United Way’s 2026 ALICE Report Highlights New Jersey’s Affordability Problems
The United Way of Northern New Jersey recently released the 2026 edition of its annual report, The State of ALICE in New Jersey (ALICE = Asset-Limited, Income-Constrained, Employed). The report highlights the extent to which many households in New Jersey struggle to afford basic necessities, even when they are gainfully employed. The ALICE threshold is meant to capture households that earn too much income to qualify as “poor” by the Federal poverty standard but have difficulty making ends meet in high-cost-of-living states like New Jersey. It is a more comprehensive measure of financial hardship than any single indicator—more so than median household income, Medicaid enrollment, or SNAP eligibility.
The report offers an opportunity to attach some actual numbers to what the state’s “affordability” problem looks like. The number of ALICE households1—those with household incomes falling below the survival budget—is on the rise in New Jersey, increasing by 13.3% from 2021 to 2024,2 from about 1.25 million to about 1.42 million. This translates to an additional 166,000 NJ households in just a 3-year period that are finding it difficult to cover basic expenses.
Because the number of ALICE households increased by 13.3% while the total number of households increased by only 3.3% between 2021 and 2024,3 the percent of households with incomes falling below the ALICE threshold has crept upward statewide since 2021, from 36.9% in 2021 to 40.5% in 2024. Two in five households in New Jersey now struggle to pay for basic necessities.
Housing costs account for the largest percentage of total household expenses for almost all households. Housing prices continue to rise faster than incomes, particularly for renters. Rising prices are the result of a housing market that is failing to keep up with demand, both in total supply and in the variety of housing types available to households of different configurations and income levels. The lack of affordable options is pushing more and more households to make hard choices among necessary expenditures.
The ALICE index does not explicitly include utility costs as a separate item, but it indicates that utility costs are presumed to be included in the rent calculation, meaning that utility costs are one component that can push overall housing expenses out of reach. Jersey Water Works recently published a multi-city case study on water affordability. The report recommends a comprehensive approach to keeping water and sewer bills affordable for financially stressed households, including improved rate structures, increased infrastructure financing at the state and federal levels, more efficient utility operations, reduced household water use, enhanced leakage detection, and expanded assistance programs.
If households are finding it difficult to afford to live where they are—that is, if their actual incomes do not keep up with the threshold income needed to cover basic household expenditures—some will feel pressured to move elsewhere. The shortage of housing options has implications for New Jersey’s economy as well. Businesses will find it increasingly difficult to attract new workers and even retain existing ones if current or potential future employees find it impossible to afford to live near their jobs.
To overcome these challenges, we need a comprehensive policy response to stabilize New Jersey’s families and neighborhoods. We need to diversify our housing stock and build more homes of all shapes and sizes, such as duplexes, triplexes, accessory dwelling units, mixed-income developments, and homes near public transit. We need to streamline development processes and address unnecessary delays that further increase housing costs. Overall, our elected leaders and other decision-makers should prioritize strategies that enable more housing production, address affordability, and create a stronger foundation for residents and the state’s economy.
- The count of households below the ALICE threshold is determined by first determining the household “survival budget,” i.e. the ALICE threshold income, and then counting the number of households (irrespective of whether they’re homeowners or renters) with household incomes below that threshold. The components of the ALICE Essentials Index are described here: The ALICE Essentials Index.
- The 2026 report is based on 2024 data. Earlier data are from earlier editions of the report.
- Total household counts are from the 5-year version of the Census Bureau’s American Community Survey.
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