The post-frame CrossFit Pallas project on Cherry Street being constructed by Fingerlakes Construction looks wrapped-up on the exterior (minus parking lot and landscaping), and the interior is fully-framed out and covered with metal panels on the ceiling, and a combination of metal panels, drywall and plywood sheathing for the walls (perhaps for securing padded panels). The open-ended ducts running along the ceiling will probably be fitted with diffusers, but besides remaining drywall, fixtures and finishes, the building itself looks rather complete.
Odds are, if you poll people on the street in Ithaca and ask them to name the most pressing problem in the City, the prevailing answer would be the lack of affordable housing. Over the years, we’ve managed to run up a housing market demand that overruns housing supply.
The Breckenridge Place ribbon-cutting ceremony last May 26th presented a startling reminder of how the lack of affordable housing threatens vulnerable populations, and why it’s so difficult to accomplish.
Among the speakers was Ithaca Mayor Svante Myrick, whom spoke of his own experiences growing up with housing uncertainty, and at times, literally homeless. It’s important for us to define housing as a basic need in society, but also housing that is located near downtowns, civic institutions, and economic centers, so that residents are able to take full advantage of social and economic opportunities. Svante made the same point by recalling that his family had lived in a nicely-furnished affordable housing complex for two years, but it had been very far from a town center, which severely reduced the benefits of the housing due to the lack of reasonable mobility to places of work, to basic needs like groceries, and to local resources.
Downtown affordable housing developments are tremendously difficult projects to accomplish, primarily due to the cost of building and financing projects under current building codes, costs, and site availability. Not to say building codes, costs, or site availability are to blame: codes keep people safe, costs are largely predetermined due to wages, materials, and technology, and site availability due to existing productive structures and planning considerations.
At the ceremony, Paul Mazzarella, director of Ithaca Neighborhood Housing Services, introduced Stuart J. Mitchell, CEO of Pathstone Development Corp. (project partner-developer), whom emphasized the complexity of the financing and planning involved in Breckenridge. Generally nowadays, affordable housing projects are complicated public/private/not-for-profit deals that leverage a slew of public and grant funding sources with private equity to finance the construction. The legal and tax benefits of each corporate structure are utilized to take full advantage of each of the funding nuances in order to make the project happen, a bit like putting together a financial puzzle set.
Programs like the Federal Low Income Housing Tax Credit (LIHTC), NYS Homes & Community Renewal programs (NYSDHCR), and federal neighborhood revitalization grants are typically oversubscribed, especially programs for urban multifamily housing development. LIHTC is said to be oversubscribed 3 to 1 with project applications each funding cycle. Organizations like Smart Growth America’s LOCUS are actively pushing federal and state governments to gear their programs towards smarter (denser, downtown) developments in order to re-align incentives with the existing and future sustainable American market for housing.
I wanted to present the current picture in Ithaca, and coincidentally, Paul gave a great presentation on housing trends in Ithaca and Tompkins County to the City Planning Committee last February 12th, and has agreed to share the slides here on the blog. Here’s a selection of slides from the presentation with brief explanations:
Housing sales cost trends show that from 2000 to 2013, prices have increased about twice as fast as income growth, and the fastest in urban areas of Tompkins County, especially in the City of Ithaca. The largest percentage of price gains have been in the lowest quartile of the housing market, essentially pricing-out many buyers from the lower end of the market.
Regionally, we have the greatest gap between median purchase price and median family income:
Affordable (defined by a multiplier of median income) home sales volumes have slipped:
Fair Market Rents (FMRs, defined by the federal government at the 40th percentile of median family income) have increased dramatically from 2000 to 2014:
Tompkins County’s FMRs are almost twice as expensive as some nearby counties:
Rental housing in Ithaca is clearly dominated by student housing, which has been the intended consumer for most new multifamily rental development since 1980, however, rental housing development has not kept pace with demand for new units.
The vacancy rate for apartments in the Ithaca urban area is 0.5%, which is far below the 5% rate considered to be a good rule of thumb for a desirable and competitive market. If not enough units are left vacant, the market is incentivized towards supplying sub-standard housing for the revenues the units command. In addition, the burden of finding housing imposes a cost to consumers. There are demographic changes that drive this housing demand: the City of Ithaca has seen minimal population growth (just less than 1%) from 1990 to 2010, while the County has seen growth around 8%. Part of the discrepancy can be traced to the lack of affordable and new housing created in the City.
Employment is arguably the major driver, since living closer to work is desirable; from 2000 to 2013, the change in private employment looks like this:
The New York State Comptroller’s Office recently published a report (March 2014) on housing affordability in New York State, and the figures statewide are quite grim. According to the State, housing affordability is defined by housing costs being a portion of 30% or less of household income. Housing costs are defined not only by rent or mortgage payments, but also utilities, insurance, and real estate taxes. Severe housing burden is a 50% cost-share of household income.
Tompkins County’s numbers may be skewed due to the fact that student households with ACS-sampled low incomes but high rents are included in the Census Bureau statistics, and thus, the reported percentage (47.8%) of rental households above affordability thresholds may not be accurate. The percentage of owner households above the affordability threshold is likely to be much more accurate, at 21.8%, since students generally do not own the property they live in.
Regardless, the reality in Ithaca is that many people are priced out of the market for housing, and the solutions are not easy. Breckenridge was the first affordable housing development in the downtown area in 30 years.
The Second Part in this series will put on “Developer Goggles”: I’ll present and explain a traditionally-financed development pro forma (cost, financing, and cash flow analysis) with up-to-date construction cost information, financing terms, and typical operating revenue and expenses to show a developer’s financial view of building and operating a sample project in Ithaca.
My thanks to Paul for sharing the presentation on housing trends. You can find out more about the mission and history of INHS at their website: Ithaca Neighborhood Housing Services
Well, this one caught me by surprise, but courtesy of a heads-up email (thanks Charles), I grabbed some photos today of this gym structure well underway as of a few weeks ago. I last wrote about the plans back in December, when renders for the 10,368 square foot building on Cherry Street to house CrossFit Pallas and a Boxing Gym were released in site plan review. The owners currently have a gym at 711 West Court Street, but the space is quite small compared with this footprint- here’s their website, and it has a page explaining what CrossFit is.
The structure is actually wood-framed, faced with corrugated metal panels, and what appears to be laminated veneer lumber (LVLs) for the rafters and also LVLs braced diagonally along the top structure walls. The major joints are joined with steel brackets, and the structure is not sitting on a pad, but a graded bed of gravel, with pre-formed concrete support blocks. The rest should probably go up quite fast.
Here’s the site render and site plan image for the future 10,368 square-foot Crossfit & Boxing gym at 241 Cherry Street by Mad4Cherry, LLC. The site plans here were done by TG Miller, and the preliminary building plan documents from STREAM Collaborative. The building would be situated between Evaporated Metal Films Corp and e2e Materials in the Cherry Street Industrial Park.
Members at Wednesday’s Common Council Meeting will be discussing and voting on the divestment by sealed bid of a 3-acre subparcel of 617 Five Mile Drive, the 25-acre City-owned parcel that makes up a portion of the proposed “Amabel” project by Sue Cosentini and Rob Morache of New Earth Living. 22 acres sit on the east side of the railroad tracks, with 3 acres on the west (see map and resolution below).
The plan is to build five small pocket neighborhoods (in a similar vein to their recent Aurora Street Pocket Neighborhood project), consisting of 6-7 small homes per each pocket. The homes will share a common house, food gardens, bike and canoe sheds, and incorporate superior insulation, solar power, rainwater harvesting, and other green features.
Common Council Agenda Item for Wednesday, December 4th:
There’s a proposal for a 10,368 Gross square foot steel-sided building on Cherry Street for a Crossfit Gym, by the company Mad4Cherry, LLC. The floor plan shows a 6,000 SF open gym area, a 1,900 SF separate gym, a couple offices, two locker rooms, and a utility room. Site plans and a map are embedded below. The site is situated between e2e Materials and Evaporated Metal Films Corp. The parcel shows up on the Ithaca Urban Renewal Agency’s (IURA) 2011 real property inventory as a 1.02 acre site for light manufacturing assessed at $180,000 with a lessee “J. Moro”.
Here are the RFEI (Request for Expression of Interest) documents for the IURA’s (Ithaca Urban Renewal Agency) Cherry Street Parcel, first announced back in June. The IURA’s homepage has links to the full application, engineering reports, and support documents- the deadline was last September, the 27th, so there may be applications in the review process at the moment.
Embedded below is the RFEI report, a GIS map, and a survey showing the 2.25 acre subdivision of the original 8 acre parcel the City plans to retain (it’s a section of wetland). The RFEI report explains the IURA’s objective, the site description, the selection process, zoning specifics, and the desired format of respondents. Hopefully we’ll hear soon whether or not there is a potential project here- I haven’t seen anything in the meeting minutes yet.
The Ithaca Urban Renewal Agency (IURA) has officially announced that it is accepting Requests for Expressions of Interest (RFEIs) on its 6-acre agency-owned Cherry St. Parcel that was divested from the City of Ithaca (whom retained ownership of 2.25 acres of the original 8 acre site for the preservation of wetlands). The surroundings are an industrial park, the railroad, and a future extension of the Black Diamond Trail.
I’m not aware of any solid proposals or developers interested in this development opportunity, but I’m sure it’s been on the back-burner for some. Industrial parks can be a difficult environment to develop: zoning is I-1, so one could conceivably build a 40 foot high building on 50% of the 6-acre lot (getting you to 1/2 million SF at 4 stories), but who would fill it? There’s a lot of enthusiasm in Upstate NY about a resurgence in local manufacturing, local goods, etc., but the growth of these industries will obviously be quite subdued compared with the past. However, it will be interesting to see what comes of this, particularly because it will trigger conversations about the future of this area of Ithaca.
INHS’s (Ithaca Neighborhood Housing Services) Stone Quarry Apartments project is included in the IURA’s (Ithaca Urban Renewal Agency) HUD (Housing and Urban Development) Entitlement Program for $370k in funds to help develop this affordable rental housing project.