By Dan Kennedy
As the commercial real estate industry navigates a rapidly shifting economic landscape, NAIOP New Jersey continues to confront a wave of legislative and regulatory proposals that could significantly impact the sector’s financial and operational dynamics. This November, New Jersey will hold what may be its most consequential gubernatorial election in three decades. Additionally, every seat in the New Jersey Assembly is up for grabs. While New Jersey remains a reliably blue state, recent trends suggest a shift toward purple – and we’ll soon see just how purple.
Since its founding, NAIOP New Jersey has placed advocacy at the core of its mission. Backed by a well-supported PAC, we’ve successfully defended the industry against challenges that have impacted other blue states. (Yes, that sound you hear is me knocking on wood.)
As we approach a potentially pivotal lame-duck session at year’s end, we cannot afford to rest on past successes. We are actively reassessing strategies, strengthening relationships, and positioning ourselves to lead the CRE industry into a new era of opportunity.
Below is a summary of recent wins, ongoing issues and key priorities as we close out 2025 and prepare to engage with New Jersey’s next governor.
Recent Wins:
- Defeated Warehouse Truck Tax: For the second year in a row, NAIOP New Jersey and its partners successfully defeated Governor Phil Murphy’s proposed tax on trucks entering and exiting warehouses – dubbed the “Tax on Everything.”
- Aspire Program Reforms: NAIOP New Jersey led efforts to reform the NJ Economic Development Authority’s Aspire Program. Murphy signed S1323/A2076, enhancing construction gap financing provisions. He also signed S4027/A5170, requiring Treasury to redeem tax credits after private market efforts – critical for market certainty in bridge loan financing.
- Permitting Streamlining: We supported the Design Professional Self-Certification Act, allowing qualified architects and engineers to self-certify compliance with construction codes. This complements A573, which permits developers to hire private inspectors if municipal officials cannot complete inspections within three business days.
- Opposition to Anti-warehouse Legislation: We continue to oppose numerous bills aimed at obstructing industrial development. With one exception (discussed below), none have gained significant traction.
- Support for Solar Expansion: NAIOP New Jersey backed legislation and regulatory proposals to expand New Jersey’s community solar program and related CRE incentives.
Open Issues:
- Real Estate Transfer Tax Expansion: The latest budget expanded this tax to include some CRE transactions. We are working with legislative leaders to mitigate unintended consequences from this last-minute revenue measure.
- Rising Electricity Rates: Electricity costs have surged, prompting a flood of legislative proposals. Most fail to address the root issue – New Jersey’s rapid shift away from in-state energy production, except for renewables.
- Climate Change Land Use Rule: Under pressure from stakeholders, NJDEP revised and republished its climate-related land use rule. NAIOP New Jersey submitted a 28-page technical comment letter. While improvements were made, we remain opposed and are preparing further comments.
- Site Remediation Rule Changes: The New Jersey Department of Environmental Protection proposed requiring any party with knowledge of contamination to report it – despite lacking statutory authority. This would disrupt transactions. NAIOP New Jersey secured legislative support to oppose the proposal, with final action expected this fall.
- Independent Contractor Classification: The New Jersey Department of Labor proposed changes to the “ABC Test,” which could drastically alter contractor classifications – especially in logistics. Action is expected before the current governor’s term ends.
- Anti-Warehouse Bill S4040: This bill would ban warehouse construction within 1,000 feet of historic districts. It was scheduled for final action but pulled due to our opposition. It may re-emerge this fall.
- PILOT Program Threats: Legislation could undermine PILOTs by imposing prevailing wage requirements and mandating payroll record reporting (S1403). We anticipate continued pressure from labor and other challenges to PILOTs.
Looking Ahead: The Next Governor
NAIOP New Jersey is prepared to work with New Jersey’s next governor and urges a focus on policies that foster a thriving CRE market across all asset classes. Key priorities should include:
- Resetting State Engagement with the CRE Community
- Revisiting State and Local Regulations
- Reconstructing New Jersey’s Energy Policy
- Enhancing Development and Redevelopment Incentive Programs
- Accelerating Infrastructure Investment
- Supporting Voluntary Sustainability Initiatives
- Advancing Education and Workforce Training
By addressing these key areas, the next governor can foster a supportive environment for the CRE industry, driving opportunity and community development statewide.
NAIOP New Jersey’s core purpose is to position CRE leaders to build vibrant spaces that create an enduring, positive impact on communities throughout the State of New Jersey. We believe that when CRE projects are designed, financed and constructed at a pace that meets market demands, the entire state sees the benefits. We aspire to have our next governor and their team feel exactly the same way.
NAIOP New Jersey’s members feel a sense of optimism as we look forward to working with the next governor, including the opportunity to work with our congressional delegation to prioritize NAIOP’s federal legislative priorities for 2025.
Read more about NAIOP New Jersey’s priorities for the next governor.
