Hudson Valley, We Have a Problem.
Sunday, October 24th, 2021
Hudson Valley, we have a problem. It’s been brewing for a while and it’s only gotten worse in the last few years: We do not have enough homes available for the people of our communities.
It’s certainly not a problem that is unique to our region – communities all over the United States are faced with the same challenge, but where we live it is a critical issue and we really need to figure it out.
Why is this an issue?
Affordability. The Law of Supply and Demand is a fundamental concept in modern economics telling us that prices increase when supply is reduced or when demand increases. When we look at housing inventory here in the Hudson Valley, we’ve seen both a reduction in inventory and increased demand. As a result, the Annual Median Sales Price in Hudson Valley counties rose between 5.7% in Putnam County to as much as 36.8% in Sullivan County, an astounding increase in pricing ranging from $19,550 – $83,300 from 2019 to 2020.
Now, if you’re a homeowner and you gained instant equity as prices rose, that may sound like great news… unless you decide to sell and then can’t find or afford a new home. Again, a lack of supply.
So, now we have increased Buyer competition, evidenced by the anecdotal stories we’ve all been hearing about for the last year – a home is listed for sale, 30 showings scheduled in 48 hours, the Sellers receive 22 offers above asking price. From the Buyer’s perspective, the competitive fury is exhausting, leading them to make offers well above asking and often waiving appraisal contingencies. If the Appraisal comes in lower than the Purchase Price, the Buyer then must make up the shortfall – that’s cash out of pocket, in addition to the original down payment, inspection fees, and closing costs – an expense that not all Buyers can afford, which means they cannot be competitive in this market. They’re out of the game.
This theoretical good news for the Seller is in effect neutralized by this next step when they encounter the same dynamics on their own purchase, as they’ll also be forced to participate in the overpaying of purchasing or renting. The sale process has now ground to a halt.
When the dust settles for both sides of the sale process – for those lucky few who survive the highly competitive market – they will both bear higher county, town, village, and school taxes, which are frequently based on estimated (and some actual!) market value. No one is winning.
The Hudson Valley, especially the villages and cities, has some of the oldest housing stock in the state.Our housing stock has a lifespan of about 75 to perhaps about 100 years. IF it’s built well and maintained well. IF we thoughtfully replace and upgrade major building elements and systems such as plumbing, heating, electric, and energy upgrades, to keep energy costs manageable. If we don’t put resources into maintaining the existing housing stock, it either becomes so dilapidated that is needs to be torn down or it is in such disrepair that revitalizing it becomes too expensive to maintain affordability, something that greatly contributes to gentrification.
As the housing stock diminishes, we also have to build new homes to replace it. With rising construction costs and cumbersome development processes and requirements in local municipalities, the break-even point for developers means that they often focus their attention on building homes that well are above the median price point. Restrictive zoning that includes minimum acreage requirements also dampens the construction of multi-family units – townhomes, condos, apartments – that could be good affordable homes for teachers, nurses, retail and transportation workers, and the many other essential workers who carried us through the Pandemic. Without this affordable housing stock available, these essential workers often have to commute long distances for work, a contributing factor to the workforce shortage we’re experiencing.
This spike in housing costs is happening at a time when the economic bounce back from the Pandemic and supply chain constraints are resulting in generalized cost of living increases – everything is more expensive. And our wages and salaries are not keeping pace.
Bottom line: We’re making housing inaccessible to people.
So, what are we going to do about it?
This week at the Hudson Valley Housing Forum titled, “A Housing Crisis: Finding a Place to Call Home,” we’ll be exploring exactly that question.
DAY 1: A crisis of inventory from the national level to the local level – the need for new and the preservation of old.
On Tuesday, we’ll hear from Mike Kingsella, Executive Director of Up for Growth, a 501(c)(3) pro-housing policy and research member network that forges policies and partnerships across sectors to achieve housing equity, eliminate systemic barriers, and create more homes. At Up for Growth, they focus on addressing the issue of housing underproduction
Karen Black, CEO of May8 Consulting, will explore solutions on preserving the housing stock and the characteristics of our communities and neighborhoods. She is very familiar with the Hudson Valley region and brings decades of experience to the conversation. Ms. Black has worked in many communities across the country with housing challenges similar to what we face here. Ms. Black brings a unique approach to improving housing through understanding the fabric of the communities and designing new opportunities to work with existing assets.
DAY 2: Solutions to the issue of increasing supply – zoning, land trusts, and tax credits.
On Wednesday, Kristin Siglin, Vice President of Policy and Partnerships with the National Community Stabilization Trust (NCST) opens up day two of the Housing Forum. Ms. Siglin leads NCST’s policy advocacy to help communities address blight, and high rates of vacant, abandoned, and distressed properties. She also works to foster sustainable homeownership to build assets for individuals and neighborhoods. Ms. Siglin will provide a presentation on the proposed Neighborhood Homes Investment Act, which is designed to revitalize distressed suburban and rural neighborhoods with federal tax credits and mobilize private investment to build and rehabilitate half a million homes over the next 10 years. Ms. Siglin will also provide an overview of the proposed federal bills to improve our housing inventory.
Michael Anderson from the Sightline Institute out of Portland , Oregon, will discuss how to revise single family zoning to help meet our housing challenges through small incremental development. Mr. Anderson will speak to messaging campaigns, public outreach, and coalition building on “Re-legalizing the Missing Middle Housing.”
Brenda Torpy from the Champlain Housing Trust and Brian Pine, Director of the City Community and Economic Development Office in Burlington, Vermont. Ms. Torpy and Mr. Pine will explore successful models used by Community Land Trusts to increase housing inventory and preserve affordability of single family and rental housing.
DAY 3: Raising the inventory of multifamily homes – policies, programs, and financing.
On Thursday, Baaba Halm, Vice President and Market Leader, New York, Enterprise Community Partners, leads a 50-person cross-functional team delivering program, capital and policy solutions to address New York’s most complex housing challenges. Ms. Halm will deliver a presentation on capital, policy and programmatic solutions for the development of multifamily housing.
Sadie McKeown, Executive Vice President and Head of Construction Lending and Initiatives of the Community Preservation Corporation (CPC), will discuss the importance for the development of a diverse portfolio of multifamily housing to improve and stabilize neighborhoods in the Hudson Valley region. Ms. McKeown will focus on the need to provide flexible capital and technical assistance to owners and developers of small buildings, and the importance of public/private partnerships in the creation and preservation of affordable housing.
After each session, we’ll open up the room to all of the Attendees in The Solutions Lounge, where we set the stage and move these conversations toward actionable steps – we look to find the answer to that question: “So…what are we going to do about it?”
This is a critical issue for our community. We hope you’ll join the conversation so we can collectively come up with the solutions.
Register now: www.pattern-for-progress.org/hudson-valley-housing-forum-2021/
