Sunday, March 28th, 2021

This week’s Blog is a collaborative effort between Joe Czajka and John C. Cappello, Partner, Jacobowitz and Gubits, LLP (www.jacobowitz.com).

Over the last several years, the Hudson Valley has experienced significant commercial development and growth in the warehouse/distribution, hospitality/leisure/tourism, and retail industry sectors. Although the later two industries have been hit hard from the pandemic, recovery has already begun. The growth in these three industry sectors brings the need for additional housing and only exacerbates the fact that local housing issues have been left on the back burner, especially in terms of affordable housing.

Simultaneously, the pandemic has caused many residents to leave New York City and other large cities. Some are making a permanent move and others, with the financial ability, have a second rural or suburban housing option, both providing more space and safety. The result has been a migration to the Hudson Valley.

The demand for new residential development is increasing across the region – good news for sellers, contractors, and tradespeople among others. This influx of new residents will also bring increased support for existing businesses along with new ideas, entrepreneurship, and creative energy to our communities as we emerge from the pandemic.

However, as the valley benefits from this real estate boom it is essential that we plan appropriately to mitigate displacement through local policy as housing prices rise. With growth, we must also mitigate and minimize potential adverse impacts to the beautiful, yet often environmentally sensitive, Hudson Valley region.

A cursory review of the residential real estate market and rental housing opportunities in a majority of our region’s municipalities shows very few affordable options. To further exacerbate the issue of affordability, looking beyond the extremely low inventory of homes coupled with the very low vacancy rate of rental housing, the cost of development, construction, and maintaining a home has skyrocketed.

The current residential real estate market for our 9-county region shows the continuing trend of rising prices. The following data is sourced from the Hudson Gateway Association of Realtors (HGAR) and the New York State Association of Realtors (NYSAR).

The data clearly shows the median prices have risen dramatically over the last year. With the exception of Putnam County, the data reveals the median prices of the residential real estate market in February 2021 are higher than the peak market years of the housing boom (2005-2008).

When comparing these housing prices against the hourly wages in our industry growth sectors, the mismatch becomes very clear. Based on the most recent data from the Bureau of Labor Statistics for 2019, the typical hourly wage rates in the growing sectors such as hospitality/leisure/tourism ($13.37/hr), retail ($16.92/hr), and warehouse/distribution ($24.06/hr), cannot support the purchase of a home, nor can these wages support the new rental housing prices. We simply need greater affordable housing options for the workforce.

Local leaders, municipal boards, and decisions makers must embrace the demand for housing, address the needs of our essential workers, and offer affordable options to live in the communities in which they work. In order to achieve a range of development opportunities, municipalities should allow for higher residential density in appropriate areas to allow an array of housing with additional density bonus for workforce housing. Other local municipal policies and programs that can be used to address the overwhelming need for housing while simultaneously revitalizing neighborhoods may include:

  • Inclusionary zoning (set-asides)
  • Reduced lot size
  • Tax incentives (PILOTs and phase-ins)
  • Allow for Accessory Dwelling Units (ADUs)
  • Housing rehabilitation
  • Adaptive Reuse of Blighted Buildings

It is neither healthy nor sustainable, from an economic or an environmental perspective, for residential development to occur in such a way that our essential workforce cannot live in the communities that they serve.

Fortunately, there are several housing organizations, planning groups, and developers focusing on developing new and innovative options to help meet our housing needs. Coupled with a number of local municipal ordinances that promote a range of housing options for both rental and single-family development, this can help address the housing needs.

There is also a nationwide movement known as YIMBY (Yes In My Backyard) that started in the San Francisco Bay area, as discussed in a book entitled “Golden Gates: Fighting for Housing in America” by Conor Dougherty. This national effort provides educational material and support for inclusive zoning that includes multi-family housing. Just type YIMBY into any search engine and you will find a wealth of information.

One exciting and innovative potential solution, a tiny home housing development, was completed in Kansas City in 2019 by The Veterans Community Project. The development is on a five-acre plot and consists of 49 “tiny houses” ranging in size from 240-320 SF. These homes were constructed to provide decent transitional housing for homeless veterans (see www.veteranscommunityproject.org ).

This concept of tiny or smaller homes for multi-family dwellings can be replicated in many of our Hudson Valley communities. These types of 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. In fact – the City of Kingston is looking into such a model and recently issued an RFP https://www.kingston-ny.gov/news/?FeedID=1353 seeking a qualified consultant or organization that specializes in providing shelter and support services for the homeless to establish an emergency tiny homes community.

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. It is vital that our region maximize all the tools available in our efforts to provide a wide range of housing opportunities. These opportunities are critical for the long-term sustainability of our communities, for both the residents and the businesses, in this fragile economy.

I’d like to thank my co-author of this blog, John Cappello, who will be gathering information regarding many of these innovative options and the educational information available and posting on the Jacobowitz and Gubits, LLP firm website under the heading Resources/Housing the Hudson Valley.

The Center for Housing Solutions and Community Initiatives within Hudson Valley Pattern for Progress 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. The Center also facilitates a monthly webinar series specifically addressing housing, community development, and the real estate market. In the fall of each year, the Center’s annual Housing Forum brings nationally recognized speakers together for panel discussions on solutions and best practices.


Written by

Joe Czajka
Senior Vice President for Research, Development, & Community Planning, Hudson Valley Pattern for Progress
Executive Director, Center for Housing Solutions and Community Initiatives

&

John Cappello
Partner, Jacobowitz and Gubits, LLP (www.jacobowitz.com).