Been thinking about this since Murphy signed the bill. My position is the minimum wage hike will mean nothing but stability and potential increases for rent rates for years to come. Particularly in C class neighborhoods in NJ.
Whats everyone else’s stance on this?
Too early to tell. Right now it's only at $11 an hour so the impact is still minimal. Before taxes that's only $22,880 a year assuming they work full time. The average cost of a studio in NJ is roughly $1084. Using the rule of thumb that your rent should be no more than 30% of your income per month that would only allow for a rent of $528. So unless you are looking at a place with roommates it still isn't that impactful an increase. It will reach $15 an hour in 2024 and even then that would only allow for a rent of $720, which is somewhere closer to doable depending on where in the state you're looking. While it may give a group of individuals a chance at getting a place there is really no large impact on an individual renter. I'm no economist, overall allowing more people access to a higher amount of money isn't a bad thing especially if that is being pumped back into the market. To your point I think it will make some rentals more stable, but especially when there is more than one person in the unit.
@Michael Anderson I think you may be onto something about increased wages meaning more stability, but I think you may see the effects of that increase hit the D class areas with a more substantial effect than you see in the C class areas. I don't think the minimum wage increase will effect rental increases either, NJ is a very tenant friendly state and many of the D class areas are rent controlled. I do predict that rent rates in NJ will continue to rise organically overtime though