Guardian Says Hovnanian Project Could Put ‘Everyone Else’s Eyes’ on Atlantic City

ATLANTIC CITY — A major new housing development in Atlantic City's Southeast Inlet could become much more than another collection of expensive homes near the beach, according to Assemblyman Don Guardian.

The former Atlantic City mayor believes the arrival of major homebuilder K. Hovnanian could send a message to other developers that there is money to be made investing in residential Atlantic City.

"I think everyone else now is going to have their eyes on Atlantic City," Guardian said Wednesday during an appearance on The Lorry Young Show on WOND.

Guardian attended a groundbreaking Wednesday for the new residential development near Pacific Avenue and New Hampshire Avenue.

He said the first phase is expected to include approximately 45 homes, with the overall project eventually growing to roughly 120 to 130 units. Prices are expected to begin in the low $700,000s, according to Guardian.

Those prices would have been difficult to imagine in that section of Atlantic City years ago.

Guardian recalled when Hovnanian developed nearly 200 homes in the city's Northeast Inlet more than three decades ago, when the surrounding neighborhood contained vacant properties, boarded-up buildings and an oceanfront Boardwalk that had not yet been rebuilt.

More than 30 years later, Guardian said the neighborhood has become highly desirable, with homes rarely remaining on the market for long.

"Hovnanian back then knew how to build the right product at the right time for the right price," Guardian said. "And I think they're doing it in the Southeast today."

Guardian said smaller residential projects have already demonstrated demand for higher-priced housing in Atlantic City.

He pointed to recently constructed homes near the Absecon Lighthouse that developers initially hoped would sell for around $400,000.

According to Guardian, those properties ultimately sold for substantially more.

That success, he said, helped demonstrate that a market exists.

Now, Guardian sees the arrival of Hovnanian as another level of validation.

"Hovnanian would not be here if they didn't think they could get a return on their investment," Guardian said.

The significance, he believes, extends well beyond one development.

"You're going to see that everyone else is going to say Hovnanian only goes where they can make a profit," Guardian said.

Building Atlantic City's Residential Tax Base

Guardian also sees residential development as an important part of Atlantic City's long-term financial future.

For decades, the casino industry has dominated the city's economy and tax structure. Guardian said Atlantic City should not assume the state will always be able to provide the same level of financial support, particularly if the number of casinos eventually declines.

"This is absolutely the right time for the city to be moving forward," Guardian said. "This is a really good project."

Guardian acknowledged criticism that homes starting above $700,000 could primarily attract wealthy buyers, investors or short-term rental operators.

"I can't disagree that that could happen," Guardian said. "But the point is, it's going to be bringing in the taxes that the city needs."

He said the development is also expected to include an affordable or workforce housing component.

Guardian believes several changes have made residential development more attractive in areas that developers might previously have avoided.

The Boardwalk has been rebuilt, lighting has improved, beaches are accessible and violent crime has declined.

"People are living here," Guardian said. "And now it's just vacant land that's on the Boardwalk. And so this should be highly desirable."

Guardian said Atlantic City needs both actual public safety and the perception among prospective buyers that neighborhoods are safe, clean and well maintained.

"You can build great housing. You can be walking distance from the beach," Guardian said. But if prospective buyers encounter poorly maintained roads, broken lights or other neighborhood problems, he said, they may question whether they want to invest.

Guardian believes Atlantic City is beginning to overcome those obstacles.

If the first homes sell quickly and Hovnanian proceeds with the remainder of the project, he believes other developers will notice.

For a city that has spent decades trying to diversify its economy beyond casinos, Guardian sees that possibility as perhaps the most important part of the project.