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ITHACA, N.Y. — An affordable housing development in the town of Ithaca has been cancelled as a result of rapidly escalating construction costs.
“We have made a decision to abandon the Greenways project because it is not financially viable,” said INHS Executive Director Paul Mazzarella in an email. “The bids for construction came in much higher than our budget and we have not been able to sufficiently close the gap through value engineering or obtaining additional subsidy.”
The cancellation of the Greenways project is a major blow to the development of affordable housing in the county, since INHS is the only major organization working on the development of new affordable housing in the county. With its discontinuation, nearly 80% (46 of 59) of the purchasable affordable housing units previously approved in Tompkins County are now off the table.
The Greenways project was slated for 10.86 acres of Cornell-owned vacant land to the west of Eastwood Commons, a housing subdivision off of Honness Lane. The project was to consist of 46 owner-occupied townhomes to be sold to individuals in the $40-50k income range.
Greenways had been in development for several years, dating back to an agreement Cornell signed with INHS in 2009 to develop the land under the condition that Cornell employees in the specified income range would receive first dibs on new townhouses as they were completed and made available for purchase. After multiple revisions, the current plan was approved last year.
The project was one of only three multi-family plans that had been approved for owner-occupied affordable housing. The others are four townhomes planned at 402 South Cayuga Street in Ithaca, and 210 Hancock, where seven owner-occupied townhomes are anticipated. Two single-family homes are also planned in the city of Ithaca on vacant lots.
Those are still being planned for the time being, but 402 South Cayuga has also struggled to start construction given the market’s rapid increase in the cost of construction.
“We did not come to this decision lightly. We have been very pleased with our partnership with Cornell to produce workforce housing and had hoped that Greenways would be a model for similar workforce housing projects in Tompkins County. INHS has invested over three years and hundreds of thousands of dollars in developing this plan. We have also received approvals for over $700,000 in subsidy grants for the project, which we will be giving back. This is the first time in my memory that we’ve ever done that,” said Mazzarella.
“The Greenways project reflects the difficulty that INHS is experiencing in building affordable for-sale homes in the present market. We are finding it increasingly difficult to produce homes that meet the affordability requirements of the low- and moderate-income people we are trying to serve. The combination of high land costs, high construction costs, high property taxes and entitlement requirements are putting these homes out-of-reach for our target buyers. This will only get worse when interest rates begin to rise.”
Given the other news this week that Cornell will be displacing more students onto the market to compete for the scare number of rental units available, this has been a one-two punch to efforts to return affordable housing to Ithaca and Tompkins County. For the town of Ithaca, this is the fourth multi-family project cancelled in recent years. The Holochuck Homes project on West Hill also cancelled development after approval, NRP dropped their Cayuga Trails project after significant wetlands were discovered on the property, and a development off Troy Road was discontinued during the approvals process and the land put up for sale.
“These conditions are not only affecting affordable housing, but also market rate housing development. Many people have observed that there are very few middle market for-sale projects being developed,” Mazzarella added.
The Voice will be following up with an in-depth exploration of the changing market conditions that led to the project’s cancellation.
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