In 2016, Tompkins County’s Housing Strategy was first released with lofty ambitions for the local housing stock: to build 200 new rental units and 380 for-sale units (including 80 condominiums) per year through the year 2025 in order to meet the demands of the market.
Several years into the plan, the mark for rentals seems to be accelerating, with Tompkins County building between 160 and 430 new rental units each year since the goals were instituted. However, the County Legislature’s Housing Committee chair Martha Robertson said, the for-sale unit creation appears to be lagging behind their annual goals.
Of the nearly 1,950 units of housing (or just under 4,000 beds) either under construction, site prepped or approved in Tompkins County, only a small number of developments – fewer than 10 in total – offer some degree of for-sale housing. Even if you expand the criteria to projects in the planning stage – a category that, thanks to projects like the Chainworks District, is expected to add an estimated 7,000 beds to the local housing stock – only about one quarter of the 40 housing developments in the pipeline across Tompkins County offer some sort of for-sale housing.
Robertson said there are several reasons why for-sale development has been lagging, particularly at price points working class families can afford: Developers locally have noted that most tax credit programs at the state and federal level favor rental housing development, and while other programs – like housing voucher programs or the Home Ownership Program – do exist, they can’t do enough to support home ownership in a market where for-sale home and condominium prices exceed the subsidies the state provides.
Robertson said there are no programs currently in place to help landlords convert their rental properties into for-sale duplexes, and the County cannot give funds to individuals. However, current and future market conditions – including a potential modification of local zoning that’s being investigated – might make that option more attractive to landlords.
“It’s much easier to convert an already-existing building than to build a new one,” she said.
Legislators review the “condominium question” in Ithaca’s housing market
Facing numerous issues on the legislative and pricing front, condominiums seem to be the most troublesome type of in-demand housing here in Tompkins County. As of this week, the members of the Tompkins County Legislature now have an exhaustive report telling them why.
On Monday, Adam Bronfin, a student in Cornell’s School of Architecture, Art and Planning, presented members of the legislature with his Urban and Regional Studies Honors Thesis titled ‘The Condominium Question: Evaluating the Lack of Condominiums in Ithaca, N.Y.’ The exhaustive report, written over several months, features interviews with 13 developers, 11 government officials, five real estate brokers, three lenders, two lawyers and a pair of consultants, seeking to learn one thing: what’s stalling condominium development in Tompkins County, especially when it’s in such high demand?
“The underlying sentiment from the interviewees was there is an opportunity for condominium development, and a need for more owner-occupied units in the city center,” Bronfin wrote. “‘You would think we would be ripe for [condominium development] but nobody has wanted to get their feet wet in a big way,’ said one interviewee. The only participants who did not perceive a need for condominiums were three people on the development team for a non-profit developer.”
According to Bronfin’s research, less than one-fifth of a percent of Ithaca’s housing units (and 0.34 percent of Tompkins County’s housing units) are condominiums, far below the national average of around 5 percent. The reasons why, according to his report, are numerous.
Among the basics, developers said that locals don’t understand the financing behind purchasing a condominium, or said the field of condominium development is unknown to them or citing Ithaca’s “anti-development” reputation. Then there’s something called the “Offering Plan” to deal with, which is a set of regulations from the New York State Attorney General’s Office that govern the offer and sale of interests in cooperatives and condominiums. The plans, which can exceed 300 pages in length, were described by some as excessive, overly complicated and, in one case, a “royal pain in the ass.”
“Additionally, the offering plan also makes plans very rigid,” Bronfin writes. “Since an amendment is required for each change, developers are often very deliberate in assembling the offering plan, drawing out the process even further. Since a great deal of work — land acquisition, architectural designs, engineering schemes, zoning approval, and others — is required for the offering plan to be completed, condominium developers often have significant upfront costs and larger carry costs than their multifamily counterparts, according to participants interviewed.”
Finally, there’s the abatement question, which – while often employed for the development of rental housing in Tompkins County – cannot be used to develop condominiums. This is especially troublesome for developers given upfront construction costs in an area where real estate is expensive, construction costs are high and legal costs – thanks to the Attorney General’s office – are astronomical, the report explains.
“To build nice apartments in Ithaca, you pretty much need abatements,” one developer was quoted as saying.
You can read the full report below.
Tompkins County readies to move forward with housing strategy
Tompkins County’s Deputy Commissioner of Planning and Sustainability, Megan McDonald, was in the house on Monday to present her plan of attack to implement her department’s housing strategy over the coming years, offering numerous strategies to address new home construction, fairness in renting and streamlining development strategies countywide.
The priorities slate, which addresses both near and long-term goals, includes implementing programming to encourage targeted development according to market demands as well as need, finding ways to get the community involved in planning and implementing projects and offering county-provided administrative assistance to landowners and municipalities with identifying funding and/or planning their projects in order to get them “shovel-ready” as quickly as possible.
The plans also outline steps to improve practices within municipal planning offices around the county, reforming code enforcement and the county’s oversight over landlords’ compliance with the local fair housing law, and to “investigate potential incentives to encourage desired new
development in appropriate locations,” which could involve the investigation of a new, local tax abatement to help fulfill certain targeted housing needs in Tompkins County, particularly for developments that include affordable housing.