HOUSING THE HUDSON VALLEY
By John C. Cappello, Partner, Jacobowitz and Gubits, LLP (www.jacobowitz.com) and Joe Czajka, Senior Vice President for Research, Development, and Community Planning, Hudson Valley Pattern for Progress (www.pattern-for-progress.com)
Over the last several years the Hudson Valley has experienced significant commercial development and growth in the form of the Resorts World Catskills Casino, Legoland, the Kartrite Resort and Indoor Water Park, Yo1 Health Resort, other resorts and tourism destinations, many large warehousing and distribution centers, light manufacturing, and some retail. Most of the time and effort of municipal and planning boards have been devoted to the attraction and regulation of such uses. Unfortunately, the local issues of housing have been left on the back burner.
After the 2008 recession, new residential development in our region slowed to a crawl. However, the times they are a-changing. The pandemic has caused many residents to leave New York City and other large cities, or have a second rural or suburban housing option providing more space and safety. This, coupled with the emergence of technology, broadband issues aside, facilitates remote work and results in immigration to the Hudson Valley.
Prospective homebuyers looking to the Hudson Valley are engaging in bidding wars and sellers are often receiving more than the asking price for their homes. These factors, combined with mortgage interest rates at historic lows and very low inventory of homes on the market, has led to skyrocketing home prices. The demand for new residential development is increasing across the region.
This is good news for sellers, contractors, and tradespeople among others. The influx of new residents to the region will also bring increased support for existing businesses and bring new ideas and energy to our community as we emerge from the pandemic.
However, as we plan to reap the benefits of this potential real estate boom it is essential that we appropriately plan to accommodate growth. To that end, there is currently a mismatch between wages and the availability of housing. It is critical for existing and new residents to have a wide array of housing options. These options must include a range of homes appropriately priced for those working in the industry sectors such as warehouse distribution, manufacturing, hospitality and accommodations, and retail.
The current mismatch and disconnect between home prices and wages begs the question, will our children have the option of remaining in the Hudson Valley? Further, will there be housing options for young families seeking their first home or seniors looking to downsize? Finally, will employees at the many recently approved commercial facilities, health care providers, municipal employees, teachers, and other essential workers needed for our community be able to afford housing in our area?
It is vital that our region maximize all the tools available in our efforts to provide a wide range of housing opportunities. It is vital for the long-term sustainability of our communities, the residents, and the businesses in this fragile economy. The new growth must also mitigate and minimize potential adverse impacts to the beautiful yet often environmentally sensitive Hudson Valley region.
The pandemic has exposed the fragility of the economy as the region is witnessing an increased number of people in need of food and housing. The rates of poverty are increasing and more and more residents are in danger of losing their homes. As a result, those suffering homelessness is on the rise and will continue in the near term. With that said, it is important to recognize the need for homeless and supportive housing as the pandemic has exacerbated these issues.
In terms of housing costs and affordability, the general rule is that no family should pay more than 30% of their gross annual income for housing. That includes mortgage payments and/or rent, real estate taxes, and utilities.
For example, a person or family with a single wage earner making $45,000 per year would be able to afford to pay up to $1,125 for housing needs, whether the home is owned or rented. This annual wage would allow for the purchase of a home priced at $120,000, including taxes and insurance. This assumes that the family would be able to qualify for a mortgage and saved approximately $6,000 for a 5% down payment and approximately $7,200 for closing costs.
However, a cursory review of real property sale listings for a majority of our region’s, municipalities will disclose that there are very few, if any, homes for sale at that price. Nor are there many rental opportunities at a price affordable to the very people who are so essential to our community.
It is neither healthy nor sustainable, either from an economic or environmental perspective, for residential development to occur in such a way that our essential workforce cannot live in the communities that they serve.
Most demographic studies of the Mid-Hudson region indicate a steady decline in the age group between 24 and 49. The lack of housing is a major contributing factor causing a “brain drain” that leads to an inability to retain and attract this age cohort. Further, this decline also inhibits the ability to compete for industries with higher paying wages to locate in the Hudson Valley.
Fortunately, there are several organizations, planning groups, and developers focusing on the problem and providing education on the impact of a lack of housing opportunities and developing new and innovative options to help to address our housing problems.
Locally, the Hudson Valley Pattern for Progress Center for Housing Solutions https://www.pattern-for-progress.org/the-center-for-housing-solutions/ provides a wealth of information on housing trends in the region as well as providing expert analysis and discussion on solutions to the problem of lack of adequate area housing opportunities.
There is a nationwide movement known as YIMBY (Yes In My Backyard) that started in the San Francisco Bay area, as discussed in a great book entitled “Golden Gates: Fighting for Housing in America” by Conor Dougherty. This national effort provides educational material and support for inclusive zoning that incudes multi-family housing. Just type YIMBY into any search engine and you will find a wealth of information.
One exciting and innovative project was completed in Kansas City in 2019 by The Veterans Community Project where 49 “tiny houses” ranging in size from 240-320 sq. ft. were constructed on a five-acre plot to provide decent transitional housing for homeless veterans (see www.veteranscommunityproject.org for more info).
This concept of tiny or smaller starter homes and multi-family dwellings can and should be replicated in many of our Hudson Valley communities. These developments can provide diverse housing opportunities on smaller footprints with much less land disturbance than traditional large suburban single family housing. In addition, by incorporating energy saving building design and alternative energy features, any adverse environmental impact can be further minimized.
We have a great opportunity in the coming year to come together as a community to start to address the need to provide for reasonable and sustainable housing for all those wishing to live in our region.
Over the course of this coming year I will be gathering information regarding many of these innovative options and the educational information available and posting on our firm website under the heading Resources/Housing the Hudson Valley.
This is not intended to be legal advice. You should contact an attorney for questions regarding your specific situation.