ITHACA, N.Y. — The county and the Downtown Ithaca Alliance will be presenting the results of their respective Housing Needs Assessments at the County Library on September 6th. Here’s a preview of some of the county’s housing study findings, courtesy of the Tompkins County Planning Department and The Danter Company.
In Tompkins County, single-family housing is primarily owner-occupied housing, and because of land costs and a lack of sites, the vast majority of it over the last decade (99.87%, all but 17 of 1262 homes) was built outside of the city, mostly in the inner suburbs. Danter’s analysis of potential homebuyers specified a couple of thresholds – one, that a buyer makes a down payment of 25% cash, mortgaging the rest of the home’s sales price; and two, any new product built would cost at least $150,000, which is a fairly conservative estimate to account for labor, land, materials and taxes.
Danter than looked at the “capture rate”, which is the proportion of people in a certain income bracket, who are interested in buying a home. The capture rate is made by looking at the local market and comparing it with similar markets, like other similarly-sized upstate communities or other large college towns in small metropolitan areas.
Their analysis found that to adequately satisfy market demand, the county would need about 313 new single-family homes per year. However, because so little product can be built in the $150,000-$200,000 range, they wrote off those who couldn’t afford $200,000, and came up with a market demand of 225 new homes per year. In the past decade, the county has averaged about 165 new single-family homes per year. Although not as bad as the rental situation, not enough owner-occupied housing gets built in the county.
Here at the Voice, we get a lot of questions asking why aren’t developers building more condos, such as the Lehigh Valley Condos above. It boils down to a few reasons. Ithaca’s a small market, and for those interested in building condos, there are few projects to compare to for a sort of guideline. Apartments tend to be more lucrative and easier to fill since they require security deposits rather than down-payments. For the developer who wants to be more adventurous, banks expect 50% pre-sales on condo projects, meaning they really have to do a lot of marketing and outreach, and have made multiple commitments with buyers before there’s any hope of getting a loan. So, condos are a mostly untested product with substantial financial risk – not an attractive proposition.
Still, for those trying to being condos to market, the Danter study offers another bullet point for their lending pitch – there’s substantial demand. Using the same base specs as with home buyers (25% down-payment, $150,000 price), they came up with market demand for 80 new condos per year, 47 if limited to the more realistic price point of $200,000+ (for example, the 22-unit condo proposal for the Library site was looking at $250,000-$400,000). Proven demand would be an effective argument, though it also has to keep in mind that those individuals might have different wants and needs in size, location and amenities.
Senior Housing, with Services
Another part of the study focused on senior housing with needs – independent living, assisted living, memory care and skilled nursing (nursing homes). As of 2015, all of them have a deficit in supply, a situation likely to worsen as the county’s population continues to age. Danter’s analysis found a shortage of 66 independent living units, 22 assisted-living units, 91 memory-care units, and 86 skilled nursing units. By 2025, those numbers are expected to increase to 296 independent living units, 165 assisted-living units, 158 memory-care units, and 154 skilled nursing units. The vacancy rates for all four categories were well below the national average, another indication of tight supply. At the moment, Brookdale’s 32-bed memory care facility under construction on West Hill is the only project making a dent in those numbers.
Also, perhaps more ominously, this just takes into consideration seniors with needs who can afford to live in these facilities – Danter used a baseline cost of $3,000/month for independent living, $4,000/month for assisted living, and $5,000/month for memory-care and skilled nursing facilities. Without sufficient options, matured adults who can’t afford those prices may be forced to remain in substandard housing situations, or create financial strains on families as relatives assume care-giving roles out of necessity.
The 2016 Danter study also looked at student housing. Now, before you get those angry emails going, the reason to examine student housing is that if sufficient numbers are built on or in conjunction with local colleges (think dorms, or the Maplewood Park redevelopment), it reduces the burden on existing units and frees up space for other renters in the market.
Danter looked at the total numbers of students not housed in dorms (14,474 for Cornell, 2,057 for Ithaca College, and 4,745 for TC3), and, using similar colleges to each as a guideline, assumed 25% of off-campus Cornell students would be interested in Maplewood-type housing, as would 20% of IC and 10% of TC3 students. Exclude the existing student purpose-built housing near Cornell, and add up the figures, and the potential is for 3,194 beds at the current enrollment levels. In other words, about four Maplewoods, or 2.5 Collegetown Terraces.
Now that we’ve thrown a lot of numbers out there, here are some takeaways:
– Some parts of the market are doing a better job at meeting demand than others, but there’s a shortage in virtually every part of the local housing market.
– Depending on your perspective, these numbers bode well (like those condo dreamers), or they’re pretty scary (will we be able to take care of our seniors?). Perhaps both. Challenges and opportunities.
– By sheer number, students clearly have a large impact on the market supply, which can be detrimental in a tight market. But it’s not just their fault. All the student housing in the world won’t help the lack of adequate housing for seniors with special care needs.
– The need is clearly identified. Now the question becomes the where do you build it, and the how do you do it while maintaining a high quality of life?
You’ll notice that we left out a lot of the rental market in this discussion. That’s where the study gets a lot more interesting. You can look forward to that discussion in part four.