Bloomberg.com: `Vasectomy Housing' Surges as New Jersey Tax Remedy

`Vasectomy Housing' Surges as New Jersey Tax Remedy

By Bob Ivry

Jan. 17 (Bloomberg) -- New Jersey towns have figured out a way to tame the highest property taxes in the U.S.

Keep kids out.

Educating a child in New Jersey costs an average of $12,567 a year, the most in the nation and more than double the property tax parents typically pay. So local governments have hit upon a way, short of handing out contraceptives, to expand the tax base without the expense of higher enrollment: age-restricted housing.

New Jersey developers have responded by building an estimated one-fifth of the country's adults-only housing, making the state the leader in a national trend fueled by baby boomers seeking new homes after their children move out. In New Jersey, where schools can eat two-thirds of a municipal budget and state officials have failed to provide tax relief, building communities that don't allow kids has as much to do with reducing taxes as it does with serving older homebuyers.

``It's frustration on the part of some communities,'' said New Jersey Governor Jon Corzine in a Jan. 12 interview. ``The real problem is we have too much reliance on property taxes in how we finance public education.''

Nationwide, 2.8 million households were part of age-restricted communities in 2005, up 29 percent from 2001. The number in New Jersey grew 37 percent in the same period. More than half the housing units started in the state in the past two years have excluded children, data compiled by the New Jersey Builders Association show.

Densely Populated

In one New Jersey town, Monroe Township, population 28,000, half the housing units are limited to senior citizens.

As many as 95,000 such units will be built in the U.S. in 2007, according to an estimate from the National Association of Home Builders. New Jersey developers will build about 20,000 of them, the state builders group said.

Towns support their school systems mostly with property tax revenue, pushing the average tab to $5,153 in 2004, the highest in the U.S. New Jersey residents are older than in most states --12.5 percent are 65 and older, compared with the 12.1 percent average in the U.S. -- and it's the most densely populated state, with 1,165 people per square mile. New York has 408 people per square mile; Wyoming has five.

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