The FAA already shot down Cape May County’s plan to build housing inside its airport once before. The county isn’t giving up.
Last fall, county commissioners floated an ambitious proposal: convert 33 acres at the Cape May County Airport into roughly 300 units of mixed-income housing. Officials called it a “city within a city.” The FAA shut it down in February, citing a longstanding policy against residential development on airport property.
So the county went back to the drawing board. Now, officials are pursuing a narrower request—asking the Delaware River and Bay Authority, which operates the airport, to formally apply to the FAA for permission to develop 18 acres of the nearly 1,000-acre property into rental townhomes reserved specifically for U.S. Coast Guard personnel, military members, airport workers, and emergency responders.
The pivot is deliberate. By tying the housing to national security, county officials are betting the FAA will take a second look.
The timing is not an accident. The Coast Guard recently announced a $400 million expansion at its Cape May training center—the largest shore construction award in Coast Guard history, according to Ocean City Sentinel. The facility currently processes about 5,500 recruits annually. That number is expected to climb to 8,000 by 2030. Cape May was designated a Critical Housing Area by the Coast Guard in June 2025 due to a severe shortage of affordable housing near the base. That problem only gets worse with more service members coming in.
The FAA has not yet responded to the new request. The airport’s future is also tied up in a separate dispute—Cape May County has given the Delaware River and Bay Authority notice that it won’t renew its operating lease, a move the authority says could cost the county $30 million in penalties, according to NJ.com. County officials reject the claim.
Whether the FAA approves the revised plan remains to be seen. But with $400 million in federal investment on the way and thousands of new recruits expected, the pressure to find housing is only mounting.
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.