ITHACA, N.Y.—As we wrap up 2022, perhaps the best way to sum up the year was “the year we tried to get back to normal.” COVID wreaked havoc in 2020 and 2021, and while supply chain issues have subsided and inflation has begun to fall back, concerns over rising interest rates and recession fears continue to be on the public’s minds.
Looking at the big picture, during the middle of the year, public sentiment on the economy was the lowest that had ever been recorded outside the Great Recession, and feelings that the economy is poor are even more intensified now than when I did last year’s summary.
But while sentiment continues to be glum, the stock market is volatile, and recession fears are elevated, the economy is not all doom and gloom. The sentiment about the ease of finding a job remains close to historic highs. Economic contraction in the first half of the year turned around to show decent growth in the second half of 2022.
From a real estate perspective, the big story is that housing prices have begun to moderate, but remain close to historic highs. Further to that, that moderation has come as a result of jacked up Federal Reserve Bank interest rates, which significantly raised borrowing costs for mortgages and cooled the home-buying market to levels last seen at the tail end of the Great Recession over a decade ago. The rising interest rates also have impacts on construction loans for apartment and other large building projects, by raising the cost to pay off those loans, and reducing the return on investment, making it harder for those projects to pencil out.
On the local level, after major rises in sales price and steep drops in the number of homes for sale and closed sales in 2021, the same patterns have largely continued in 2022, but on a much more moderate pace. Through October (the latest month available from the Ithaca Board of Realtors), the number of homes for sale is down 17% (vs 46% in 2021), while the number of closed sales is down 2%, after finishing 2021 up 2%. The median sales price is up 2.4%, after finishing 2021 with increase of over 10%. In short, very low inventory, but a property on the market will still sell for a healthy sum, though technically a few percent lower in value than a year ago due to 2022 inflation.
Since some reflection is always healthy, and it can be difficult to keep tabs on everything going on, let’s take a look at the five biggest development topics of the past year.
Regulating Short-Term Rentals
At both the municipal and county level, communities began to take some major steps to address and regulate the short-term rental (STR) market, dominated locally by AirBnB. Over the past year, the county has contracted with tracking firm Harmari to keep tabs on the STR market. Active and unique listings grew 5% from 1,154 to 1,217 units, with around 2,000 bedrooms, practically the same number of hotel rooms in Tompkins County. Ithaca city hosts the most, followed by Ithaca town and Dryden town.
As readers are aware, STRs are controversial. On the one hand, most folks don’t have a problem with their neighbor renting out an in-law unit or their home for occasional tourists and visitors. On the other hand, it deprives the market of needed housing, there have been noise, health and safety concerns with a subset of problematic hosts, and many units are not in compliance with room tax laws, giving them an unfair and illegal advantage over motels and hotels.
With this in mind, the Town of Ithaca followed Cayuga Heights’ lead and became the first large municipality to institute STR regulations. The number of listings dropped by 40% with the town’s new operating permits and limitations on occupancy and rental periods, with hefty fines for violators. Property owners both in favor and against STRs continue to duke it out as the county, the city of Ithaca and other communities weigh their own legislation.
Town of Ithaca ends controversial short-term rental discussion with slew of new regulations—The legislation passed unanimously, ending years of committee work on the issue and setting up a framework for nearby municipalities as they grapple with short-term rentals. However, there was still significant resistance from some members of the public. The Ithaca Voice
Town of Ithaca’s new short-term rental regulations begin — with neighboring governments watching—The Town of Ithaca took the lead on legislating Airbnb rentals, and now other Tompkins County governments are monitoring the impacts. The Ithaca Voice
Cayuga Heights steps up enforcement against unlicensed short-term rentals—Cayuga Heights announced new software to monitor STRs and ensure that rentals are operating properly, enabling the village to step up its punishments for violators. The Ithaca Voice
City receives policy proposals for Airbnb legislation—Assumed policy goals that the proposals attempt to answer include preserving housing affordability in the long-term rental and home ownership markets. The Ithaca Voice
The workers rise up
One of the bigger headlines, both locally and nationally, is the rise of workers’ rights groups and unions, which have seen a surge in applications and vote for membership. Post-pandemic, labor shortages have been widespread and staff stretched thin; the unionization drive largely stems from an economy where workers are in short supply and in a better position to demand better conditions. This drive to organize has met with mixed success, with perhaps the best national example being the surprise win for a unionization vote at an Amazon warehouse Downstate, while similar votes at other warehouses failed.
Locally, the story is similar, with Starbucks, itself subject to a wave of unionization drives at stores across the country, though that had slowed as the corporate giant has fought back in various ways, rewarding non-union stores and allegedly closing union shops in retaliation. That dynamic played out when Ithaca, the first city where all Starbucks unionized, saw the closing of its College Avenue Starbucks location, a highly controversial move that the National Labor Relations Board declared illegal. Meanwhile, Gimme! Coffee, a local mainstay, saw its union falter but its ownership turn to a co-op format where workers can buy into ownership.
All three Starbucks locations in Ithaca successfully vote to unionize—The quick-moving unionization effort at Ithaca’s three Starbucks locations has proven victorious after votes were tabulated from stores in downtown Ithaca, on South Meadow Street and in Collegetown. Organizers say it is the first municipality to have all of its Starbucks locations vote to unionize. The Ithaca Voice
Starbucks workers from last two remaining Ithaca locations striking over more union-busting allegations—Workers at the last two open Starbucks locations in Ithaca are striking after another episode of what they allege is retaliation against them for unionizing by the company. The Ithaca Voice
NLRB finds several violations against Ithaca Starbucks, requests Collegetown location be reopened—The National Labor Relations Board delivered a surprising blow to Starbucks Tuesday night, declaring that the company should reopen the Collegetown location it closed earlier this year while also setting a hearing date to settle the myriad labor cases filed against Starbucks by Ithaca employees. The Ithaca Voice
Gimme! Coffee: Tale of a union unraveling—The path to decertification is marred with interpersonal conflict among union members, twisted by COVID-19 stress and uncertainty. Yet, The company realigned and transitioned into a worker-owned co-op in July 2022, giving all employees the opportunity to buy into the business at a realistic cost and share its profits, as well as share decision-making powers and have access to Gimme! Coffee’s financials. The Ithaca Voice
Cornell does its research
Over the past few years, Cornell’s campus investments were generally on ancillary functions—student housing such as the new North Campus and Maplewood, a visitor’s center, the expanded student health center, the new Hoy baseball field. There have been some investments in educational functions like as well, like the new Mui Ho Fine Arts Library and the College of Arts & Sciences offices in the new Klarman Hall. However, one of the research university’s core premises, research, had not seen quite the same investment in expanded facilities in Ithaca these past few years.
This isn’t to say the other aspects aren’t important; they certainly are. But focused research, in its essence, is what moves society forward; the advancements in science and technology such as computers, cancer treatment, medical devices, and sustainable energy and materials. The Silicon Valley and Wall Street types get all the attention, but they don’t like throwing money at “what if’s” for public benefit. Those “what if’s” are discovered, published and produced in offices and labs at places like Cornell. Not only does research have potential large-scale impacts, it also brings in grant dollars for local purchases of equipment, academic visitors, and jobs to organize and run it all.
This past year saw a number of big moves from Cornell towards new frontiers in scientific and technological research. Those include the new building for the Ann S. Bowers College of Computer and Information Science, the new Atkinson Hall for sustainability and immunology, an expanded Synchrotron facility, and an expanded Thurston Hall for biomedical engineering. If you want to move humanity forward even as the culture feels wrong (as it always has when you take the rose-tinted glasses of nostalgia off), this is how it happens, and Cornell and Ithaca are doing their part.
Cornell plans new $100M computer science building on Hoy Field—It’s been in the works for a couple of years, and the plans are finally making their big debut. In a release Wednesday morning, Cornell’s revealed its newest Computer and Information Science (CIS) academic building to the public. The Ithaca Voice
Cornell plans $30 million addition to Engineering Quad—The addition would serve as the new home for Cornell’s Meinig School for Biomedical Engineering, Cornell’s fastest-growing engineering program. The Ithaca Voice
Schumer announces $8.5M for Cornell’s particle accelerator lab—The $8.5M adds to a $32M expansion project breaking ground at the CHESS facility. The expansion of CHESS will add over 150 jobs in science and tech at the facility. The Ithaca Voice
Gallery: See what’s under construction at Cornell this summer—The new 104,000 square-foot Atkinson Hall, to be built east of the Ag Quad on Tower Road, will host several disciplines, including research space for environmental sustainability, public health, cancer biology, immunology and computational biology. The Ithaca Voice
What’s old is new again
Generally speaking, after some of the high-profile new construction projects announced over the past couple of years, like the Collegetown Innovation District / Catherine Commons project, the Green Street Garage developments, and the waterfront project, this year didn’t quite see the same splashy headliners.
One thing that we did see in 2022, though, is a renewed interest in rehabilitating and renovating existing structures, in Downtown, on South Hill, and elsewhere in and around Ithaca. Generally, these renovations are industrial or commercial to mixed-use, usually in the form of ground-level retail. This is generally a safer approach to development, as it’s often easier and cheaper per square foot to renovate than to build fresh, so long as the hidden surprises are kept to a minimum.
Large renovation projects seek state grants with city help—The office space in 115-121 and 123 South Cayuga Street would be converted into 16 new housing units on upper floors, while the ground-level retail space would be renovated to house a new restaurant tenant. The Ithaca Voice
As office market shrinks, second Downtown site plans conversion to apartments—Plans detailed by Travis Hyde Properties call for conversion of the now-vacant office floors of 401 East State Street into 46 market-rate apartment units, the “Gateway Lofts,” plus ground level retail. The Ithaca Voice
Cliff Street Retreat developers seek abatement from IDA—The project will convert an industrial plant into ten apartments, six hotel lofts, and four hotel cottages. Plans also call for a neighborhood café, a potential neighborhood bar/lounge for after-hours gatherings, and boutique retail and office spaces. The Ithaca Voice
Former Emerson Power site on South Hill gets new ownership, new branding—The long-incubating Chainworks District planned for Ithaca’s South Hill has a new name and a new primary developer as of this month. Goodbye “Chainworks,” hello “Southworks.” The Ithaca Voice
A home for the homeless
I’ll be honest, in thinking of the fifth segment to round this out, there were a few close contenders. For one, there’s been a lot ado about cannabis legalization and the appearance of sticker shops, legal growers and dispensaries in and around Ithaca. Another contender, if I had to pick any one project over the past year that stands out, would be The Ithaca Gun redevelopment by Visum Development into “The Breeze Apartments.” However, I’ll patiently wait until shovels are in the ground (and trucking dirt to the landfill) before celebrating the revitalization of one of Ithaca’s premier brownfield sites.
One of the stories that continues to persist as a major story is Ithaca and Tompkins County’s homelessness crisis. Now, some readers might say this isn’t “economic” in the strictest sense. But fundamentally it is, given inflation and Ithaca’s high rents. A lack of housing, overcrowded shelters and rising costs have contributed to a pervasive struggle with finding adequate shelter and resources for the unhoused. Adding to the controversy is a general hands-off policy with established encampments such as “The Jungle.” While “out of sight, out of mind” might work for some, crime, sanitary issues and safety concerns are a major worry.
There is no magic wand that fixes the problem. Permanent lower-income housing options is one helpful component, helped by recent additions such as Vecino’s Arthaus, Lakeview Health’s West End Heights and Ithaca Neighborhood Housing Services’ Founders Way. But issues persist with dealing with homeless people that are difficult to house because of drug abuse, a history of crime, or other barriers.
The city is exploring options for sanctioned encampments, but in a city known for its red tape, the debate is slow and arduous. Meanwhile, in the surrounding towns such as Newfield, the bureaucracy is less stifling, but the sentiment against places like the Second Wind Cottages, which offers low-barrier housing to homeless men, is rising. As housing costs continue to rise and access to treatment and health services becomes difficult with stretched staff and difficulties in access, the crisis will not improve unless there’s a more concerted countywide effort.
New affordable housing complex introduced in Ithaca—The Ithaca Arthaus, a 123-unit income-based apartment development, opened its doors to artists and residents looking for affordable housing. The complex includes arts-related community facilities and 40 homes for young people in need of support services. WENY
Opening of special needs housing in Ithaca “a long time dream” fulfilled—Ithaca is not an easy place to build affordable housing or special needs housing. For Lakeview Health Services, the opening of their new West End Heights building at 701 West Court Street is something of an accomplishment in itself, the culmination of years of planning and effort. The Ithaca Voice
Ribbon cut for new INHS affordable housing project downtown—Located at 320 West Buffalo Street where Immaculate Conception Church was previously located, Founders Way offers 75 units of rental housing for residents making 30%-100% of the area median income, including 22 supportive housing units for young adults and survivors of domestic violence. The Ithaca Voice
West End Development Challenged By Homelessness—Our desire to be our best selves and care for our neighbors has led to that population growing and changing, and that is now affecting many of the residents and businesses in the West End, who are experiencing a level of crime and vagrancy that impacts quality of life. How we deal with this subject is perhaps the most important issue Ithaca has faced since the construction of the Commons in 1974. The Ithaca Times
City mulling various options to address homelessness as weather warms—In reaction to mounting complaints about encampments creeping closer to businesses and other residences, the City of Ithaca is grappling with how to best address the homeless population this year. The Ithaca Voice
Newfield Town Board Opposes Second Wind Expansion—”I just think it’s not safe for the neighborhood,” [Legislator Randy] Brown said, “and I don’t think it’s fair for them to outsource this to Newfield. I just don’t think it’s right.” The Ithaca Times