ITHACA, N.Y.—It’s been almost a decade since Tompkins County began efforts to address its growing housing affordability crisis. Unfortunately, according to numbers provided by the County Planning Department to county legislators last week, the county is still falling well short of its goals on the supply side.
At its simplest, the housing issue boils down to preserving affordability in existing housing, and providing new units to keep demand satisfied enough so that prices don’t grow beyond what county residents can afford. With production far below goals, and with home prices soaring at more than double the rate of inflation over the past decade, and 20% in just the past couple of years, the situation appears to be worsening.
The issue isn’t new and the county has known for several years about the burgeoning problem. They held a large summit in 2016 to discuss ideas, paid for a study to identify needs, came up with conclusions, established production targets and focus areas using that study, and implemented the findings as part of its 2017 Housing Strategy.
To keep tabs on progress, the county has its planners conduct an annual “snapshot” to monitor the county’s progress toward its housing strategy goals. This is done by monitoring demographic and workforce trends, economic and real estate activities, and housing production data. All that info is collected through various government and private reports, ranging from the Census to the Bureau of Labor Statistics to Cornell to local municipalities’ building permit data.
Last week, Tompkins County Planner Eliot Benman gave the snapshot in the form of a presentation to county legislators at the Tompkins County Housing and Economic Development Committee meeting this past Wednesday.
The basic findings essentially go as follows:
- Steady increases in rental prices (34.7% over the past 10 years), but not much faster than income growth (29.8%). Prices for larger units (two- to four-bedrooms) rose faster.
- An increase in the past decade of severely cost-burdened renters (people paying 50%+ of their income towards housing) due to a lack of lower and middle-income units, from 32.7% to 37.9%. Nearly 60% of households are at least moderately cost-burdened, paying 30%+ of their income towards housing.
- Significant increases in the cost of home ownership with limited inventory.
- Inflation, labor shortages and high interest rates are majorly hampering housing production.
- Employment and economic trends during and post-COVID have made everything more uncertain.
“We found a lot of things that were a continuation of past housing snapshots,” said Benman. “We continue to be a regional outlier in population growth, in housing growth. […] In the past couple of years, we’ve seen really dramatic increases in the costs of for-sale housing, because this is a competitive market with limited inventory.”
The economic side is a mixed picture. COVID deeply damaged the local economy, and while the local employment picture has rebounded, it has yet to reach pre-pandemic highs. Berman noted this has not impacted housing demand because of demographic and workforce trends. Increasing numbers of retirees, students, and people who live here but are counted as workers elsewhere (remote workers) have housing needs but are not a part of local employment data.
As noted earlier, renters, who make up a large majority of Ithaca city and about 45% of households in the county, have lost some affordability since the last snapshot. The issue, however, is much more acute on the homeownership side. Median home sales price in Tompkins County has increased 41.3% in four years, and houses were usually sold above asking price last year.
The issue is so severe that Tompkins County is causing upward price pressure on neighboring counties, and stressing the long-time residents of those areas who are getting priced out by Ithaca-area workers.
As Benman called it, it’s “an expensive and competitive market with restricted supply.” Even with those massive price increases, the number of homes for sale has dropped by 25% in the past few years. Very few homes are built locally “on spec” with no buyer immediately lined up. For one thing, it’s an expensive proposition, as local homebuilding costs are now $400/square foot, almost double what it was pre-pandemic, due to a lack of available labor, high local land prices and materials costs, onerous local permitting processes and a tough lending environment.
The result of these issues is a supply of housing that has generally fallen far short of goals. The goal from 2016-2025 was 3,800 new owner-occupied housing units, 3,000 as single-family homes, and 800 as condos; through 2022, there looks to be a net gain of just 628 (608 homes and 20 condos), net meaning that an old house replaced with a new house is a net gain of zero. That’s only 16.5% of the for-sale housing goal, and barring a surge in housing construction it will be a struggle to hit even 20% of the goal (760 units) before 2025.
The numbers tell a bleak story: for-sale housing production in Tompkins County is falling so far short of goals that the lack of new for-sale units is harming the community.
Another area where the county is falling short is lower and middle-income rentals, “workforce” housing up to 100% area median income. The goal through 2025 was 2,000 apartments. The amount produced through 2022 was only 466, less than 25% of the way towards the goal.
Even if the units currently planned are built by the end of 2025 — a tall order, given the need for site plan approval, outside funding and finding available construction crews — it would still fall under 40% of the goal.
The news is somewhat better for senior housing. The goal is 100-200 lower-income “affordable” senior housing units, with an undetermined number of higher-end market-rate senior units. So far, Tompkins County has added 68 affordable units and 71 market-rate senior units since 2016, with 142 market-rate senior units in the planning or construction stages.
Supportive housing is also a mixed picture. On the one hand, the goal was 100 beds of Permanent Supportive Housing (PSH) — through the existing Arthaus building and the Asteri Ithaca project, the county will meet its goal of 100 beds. However, the related goal was 100 single-room occupancy beds for very-low income households, making less than 30% of the area median income. The county has added four beds, with another four beds underway.
To the chagrin of many, the one market segment where it’s somewhat exceeded goals has been student housing. If someone can charge $4,000 or $5,000/month for a three-bedroom, there will likely be someone capable of building to meet that demand. However, the primary contributor to that stock has been Cornell, which rebuilt Maplewood and expanded its North Campus.
The goal by 2025 was 1,500 beds, plus meeting enrollment growth, which between all the local colleges has been 2,016 students (all Cornell) since 2016, so the goal was 3,516 by the start of this year. 3,623 beds have been added, with Cornell directly providing about 2,500 of those, and at least 480 more beds are on the way before 2025.
As well as the lack of new supply, a secondary contributor to the affordability issue is wealthy investors scooping up hundreds of existing properties over the past couple of years for short-term rentals. It’s easy because the units already exist, they have the money to outcompete local buyers, and the short-term rental units are more lucrative than long-term rentals in an area like Tompkins County with a thriving leisure and hospitality economy. These issues aren’t as significant in Syracuse or Albany because they are less popular vacation spots.
“We have done well in terms of student housing. In terms of supportive housing, a lot has been accomplished, but the HSC (Human Services Coalition) has identified the need for another 100 units,” summarized Benman. “When it comes to senior housing, that seems to be challenging, and when it comes to workforce housing, we’ve fallen well short of accomplishing our target.”
“The differences among the types of housing between targets that have been filled or exceeded and targets that we’re way short of is pretty striking,” commented legislator Veronica Pillar (D-2nd District).
“It seems like we’re going to exceed the target for student housing,” Pillar said. “To what extent is building more student housing solving our problems a myth, or real?”
Pillar said she often hears from constituents who question the wisdom of building more student housing to impact the area’s overall housing issues.
“In a college town like Ithaca, the student housing is always an important piece of the puzzle. Certainly, the pattern could be that students are moving from shared living situations into units where they’re living with fewer students or alone. […] But if we’re not complementing that with addressing the workforce housing side of things, I think the results are unsurprising,” replied Benman.
Even with sufficient student housing construction, Benman said, the benefits will be mitigated with workforce housing still lagging so far behind. With so much demand and a lagging supply, cheaper workforce housing will get gobbled up by someone willing to pay a higher price for a roof over their head.
“I was looking at the single-family home stuff, it seems to be lagging. But I was wondering if we just need to readjust our expectations for single-family homes? We’re not building homes for $150,000-$199,000 anymore,” asked legislator Mike Sigler (R-6th District).
“Unsurprisingly, the $400,000+ new single-family homes increased substantially to almost half of all the new single-family homes as of 2022,” Benman said. “Those price points probably aren’t too relevant anymore.”
Sigler suggested ways to incentivize single-family home construction, particularly in order to reduce the overall home price to make them more affordable for people who want to purchase. He suggested waiving sales taxes, an approach he said is used by the Industrial Development Agency (IDA).
“I don’t know if there are any easy answers,” said Benman. Generally, state laws prevent IDA tax incentives for owner-occupied units. “There has been a group organized by the Chamber of Commerce to look at housing production, there will be thought given to ownership, [we’re] actively participating in those meetings. We have heard some ideas of applying IDA incentives for single-family rental units, so you’re not immediately creating ownership units but there’s the potential to convert down the line.”
As for ideas, Benman and Planner Megan McDonald noted that some communities like Dryden are putting forth an effort to identify sites suitable for workforce housing and single-family home clusters, and that money to support land acquisition, development and closing costs from the IDA’s inclusionary zoning developer fees is beginning to flow into the Community Housing Development Fund to support that effort.
But, that’s a slow process, unlikely to produce concrete results, figurative and literal, before 2025. In the meanwhile, the county is left scrambling for ideas on how to keep its housing issues from getting worse in a time of elevated inflation and a difficult lending environment. For many homebuyers and lower-income renters, it’s going to be a painful buying process for at least the next couple of years.
(Clarification: The county uses Ithaca Voice reporting and statistics in the snapshot, but no Voice staffers were involved in their data collecting)