By: Natalie Pineiro
Executive Director,
Downtown New Jersey 

From liquor licenses and parking requirements to housing incentives and redevelopment funding, decisions being made in Trenton can have an outsized impact on New Jersey’s downtowns. For downtown managers, municipal officials, developers and small businesses, keeping track of those changes is becoming increasingly important.

Downtown New Jersey is following legislation and State policy initiatives that could shape how our downtowns grow, how projects get financed, how businesses operate and how people get around. Here are 10 issues currently on our radar.

Liquor License Reform Could Unlock New Downtown Restaurants

New Jersey’s notoriously restrictive liquor licensing system continues to be a major economic development issue for downtowns.

S4404/A5295 would make a number of changes to the State’s alcoholic beverage licensing laws, including expanding opportunities to transfer inactive plenary retail consumption licenses. Importantly for downtowns, transferred licenses could be used in connection with economic redevelopment plans or within redevelopment, improvement or revitalization areas.

The legislation also addresses craft manufacturers and other licensing issues.

Why we’re watching: A scarce or prohibitively expensive liquor license can be the difference between a vacant storefront and a successful restaurant. Greater flexibility could provide municipalities with another tool to recruit restaurants, activate commercial spaces and strengthen the nighttime economy.

The legislation passed both houses of the Legislature in June and remains an important bill to watch.

Making Restaurant Takeout Cocktails Permanent

Another alcohol-related proposal could preserve one of the more popular restaurant policies to emerge from the pandemic.

S4384/A5225 would make permanent certain temporary provisions allowing qualifying restaurants and bars to sell alcoholic beverages and mixed cocktails in sealed containers for off-premises consumption and delivery.

The legislation also provides additional privileges for certain alcoholic beverage manufacturers.

Why we’re watching: Downtown restaurants continue to face significant operating costs and changing consumer habits. Providing businesses with additional ways to serve customers can strengthen restaurant revenues and make downtown hospitality districts more resilient.

Like the broader liquor-license reform package, the legislation passed both houses in June.

Rethinking How Much Parking New Development Really Needs

Parking remains one of the biggest—and sometimes most expensive—questions surrounding downtown development.

A1522/S3718 would reduce residential parking requirements under New Jersey’s Statewide Site Improvement Standards based on a development’s proximity to public transportation.

Why we’re watching: Structured parking can add millions of dollars to a development project. Requiring fewer spaces near transit can make infill housing and mixed-use projects more financially feasible while encouraging walkability and transit use.

For transit-served downtowns in particular, parking reform could have a significant impact on what projects ultimately get built.

A New Enhanced Transit Village Program

New Jersey already has a successful Transit Village initiative, but S1810 proposes taking the concept a step further.

The bill would establish an Enhanced Transit Village Program, administered by the Office of Planning Advocacy and NJDOT, and appropriate $25 million to support the program.

Why we’re watching: Transit-oriented development is downtown development in many New Jersey communities. Additional planning assistance and infrastructure investment around train stations and transit hubs could help municipalities unlock housing, mixed-use development, pedestrian improvements and private investment.

For DNJ, this is one of the proposals most directly aligned with creating stronger, more walkable downtowns.

PILOT Reform Could Change the Math on Redevelopment

Payments in Lieu of Taxes—or PILOTs—are an important redevelopment tool used by municipalities throughout New Jersey.

S1807 would require municipalities to share certain PILOT revenues with school districts unless specified exceptions or alternative agreements apply. The legislation would also establish additional notice and reporting requirements when municipalities consider property tax exemptions.

Why we’re watching: PILOTs are frequently used to close financing gaps and make redevelopment projects feasible. Changes to how PILOT revenue is distributed could affect municipal finances as well as negotiations between municipalities and developers.

This is an issue where seemingly technical changes can have significant downstream consequences for downtown redevelopment.

New Incentives for Communities That Make Room for Housing

Housing policy is increasingly becoming intertwined with economic development policy.

A3877/S2960, signed into law in August, establishes preferences for certain State funding for municipalities that take steps to enhance opportunities for housing development.

Why we’re watching: This creates a new connection between local housing policy and access to State resources. Downtowns are often among the most logical places to accommodate additional housing because they already have infrastructure, businesses, services and, in many cases, transit.

More residents living within walking distance of local businesses can also mean something every downtown needs: more customers.

The next important question will be how the State implements the new law and which funding programs are ultimately affected.

The Future of NJ Aspire

Not every important policy development starts in the Legislature.

The New Jersey Aspire Program is one of the State’s primary gap-financing tools for commercial, residential and mixed-use redevelopment projects. A3588 proposes statutory changes to the program, while NJEDA has separately temporarily paused acceptance of new Aspire applications while it conducts a program review.

NJEDA says applications are expected to reopen with revised criteria.

Why we’re watching: Aspire can determine whether a challenging redevelopment project moves from concept to construction. Changes to eligibility, underwriting, costs or incentives can have major consequences for downtown projects throughout the state.

For downtown leaders and developers, this may be one of the most consequential economic development issues to follow.

Turning Underused Commercial Property Into Workforce Housing

What happens to obsolete office and commercial properties is becoming a major planning question across New Jersey.

S1830, the New Jersey Workforce Housing Partnership Act, proposes incentives for workforce housing, including provisions encouraging the conversion of underutilized commercial property.

Why we’re watching: Adaptive reuse gives communities an opportunity to address two problems simultaneously: obsolete commercial space and housing demand.

For downtowns, converting an empty office or commercial building into housing can bring new residents, foot traffic and spending without requiring development on previously undeveloped land.

New Mobility Tools Beyond the Bus and Train

Getting people to downtown can be just as important as what happens once they arrive.

A4761/S4010, signed into law in August, expands the ability to use certain county transportation assistance funding for on-demand microtransit serving seniors and people with disabilities.

Why we’re watching: Microtransit can help address one of New Jersey’s persistent transportation challenges: the first and last mile.

In communities without extensive fixed-route transit, on-demand transportation could connect residents to downtown shopping, restaurants, healthcare, services and rail or bus connections. It also provides another reason for downtown organizations to think about mobility as an economic development strategy—not simply a transportation issue.

More State Investment in Main Streets, Historic Buildings and Cultural Anchors

Finally, some of the most important downtown policy developments aren’t bills at all—they’re funding programs.

NJEDA continues to administer programs directly relevant to downtown revitalization, including the Main Street Acquisition Support Grant, which can provide eligible small businesses with up to $50,000 toward certain closing costs when purchasing commercial property they will occupy.

The State also continues to invest in historic preservation and cultural facilities. Recent activity through NJEDA’s Cultural Arts Facilities Expansion (CAFE) Program includes support for the renovation of Asbury Park’s Convention Hall.

Meanwhile, the Historic Property Reinvestment Program provides tax credits intended to support rehabilitation of qualifying historic properties.

Why we’re watching: Successful downtown revitalization rarely comes from one massive project. It comes from layering tools—small business assistance, historic preservation, arts and culture, infrastructure, housing and private investment—to create places where people want to spend time.

And increasingly, understanding the State’s funding toolbox is just as important as following legislation.

What’s Next?

These ten issues illustrate just how broad “downtown policy” really is. A bill about parking can determine whether housing gets built. A liquor-license change can help fill a vacant storefront. Transportation funding can bring customers to a commercial district. Housing policy can influence access to State grants. And an economic development incentive can determine whether a long-vacant property finally gets redeveloped.

Downtown New Jersey will continue monitoring legislation, regulations, funding programs and State policy decisions throughout the legislative session—and advocating for policies that help New Jersey’s downtowns remain economically vibrant, welcoming and resilient.

Have a legislative or policy issue affecting your downtown that you think DNJ should be following? Let us know.