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Housing values in New Jersey and the Prospects for Municipal Consolidation

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  • Douglas Coate

Abstract

New Jersey has the highest property taxes in the US and the largest number of municipalities per square mile. Two hundred ninety seven of the 565 municipalities are smaller than 5 square miles and 172 of these are smaller than two square miles. Yet there has been only one significant merger of New Jersey municipalities in the past half century despite a number of state programs to subsidize or otherwise encourage consolidations. Either residents of smaller municipalities question the potential for cost savings and property tax reductions from consolidations and/or value close-to-home rule over any efficiencies that might be realized. In this research I have found that there is a premium in residential real estate as exemplified by three bedroom home values in smaller New Jersey municipalities as measured by population. These findings are from regression models that explain three bedroom home sales values in the spring of 2022 in New Jersey places, taken from Zillow public use data files I conclude from these results that sentiment towards consolidation among New Jersey residents of smaller municipalities is not likely to emerge anytime soon.

Suggested Citation

  • Douglas Coate, 2022. "Housing values in New Jersey and the Prospects for Municipal Consolidation," Working Papers Rutgers University, Newark 2022-002, Department of Economics, Rutgers University, Newark.
    • Handle: RePEc:run:wpaper:2022-002
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    References listed on IDEAS

    as
    1. Takeshi Miyazaki, 2018. "Examining the relationship between municipal consolidation and cost reduction: an instrumental variable approach," Applied Economics, Taylor & Francis Journals, vol. 50(10), pages 1108-1121, February.
    2. Marina Gindelsky & Jeremy G. Moulton & Scott A. Wentland, 2020. "Valuing Housing Services in the Era of Big Data: A User Cost Approach Leveraging Zillow Microdata," NBER Chapters, in: Big Data for Twenty-First-Century Economic Statistics, pages 339-370, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    municipal consolidation; New Jersey; home values;
    All these keywords.

    JEL classification:

    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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