No jobs, but at least we have open space

Guest Column • Jeff Kneler

This is a response to Greg Bean’s recent column “Preserving Farm for Open Space Would Be a Winner.”

Our state and others are like a beehive with honeycombs of municipalities, each an integral part of the cumulative prosperity that feeds the hive. When “bees” could no longer produce, as open spaces of flowers are deemed a “No Fly Zone” by the human NIMBY (Not In My Back Yard), not wanting the “bee traffic,” the bees feed off of stored honey (unemployment), eventually leaving a poor ghost hive behind (the economy we have now.)

Our “primary (honey)” for six decades was real estate development. Although it is the most consistent and important prosperity generator in the history of our national economy, it has effectively been ground to a halt by the “Human NIMBY” applying pressure to politicians.

Development has been systematically torn to shreds by those in power who do everything possible to satisfy the immediate ideal that if they stop development, they will get the votes to keep them in their seats to one day move away, collect a pension and leave the rest of us to figure it out. Let us hear from any politician on how they propose to replace the tens of millions of dollars that real estate development pumped into our economy for about 50 years. What, by creating non-productive open space?

Towns wanted to add a warm and fuzzy feeling of open space and convince voters they are controlling development all in one package. They did not, however, produce vast areas of thousands of acres of “Sound of Music” vistas. In so many cases, open space is just a sum total of unconnected wetlands “near” developable land, that would have never been built on anyway, along with detention basins, buffers etc., between differently zoned properties.

Our leaders could have met openly over the years with the developers as a coalition of partners to “schedule” planned development without penalty, lobby for more sanitary sewer lines and water lines so that they could rezone areas of land to more efficiently create an oasis of recreation and neighborhood commercial sites.

Now, if you want to buy bread and eggs you have to drive to (your own) Route 9 that is choked by traffic moving “through” towns to get to upstate or out-of-state work centers. No wonder Route 9 is crowded!

Imagine if all the bathrooms in your house were on either side of your front door? How much gridlock would that cause every morning in your quest to do your local “business” while others are trying to get to work?

We can’t exist wanting to buy a gallon of gas to mow a lawn but have to burn a gallon and-a-half to find a gas station. I offered that up about five years ago. The response was, “How long do you think we would be in office if we said we were working with developers?”

There are some good recreational areas that came out of the open space programs, but when you drive the roads, seeing billboards proudly proclaiming 10,000 acres of open space in one municipality, do not forget that what you are looking at could be the very reason you lost (or may lose) your job or your home.

Why? They grounded the “bees” out of business so the combs went dry. But the politicians stayed elected, albeit with no way of ever getting us back on track when the hive dried up. We will all suffer for a long time unless we are all ready to look at this as a common problem that has a predictable future.

We must go back to our future … reevaluate all the viable land we have, including open space, like the farm across from Mr. (Anti)“BEE”AN, meet with multiple high-volume developers, find planners who think out of the box and set a course back to producing “honey” to restore the hive.

Development creates jobs with predictable prosperity in multiple areas of the economy. Development is a way to redistribute wealth. If there was to be that kind of proud, brave and productive attention by our leaders, I am sure they would be reelected every time.

What about the overcrowded classrooms from development? Plan with developers to follow a cycle where kids are replacing one another with what we have now. Take off the time clock for development based on cooperative efforts so that a glut of quick trigger subdivisions do not get built.

Wait! I hear many supporters of vast open space screaming, “It’s those evil bankers that caused this!” OK, poof. You are now the owner of a bank in 2002. Prices of new homes and commercial property are starting to ramp up. As a banker, your business is to lend, collect interest and raise the bottom line.

But due to a reduction of eligible buyers caused by the rise to $600,000 and $700,000 homes, and even $1 million homes (that a very short time before were 40 percent less), the banks needed to find creative ways to continue giving out large loans to make up for the loss of the middleclass players. Survive or fold.

What they did not look at was opportunity to build that was being dried up by our towns … there would be no competition to sustain the price of the million-dollar homes they lent money for.

Due to the municipalities’ rush to eliminate developable land, the land that was left was pounced on by developers who paid any price ($250,000 to $300,000) for a raw lot. Less supply with no decrease in demand equals inflation.

Add $100,000 for improvements to each lot (roads, water, sewer, drainage etc.) Add the cost of building a marketable home ($350,000 to $400,000) and you have an investment of about $750,000 on each house, plus the cost of sales commissions and other soft costs. That begets a retail price of $900,000 to $1.2 million.

If lots had not been manipulated from the pipeline but left to cost $50,000, and if the developer was allowed three or four additional lots it reduces the cost by about $300,000 to $400,000 or more on a home. That retail price is doable. In a real world the lot was worth $50,000 to $75,000, but just to stay in business, to employ contractors, brokers, in-house people, purchase materials, etc., the builders paid the highest price.

This would provide a wild flow of revenue where maybe you, the reader, opened a small business or were offered a job, all with hopes of this continued prosperity. How many of you are now thinking about closing and how many of you or your employees are already out on unemployment and maybe falling behind on rent, or home mortgage payments? (Good thing we have that open space to fall back on for our quality of life).

Maybe you are a “long-timer” and your house is paid for? Don’t worry, the impending increases in property taxes will force you out.

There is only one thing that can jumpstart our economy and until we see concrete trucks back on the highways of our towns heading to job sites, employing people that produce, stock up on the C-rations.

Open space and rezoning was “the plan” to stop development, but they never thought this would happen and yet we are here and we now need a real bailout, and it is not more open space to satisfy selfish NIMBYs.

A bailout with forethought, creating thousands of jobs from developing property that secures a solid hope for our children’s future. A co-op of planned development is the only real kick-start to economic survival. We are living the effects of no development. Like it?

Let prosperity thrive before open space smothers the prosperity. Real estate development holds the key to the current lockdown on our economy. If we do not recognize that, be ready for a long way back that could break us. Friends and neighbors, if we do not change our direction, we are likely to end up where we are headed.

For your information, five-year adjustable rate mortgages on so many higherend homes are now coming due, and there are a rash of foreclosures that will come in its wake that will stagger you back to this column with a wish that you would have demanded action from your municipalities when you still had a chance.

How do I know about all of this “inside stuff?” I am a second-generation developer (“beekeeper”) in Monmouth and Ocean counties who can no longer find a place for our bees to produce honey, so we closed the hive.

Hundreds of workers are out of business by connection, millions of dollars of materials are not manufactured for us to buy, vehicles are not produced to deliver and handle those materials, new businesses are not being opened to support the new customers, etc.

How long do you think this can go on? Do you honestly think government can throw borrowed money from our children’s future at this problem and not turn to a proven method of gigantic revenue production to help us get moving again?

We need a municipal coalition of rational and proven professionals who have shown that they can run a multi-multimillion dollar development company, planners who see beyond the standard way of looking ahead, and municipal leaders who are willing to trade a bit of Camelot, be bold in their convictions and ready to perform in a manner that secures our children’s future ability to own a home, have a good job and damn the torpedoes of the NIMBYs. Are you out there?

I ask one last time, please, will any politician write in and explain the plan that is going to replace the tens of millions of dollars we are missing in our local and regional economic system without getting back to business? If you cannot answer that question with a plan and are waiting for a pie in the sky to save us (while we have the tools to do it ourselves) and you dismiss it, what will your legacy be?

Jeff Kneler is a resident of Freehold Township. He is a second-generation developer in Monmouth and Ocean counties.