ITHACA, N.Y. — 402 S. Cayuga St. has been a problematic site. The parcel, which previously held an apartment building demolished in 2001, was foreclosed on and turned over to the Ithaca Urban Renewal Agency (IURA), the city department in charge of trying to improve Ithaca’s housing and economy, especially for families of modest means. The goal for the site was, quite reasonably, to sell it someone who would be willing and able to build affordable housing on it.

It seemed like an easy move when the IURA reviewed bids and offered to sell the land to non-profit affordable housing developer Ithaca Neighborhood Housing Services (INHS) in 2013 to facilitate the construction of four for-sale townhouses. The site would be developed into affordable housing, it would generate some new tax revenue, everything looked great. The planning board approved and INHS had been awarded some grant funds to cover the costs.  But then the construction costs rose too high, and INHS was unable to move forward with the plan. They ended up returning the grant money. A local couple proposed a four-townhouse plan, with three market-rate units and one affordable unit, but the affordable unit required a grant to subsidize the costs, and the grant wasn’t awarded, so that plan didn’t move forward either.

Next up to bat was the Tompkins-Cortland chapter of Habitat For Humanity (TCHFH). Like INHS, they too proposed four townhouses for low-income households, and the project was approved and given grant funding. However, their costs also rose beyond what they could afford, and there were legal issues with easements and the need to establish a Homeowner’s Association, which TCHFH didn’t want to do. They had to cancel their development plans for the site. The IURA was now batting 0-3.

Finally, it looks like there is a plan in place to move forward with affordable housing on the site. This fourth plan also happens to come from INHS – four townhouses, but with a different construction approach.

“We’ve always been interested in the site, we were just having trouble making it work financially.  There is significantly less subsidy available to build for-sale homes than there is to build rental housing, and the city has been clear that they wanted for-sale homes in this location, they own the land.  This time around we are working with a modular builder, which has reduced construction costs and INHS is also devoting a significant amount of our own internal funding to the project to close the remaining gap,” said Lynn Truame, senior real estate developer for INHS.

By working with modular builder Cayuga Country Homes, INHS was able to rein in the construction costs. Think of it like a Lego kit – the pieces are built off-site and lifted by crane onto the foundation, where they are bolted together and finished out. The revised plans were approved by the Planning Board last month, and both INHS and the city are confident the plan is workable – enough that the IURA has entered into a sales agreement for the South Cayuga Street property.

As part of the effort to keep the $850,000 project financially feasible, the project will also be “mixed-income”. Two of the units will be set aside for prospective buyers making at or below 80% of area median income, while the other two will be middle-market, set aside for prospective buyers making at or below 100% of area median income. For a family of three, that means they must make equal to or less than $60,650/year to qualify for the lower-priced 80% AMI units, or equal to or less than $75,800/year to qualify for the 100% AMI units.

“Ithaca has an extremely low rate of homeownership, and a big part of that is our high housing costs. There’s a huge need for affordable for-sale housing in the City (and in many other parts of the County) and it’s part of INHS’ mission to address that need.  It’s challenging to find appropriate parcels for development and to assemble enough financing to keep the sales costs affordable, but given those challenges, we still think it’s realistic for us to build 3-4 affordable for-sale homes every year,” said Truame.

The units would become a part of INHS’s Community Housing Trust, which will lock them in as affordable housing for 99 years.

With all the approvals in place, INHS intends to start construction in the next few weeks. Once underway, they should move along quickly – as an extra benefit of the modular approach, Truame notes that the four townhomes should be completed and for sale by the end of the year.

Brian Crandall

Brian Crandall reports on housing and development for the Ithaca Voice. He can be reached at