Towns tame taxes by keeping children out

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New Jersey towns have figured out a way to sidestep the highest property taxes in the U.S.

Keep children out.

Educating a child in New Jersey costs an average of $12,567 a year, the most in the nation and more than double the property tax parents typically pay. So local governments have hit upon a way to expand the tax base without the expense of higher enrollment: age-restricted housing.

New Jersey developers have responded by building an estimated one-fifth of the country's adults-only housing, making the state the leader in a national trend spurred by baby boomers seeking new homes after their children move out.

In New Jersey, where schools can command two-thirds of a municipal budget and state officials have failed to provide tax relief, building communities that don't allow children has as much to do with reducing taxes as it does with serving older home buyers.

"It's frustration on the part of some communities," said New Jersey Gov. Jon Corzine, a Democrat. "The real problem is we have too much reliance on property taxes in how we finance public education."

Nationwide, 2.8 million households were part of age-restricted communities in 2005, up 29 percent from 2001. The number in New Jersey grew 37 percent in the same period. More than half the housing units started in the state in the past two years have excluded children, according to data compiled by the New Jersey Builders Association.

In one New Jersey town, Monroe Township, population 28,000, half the housing units are limited to senior citizens.

As many as 95,000 such units will be built in the U.S. in 2007, according to an estimate by the National Association of Home Builders. New Jersey developers will build about 20,000 of them.

Exclusionary zoning is legal in the U.S. A 1998 exemption to the federal Fair Housing Act allows age restrictions if homes in a development are intended solely for residents age 62 and older, or if 80 percent of the units are occupied by one person who is at least 55.