ITHACA, N.Y. — Home ownership need not be the clapboard house with the porch and white picket fence. Increasingly, for those seeking to own a little niche of Ithaca, the options are expanding beyond the traditional detached homes that comprise much of Ithaca’s urban fabric. Slowly but steadily, condominiums are inching their way into the Ithaca housing market.
First, a quick definition of condominiums, condos for short – condominiums are physically similar to apartment buildings and complexes, but instead of renters leasing units, people own their units outright. Most of the existing condo developments in Ithaca were built in suburban locations from the 1960s to 1980s, like Sevanna Park, Eastwood Commons and Commonland Community. Due to the combination of a deep recession and tightening legal restrictions at the state level, condos fell out of favor by the 1990s. But, the Ithaca market continues to change. The demand for new housing has grown, and there’s a renewed interest in urban living.
According to the Downtown Ithaca Alliance’s Gary Ferguson, that’s driving a push in for-sale apartment-style housing- i.e. condos. The results were confirmed by the latest Danter housing study commissioned by the DIA earlier this year, as well as the county’s study. Danter estimated the demand for new condos to be about 47 units per year, mostly in the $200,000-$400,000 range.
“This is the first time we’ve been able to quantify a real strong demand for for-sale units in downtown. The study’s identified significant opportunity here. This isn’t just a pipe dream, we’ve actually quantified potential demand here. That’s pretty exciting, we can now say with some certainty that there really is an opening here for condo housing,” said Ferguson.
It’s not just the DIA that sees the opportunity. An example of Ithaca’s growing interest in condominium housing can be seen on the 200 block of West Spencer Street a few blocks south of downtown, where long-time landlord Ed Cope of PPM Homes is building the “Ithaka Terraces”, a “pocket neighborhood” of condos, 12 units spread out across four buildings. The units, 2-bedrooms and 3-bedrooms, have a planned price range of $265,000 to $390,000, above-average in the Ithaca market, but still below most luxury housing.
For Cope, who owns dozens of houses in the city, it’s only his second new development, his first being the house for sale across the street. “We originally planned the project as rentals, but what we heard from so many people in Ithaca was that they were really interested in seeing some much needed owner owner occupied housing being built, so for this project we opted to go the condominium route instead,” said Cope in an email.
“This decision was bolstered when the Franklin proposal for the old library, which provided for building many condos, was rejected by the County. We are excited to begin providing this demonstrated need.”
Among the selling points are a “pleasing Greek aesthetic” by STREAM Collaborative’s Noah Demarest, individual charging stations for electric vehicles, and that the condos will be powered by a solar array being built in Caroline. Even though it’s on a steep site, all the units are designed for access from no greater than one flight of stairs. According to Cope, the interest in units has been over a wide spectrum, from retirees looking to downsize, to small families and young professionals who like the proximity to downtown as well as owning the place they live. Formal marketing for the units has yet to launch – plans are to market units early next summer, with occupancy by this time next year.
The Ithaka Terraces are only the second condo plan to be brought forth during the construction boom. The other is Tim Ciaschi’s Lehigh Valley Condominiums on Inlet Island, whose six units opened last year. It might seem kinda shocking that so few for-sale units have been built compared to the hundreds of apartments underway or already completed, but Ferguson says there are at least three reasons why condos are a tough prospect.
“Condos are expensive to build. As you look at the study, while there’s certainly an indication of demand, there are multiple price points, and we may need a subsidy to make middle-market for-sale units happen, they may not be able to be done without some sort of assistance. Second, [there are] regulatory issues. It is complex to do condos in New York State. We need to better understand that process and how to navigate it, so that people have to the tools and confidence to move forward with condo proposals in a cost-effective way, Third thing, financing. The banks have to speak for themselves, but 50% seems to be a number that’s been floated around the market here, sometimes higher. Asking for hard money for projects, getting those pre-sales is easier said than done. If you need to sell 10 of 20 units, or 25 of 50 units, that could quickly become a difficult hurdle to overcome. Being able to have some sort of discussion what the financing options are, what needs to be done…if we know this is a product the community wants, we gotta be able to get over these three major hurdles.”
Cope said that in his case, the financing part was not so difficult. “The private lenders were pleased that their financing could help build much needed housing in Ithaca, so that did not become an issue for me.” However, Cope agreed that while they are an understandable protection from unethical developers, the consumer protection laws that oversee condominium sales do pose significant hurdles, especially for small projects.
“We have seen plans for several other condominium developments in Ithaca fail due to the hardships related to building, financing, and approval to sell them. Therefore one of our hopes in building the Ithaka Terraces is that it will show others that even though building condos presents some unique hardships, it is still a great option to help solve the housing shortage in the city of Ithaca.”
So what’s next at this point? Education and observation. The DIA and other local organizations want to host a workshop this fall to discuss how to navigate state laws and achieve financing. But, the proof is in the pudding – builders and developers aren’t known for being adventurous with money, and many will wait on the sidelines and gauge whether projects like Cope’s are successful, before launching plans of their own.
In a city trying to push home ownership, and where the number of single-family homes built in the past decade can be counted on two hands, condos might be part of the solution. Who knows, maybe the ever-present gripes about landlords might start to include gripes about HOAs.