements work, so if someone does, please let me know ... lol)
Here are three more ideas I think could work.
1. Sell the two-family as two condos
Instead of selling one building to one owner, the builder sells each unit separately. That could mean two units at around $675,000 each instead of one big house.
Builders often come out ahead on the total sale. Buyers get a brand-new home at a price that's nearly vanished from our market. Split a 100 x 100 lot into two, and that's four families where there used to be one.
2. Make it faster to say yes
For builders, time is money. Every month waiting on a variance adds cost, and that cost ends up in the price.
Towns could allow two-families by right when they meet clear standards. Better yet, offer a short list of pre-approved designs. Pick a plan, skip the back-and-forth, start building.
3. Swap size for units
Neighbors worry about density. So here's a simple trade: allow two units as long as the total square footage is no bigger than the single-family the town already permits.
Instead of one 4,000-square-foot home, you get two comfortable 2,000-square-foot homes. The block looks the same. The prices come down.
The bottom line
Builders get more from the same lot. Buyers get a realistic way in, whether that's owning one unit, renting the other, or sharing with family. Towns get new homes that fit the neighborhood, instead of density they never wanted.
I certainly do not have the full big picture solution to this housing challenge but I think getting somewhere with re-zoning to allow for two-family construction and possibly tax incentives for smaller builders, not just the big ones, could possibly look to double the inventory if where a single family once was, a two-family is created.
The two-family built North Jersey's middle class once. It could do it again.
Would you want to see more two-families in your town?
Do you have any creative ideas about solving the housing crisis NJ?
Hit reply and tell me!
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