News out of Washington this week included a threat to ban institutional investors (i.e private equity firms) from purchasing single family homes in the US. While this will be a positive move, will it really affect the housing crisis we are seeing in our area?
Considering that less that 2% of all home sales nationwide are by institutional investors (not “mom and pop” investors), it really won’t make an impact and certainly not in Bergen County as most of these institutional investor homes are found in the Sun Belt.
Bergen County’s housing shortage has been an issue since 2020 and there is no relief in sight. We have strong schools, commuting options, and a steady flow of buyers, yet too few homes come to market and very few opportunities to develop. The result is familiar: low inventory, competitive bidding, and prices that climb faster than many households can comfortably manage.
In a perfect world without red tape, bureaucracy or multi-billion dollar infrastructure spending, here are some ways we could loosen the supply crunch and create a healthier, more balanced market in Bergen County.
1) Tax credit for sellers to increase “move-up” inventory
One of the biggest reasons inventory stays tight is the “lock-in” effect: homeowners who might otherwise sell and move are staying put because the financial hit feels steep—whether it’s transaction costs, taxes, or the uncertainty of finding a replacement home.
Similar to the first-time home buyer tax credit incentive used to get the housing market out of the financial crisis of 2008, a targeted seller tax credit could help bring more listings online by reducing friction for people who are ready to move but hesitant to take the leap. Thoughtfully designed credits could be:
- Income – or age-targeted (for example, long-time owners or downsizers)
- Time-limited (to create urgency and actually move inventory)
- Tied to listing a primary residence (to keep the benefit focused on housing supply)
When sellers feel less “penalized” for moving, more homes hit the market – especially the mid-range homes that many first-time and trade-up buyers are chasing.
2) Remove the NJ mansion tax or waive it temporarily to unlock higher-end turnover
In Bergen County, where the median sales price was $840,000 in 2025, many towns have home values that cross thresholds where additional taxes kick in. The New Jersey “mansion tax” of 1-3% of the sales price and now paid by the seller at closing can become a psychological and financial speed bump—especially when combined with NJ’s transfer tax of an additional 1%.
3) Reimagine zoning to reflect today’s housing needs
With commercial spaces sitting vacant across North Jersey, we have an opportunity to rethink land use. Office parks, aging retail centers, and underutilized commercial corridors no longer match how people work and shop, yet many sit on well-located parcels with existing infrastructure.
Thoughtful rezoning could allow these areas to transition into residential or mixed-use developments, including:
- Townhomes and condos
- Smaller single-family homes
- Housing options for downsizers who want to stay local
Creating housing where infrastructure already exists adds supply without overburdening established neighborhoods and does so in a way that aligns with how people live today.
4) Extend mass transit west to relieve pressure on Bergen County
Bergen County is supply-constrained in part because it sits at the outer edge of practical commuting distance for many buyers. Extending reliable mass transit further west into Passaic, Sussex, and Warren Counties would meaningfully expand housing options while easing demand locally. With the Hudson River Tunnel Project underway, this isn’t that far fetched of an idea.
Improved westward transit would:
- Open more affordable housing markets to commuters
- Encourage development in areas with available land
- Reduce buyer pressure on Bergen County towns closest to transit
Housing shortages are regional challenges. Expanding where people can realistically live and commute is a critical part of the solution.
Big policy ideas – like banning institutional investors – make headlines. But here in Bergen County, the real issue remains supply. Encouraging sellers, modernizing zoning, improving transit, and reducing barriers to movement are the levers that actually change inventory.
Solving the housing shortage won’t happen overnight, but with practical, coordinated steps, it’s absolutely achievable.