PILOT agreement passed admist larger debates on housing developments in Princeton

June, 2025
Aritra Ray•Harry Dweck•Fangwu Yu•Daniel da Costa


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Graphic: Emily Kim

Princeton’s new housing projects have come with increasing debates about whether the developments adequately meet Princeton’s affordable housing obligations while at the same time preserving the town’s unique historic identity. The projects, most notably the Alice and Avalon Bay developments surrounding the Princeton Shopping Center and a proposed development near the Princeton Theological Seminary, generally include both market-priced and affordable housing units.

Princeton Council’s strategy, as outlined in their master plan, is to promote developments that have both affordable units and market-priced units through PILOT (payment in lieu of taxes) agreements. PILOTs are designed to make critical infrastructure developments, like affordable housing, more financially attractive to developers, while at the same time providing the town with extra revenue. On May 12, the Princeton Council approved a resolution to share surplus funds with PPS from a PILOT agreement between the 232-unit Avalon Bay development and the municipality; the additional funds for PPS are expected to amount to about $300,000 to $500,000 annually.

“[This agreement] comes at a critical time for the PPS,” said Dafna Kendal, president of the Board of Education, at the May 12 Town Council meeting. “In April, we were notified that our state aid will be reduced by 3 percent. We are also at risk of losing more than a million dollars in federal funding because we do not want to compromise our educational programming to accommodate an agenda that does not reflect our community’s values.”

In New Jersey, housing is classified as “affordable” when the occupant’s housing costs are no more than 30 percent of their gross income. Mia Sacks, President of the Princeton Council, noted that the town’s primary approach to city development is one of “smart growth.”

“We have a housing crisis and a climate crisis. How can you address both? Smart Growth: bikeable, walkable, transit-oriented development close to economically productive downtown centers where people can walk to work, bike to schools. The old model of building affordable housing ... was build it on the outskirts of town ... and you have to have a car to get anywhere. It’s not genuinely integrated housing. This is genuinely integrated housing,” said Mia Sacks, president of the Princeton Council.

However, there exists considerable opposition to these new developments, especially the proposed developments near the Princeton Theological Seminary, from the Princeton Coalition for Responsible Development (PCRD), who question whether the district and the town can accommodate a larger population. On April 23, the Ad Hoc Commitee of Historians in Defense of Historic Princeton, published a full page letter in the Town Topics which is now featured on the PCRD website.

The letter alleges that a rapidly expanding Princeton could threaten downtown Princeton’s historic character. The proposed Seminary development in particular would sit a quarter of a mile from the Barracks, a 1684 house that was the temporary residence of James Madison and Alexander Hamilton, and the house of former Princeton resident Albert Einstein. In the past few weeks, a number of orange and black signs reading “Defend Historic Princeton,” distributed by the PCRD have gone up around Princeton, particularly in the historic Mercer Hill neighborhood.

Sean Wilentz, professor of American history at Princeton University and signee of the letter, argues that the size and height of the proposed developments, which would be 50 feet— could damage Princeton’s historical character. “This kind of high density project is an assault on historical integrity. It’s [important to]find ways to harmonize development and the preservation of what make s Princeton, Princeton.” said Wilentz. “It makes it different from any other place, this history which is unique in all the world ... If you undo that, if you endanger that, then the entire town suffers. It’s no longer Princeton.”

In response to the Town Topics letter by the PCRD and the “Defend Historic Princeton” signs, the Princeton Town Councilman Leighton Newlin released a letter in the Town Topics.

“These arguments about PILOT agreements, density, traffic, walkability, storm water management and architectural design are not arguments at all. The surface looks polite and technical, the core is about power, privilege and a refusal refusal to share space,” read the the letter.

Wilentz argues that the PCRD is not anti-affordable housing, nor a not-in-myback-yard group, but rather it opposes large developments with affordable and market-priced units. The town’s current strategy is to support developments with 80 percent market-priced units and 20 percent affordable units, with the idea being that developers will use the revenue from the market-priced units to support affordable units.

“You end up ... justifying luxury housing developments on the basis of affordable housing ... but it’s a bait and switch. [The developers] are basically gonna build four times as much luxury apartment stuff ... as affordable housing. That’s not gonna help the social imbalance, it’s only gonna make it worse,” said Wilentz.

Wilentz instead supports developments with 100 percent affordable housing. “We want affordable [housing]. We’re not objecting to the historical integrity because they’re gonna be low income people living here — some people accuse us of that. That’s not a threat to the historical stuff ... quite the opposite ... it’s the luxury [development] that’s going to present a problem to the historical integrity of the neighborhood — the height [and] sheer mass of the [luxury developments],” said Wilentz.

However, Princeton Council officials have pointed to the financial inviability of the housing projects PCRD proposes.

“The proposal, for 100 percent affordable (i.e., municipally-sponsored) housing, would require the financial backing of the municipality, including millions of taxpayer funds to purchase the property, to construct the housing, and to provide tax subsidies over time. Further, the low unit count would make it uncompetitive for state financing, causing Princeton residents to make up significant funding shortfalls,” said a letter from Mayor Mark Freda and the Princeton Council in response to PCRD’s letter.

The recent surge in housing developments throughout Princeton is primarily due to the Mount Laurel Doctrine, a judicial doctrine in the New Jersey Constitution that requires towns to use their zoning powers to provide its share of affordable housing to those who have lower and moderate incomes. In 1996, Princeton fulfilled its affordable housing obligation by paying $460,000 to build 23 affordable units in Trenton.

“The housing that’s being built in Princeton is a result of municipal compliance with that very critical housing desegregation case,” said Sacks. “Princeton [is] making up for 20 years of not fulfilling its obligation. That’s why there is so much housing in such a short amount of time.”

The array of proposed developments is slated to add over 800 units, and it remains to be seen how both sides of this debate work to balance the need for new housing and ensuring that the town and the school system can accommodate a growing population.

“You know, we are not the same small village we were in the 1700s and 1600s when Europeans began to settle in this area. However, we can’t stop the growth, right? We can’t just say no one else can move into Princeton,” said PHS history teacher Rick Miller.


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