New Jersey's Cities: Sad Urban Presence Encircled by Wealth

IN the heart of Newark, people are moving into three new housing developments -- subdivisions, really -- that recently sold out. Paterson is the new home of four companies that relocated from New York. In Trenton, construction on a hotel is to start before winter.

Facts like those are barely worth noting in any suburb with a highway cloverleaf. But in the cities known as the Big Six -- Newark, Jersey City, Paterson, Elizabeth, Trenton and Camden -- the smallest stirrings of new life draw attention.

Seen in one light, urban revival is positively vigorous. Manhattan has exported thousands of jobs to what was a broken-down industrial belt across the Hudson. Four of the Big Six have begun to register population gains, which is more than Boston or Philadelphia have managed. Last year, the state's leaders in construction activity were Jersey City, Elizabeth, Newark and Rahway. Indeed, one site in Jersey City sold for $10 million an acre.

But from another perspective, the Big Six are just bleeding more slowly than they used to. Their combined population was halved from 1930 to 1970, and more economic devastation would follow: since 1975, Camden has lost one in three jobs, Newark one in four. Except for Jersey City, all of the Big Six have lost jobs even since 1995. All are on life support from a reluctant and often exasperated state government.

The question is obvious: Why can't New Jersey support cities?

After all, New Jersey is a wealthy state, second only to Connecticut in income, and the most densely populated in the nation. Yet the cities are small -- Newark, the largest, has 267,823 people, and the smallest of the Big Six, Camden, has only 83,546 -- and their residents' income is about half the state average.

Benjamin Franklin, Philadelphian and cosmopolitan, described New Jersey as a ''barrel tapped at both ends,'' and many urban experts still say New Jersey has two important cities, which happen to be in other states.

James W. Hughes, dean of the Bloustein School of Planning and Public Policy at Rutgers University, said New Jersey's cities had always been stunted by the mere existence of New York and Philadelphia. ''Those two cities drew the allegiance of the elite of New Jersey,'' Mr. Hughes said, and even now those two keep a lock on media and major league sports.

But there is more. It has to do with New Jersey's historical and geographic accidents, its dependence on property taxes and its tradition of fragmented local governments, known as home rule, which makes each city just one among 567. Then, too, there is the nation's relentless exurbanization, fed by yearnings for what Mr. Hughes calls ''McMansions'' and ''suburban assault vehicles'' -- and a way of life not offered in Camden or Elizabeth.

The cities' survival ''is not just a matter of more state revenue,'' said Stephen A. Salmore, a political scientist recently retired from Rutgers and the co-author of ''Politics and Government in New Jersey: Suburban Politics Comes of Age.'' ''It's a matter of economic development. The state has not been successful in attracting business. The market does that, and at this point the market is not interested in setting up businesses in large cities.''

The Whitman administration disagrees. Last week, in announcing a state report on business relocations, the Governor emphasized that more than half of the 116 companies that moved to New Jersey last year chose ''metropolitan centers.'' (Jersey City, with 14 of the 116, and Newark, with 6, were identified as ''hot spots.'' Paterson got 4, and Elizabeth and Trenton each got 2.)

And when Jersey City, Elizabeth and Newark appeared at the top of the rankings on construction activity, the Commissioner of the State Department of Community Affairs, Jane M. Kenny, spoke of ''a building boom in the cities.''

Ms. Kenny -- who was born and grew up in Jersey City -- leads the administration's urban revitalization efforts, a slew of programs providing professional help and seed money in the hope that private enterprise will bloom. ''It's a combination of the state having tools that cities need, and I think we have, and a city that knows how to take advantage of the tools,'' she said.

William Dressel, the executive director of the New Jersey League of Municipalities, said, ''It's still a struggle'' to attract businesses to older downtowns. But Mr. Dressel added: ''Every mayor I can think of in the past five years or so has been basically reinventing urban government. I see more doing roll-up-your-sleeves work up and down the state, redoing their wharves, their central downtown areas, Brownfields cleanups, and really doing some very aggressive lobbying and arm-twisting.''

ONE is Mayor Douglas H. Palmer of Trenton, who has spent almost a decade wheeling and pleading for one hotel for his city -- while others proliferated along Route 1. The state finally agreed this month to release a $5 million loan for the downtown Marriott that he covets, and the Mayor said the groundbreaking could be expected soon.

Still, as many visitors ask, what kind of capital has no hotel rooms? And what kind of state operates with no healthy cities?

''The state that compares with New Jersey is Connecticut,'' Mr. Salmore said. ''Bridgeport, Hartford and New Haven are all in very bad shape. They're poor cities in a wealthy state. It's a very suburban state, with very similar problems and similar political situations. Both are tax-averse and upscale.''

But those Connecticut cities do a little better than New Jersey's Big Six, at least in income levels. Hartford has television stations and major league sports franchises. All have hotels.

Newark comes closest to behaving like a big city, especially with the opening of the new Performing Arts Center, the investment in offices and retail development -- more than $100 million last year -- and its university complex. Still, Newark, which once provided one in five jobs in the state, now accounts for fewer than one in 25.

''It's unlikely that cities in New Jersey are ever going to be important,'' said Barbara Lawrence, the executive director of New Jersey Future, a nonprofit planning organization. Ms. Lawrence, reflecting after a conference on sprawl, added that in view of the centrifugal force sending the population ever outward, any growth was remarkable. Still, she said, a little is not enough.

''Think of it as market share,'' she said. ''If you were a company and increasing revenue but losing market share, you'd say, 'Whoa, we're on the wrong track.' That's where our cities are.''

Mr. Hughes at Rutgers says New Jersey's cities have been on the wrong track for decades, since their short-lived reason for being expired.

''We did not build great cities in the European sense,'' he said. ''What happened was manufacturing firms agglomerated into tight complexes in the 19th century, and we woke up and had six overgrown factory towns.''

Now, they are factory towns short on factories. The Big Six have managed a 1.1 percent increase in employment in private industry since 1992, roughly the beginning of the economy's expansion, but since 1975 they have lost almost 20 percent of their jobs. And of all the new jobs in the Big Six since 1992, one city, Jersey City, accounts for more than 90 percent.

Jersey City is the celebrated exception. It's a city being physically remade and economically -- if not fiscally -- held together by its new role. Like New York, from which it received thousands of jobs, Jersey City is a center for finance.

On a recent drive around the city, Annemarie C. Uebbing, director of housing, economic development and commerce, spoke with an ease that sounds right in a city that saw $203 million in development last year.

''We've got the waterfront, and we don't have to create the market,'' Ms. Uebbing said. When developers approach, she said, ''we can say, 'We'll get this through for you.' You have to put on this political show. It's almost the field of dreams thing.''

To start, she pointed out the office towers newly risen on two one-acre parcels that Hartz Mountain Industries bought for $20 million. To the north, past residential towers, she noted the Doubletree Hotel, a Marriott, is under construction, she said, and Hyatt and Embassy Suites plan to build.

Passing the Newport Centre Mall, where Manhattanites come for the sales tax break, she mentioned that Modell's and Office Max are joining Sears, Stern's and J. C. Penney, the only department stores in the Big Six.

Along the way, on the waterfront and on the inland streets that resemble Detroit or Gary, Ind., Ms. Uebbing indicated vacant swaths where housing is planned.

And she talked about the pedestrian-friendly, neotraditional ''new urbanism'' of the architect Andres Duany -- something the well-educated urbanites the city draws actually might have given some thought to. Some colonized the brownstones that reminded them of Park Slope, in sometimes uneasy buffers between the gleaming waterfront and the poverty that still makes life in Jersey City difficult.

The other Big Six cities, of course, beg for any measure of gentrification. But few expect that to come about.

Mr. Hughes, for one, sees little to be restored. The housing slapped together for factory workers ''doesn't have chestnut moldings and walnut doors,'' he said. ''It's not the housing that today's middle class would ever consider living in.''

Mr. Salmore wavered before concluding, ''I'm not even cautiously optimistic.'' ''There are pockets,'' he said. ''There are some neighborhoods in Elizabeth. Camden? I don't see anywhere in Camden people want to move back to.''

The result, naturally, is that New Jersey's cities, even more so than other American cities, are custodians of the poor. Mayor Bret Schundler of Jersey City, a Republican who often quarrels with the Republican Governor, says the state fails to account for the exhaustive social needs in the cities.

''You need someplace for the poor to live,'' Mr. Schundler said in an interview, gesturing and talking urban policy at the rat-a-tat pace for which he is known. ''The issue becomes: if you have a lot of people who need services and live in property that doesn't pay much in taxes, you ghettoize your cities.''

That was a point that Camden politicians tried to illuminate for their overseers from the state on a bus tour last month, not long after Mayor Milton Milan filed and then withdrew his city's petition for bankruptcy.

The hosts on the bus tour were four City Council members, and the guests were two members of the financial review board that has supervised Camden's budget for a year, plus Commissioner Kenny of the Department of Community Affairs and several other officials from Trenton.

The tour accentuated the negative, although the Council members eagerly showed off restored housing and introduced a few friendly constituents. At the first pause on the tour, in front of Riverfront State Prison, Councilman Angel Fuentes said: ''The residents would really like to see a hotel and convention center here, but unfortunately, we got stuck with this prison. At least the landscaping is nice.''

In East Camden, the group had alighted for a discussion of infrastructure dollars -- a local housing activist explained that the area was off-limits to new housing because the city could not repair storm sewers -- when some on the tour happened on a house with an open door.

The startled occupant, a man in a wheelchair who spoke only Spanish, was soon being introduced to Stephen R. Sasala 2d, the chairman of the financial review board who has since stepped down. The people in suits looked shyly at the craters in the walls and the bare, dangling light bulb, an artificial leg and a table crowded with prescription vials.

Councilman Francisco Moran finished his segment of the tour a bit sardonically. ''I don't know if you've noticed, but I haven't had the pleasure of talking about big companies with lots of jobs,'' Mr. Moran said. ''East Camden doesn't have any. It's not a good thing being an elected official in this city with no alternatives to offer people.''

He added, ''I hope this has been at least touching for you guys.''

Camden also exemplifies the bind that results from one distinctive fact of political life in New Jersey: its reliance on property taxes. Already drained of commercial and industrial taxpayers -- in Camden's case, the Campbell Soup Company, RCA and an entire shipbuilding industry -- the cities have to tap residents in a self-defeating cycle.

When Camden filed for bankruptcy, Governor Whitman received a lecture from the other side of the border as The Philadelphia Inquirer complained in an editorial: ''Camden is merely the poster child for broader problems in a wealthy state where poor cities are punished by their forced dependence on a shaky property tax base -- with matters made worse by the Governor's cuts in state income tax.''

Camden taxpayers clearly fare worse than those outside the city. Camden's effective property-tax rate -- that is, the tax per $100 of market value -- is $3.88, while Cherry Hill's is $2.68 and in Voorhees it is $2.90. Trenton's burden is even worse. Its effective rate is $3.43, compared with $1.95 in Princeton Township and $2.676 in Ewing Township.

These disparities do not exist in most states. In New York, for example, Buffalo and Rochester have effective tax rates almost identical to those in the suburbs.

Professor Hughes doubts that this makes much difference. If all capital investment by the state is counted, he said, ''I bet on a per capita basis New Jersey's expenditures on its cities are probably commensurate with New York's.''

But Mayor Schundler, like Mayor Milan in Camden, complains that the state's formulas for direct aid leave the cities forever at Trenton's mercy. ''Since aid is a function of distress, they're paying you for distress,'' Mr. Schundler said. ''They're basically saying, it's your fate to be a ghetto. The minute you begin to climb up, we'll cut your aid so you'll have to raise your property tax rates.''

IF that is ever going to change, the cities will have to find alliances in Trenton. The Big Six have less than 10 percent of the state's voters and not much of a legislative delegation at all, let alone one that can wield influence like those in New York, Illinois or Pennsylvania.

The Whitman administration has focused not on aid -- in fact, state funds to all municipalities have declined -- but on self-help measures and land-use planning. The State Development and Redevelopment Plan, for example, is meant to direct state infrastructure spending to urban areas, and the Brownfields program offers incentives for redeveloping abandoned urban sites.

Ms. Kenny, the community affairs commissioner, subscribes to what many call ''the broken window theory,'' holding that small gestures can have inordinate effects on how people treat their surroundings.

''Everybody talks about the squeegees in New York City as a tremendous symbol,'' she said. ''People start little by little to feel the neighborhood's improving. We've seen it with home ownership. I'll use Newark as an example. When we go there, you see brand-new houses and homeowners for the first time getting a homeowners association and putting swings in their backyards. You go back the next time, and people on the next block have started fixing up their houses.''

Newark is indeed the place to look. While Jersey City houses its newcomers in sleek apartment towers, Newark is trying to recapture its old residential self with single-family houses for the middle class and the near-poor.

The city, which led the state in rehabilitation construction last year, also had 611 new housing units, most of them one- and two-family houses. And many went into the Central Ward, which has so much vacant or abandoned property that big chunks can be claimed for what is, in effect, tract housing.

One new development built last year, Magnolia Court, occupies an entire city block where just one house had been left standing. The builder, RPM Development Group of Montclair, sold the 32 new houses quickly and, left with a waiting list, took a nearby three-block tract for Magnolia Court II.

Now, closings are beginning on those houses. Not far away, buyers are moving into two more developments, Crystal Gardens and Macedonia Heights, sponsored by church-affiliated nonprofits. Most of the buyers are church members, said Paul R. De Bellis Jr., vice president of the builder, American Dream Homes.

These and a half-dozen more new inner-city subdivisions, all built with state mortgage subsidies and construction financing aid, amount to a vast experiment, but for now the market is hotter than anyone had dared to predict. Add them up, and they probably account for Newark's population gain last year of 644 residents, after a loss of more than 7,000 since 1990.

''This is not gentrification,'' said Ed Martogio, a principal of RPM. ''It's bringing middle-income people back to the core.''

Not that Mr. Martoglio is opposed to gentrification. ''We're looking to have more people come to Newark,'' he said, including ''people with plenty of money.''

Then, allowing that he might be getting carried away, he added, ''I can't help thinking there's tremendous potential in downtown.''