ITHACA, N.Y. — Despite the demand for housing in Tompkins County, condominiums have never been a popular development. The expense and lengthy approval process in New York can make building condos not worth the effort for local developers, especially when the vacancy rate is low and apartments are quickly occupied.
There are only 143 condominium units in Tompkins County, assessment director Jay Franklin said. But there is demand for condos, a recent study showed, and some developers are opting to build them downtown. The Lehigh Valley Condominiums were recently completed, and Ithaka Terraces are almost complete and now listed for sale.
Visually, condominiums can look similar to apartment buildings or complexes, but instead of renting units, people own them. In a market where high prices can make it difficult to own a home, condos are one option to own local property. Condos can also appeal to young professionals or young families who want to own property, but don’t want all the maintenance that comes with owning a home.
This week, the Housing Committee of Tompkins County Legislature explored why condominiums are scarce locally, and what it takes to build them. The Housing Committee, chaired by Martha Robertson, was created this year to address the critical shortage of local housing.
Getting the green light to start a condominium project is often a tedious process. The New York State Attorney General must approve any project, and financing can sometimes be difficult and require a large portion of units be pre-sold. In a strong rental market like Ithaca, developers often lean toward building apartment complexes because income can come in steadily each year.
In addition to purchase a condo, owners usually have to pay a monthly HOA fee. But one advantage to owning a condominium is the tax benefit because the assessed value of a condo unit is usually a lot lower than what it sold for. A condominium at Sevanna Park in Ithaca, for example, recently sold for about $140,000 but the unit’s assessed value is about $72,000, Franklin said.
Under requirements of the New York State Real Property Tax Law, the value of a condominium project must be determined as a whole, with individual units then allocated a fraction of the overall value. The sum of the individual assessments of each unit cannot be greater than the whole, Franklin said.
The latest condominiums to become available locally are Ithaka Terraces, located at 215 W. Spencer St., a short distance from the Ithaca Commons. The 12-energy efficient units range in price from $299,000 to $434,000. With formal sales just getting underway, one unit has already been sold.
Ed Cope, owner of PPM Homes, and developer of Ithaka Terraces, said they have approval from the attorney general’s office. The process of getting approval is one of the reasons people often don’t build condos, Cope said.
“If you’re a small (developer) like we are, it’s almost prohibitively expensive,” Cope said.
Attorney fees and the whole process for Ithaka Terraces cost at least $60,000, he said. That cost does not account for the time architects spent compiling reports on all the details of the buildings, almost down to the nails used, Cope said. It’s a lengthy process, but is designed to protect the consumer. Developers are not allowed to advertise or sell the property until the New York Attorney General’s Office approves the plans.
Ithaka Terraces began development in 2016, and only received approval from the attorney general’s office a few months ago, Cope said.
The Ithaka Terraces are divided into four buildings, a few blocks from the Ithaca Commons. The architecture and name was inspired by Greece’s hilly landscape. Cope said they originally considered making them rentals, but ultimately opted to build condos because of the demand, and also because of how much they would have to charge for rent because of the cost of the project.
Open houses for Ithaka Terraces will take place the first two weekends of May. For more information, visit www.ithakaterraces.com.
At the Housing Committee meeting, Franklin said a softening local rent demand, plus the demand for condominiums, may make developers more interested in this option.
Featured image: Rendering of Ithaka Terraces. (Provided Image.)