In the nineteenth century, the railroad was one of the chief means of commuting. It was also the main way of transporting freight. However, the freight bound for New York City had to be unloaded on the Hudson County side of the Hudson River and transferred onto barges to cross the river. In order to alleviate this problem, the Port Authority of New York was established in 1921. While its original mission was to expedite railroad transportation, the authority soon shifted its attention to trucks and automobiles by building a network of bridges and tunnels. The consequence of these Port Authority projects was to spur suburban development in New Jersey.
Federal policy also encouraged the growth of the suburbs. The Federal Housing Administration created in 1934 and the GI Bill in 1944 provided low-cost mortgages to families who otherwise would not have been able to afford to buy their own houses. However, these agencies tended to discriminate against urban centers, reinforcing racial and class segregation in housing. Another factor that led to the decline of the cities was the development in the 1950s of regional shopping centers
located near suburban communities. These centers were modeled on the small town square, except that they were private, not public, property. Furthermore, it was difficult for poor and nonwhite residents of the cities to get to the shopping centers, except possibly to work at low-paying jobs. Thus, the shopping centers not only undermined the downtown department stores, but also resulted in a new form of class and racial segregation. Newark went into an economic decline as downtown stores closed and businesses and residents that could move to the suburbs.
The new state constitution of 1947 established a powerful supreme court, which became a flashpoint for controversy in the last half of the twentieth century. In 1973, the New Jersey Supreme Court decided that the reliance on property taxes to fund public education violated the clause of the state constitutional guarantee of a “thorough and efficient” education to every schoolchild. However, the state legislature refused to provide funding for attempts for equalize the spending for urban and suburban schools, and so the supreme court ordered the closing of the public schools. This forced the governor and legislature to pass the state’s first income tax. But the inequalities continued, and in 1990 the court again decided that the state’s poorest districts must have equal funding with the state’s wealthiest districts.
In the 1970s, the National Association for the Advancement of Colored People (NAACP) sued the township of Mount Laurel, claiming that the township’s zoning ordinance discriminated against the poor, the young, and the old. The case made its way up to the state supreme court, which in 1975 declared the township’s zoning law unconstitutional. The decision led to years of controversy about the appropriate remedy. Finally, in 1985, the state legislature established an Affordable Housing Council, which was empowered to determine the affordable housing obligation of developing suburban communities. However, the council also permitted these communities to sell part of their affordable housing obligation to nearby cities.