HomeMy WebLinkAboutSupply, Demand, and Affordability of Housing - City of Ithaca 1987 SUPPLY, DEMAND, AND AFFORDABILITY OF HOUSING
CITY OF ITHACA, NEW YORK
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A Report Prepared as a Part of a Strategic Housing Plan for the
City of Ithaca
SUPPLY, DEMAND, AND AFFORDABILITY OF HOUSING
CITY OF ITHACA
NEW YORK
May 1987
Second Edition
i
A Report Prepared as a Part of a Strategic Housing Plan
for the City of Ithaca, New York.
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This report has been prepared for the City of Ithaca Planning
and Development Board, the Strategic Housing Plan Technical Advisory
Committee, Common Council and citizens, by City of Ithaca Planning
and Development Department, H. M. Van Corti Director.
REPORT STAFF
Paul Mazzarella, Deputy Director o
Katherine Evans, Planner-Data Coordinator
TABLE OF CONTENTS
- INTRODUCTION
DEMAND CHARACTERISTICS
OF THE ITHACA HOUSING MARKET page 1
- Household Characteristics page 1
- Population Changes page 4
- Population Projections for the Year 1990 page 5
- A Population Increase of .41% page 5
- A Population Increase of 5% page 6
- Information and assumptions used
in making a 5% Projection page 7
- A Population Increase of 10% page 9
- Population Changes and Household Formation page 10
- Household Formation and Future Needs page 13
- Vacancy Rates Considered
in Meeting Future Needs page 16
- Rental Tenure Characterizes
the Ithaca Housing Supply page 17
SUPPLY CHARACTERISTICS
OF THE ITHACA HOUSING MARKET page 18
- Recent Housing Production page 19
- New Construction - page 20
- Conversions page 22
- Demolitions page 22
- Implications of
Housing Supply Changes page 24
- The Impact of Cornell
and Ithaca College page 25
- Ithaca College page 25
- Cornell University page 25
SUPPLY AND DEMAND CHARACTERISTICS
THROUGH ANALYSIS OF HOUSING SALES
IN ITHACA AND THE HOUSING MARKET AREA page 27
- Methods Used in Housing Sales Analysis page 27
- Some Features of Residential Sales page 28
- Establishing the Price of Housing page 33
AFFORDABILITY OF PURCHASING A
SINGLE FAMILY HOUSE IN ITHACA page 36
— Definitions of Affordability page 36
- Buying a Single Family House in Ithaca
Using Conventional Bank Requirements page 38
- Cost of Homeownership - A Consumer Oriented
Approach to Affordability page 39
- Determining Percentage of Families Who
Can Afford the Median Priced House page 41
- Determining Percentage of Households Who
Can Afford the Median Priced House page 43
- First Buy the Hardest page 44
- Increases in Cost of Housing vs Income page 45
- Providing a Rental Unit Can Increase
Affordability page 45
RENTAL AFFORDABILITY page 47
CONCLUSIONS page 49
SELECTED BIBLIOGRAPHY page 51
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INTRODUCTION
This report is part of the data gathering and analysis phase of a
strategic Housing and Neighborhoods Plan for the City of Ithaca.
On November 6, 1985, Common Council approved a resolution
initiating a process of data gathering, analysis, problem
definition, goal and objective setting, evaluation and choice of
a series of actions which could be implemented over the short
range future, the next 1-3 years. Council designated the
Planning and Development Board as the committee to work on and
oversee the process. Further, it authorized the Mayor to appoint
a Technical Advisory Committee on Housing and Neighborhoods to
offer additional information and perspectives to the Planning and
Development Board and Common Council. Those two groups have
defined six problem areas for the City to address in the
strategic plan and are actively working to identify, examine and
prioritize actions which will have significant and lasting
effects upon each problem. The housing problems identified for
earliest action include;
1. Lack of availability of housing in a variety of types,
prices and locations in the City.
2. Lack of affordable housing for low/moderate and middle
income households.
3. Neighborhood conflicts resulting between different
groups of neighborhood residents; also, conflicts between
commercial and institutional uses and their residential
neighbors.
4. Parking and traffic problems including lack of parking
space, traffic congestion, through truck traffic on residential
streets and alternate side of the street parking.
5. Inadequate maintenance of buildings and grounds.
6. Lack of effectiveness of neighborhood civic
associations.
Members of Common Council have received copies of all
deliberations on goals and actions of these groups and several
have attended committee and public meetings. It is anticipated
that Council will review recommendations and authorize actions of
its designated committees during the Summer and Fall of 1987 .
This report includes clarifications, corrections and updated
information beyond one of the same title published in September,
1986. Research staff have reviewed additional records and
surveyed additional resource people on affordability issues,
particularly. Further, there is a more extensive discussion on
the projections of population and household formation.
A
Suggestions regarding possible actions included in this report
are some which have been mentioned in the literature on housing.
They are not an exhaustive list of actions possible, nor ones
which upon further study may be feasible for our community. The
Planning and Development Board, the Technical Advisory Committee
and the public have suggested additional actions over the last
ten months which have resulted in dialogue and continued
research. These proposed actions will be presented and discussed
in future reports. In addition, a report on work and
recommendations of the Technical Advisory Committee has been
prepared.
We wish to thank the many key informants who provided information
for this report. A number of informants are listed in the
bibliography; however, many staff people in agencies and
companies have added valuable insights to our efforts and they
have not been specifically cited. We extend our thanks for their
help as well.
•
Katherine Evans, A. I.C.P.
Principal Author and Data Coordinator
April 1987
SUPPLY, DEMAND AND AFFORDABILITY OF HOUSING •
CITY OF ITHACA, NEW YORK
This report comprises some of the initial research in the City of
Ithaca Planning Department's "Housing and Neighborhoods Strategic
Plan. " The purpose of the report is to examine Ithaca's housing
market area and to look at the issues of supply, demand, and
affordability. To this end, the staff have looked at past and
current trends in sales, housing construction, the rental market,
and trends in population and household formation at the local,
regional, and national levels. Because the City of Ithaca is
integrally tied to the wider urbanized area which includes the
Town of Ithaca, the Village of Lansing, and the Village of Cayuga
Heights, those municipalities are included with the City of
Ithaca when reference is made to the "Housing Market Area"
(HMA) .
DEMAND CHARACTERISTICS OF THE ITHACA HOUSING MARKET
HOUSEHOLD CHARACTERISTICS
The population of Ithaca differs significantly from most
communities in New York State. The differences are due to the
presence of large numbers of college students in the area. In
fact, Cornell University and Ithaca Colleae contribute 23,000
s t• C. t 0: . . .0 -t' • ! ll• - o w! •m
reside in the City of Ithaca.
Ithacans reside either in group quarters (7,579 people) or in
housing units (21, 153 people) . Group quarters are facilities for
9 or more unrelated individuals who share the unit (e.g. ,
institutions such as hospitals, nursing homes, dormitories,
boarding houses, sororities, or group shelters) . A housing unit
is defined as separate living quarters with facilities for
separate eating and with a separate entrance or an entrance
through a common hall (houses, apartments, mobile homes, etc. ) .
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People who live in housing units are called households by the
- U.S. Census. A household can be a single individual, two or more
unrelated individuals living together or a family.
A family is a subset of households and is defined by the census
as two or more individuals related by blood, marriage or adoption
residing in a housing unit. Family household typically comprise
the largest household type and often the majority of households
in communities. Though families are the largest single household
type in the City of Ithaca, they do not form the majority here.
Figure 1 shows that families comprise only 3804 or just over 41%
of total households in the City of Ithaca. One person households
and households of unrelated individuals comprise 34.6% and 24%
respectively. of total households, for a total of 5391 or nearly_
59% of all households. These proportions are different for the
Town of Ithaca and the county as a whole where families comprise
around two thirds of all households . A ratio of two thirds
family to one third other households is closer to the national
norm. The large number of non-family households in the City of
Ithaca is mainly attributable to the large numbers of students
who live in one person households (34. 6%) , and households
composed of unrelated individuals (24%) .
FIGURE 1
Household Characteristics by Household Type
Total Households Family HH 1 person HH Other Households
City of 9195 3804 3184 2207
Ithaca 100.0% 41.4% 34. 6% 24.0%
Town of 4910 3265 1132 513
Ithaca 100.0% 66.5% 23.0% 10.4%
Tompkins 29,548 18,058 7572 3918
County 100.0% 61. 1% 25.6% 13.2%
Source: 1980 Census of Population and Housing, Summary Tape File 1
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Figure 2 shows the 'total- population and the total number of
people in various types of housing and households in the City and
- County. The population for the City of Ithaca was 28,732 in
1980. Of these, 7,579 were in group quarters, largely reflecting
residence of students in dormitories and similar facilities.
11,420 people were in families, 6,549 were in households composed
of unrelated individuals and 3, 184 lived alone. About 31% of the
city's residents who lived in housing units lived in households
composed of unrelated individuals. These percentages are similar
to other college towns such as Ann Arbor, Charlottesville and
Berkeley.
FIGURE 2
population Characteristics by Household Type - 1980
Total Population in Population Not in Group Quarters
Population Group Quarters
Pop. in 1-person Other Total Population
Families Hhlds Hhlda in Households
'- Ithaca (City) 28,732 7,579 11,420 3,184 6,549 21,153
54% 15.5% 30.5% 100%
Tompkins County 87,085 11,587 57,191 7,572 10,735 75,498
75.8% 8.7% 14.2% 100.0%
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Source: 1980 Census of Population, Summary Tape File 1
The 1980 census revealed that the largest increase in households
in the United States from 1970 was in non-family households. In
the U. S. , non-family households represented 26. 7 percent of all
households in 1980, cornered with 19. 7 percent in 1970. The
growth in non-family households in Ithaca showed a similar
pattern.
In Ithaca, many non-family households are located in
neighborhoods zoned for single-family and two-family use. There
are many problems associated with the behaviors of households of
unrelated individuals, especially unrelated students, and with
the fact that the majority of such households live in rented
housing units. Examples of problems identified with those
households include additional cars resulting in parking problems,
excessive late night noise and insufficient maintenance of
properties.
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- POPULATION CHANGES
Population changes are due to births, deaths and migration.
There were 10,000 resident live births in Tompkins County between
1970 and 1980. In 1982, there were 1138 resident live births in
Tompkins County for a rate of 12.9 live births per 1000
population. This is lower than rates for the State, or the State
minus New York City, which are respectively 14. 1 and 13.3 live
births per 1000 population. In fact, Tompkins County's birth
rates fall in the bottom quartile of New York State's fifty seven
counties.
Between 1970 and 1980 there were 5300 deaths in Tompkins County.
In 1982, Tompkins County had the lowest resident death rate of
any New York State county, 554 deaths or a rate of 6.3 persons
per 1000 population. This compares to death rates of 9.5 deaths
per 1000 population at the State level and 9 .0 persons per 1000
population in New York State minus New York City.
While births outweigh deaths in Tompkins County between 1970 and
1980, an increase of 4700 people due to natural increase (births
over deaths) is overshadowed by migration (net inmigration = 6500
people) . Many Tompkins County residents come to the area, r
especially Ithaca, to attend college and after approximately four
years, leave the community. Some students or student spouses,
especially at the graduate level, give birth in Tompkins County,
but those children seldom enter local kindergartens five years
later. David Backrack, a demographer with the Ithaca City School
District, has computed the probability of a child being born in
the school district entering kindergarten ( "retention rate" ) . He
reports that over the last several years the retention rate has
averaged .398; that is, of one hundred children born to school
district residents, about 40 children will enter school district
kindergartens. A crude estimate computed by Barclay Jones,
Professor of City and Regional Planning at Cornell, suggests that
over 62,000 people moved to Tompkins County in the decade of the
'70s while around 56,000 of that total moved out during the same
period.
Figure 3 shows decreases in the City's population during the
decades of 1950 and 1960. However, Ithaca and Tompkins County
have been growing since 1970. During the period from 1970 to
1980, the City's population increased by 9 .56 percent. This is a
significant increase, considering that many cities in New York
State and the Northeast United States experienced a net loss of
population during this decade.
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POPULATION PROJECTIONS FOR THE YEAR 1990
The research staff has examined an existing population projection
and developed two additional ones in order to estimate housing
needs for 1990. The three projections estimate that population
will have grown by .41%, 5.00% and 10.00% between 1980 and 1990.
A. A Population Increase Of .41%
The first population projection was prepared in 1984 by the
Tompkins County Planning Department in consultation with
municipal planning agency staff, and was then reviewed and
accepted by the New York State Department of Environmental
Conservation and the New York State Department of Commerce. That
estimate projects that the City's population will increase by .41
percent (four-tenths of a percent) between 1980 to 1990. The
methods used by the County included cohort survival, secular
trend and saturation analyses. Cohort survival methods examine
the age/sex components of the population and look in detail at
trends resulting from expected behaviors of each of those
components.
Secular trend analysis is a projection based upon past time
series data and the tendency of that information to show an
increase, decrease or stability. Secular trends are to be
distinguished from periodic movement like seasonal variation,
intramonth or intraday variation. Saturation analysis is the
examination of vacant land available for residential development,
the density of housing and population as allowed by zoning and
the projection therefrom of the total expected future
population. This increase is then spread over a designated,
reasonable period.
Using a similar means of projection, Cayuga Heights is shown
increasing in population by 8-9 percent between 1980 and 1990.
The Town of Ithaca is projected to have the largest absolute
increase in number of persons, from 16,022 to 17,900 people, an
11.72 percent increase.
The Tompkins County/New York State Departments of Environmental
Conservation and Commerce projection as described above, shows
fewer people projected to reside in the city in 1990 than there
were in the city in 1950.
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FIGURE 3
• . • • i Y, - -
Municipalities & Tompkins County
1950 1960 % Change 1970 % Change 1980 % Change 1990 % Change
ITHACA (C) 29,257 28,799 -1.57% 26,226 -8.93% 28,732 9.56% 28,850 0.41%
ITHACA (T) 7,282 9,072 24.58% 15.620 72.18% 16,022 2.57% 17,900 11.72%
CAYUGA HIS. 1,131 2,788 146.51% 3,130 12.27% 3,170 1.28% 3,450 8.83%
LANSING (V) 3,039 3,450 13.52%
TOMPKINS CO. 59,122 66,164 11.91% 77,064 16.47% 87,085 13.00% 92,556 6.28%
----------------------------------------
Source: U.S. Dept of Commerce, Bureau of Census,1950-1980; 1990 Projections by New York State
Departments of Environmental Conservation and Commerce.
The research team also made two additional population projections
as a result of comments from agencies and the public. The
research team estimated population increase in Ithaca due to 1)
development experienced and anticipated in the City since 1980,
as well as 2) growth experienced and anticipated in the wider
Housing Market Area.
B. A Population Increase Of 5%
This projection is based upon changes in the local population
noted since that 1984 Tompkins County Planning Department,
Departments of Environmental Conservation and Commerce
projection. Changes include:
1. An aggressive building program at Cornell University which
will increase both temporary and permanent job creation in one of
Ithaca's major employers.
2. Increases since 1980 in employment at Cornell University
and Ithaca College.
3. Increase in the number of students attending Cornell and
Ithaca College since 1980.
4. New construction of additional housing in the City of
Ithaca since 1980 as well as conversions of existing buildings to
create more housing units. This indicates that the market will
accept more costly housing in central locations and developers
can make a satisfactory return on investment on higher priced
redevelopment/reuse sites.
On the basis of these changes, it is estimated that between 1550
and 1735 additional people have already moved to Ithaca or will
reside in the City over the 1980 Census count. Those additional
people would result in a 5.3% to 6.0% increase in population over
the decade. Therefore. the research team determined there was
sufficient reason to choose a projection which showed City_ '
population increasing by 5% by 1990, to a total of 30, 169 people.
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o ' • s al. 'n m-k' • a • _o ' ' • �
= 1. Cornell's Aggressive Building Program. Cornell is presently
- implementing a $500,000,000 building construction program at its
Ithaca Campus. Projects range from a new biotechnicalresearch
complex, performing arts center, dormitory renovations, additions
to the engineering, human ecology, veterinary and agricultural
quadrangles, service building additions, athletic facilities and
other grounds and individual building projects. Major
construction of these facilities began in 1985 and is expected to
continue through 1993. Building permits taken out in the City of
Ithaca leapt from about $11 . 6 million in 1984 to over $81 million
in 1986.
In 1986 over $60 million of the $81 million in permits in the
City were for Cornell building projects. Other Cornell projects
were being constructed in the Town of Ithaca and Cayuga Heights.
If one assumes that the non-Cornell community will generate about
$75,000,000 in permits between 1985-1989, Cornell's construction
will represent over four times the non-university construction
rate in dollars to be spent.
With construction projects of this scale, additional staff will
be added to Cornell, both in temporary construction jobs as well
as permanent positions. Permanent employment will be phased in
as new and renovated facilities become ready for occupancy and
organizational restructuring occurs. Estimates of between 300
and 600 additional staff at all levels by 1990 have been made by
various administrators from the Office of Campus Planning and
CISER. No one is very confident of a specific estimate; funding
for a number of positions is dependent upon government grants and
private sector support. Major employment locations for that
employment are identified as the veterinary college, the
supercomputer/theory center and the biotechnology center.
A random sample of pages from the Cornell Directory revealed that
about 30% of Cornell employees listed in that guide reside in the
City of Ithaca. Assuming that trend will continue, between 90
and 180 Cornell employees hired for these new jobs will reside or
seek to reside in the City.
Assuming further that these employees will have an average
household size of 2 .07 (see page 13 for discussion of mean
household size) , we estimate that Cornell employment will result
A in 186 to 373 additional individuals added to the City by 1990.
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2. Increases In Cornell And Ithaca College Employment Since
1980. The Cornell Office of Institutional Planning and the
Personnel Department of Ithaca College report that 518 additional
employees have been added to their staffs since 1980. Once again
_ if one assumes that 30% of these employees live in the City, and
each has a household of 2.07 persons, employment increases in
higher education result in 322 additional residents to the City.
Higher education is Ithaca's basic industry and as that basic
industry increases, additional jobs are created in secondary
level firms, e.g. commercial activities, business services.
While the research team is aware of growth in those services, we
have not attempted to make an estimate of spin off or secondary
employment in this projection. By including secondary
employment, population increases would be even higher.
3. Increases In Students At Cornell And Ithaca. Between January
1980 and Fall of 1986, Cornell and Ithaca College have added just
over 1300 undergraduate and graduate students to their Ithaca
campuses. Administrators in the Office of Residence Life at
Cornell report that enrollment increases will take place at the
graduate levels, with undergraduate enrollment remaining "pretty 2
much as it is presently" . Ithaca College has indicated no plans
to continue its increased enrollment of the past 6 years (nearly
600 students) .
It should be noted that local college administrators have been
projecting no growth since the early '80's and yet both schools
have defied national higher educational trends and seem to have
had no difficulty adding to their student body. It should also
be noted that while nationally there will be a significant
decrease in the number of college age people, this does not
necessarily mean that enrollments at Cornell and Ithaca College
will decline. Applications for admission to both institutions
far exceed the available spaces, and the economic pressures to
maintain programs, the physical plant and staffing will likely
mean that a stable and even growing student population will
occur.
4. Increase In Housing Since 1980. This change confirms that a
portion of the housing demand generated by area population
increase is being satisfied in the City. As described in the
section of this report on housing supply, the majority of new
units have been in structures with five or more units.
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C. A Population Increase of 10%
A basic concept in studying a Housing Market Area is that a
typical housing consumer will evaluate housing within the whole
_ of the area, attempting to maximize whatever criteria are
important to her/him. Compromises occur as a selection is made.
For example, location may overrule initial price limits as
established in the mind of a consumer, or as in the case of a
lower income family, a household will go wherever members can
find affordable shelter in the area.
If the City of Ithaca proves to be a more attractive location,
has housing appropriate for the needs and desires of households,
the City may draw more consumers of the Housing Market Area than
a preliminary analysis of available vacant sites for housing
might suggest. If the effective demand is great enough,
developers will construct housing on more difficult sites, even
ones which have already been developed and where demolition must
be considered in the cost. The implications for population
projections are that people will choose to reside where housing
and other neighborhood amenities are available, especially if a
central location is advantageous. Thus, there is good reason to
believe that Ithaca could grow at a rate similar to the projected
composite rate of the whole Housing Market Area, which is
projected to be about 11% on the basis of trend analysis.
Real estate developers appear very confident of such growth. As
of March 1987, housing proposals in the Housing Market Area at
varying stages of planning and local approval totaled 1975
housing units. While some ofthose units will not eventually be
constructed, 1975 units represents over 10% of the total housing
units existent in the Housing Market Area as of July, 1986 and
nearly twice the number of housing units actually produced
between 1980 and 1986 (993 housing units) .
Additional support for this projection is found in Ithaca's
growth rate between 1970 and 1980. The City grew 9 .85% over that
decade, or at about 1% per year. It is reasonable to project
that the trend of the last decade will continue through this
decade.
For these two reasons. Housina Market Area growth and the City's
. . . w=e, • - s . . c0 _ p s -d
- I . . . .0 '_ . } ' ,c e: _ - . w- - 4 981- • • i - = .t= 4 ' t! 4 .
• - • ! . 0 • e- w. - . e= _ ; - . . . • ; •
31, 606 people by 1990.
A
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POPULATION CHANGES AND HOUSEHOLD FORMATION
"People and the household groups they form give housing its
- reason for existence" (Alonso, 1979) .
Translating total population increases or decreases into changes
in the need for housing is only part of the picture. Housing
involves more than just sheer numbers in the population, it also
involves household size. The same population with a smaller
household size means that more housing is needed. Household
since the 1950s. Thus, even though population is increasing
slowly, the increasing rate of household formation will drive up
the need for housing. Figure 4 and Figure 5 show these trends.
In looking at household size changes and making comparisons with
several different geographic areas, it is most appropriate to
examine the median household size. The median is the midpoint, •
with half the households falling below that indicator as fall
above. It is a statistic less affected by very high or very low
sized households than other measures of central tendency.
Nationally, and at sub-national levels, household size has a
skewed distribution to the high end, toward large household
size. This is due to relatively few very large households which
pull the normal bell shaped distribution curve to the high end.
The use of median household size tends to modify the effect of
those idiosyncratic or unusual units, where mean is affected
equally by each unit, whether they are typical or unusual.
Nationwide, as well as in Ithaca, household sizes have been
shrinking since 1950, and this trend is expected to continue.
In the City of Ithaca, the shrinking of the household is even
more pronounced as Figure 4 illustrates. In 1960, the median
number of persons per occupied housing unit in the City was 2.3,
by 1980 it was 1.98. Between 1980 and 1990, it is estimated that
��. i. • _ • 1 _ • * • - - O6 0 w• • o• • e .
persons per occupied housing unit. Such changes are attributable
to the rise of single parent households, the reduction in the
birthrate, children leaving home earlier, an increase in persons
living alone, increased longevity and the maturing of the "baby
boomers. " The types of households that are growing the fastest
are one-parent households, single households, and households
composed of unrelated individuals. Nationally, from 1970 to 1980,
the number of one-parent families rose nearly 80 percent. In
Ithaca, female heads of household with children under 18
increased from 16.3% to 31% of families with children from 1970
to 1980.
-11—
FIGURE 4
Median Persons Per Occupied Housing Unit, 1960-1990
1960 1970 % CHNG 1980 % CHNG 1990 % CHNG
Ithaca 2 .3 2 .1 -8. 6% . 1.98 -5.7% 1.93 -2.5%
Tompkins Co. 2.8 2 .5 -10.7% 2 .24 -10.4% 2 .02 -9 .8%
N. Y. State 2.8 2. 6 -7. 1% 2 .32 -10.7 2.16 -6.9%
Source: General and Detailed Housing Statistics, Summary
Characteristics for Areas and Places, U. S. Census of Population,
1960, 1970, 1980. Projections based upon trend analysis; the
projection for Ithaca is modified upward (decline in household size
is less acute) due to earlier decline in household size than the
county or state.
FIGURE 5
Median Persons Der Occupied Housina Unit, 1960-1990
■ City
3.0 - ■ County
• Fu
2.S - ® United States
Med.Per.Per Occ.
Unit
1.0 - A
0.5
0.0
RFs
1960 1970 1980 1990 (projected)
Year
The maturing of the "baby boomers" will have a significant impact
on the housing market. Nationwide, of the 17 million new
households that will be formed from 1980 to 1990, about one-third
will be in the 25-34 age group and two-fifths will be in the 35-
44 age group. Tompkins County reflects this trend. From Figure
6 and Figure 7 we see the age groups with the largest percentage
aains are the 25-34 age group and the 35-44 aae grouQ. These
a groups will register 21.91% and 47 .81% increases respectively.
gpe are the prime home buvina aae arouAs. Thus we should see a
preference for single and two family housing locally. Also of
note is the 12.99% gain in the 65+ age group.
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FIGURE 6
Tompkins County-. Chanaes in Age Group 1980-1990
r
1980 . 1990 % CHANGE
0-13 14,898 14,533 -2.38%
14-24 28,325 25,544 -9.82%
25-34 15,967 19,466 21.91%
35-44 8,141 12,033 47.81%
45-54 6,506 7,285 11.97%
55-64 5,996 5,501 -8.26%
65+ 7.252 8,194 12.99%
TOTAL 87,085 92,556
Source: New York State Department of Commerce, Official
Population Projections for New York State Counties, 1980-2010.
According to this projection, Tompkins County is expected to grow
by 6.28%.
FIGURE 7
Percent Change in Tompkins County Age Groups 1980-1990
65+
55-64
45-54
Change 1980- —
1990
35-44
25-34
14-24
-10 0 10 20 30 40 50
Ago GrouP
Nationally, and most likely in the Ithaca market area, we may
expect to see housing developments which respond to the changing
life-styles and incomes of these age groups. Smaller versions of
the single family detached house as well as more condominiums,
townhouses and other higher density developments are likely.
-13-
Retirement communities should become more popular and possibly
units designed for shared living to respond to the increase in
households of unrelated individuals . The partitioning of existing
single family homes into two or more units should also become
more popular as housing becomes scarcer and more expensive and a
greater percentage of the elderly find themselves in large single-
family homes . Some experts predict that the greatest increase in
housing will come about through such partitioning of existing
units (Edward Connolly, 1986) . However, addition of units to
existing structures may be less possible in the City of Ithaca
than other areas, since many houses originally designed for a
single household have already had apartments added to them.
HOUSEHOLD FORMATION AND FUTURE NEEDS
The number of households projected for the future is determined
in the following manner. First, projections of total population
are made for a particular point in the future, for example 1990.
Next, those people living in group quarters are subtracted from
total population, since by definition, only those people living
in housing units are members of households. In Ithaca's
projections, we have held population in group quarters constant
at 7579 people between 1980 and 1990, mostly because additional
Cornell Dormitory space has been and will be offset by dormitory
space reductions and Ithaca College has not added to its
dormitory system since 1980 (for further discussion of college
housing, see section of this report on housing supply) .
Next, this total number of persons in households is divided by
the mean number of person per household The resulting number is
the total number of households at that future point in time. By
subtracting the number of 1980 households from the number, of
households at a future point, one can begin to determine the
potential demand for additional housing units.
Mean household size in the City of Ithaca has decreased from 3 .06
persons in 1950, to 2 .7 persons in 1960, 2 .5 persons in 1970 and
2.30 persons in 1980. The research team used several curve
fitting techniques, including linear trend analysis and modified
exponential curve analysis, and several different combinations of
data, to develop data projections for mean household size in
1990. Estimates of household size varied between a mean of 2.02
persons and 2. 12 persons per household. The research group chose
the midpoint of these estimates for its size estimate of future
households, a mean of 2.07 persons per household.
-14-
Using the three population projections discussed earlier in this
report, Figure 8 shows three estimates of the number of
households in Ithaca in 1990.
FIGURE 8
TOTAL POPULATION AND HOUSEHOLDS PROJECTED FOR 1990
Projection Total Population not Total Households
29.12J_ Housed in Group Otrs 2.07perso;s/hsehld
(1)
1.Pop.increased by.41% 28,850 21,271 10,276
2.Pop.increased by 5% 30,169 22.590 10,913
3.Pop.increased by 10% 31, 606 24,027 11, 607
(1) Number of people housed in Group Quarters held constant between
1970-1980 at 7579 persons.
FIGURE 9
HOUSING NEED "GAP" GIVEN DIFFERENT POPULATION PROJECTIONS
Projection 1990 Households 1980 Households Additional Housing Units Produced Housing Need
1990 Hshlds. or estimated by '90 Gap
1 - .41% 10,276 9,195 1,081 589 492
2 - 5% 10,912 9,195 1,718 589 1,129
3 - 10% 11,607 9,195 2,412 589 1,823
Source: 1980 Census of Population; Projections as described in text.
As shown above in Figure 9, under the three 1990 population
projections there will be between 1081 and 2412 additional
households seeking housing in the City during the decade. When
the number of housing units produced in the City between 1980 and •
1986 is projected through 1990, the total units produced over the
decade is estimated at 589 housing units. This leaves between
492 and 1823 households with a need for housing, unmet by the
existing housing supply or projected new additions to it.
-15-
With a population increase of 5%, the projection which members of
the research team believe to be most likely, there will be a
housing need gap of 1129 units over the decade. If one assumes
_ that those who need housing are composed of household types
similar to the 1980 composition, over 462 families and 667 non-
family households have sought or will seek housing in the City.
Clearly some of these households have already found housing,
either by moving outside the City, by doubling up with other
households or by occupying a vacant unit. The extremely low
vacancy rate in apartment complexes in the City and Housing
Market Area (Figure 11) would appear to verify this assumption.
The quality of City housing has also improved over the last five
years allowing a number of deteriorated, potentially unoccupiable
units to become usable again. Especially notable is improved
housing quality in downtown neighborhoods, where HUD Community
Development funds have been targeted.
Each of the municipalities of the Housing Market Area has a need
for additional housing to meet expected population growth and the
trend toward reduced household size.
FIGURE 10
Household Changes 1980 - 1990
1980 Households 1990 Households Change % Change
Ithaca 9,195 10,276-11, 607 1, 081-2,412 11.7-26.2%
Tompkins Co. 29,548 33,737 4, 189 14.2%
N. Y. State 6, 340,429 6,837,725 497,297 7.9%
Source: U. S. Census of Population, 1980; County and State
population projections are from New York State Departments of
Environmental Conservation and Commerce, Official State Population
Projections; Ithaca's projections are based upon increases ranging from
.41-10.00% State and County mean household size has been projected as
2.57 and 2.4 respectively. Mean household size for Ithaca is projected
to be 2.07 persons per household.
-16-
In 1980, the Housing Market Area (City, Town of Ithaca, Villages of
Cayuga Heights and Lansing) had 11,706 rental units; 6230 of these
_ were in Ithaca.
The apartment vacancy rate for the City of Ithaca and the market
area is very low when one considers that vacancy rates below 5%
will seriously restrict opportunities for housing choices for
renters. A look at Figure 11 indicates that the apartment vacancy
- • m• e n't: f. _ 1• . . : ; 6 •
City of Ithaca, while it was 1.74% for the whole market area.
Since 1983, the rate has remained low and has fluctuated little.
FIGURE 11
Rental Units and Vacancy Rates
For Predominantly 10+ Unit Apartment Complexes/Buildings
Housing Market Area
(units (units)
HMA* surveyed) City surveyed)
Rental Vacancy Rates 1983 2 . 85% 3435 3. 01% 1527
Rental Vacancy Rates 1984 2 .54% 3610 2 .56% 1597
Rental Vacancy Rates 1985 2 . 69% 3531 2.94% 1528
Rental Vacancy Rates 1986 1.74% 3676 1. 61% 1672
*Housing Market Area = City of Ithaca, Town of Ithaca,
Cayuga Heights, Lansing Village
Source: Tompkins County Planning Department Semiannual Survey
of Apartment Complexes
Another index of local vacancy rates is NYSEG's (New York State
Electric and Gas) active electric meter indices. NYSEG keeps track
of the number of meters that are currently turned off. Presently,
in an area which includes Tompkins County and sizeable portions of
other counties, 748 out of 34, 000 residential meters are turned
off. This translates into a vacancy rate of 2 .2%. It must be
remembered that this survey area includes many units outside of the
high demand Ithaca Housing Market Area. _
In addition to meeting the need for 492 to 1823 additional housing
units an adequate vacancy rate may help to reduce inflationary
price increases. Nationally, housing experts generally agree that
a vacancy rate of 5% characterizes a healthy real estate market. A -
vatancy rate closer to 5% could help to create a market in which
there is a choice of housing types and costs, rents and prices rise
more gradually, units can be left unoccupied for repair or •
upgrading and a less hurried move can be made between units.
-17-
RENTAL TENURE CHARACTERIZES THE ITHACA HOUSING SUPPLY
The presence of large numbers of college students in Ithaca creates
a demand for a large number of rental units. This is especially
important because Cornell University only houses about 50% of its
!e! 5 . 0 • 4P • 2 _ • 0 . - = . }_• - - . 0 • : . 8
students to be housed off campus (Cornell Dean of Students Office,
Data from Fall 1985) .
Nearly 45% of the county's housing units are renter occupied. The
city accounts for close to half of the rental units in the county
(Figure 12) . This proportion is much different from the State and
the U.S. where the relationship between owner and renter is
generally reversed (2/3 owner, 1/3 renter) . Only Lansing Village,
with an 87 .3% renter occupancy, has a larger proportion of rental
units than the City.
FIGURE 12
Housing Characteristics : Occupancy Status
Total Occupied Units Owner Occupied Renter Occupied
Ithaca 9,195 2, 965 6,230
100% 32% 68%
Tompkins Co. 29,548 16,312 13,236
100% 55.2% 44.8%
Source: 1980 Census of Housing, General Housing
Characteristics, New York, Table 1, 34-20 and 34-13.
t
-18-
SUPPLY CHARACTERISTICS OF THE ITHACA HOUSING MARKET
In 1980, the Housing Market Area (HMA) had 17,348 year-round
- housing units for its population of 50,963. The greatest share of
housing, 54.9%, was located in the City of Ithaca, with 29 .2% in
the Town, and the remaining 15.9% was split almost evenly between
the Village of Lansing and Cayuga Heights.
A wide variety of housing types make up the area's homes,
including single family detached houses, duplexes and triplexes,
medium to high density apartments, and mobile homes. Single
family houses make up forty percent (40. 1%) of area housing
(Figure 13) ; about one quarter (24.5%) are duplexes to four unit
apartments, and nearly thirty-five percent, (34.6%) , are
apartments in buildings of 5 units or more. Less than 1% of area
homes are mobile units.
FIGURE 13
COMPOSITION OF ITHACA AREA HOUSING STOCK
1980
a
I Unit TOTAL
(attached 2-4 Units/ 5+ Units/ Mobile _.Ali_
MUNICIPALITY or detached) % structure % structure % homes % Units %
City of Ithaca 3226 33.9 3036 31.9 3152 33.1 108 1.1 9522* 100
Town of Ithaca 2729 53.9 852 16.8 1455 28.8 24 .5 5060 100
village of Lansing 284 18.9 141 9.4 1069 71.2 7 .5 1501 100
Cayuga Heights 718 56.8 221 17.5 326 25.7 0 0 1265 100
All Municipalities 6957 40.1 4250 24.5 6002 34.6 139 .8 17348* 100
*Slight differences in housing unit totals between this
figure and others are due to some totals being based on
sample data, and some based on 100% counts.
SOURCE: 1980 Census of Population, Characteristics of People and Housing, Summary Tape File 3 (Sample Survey)
Each muniicipality in the market area is characterized by a
predominant housing type within its share of total housing. As can
be seen above, in the Town of Ithaca and Cayuga Heights, single
family homes predominate, making up more than 50% of housing. In
the Village of Lansing, less than a fifth of all housing is single
family structures while over seventy percent is in structures of 5
-19-
or more units. The City of Ithaca is characterized by nearly
equal proportions of housing in single family structures, two to
four unit structures and in buildings with five or more units. In
contrast to the Town or Cayuga Heights, only 33.9% of City housing
• is single family detached homes. 31 .9% of the City's housing
units are in structures of two to four units per building,
compared with shares of 20% or less in other municipalities.
While a few are in newly constructed duplex homes, most of
Ithaca's mid-density housing (2 - 4 units) is older single-family
homes that have been converted during the past fifty years to
contain multiple units. What to the outside observer appears as
spacious turn-of-the-century houses are often residential
buildings with two to six housing units.
As is evident from information above, a dominant characteristic of
Ithaca City housing is its age. The 1980 Neighborhood Statistics
Program determined that 62% of the City's housing was built prior
to 1940. In contrast, the majority of housing has been
constructed since 1940 in the surrounding municipalities of the
Town of Ithaca and Village of Lansing. Although development in
the last seven years has added to the City's stock of new housing,
the situation in terms of housing conditions has not significantly
changed. Today, 57.5% of the City's housing is over 45 years
old. This characteristic lends the City both its charm and the
• accompanying problems of an aging housing stock. Ithaca's
Community Development Agency determined in 1981 that 33% of all
units in the City's older downtown neighborhoods were substandard.
RECENT HOUSING PRODUCTION
Since 1980 the area has experienced moderate expansion in
housing. Between January 1, 1980 and June 30, 1986, the HMA •
housing supply expanded by a net total of 5.4%. This net growth
takes into account units gained through new construction,
alterations to existing dwellings resulting in the addition of one
or more units (conversions) and demolitions that reduced the
number of dwellings. In actual numbers, the area's housing grew
from 17,347 dwelling units in 1980 (U. S. Census, Summary Tape
File 1) to 18,282 in mid 1986.
The greatest percentage increase in housing occurred in the Town
of Ithaca, where housing grew by 7 .9%, with a net increase of 401
new units. The City of Ithaca experienced a 4.0% growth during
the same period, with a net addition of 383 housing units. The
housing stock expanded by 7 .3% in Cayuga Heights, and 4.0% in
Lansing Village. With this growth, the share in housing shifted
somewhat from the City of Ithaca to the Town. The City share
decreased from 54.9% in early 1980 to 54.2% in mid-1986. The Town
-20-
share expanded from 29 .2% to 29 .9%. The Village of Cayuga Heights
also experienced a slight increase in its area share of. housing.
These recent trends indicate that net housing growth is shifting
• fit � _ • e = - s • • • • .1' .. }_• - A • -
_ Heights. (Figure 14. )
FIGURE 14
Changes in Ithaca Area Housing
By Municipality and Type of Activity
January 1980 through June 30. 1986*
Total Housing % Share Gained by Gained by Lost by Net % 'Total Housing % Share
MUNICIPALITY Units -1980 of HNA New Const. Conversion Demo!. - Change, IncreaseMits - 7/'66 of HMA
City of
Ithaca 9520 54.9% 365 67 -49 +383 4.0% 9903 54.2%
Town of
Ithaca 5061 29.2% 367 38 -4 +401 7.9% 5462 29.9%
Village of
Lansing 1501 8.7% 63 1 -3 +61 4.0% 1562 8.5%
Cayuga
Heights 1265 7.2% 79 13 -0- +92 7.3% 1357 7.4%
All
i♦,w+icipalities 17,347 100.0% 874 119 -56 +937 5.4% 18,284 100.0%
Source: Building Permits issued by each municipality and 1980
Census of Population, Characteristics of People and Housing,
Summary Tape File 1 (100% survey) .
NEW CONSTRUCTION
The yearly pattern of new construction activity closely followed
national construction trends relating to financial cycles. In the
Ithaca area, as in much of the nation, 1982 and 1984 were very
active years. New construction and conversion activity reached a
peak in 1984, when 116 new housing units were constructed in
Ithaca and 201 within the entire HMA. New construction activity
has been leveling off since 1984. If current trends continue in
the latter half of 1986, new construction will match the 1985
level of about 160 new units in the HMA and will decrease by about
-21-
50% to 30 in the City. New construction in the Town, which
totaled 80 units in 1985, is likely to exceed 100 units in 1986.
It is interesting to note that the Town and City have experienced
reverse construction trends in the last seven years. The 1982 and
1984 peak years for the City were years of the lowest residential
_ construction in the Town.
A look at Figures 15 and 16 reveals that not only has the
composition of area housing been changing, but that each
municipality is marked by a distinctive type of housing growth.
FIGURE 15
Growth in Ithaca Area Housing Stock
Through New Construction Activity_
1/1/80 - 6/30/86*
' -Total
2-4 Units/ 5+ Units/ Mobil. all
MUNICIPALITY 1 Unit 2 Structure 2 Structure 2 Homes 2 Units 2
1
City of Ithaca 26 7.1 30 8.2 309 84.7 0 0 365 100
Town of Ithaca 233 63.3 107 29.1 28 7.6 0 0 368 100
.
Village of Lansing 51 81.0 12 19.0 0 0 0 0 63 100
Cayuga Heights 37 46.8 12 15.2 30 38.0 0 0 79 100
All Municipalities 347 40.0 161 18.0 367 42.0 0 0 875 100
Source: Building Permits issued by each municipality.
In 1980, the structures with five or more units contributed only
34.6% to area housing, but new housing growth through construction
of 5 or more unit structures comprised 42 .0% of area housing
growth between 1980 and 1986. Most of this growth occurred in the
City of Ithaca.
Growth has tended to be specialized by type in the municipalities.
Of 365 new units gained through new construction in the City, 309
were apartments in buildings of five or more units (Figure 15) .
In the City of Ithaca, construction of new single family homes
accounted for only 7 . 1% of total housing growth since 1980. By
far the greatest growth of new single family housing occurred in
A the Town of Ithaca. 63.3% of all new housing in the Town of
Ithaca were single family homes; these 233 new units
-22-
constituted over two thirds (67. 1%) of all HMA single family
housing growth. The Village of Lansing was also characterized by
a very high share of single family construction, although it
contributed only 51 units to total area growth. No apartments in
_ 5 or more unit structures were constructed in Lansing Village
during the last seven years, a reversal of construction trends of
the seventies. Cayuga Heights, a characteristically low density
residential area, had a somewhat smaller share of single family
construction then previous patterns, largely due to the addition
of 30 new apartments in the Country Club development on Triphammer
Road.
CONVERSIONS
Conversion activities generally followed construction trends
within the HMA (Figure 16) .
In 1984 the number of conversions peaked at 34, 29 of which were
in the City. An interesting exception was 1983, when new
construction activity ebbed, but conversions continued to increase
through the following year. 56% of the area's 119 conversions
occurred in the City of Ithaca, 32% occurred in the Town, and the
remainder took place in Cayuga Heights.
Within the City, they were scattered throughout the
neighborhoods. Major conversions from non-residential to
residential group quarters occurred in East Hill, specifically
creation of the Sheldon Court Dormitory and Schuyler House. Five
private conversions in Collegetown added additional housing units
between 1980 and 1986. Six conversions took place in the Central
Business District, while four occurred in Lower South Hill. The
Henry St. John School conversion, one of three in the Southside
Neighborhood, created twelve new housing units from an existing
non residential structure. In the Town of Ithaca, most of the
conversions occurred in the North Hanshaw Road and East
Slaterville Road areas.
DEMOLITIONS
Between 1980 and 1986, 56 housing units with no replacement
construction were demolished in the HMA. Of these, 49 or 88%
occurred in the City of Ithaca. With only a few exceptions, all
were in the downtown neighborhoods of the Central Business
District, Southside and Northside, where the City's oldest and
most deteriorated housing stock is located. It was this large
i
—23—
FIGURE 16
9:103013 8SIT t1 A1N111111 II8ACA 90N31103 MAUR/AMA
250- jemmy 1900through Jo6.1986
201
200-
153 161
ISO-
113
1111TS 100- %
71 .....
80
1
.::...
....
•
4 11
0. �i8 moi,........
i E : � . —.-.
-7 -8 -13 -8 -11 -2 -7
-SO-
80 01 02 83 84 00 86
WAN
•
I OONVUSIONS ®1aw0ssituence 0 SNS
60031110111NT a1AN01 IN PIT Of 17lIACA
jemmy 1960Swoop]ua 1966
140 .. 110 116
100 -
•
60 - lt•
60 .. '- , 60
_ - �-
v4.4..•
40
30 '
s:-
40 - 14 17
14 'J'•".,-j--.i 11
0 4 2 4 J,K 6
I
-6 -7 -IO -7 -II -4 -6
-20 -
a
10 11 12 13 14 10 16
-24-
number of demolitions with no replacement structures that
- significantly reduced the City's share of net housing growth.
As Figure 14 indicates, the City of Ithaca actually increased by
432 new units through new construction and conversions, while
those same activities produced only 405 new units in the Town
during the period. The Town, however, had only four demolitions
compared with the City's 49 . Three housing units were demolished
in Lansing Village and none in Cayuga Heights between 1980 and
1986. A significant number of marginal homes remain in older city
neighborhoods, and will require major repairs or replacement in
the next few years. Further, parking requirements for both
residential and commercial activities will result in demolitions
to create parking lots and driveways.
IMPLICATIONS OF HOUSING SUPPLY CHANGES
The area has undergone moderate expansion in terms of its housing
in the last seven years. The composite HMA growth of 5.4% has
occurred primarily in the Town of Ithaca, with the construction of
single family and duplex homes, and the City of Ithaca, with the
construction of new moderate and high density housing.
Comparatively, the Town of Ithaca grew at a significantly greater
rate (7.9%) than the City (4.0%) , during the same period. New
single family homes continue to be built in the municipalities of
Lansing Village and Cayuga Heights, but together contribute less
than 17% to overall housing growth in the area. Conversions
contributed 12% to total positive construction activity in the
area, and those occurred primarily throughout the nineteen
neighborhoods of the City. Almost all demolitions during the
period took place in the City, in downtown neighborhoods with the
oldest housing stock.
If present housing trends continue, the number of housing units in
the Ithaca Housing Market Area will have grown 8.3%, or by 505 new
housing units between 1986 and 1990. For the same period, the City
will have expanded by 6.2%, or by 206 new housing units for its
population. The City will continue to lose part of its share of
area housing at a time when both City and area population is
expected to increase and household size is expected to decrease. •
An increasing proportion of people seeking housing in the City
will be faced with one of two options : they will either have to
locate in the outlying areas and commute into the City adding to
traffic and parking congestion, or make do with a housing
situation in the City they consider inadequate or inappropriate
for their household needs.
-25-
THE IMPACT OF CORNELL AND ITHACA COLLEGE
Ithaca College
Ithaca College went through major campus and dormitory
construction in the 1960s and 1970s. Student enrollment has grown
steadily since 1981, when the enrollment was 4600, to a present
population of 5700. The Ithaca College Administration has not
planned for further increases in student enrollment, and currently
has no plans to expand on-campus housing. At least 25% of IC
students live off-campus, a proportion that continues to have a
significant, and often negative impact on city housing and
neighborhood life.
Cornell University
Cornell University has been characterized by active construction
in the years since 1980. While the actual number of student units
has not increased significantly in relation to enrollment,
University dormitory construction has had a significant impact on
Housing Market Area neighborhoods. In the Fall of 1979, the
University and related fraternities provided 48% of housing needed
by Cornell's 16,963 students. In the Fall of 1985, 50% of
Cornell's 17,476 students were housed on campus and in
fraternities and sororities. The increase in housing provided by
Cornell has taken some pressure off the private housing market,
since 82 fewer students are looking for private housing than was
the case prior to 1985. This has had little impact in Ithaca,
however, since much of the new University housing development has
been on the edge of or off the campus (542 more people housed in
Sheldon Court, Cascadilla Hall and Schuyler House) and the easing
of the vacancy rate for private market housing likely occurred at
the edge of the HMA, far away from Cornell. It is important to
note that rehabilitation of the University Halls dormitories will
reduce the number of students housed by 200 by 1988. In addition,
the Sage Dormitory Reuse Project will remove an additional 198
beds from Cornell's supply (Fall, 1987) . Since additions to
Cornell housing in the City of Ithaca have or will be offset by
losses of student beds provided by the University in the City, the
research team has projected no net increase in Cornell provided
student housing by 1990.
s
It is clear that when adequate university housing is available,
students prefer to reside in the close proximity to the
conveniences it provides. Pressures are taken off more outlying
-26-
neighborhoods that experience congestion and high rents with
- student demand. The recent completion of the Jessup Road
Townhouse complex by Cornell, housing 310 students, is the kind of
construction activity that will need to take place if pressure is
to be taken off Ithaca's and the HMA's residential neighborhoods.
William Gurowitz, Vice President of Residential Life at Cornell
University, has said he would like to see 1000 new spaces added by
1990, especially for graduate students. However, at the October
1986 Board of Trustees meeting where this suggestion was
discussed, and an Ithaca Common Council resolution was presented
which urged Cornell to provide more housing for its students, no
action on any specific policy, plans or projects was taken by the
Board. If plans were accepted by the Trustees during 1987 and
construction were to get underway as soon as possible, it would be
another two to three years before such units were available and
would have an impact on the Ithaca housing market.
-27-
SUPPLY AND DEMAND CHARACTERISTICS THROUGH ANALYSIS OF HOUSING SALES
IN ITHACA AND THE HOUSING MARKET AREA
METHODS USED IN HOUSING SALES ANALYSIS
One of the first tasks of the research team was to establish the
current price of different types of housing in Ithaca and the
Housing Market Area (HMA) . This information was secured by
reviewing over 2000 sales records from the period between January
1983 to May 1986 filed in the Tompkins County Assessor's Office. In
addition, for this updated version (April, 1987) , sales data for
single family residences and duplexes were collected between June
and mid December, 1986 for the City of Ithaca. This resulted in an
additional review of 208 sales records.
The Real Estate Board publishes sales information, including price,
on a quarterly basis, however, Planning Department staff wished to
have information on all sales, not only those which involved a real
estate agent. The Board also reports its data by the whole area
served by its member agents; this includes areas outside of Tompkins
County. Further, the Real Estate Board does not make it easy to
separate out single family residences with additional rental housing
units from single family alone. Classification is more easily
determined from the assessor's records, where the number of housing
units and the form of tenure of those units is defined by the State
Assessor's Code.
The team chose the period between 1983 and the present because State
policy required that, beginning in 1983, sales prices be recorded
from County Clerk's records of sales price, and not inferred from
tax stamps. Occasionally, a purchaser of a property would buy more
tax stamps than the value of the property, intending to sell it in
the near future at an inflated price. The State Board of Assessors'
(Division of Equalization and Assessment) housing type
classification code is shown below:
FIGURE 17
Housing Type Classification Code
210 A dwelling of one dwelling unit (single family dwelling) .
220 A dwelling of two dwelling units (duplex) .
230 A dwelling of three dwelling units (triplex) .
310 Vacant lots or acreage located in residential areas.
330 Vacant commercial land.
411 Apartment other than condo and co-op.
412 Apartment (condominium) , individual tenant ownership of
the living area plus a fractional ownership of common
elements.
483 Converted Residential. Generally a building located in a
residential area which has been converted or adapted for
office space.
Source: Property Type Classification Code, Division of
Equalization and Assessment, May, 1980.
-28-
As can be discerned from the above, the 200 group (210,220,230)
identifies sales of residential housing of 3 or fewer units; the
300 group identifies residential vacant land; and the 400 group
identifies apartments. -
SOME FEATURES OF RESIDENTIAL SALES
Figure 18 below shows the residential sales activity between 1983 -
and 1985. Data from 1986 was only collected through May and was
dropped from this illustration due to that limitation. One of
the things which can be seen from Figure 18 is the seasonal
nature of sales. The highest volume of sales occurs during late
Spring (May) and Summer (June-August) . While seasonality is
generally typical of residential sales, it is especially
accentuated in the Ithaca area due to the economy being so
affected by the educational sector and the school year cycle.
New employees are hired to start in September. They purchase and
move into housing during the months immediately preceding the
start of the academic year. Rental property is purchased so that
apartments can be leased for the school year. With Cornell and
Ithaca College affecting the market so dramatically, other
sellers and buyers less tied to the school calendar find it
advantageous to offer and purchase properties at this same time.
FIGURE 18
Sales Activity Curve.1983 through 1985
City of Ithaca and HMA
Sales oosurisg in
Carving's
Itluas
- Eousiag Marfcet Ares
90
except Itbsaa City 1'\
I i, pli
TO - ,.-.% M
1
I t
i i 11
60 - t
_ �, up
t
Sales _ �� ,. ; l r'` \ 0
t
a) - J I
i .. • i t ,i
21) -
/ tI
0 10
J M M J S M J M M J S N J M M J S N
'83 '84 Mouth '1
Some: Coaudy Assesor's Office d
-29-
Next, the total volume of sales between 1983 and 1985 has been
- steadily increasing both in the City and the Housing Market
Area. Between the beginning of 1983 and the end of 1985, sales
in the City increased by 34% and the whole of the Housing Market
Area by 5.0%.
Recent increases in number of sales. both seasonally and over
• e • 9 - e =s - • • - t . • - I - • •r ' • = _ =
interest rates have fallen. By looking at the chart below of the
adjustable interest rate index of the Federal Home Loan Bank
Board (Figure 19) , one can see that, as interest rates fall,
sales volume increases (compare Figures 18 and 19) .
FIGURE 19
: 111. kb ice__ .* • O • �__ = ; • ' ' •
1984 1985 1986
01/13 - 02/10 11.94 01/11 - 02/11 12.26 01/13 - 02/11 10.70
02/10 - 03/13 11.70 02/11 - 03/12 12.09 02/11 - 03/11 10.40
03/13 - 04/11 11.73 03/13 - 04/10 11.90 03/12 - 04/10 10.46
04/11 - 05/14 11.69 04/10 - 05/10 11.72 04/10 - 05/12 10.24
05/14 - 06/12 11.61 05/10 - 06/10 11.62 05/12 - 06/11 10.00
06/12 - 07/12 11.63 06/10 - 07/11 11.62 06/11 - 07/11 9.80
07/12 - 08/09 11.79 07/12 - 08/12 11.29 07/11 - 08/11 9.83
08/09 - 09/13 12.03 08/12 - 09/12 11.02 08/11 - 09/11 9.88
09/13 - 10/11 12.24 09/12 - 10/12 10.87
10/11 - 11/12 12.43 10/12 - 11/12 10.76
11/12 - 12/12 12.52 11/12 - 12/12 10.86
12/12 - 01/11 12.38 12/12 - 01/12 10.80
Sales will lag behind interest rate reductions as potential
consumers learn about an interest rate reduction, locate a
suitable dwelling, make a purchase offer, and close on the deal
(a 60-90 day process typically) .
In the summer of 1984, when the residential mortgage index was
over 12%, there were 140 properties sold from May through
September in the City of Ithaca. But in the summer of 1985, when
the residential mortgage index dropped to as low as 11.02%, total
sales increased to 181 within the same period for a 30% increase
in sales. Most of the increase was in single family or duplex
house sales, with apartment sales contributing only slightly to
the increase. "Home" properties tend to have stronger ties to
interest rates than do "investment" properties .
-30-
_ The greatest volume of sales by type of housing is sale of single
family residences (Assessor's Code 210) . In the City of Ithaca,
the percentage of single family sales hovered between 50-55% of
total sales from 1983 to 1986. They were 55%, 52%, 54% and 50%
respectively (Figures 20 to 23) .
FIGURE 20
ROUSING SALES HY TYPE, 1983
CITY OF ITHACA
3R •
1R
itrk,
ill Single Family
10$ Dwelling
II
1 R M ® Duplex
75. Triplex
4Rt,
D Vacant
Residential land
0 Apartments
8 Converted
Residential
. ® others
25S
b
-31--
FIGURE 21
1984 HOUSING SALES BY TYPE. CITY OF ITHACA
4X 2%
6%
=
30%
--- 2X
•
11,3X
• singleFly Dwelling
1111111
11 1
I Duplex
/01
•
Triplex
O Vacant Residential Land
13 Apartments
ig Converted Residential
OTHERS
52%
FIGURE 22
1985 HOUSING. SALES BY. TYPE. CITY OF ITHACA
24X
" 2%
—==wiwooMMOMI
2%
.1/444404 5X
/ 2%
4%
54%
II Single Family IN Duplex I Triplex 0 General vacant 0 Residential
Dwelling Land vacant Land
Commercial 0 Apartments Converted P4 others
Vacant Land Residence
-32-
FIGURE 23
1986 HOUSING SALES BY TYPE. CITY OF ITHACA
(JANUARY - JUNE 30. 1986)
I Single Family
11 Dwelling
tOR _
® Duplex
2R
2R �A
ATriplex
4.»r
"
Do Commercial
vacant land
24% ❑ Apartments
• 4%
others
The reader will recall that the Town of Ithaca has a high
percentage of single family homes (64%) in its stock of housing.
Sales of single family housing as a percent of all residential
sales in the Town of Ithaca consisted of 71% in 1983, 52% in
1984, 67% in 1985, and 60% in 1986.
Wide fluctuations in the number of units sold in the Town of
Ithaca can be explained by the construction of new single family
homes and purchase by the unit's first owner. Surges occurred as
new subdivisions of housing became available, a phenomenon which
is shaped by such factors as the large supply of vacant,
appropriately zoned land in the Town, and recent provision of
municipal water to a large portion of that area.
*
-33-
ESTABLISHING THE PRICE OF HOUSING
_ The research team examined both median as well as average prices
of units for each housing type between January 1983 and end of
May 1986. As discussed earlier, median values express the value
of the middle number in a range, or the midpoint. It is a
statistic less subject to wide variations of several extremely
low or, more likely, extremely high priced houses. When the
average is relatively close to the median, either the range of
sales is normally distributed or the few aberrant high prices are
balanced by excessively low prices (resulting in a wide
distribution) . Most research in housing employs median prices as
a more reliable indicator than the average of a population of
prices. On the other hand, the Ithaca Real Estate board
periodically makes reports on average prices in the market area,
as do media sources with whom the public is in constant contact.
In our analysis we decided to use both indicators, median and
average, in order to reach out to varied audiences.
As can be seen from Figures 24 and 25, median and average prices
went up between 1983 and 1986 for single family, duplex and
apartment units in the City of Ithaca.
FIGURE 24
COMPARISON OF MEDIAN PRICES BY HOUSING TYPE
1983-1986. CITY OF ITHACA
*insufficient sales for 230 in
90000 1986
80000
70000
60000toat
Ek
50000
40000 ` ' I Iiedion Price of 13
30000 r - - ■ Medisa Price of '84
20000 _ = I Median Price of '85
t< s
10000 4 Iiedisn Price of '86
ire
0 r.,
210 220 230 411
per apartment unit
-34-
FIGURE 25
COMPARISON OF AVERAGE PRICES BY HOUSING TYPE
1983-1986, CITY OF ITHAC.
100000 sisuffioient sake for
230 in 1986
90000
80000 • t Average Price of '83
70000 • ■ Average Price of 684
60000
■ Average Price of '85
50000 -
- 0 Average Price of'86
40000
30000
20000 — -
10000
0 - - — 'er housing unit
21Q 220 2W 411
type
Only one triplex (3 family unit (type 230) ) was sold in 1986 and
so there is no type 230 entry for that year. Due to few sales of
triplexes, median prices over time show fluctuating results.
While the direction of prices for triplexes is unclear, from
Figures 24 and 25 above, one can see that those properties are
sold at a higher price than single family or duplex structures.
Since apartment complexes (411) can range in size from 4 units to
over a hundred, staff analyzed the cost per apartment unit over
time rather than the cost per property, i.e. all apartment units
on a sale property.
Median sales prices for apartment units rose only 8% over the
three year period, barely one-fifth of the sales increase of a
single family home. In 1983, the median price of a single family
house was $46,000. In 1984, it increased to $47,500, a 3%
increase. In 1985, it increased to $53,000, a 12% increase.
From January to May 1986, the increase was an even greater 23%,
to $65,000 . Median prices of single family, duplexes, triplexes,
and multifamily apartments (411) are shown in Figure 26.
-35-
FIGURE 26
MEDIAN HOUSING PRICES
1983-1986, CITY OF ITHACA
1983-86
TYPE 1983 1984 1985 1986 (6/86) % change
Single 46,000 47,500 53,000 65,000 41%
Dwelling
Duplex 51,000 57,000 61,500 68,250 34%
Triplex 75,875 95,480 83,750 NA 10%
( '83-'85)
Apartment 22,250 22,333. 23,837 23,929 8%
Unit
-36-
AFFORDABILITY OF PURCHASING A SINGLE FAMILY HOUSE IN ITHACA
DEFINITIONS OF AFFORDABILITY
Affordability, according to the conventional loan method used by
most lending institutions today, requires that total annual
payments for principal, interest, taxes and insurance cannot
exceed 26-28% of the borrower's gross annual income. In
addition, those four expenditures (principal, interest, taxes,
insurance And all other indebtedness (loan payments, credit card
balances, alimony, child support, etc. ) cannot exceed 33-36% of
the borrower's gross annual income (see Figure 27) . The borrower
must also have sufficient funds to cover the downpayment (5-15%
of sales price) and closing costs. An example of this approach
is shown in Figure 29 .
FIGURE 27
CONVENTIONAL LOAN REOUIREMENTS
Principal Payment Principal
- - Interest Interest
Taxes Taxes
Insurance Insurance
Other Loan Obligations
4$ Financial Commitments
(child support, alimony)
Total Total
Cannot exceed 26-28% of Cannot exceed 33-36% of
gross annual income gross annual income
A variant on this method is used by consumer oriented groups like
Tompkins County Cooperative Extension and Ithaca Neighborhood
Housing Services. The borrower is advised or is limited to a
mortgage amount which is 40% of income on all housing expenses
and must have accumulated savings to pay a typical 10% down
payment and 8% of mortgage amount for closing fees. " All
housing expenses" include utilities, repair allowances and "other
expenses" like telephone, TV cable, as well as principal,
-37-
interest, taxes and insurance. The research team has chosen this
method to demonstrate the monthly and annual costs of owning a
home in Ithaca (Figure 30) .
Finally, another approach used by the Federal Housing
Administration uses a third rule of thumb. That approach (Figure
28) subtracts net monthly payment obligations (e.g car payments,
alimony, etc. ) from net monthly income. From that balance, one
subtracts $300 if the applicant is single, $400 if a couple, and
an additional $100 for each dependent (e.g. $700 if the applicant
is part of a family of five) . The remaining monthly income
should be enough to cover mortgage payments, interest, utilities,
and $40 per month for repairs and maintenance.
Repair allowance requirements are low with FHA mortgage insurance
programs because 20-25% of covered single family housing is newly
constructed and another 34% is less than 10 years old. The
Federal Housing Administration traditionally insures newer
housing than that found in Ithaca. 75% of FHA insured housing is
less that 25 years old, whereas 80% of Ithaca's year round
housing is over 25 years old.
FIGURE 28
s
FHA MORTGAGE LOAN REQUIREMENTS
Net Monthly Income
- Net Monthly Fixed Obligations
Difference
- Household Living Expenses (depending upon family size)
$300 For a Single Person and $700 for a Family of Five
Difference Available
-► Must be enough to cover mortgage payments,
interest, utilities and about $40 per month
for maintenance
-38-
Each of these approaches uses similar cost items and, as can be
seen, places specific limitations on the behavior of the lender
and recommendations and requirements for the buyer. Each has an
appropriate place in looking at affordability of housing in the
- City and wider Housing Market Area.
Some families or households manage to defy guidelines. Through
heroic efforts at saving, cleverness in money management, friends
and/or relatives who are willing to assist in a home purchase, a
persuasive manner which perhaps convinces the seller to hold all
or part of a mortgage of a normally unbankable family, a
government subsidized agency able to make non-market rate loans
or handyman skills which allow the purchasers to buy a low priced
substandard house, people make their way through the interstices
of the system and achieve homeownership. The drive for
homeownership is strong; people have been and will continue to be
creative in attempts to achieve their goal. We tend to hear
about these "winners" , these clever finaglers. We rarely hear
about the ones who try and fail.
. .
REOUIREMENTS .
The median price of a single family house in the City of Ithaca
was $65,000 in 1986.
In mid 1986, major local lending institutions typically required
that principal, interest, taxes and insurances not exceed 26-28%
of gross family income. Common local underwriting conditions at
that same time were a 10% downpayment, a term of 30 years and an
annual fixed rate interest of 11%. In addition, the borrower
needed to be able to manage closing costs.
Closing costs include bank fees for credit checks, application
review, an appraisal, points, title insurance, a mortgage
insurance start up charge, and services of the bank's attorney;
recording fees; mortgage taxes; services of the buyer's attorney;
structural and systems inspections and a property survey.
Tompkins County Cooperative Extension suggests that the purchaser
should expect to pay about 8% of the mortgage amount for closing
costs.
Using insurance and tax rates as found in our community at the
same point in time, the following example (Figure 29) shows
income requirements for a family as required by banks:
-39-
FIGURE 29
INCOME REOUIREMENTS FOR PURCHASE OF A 565,000 HOUSE, ITHACA. 6/86
TYPICAL LOCAL LENDING INSTITUTIONS' MORTGAGE REQUIREMENTS
For a $65,000 single family house, with a 10% downpayment:
- $58,500 to be financed 211%, 30 year term = $557 per month (1)
$557.00 Mortgage Payment (principal,interest)
125.00 Taxes
15.00 Mortgage Insurance (2)
25.00 Property and Liability Insurance
$722.00 Total Monthly Costs
- Total Monthly Costs, $722.00 x 12 = $8664.00 Annual Costs
Most Banks will not allow these annual costs to exceed 26-28%.
Therefore, Gross Income must be at least $30,943 - $33,323.
(1) Costs will be less if interest rates are lower or down
payment is higher. Costs will increase if ten is shorter than
30 years or if the condition of the house requires an additional
loan for rehabilitation.
(2) Mortgage insurance is required if the downpayment is less
than 20X, and it generally must be paid until 25X of the principal
is paid off (approx. 1/2 the term of the mortgage).
A family would need an income of between $30,943-$33,323 in order
to qualify for a mortgage. Sufficient income is not enough; the
family would need $10,800-$11,200 in downpayment and closing fees
in order to "swing the deal" with a local bank. Without nearly
$31,000 in gross income, a family cannot meet the threshold
requirements of ownership of a median priced home. However,
once a family has met the bank's purchase requirements, actual
costs of owning and maintaining a house may require an income
which is slightly less. Our next example, Figure 30, using a
recommended rule of thumb of Cooperative Extension and Ithaca
Neighborhood Housing Services, shows those calculations.
COST OF HOMEOWNERSHIP - A CONSUMER ORIENTED APPROACH TO AFFORDABILITY
Using this approach, all housing costs cannot exceed 40% of gross
family income. Let us assume again that the owner has paid 10%
down and that a 30 year fixed rate mortgage has been secured at
11% annually. Under this assumption, monthly mortgage payments on
a median priced single family house will be $557 .00 (Figure 30) .
-40-
FIGURE 30
COSTS OF OWNING A SINGLE FAMILY HOME - JUNE, 1986 (1)
DOWNPAYMENT & MORTGAGE ANNUAL INCOME
MUNICIPALITY MEDIAN PRICE CLOSING * PAYMENT (90%)* OTHER COSTS** PAYMENT NEEDED
CITY OF ITHACA $65,000 $11,180 $557 $463 $12,240 $30,600
TOWN OF ITHACA $70,250 $12,083 $602 $404 $12,072 $30,180
VIL. OF CAYUGA HGTS. $133,000 $22,876 $1,140 $556 $20,352 $50,880
VIL. OF LANSING $111,750 $19,221 $958 $452 $16,920 $42,300
*Underwriting conditions set at 10% downpayment, 30 year mortgage, and an 11% annual interest rate. In addition, closing
fees are approximately 8% of the mortgage amount.
**Other housing related costs (2) for a 2 or 3 bedroom City of Ithaca house include:
1. Gas and Electric $115/month
2. Telephone $30/month
3. TV.(basic service) $8/month
4. Water/Sewer $10/month
5. Insurance $25/month
6. Repair/maintenance.(3) $135/month
7. Taxes (based on sales sample, 1/86-5/86) $125/month
8. Mortgage Insurance (paid over 1/2 loan term).$15/month
Total: $463/month
Taxes (per $1,000 assessed value, assessment rates are approximately 50% in Tompkins Co.) (4)
Town of Ithaca City of Ithaca Vit. of Cayuga Hghts. Vil. of Lansing
School $21.46 $22.95 $21.46 $21.99
County $6.073 $5.66 $5.72
Town $2.83 ----- $1.127 $1.67
Village ----- $4.64 $1.50
City ----- $14.80 -----
Fire $2.07 ----- ----- $1.00
Totals: $26.36/$1000 $43.82/$1000 $32.88/$1000 $31.88/$1000
(1) This set of examples assumes that the borrower/homeowner will spend a maximum of 40% of income on housing
expenses and will have savings to pay a 10X down payment and 8% of mortgage amount for closing fees.
(2) These monthly costs could be lower with a higher down payment, lower interest rates on a mortgage or rental
income from the property. Monthly costs could be higher if major repair projects are needed at time of purchase.
(3) Repair/maintenance costs are based upon 6/86 prices for major systems or structural components
protection,repair or replacement on 5 to 20 year schedules, e.g. roof replacement, repainting wood siding and trim,
replace hot water heater, etc.
(4) Assessments may be higher than approximately 50% of sales price on houses which have been substantially
rehabilitated since 1980. Higher assessments are likely to be found in the Ithaca Neighborhood Housing
Services target areas. According to the Tompkins County Assessor's Office, sales do not trigger reassessment.
Assessments to be recalculated in 1988-89 are likely to increase in parts of the City where sales prices have
jumped dramatically.
-41-
In addition to that payment, there are other housing costs such as
taxes, utilities, insurance, repairs, etc. which amount to $463.00
monthly. Total monthly costs will be $1020.00, which means that
annually those costs will be $12,240.00. In order to limit those
- costs to 40%, a family will need to have at least $30, 600 in
annual income (1986) in order to afford ownership of a median
priced single family house in Ithaca.
DETERMINING PERCENTAGE OF FAMILIES WHO CAN AFFORD THE MEDIAN PRICED
HOUSE
In order to determine the percent of families (or households) in
1986 who could borrow for the purchase of an average priced
single family house, 1979 income levels from the 1980 census
(Figure 31) were increased by 6% per year (compounded) . A 6% per
year increase is based upon increases in earnings of employees in
Tompkins County covered by unemployment insurance and is
collected by the N.Y.S. Department of Labor, Division of Research •
and Statistics. This increase was also verified by checking
against average wage increases for employees in Tompkins County
Human Services, City Civil Service Employees, and Cornell
employees.
FIGURE 31
FAMILY INCOME DISTRIBUTION IN 1979. CITY OF ITHACA
50000 more -3R
35000 to 49999 82
25000 to 34999 y 13*
20000 to 24999 142
Inane 15000 to 19999 162
10000 to 14999 162
7500 to 9999 102
5000 to 7499 92
below 5000 92
► ► ► ► 1 ► ► 1
02 22 42 62 82 102 122 142 162 182•
2'
Percentage
Source: 1980 Census of Population and Housing, Neighborhood
Statistics Program for the City of Ithaca, N. Y.
-42-
The income distribution (% in each income category) was projected
from 1979 income data. This decision was made based upon
knowledge of local economic conditions and in consultation with
statisticians from the NYS Department of Labor.
Figure 31 is the family income distribution in 1979. The same
distribution inflated by 6% per year to 1986 is shown on the x-
axis of Figure 32. By locating an annual income of $31,000-
$33,300 on the graph, it can be seen that only about 31-35% of
families in the City could get a local mortgage commitment for a
$65,000 single family home in 1986.
FIGURE 32
PERCENTAGE OF FAMILIES WHO CAN AFFORD A S65.000 HOUSE
CITY OF ITHACA. 1986
Only those families with more
Jima=30,943 annual Income
and enough savings for a down
payment and closing fees can
afford a merlon priced hoose
In Ithaca (1955)
18% .
16%
14% .
12% .
10%
5%
31-35%
5% .
4%
2%
0!L • • •
Below 37.518 311,277 515.039 322.554 $30,072 $37,590 $55,529 Atm.
$7.518 to to to to to to to $75,180
11,276 15,035 22,563 30,071 37,589 55,825 75.179
Source: 1980 Census of Population and Housing, Neighborhood
Statistics Program; income inflated by 6% per year.
Figure 33 shows the percentages of all families in the City of F
Ithaca who are able to afford various priced single family
homes. The percentage of families able to afford a single family
-43-
home in Ithaca declines rapidly as the cost of housing
increases. While 70% of- all families can afford a $30,000 home,
for example, only 20% can afford a $70,000 home.
Unfortunately, during all of 1986, there were only 7 houses out
of 164 sold priced at $30,000 or less in the City of Ithaca. In
reviewing those sales with several local realtors and the
multiple listing reports, the conditions of those properties were
described as "deplorable" or "deteriorated" by realtors, and as
"needs considerable work" or "perfect for the handyman" in
multiple listings. All those houses were on the market between
50 and 105 days, attesting to their poor condition despite a
reasonable price. A long period on the market occurred in a
relatively "hot" real estate market where most houses sold in
less than 30 days. While the median price was $65,000 in 1986,
60% of single family properties below the median cost over
$50,000 with prices clustered in the high $50's and low $60's.
FIGURE 33
HOUSING AFFORDABILITY BY FAMILIES
CITY OF ITHACA, 1986
7 /
03%
%of Fain.Able To Mind 40.44
1øI',
0%• 011011114 Ole .
90 40 50 00 70 ft0 90 100 110 120 190 140 150
Cast of Sinpia Fang Horns
Most in Thousands of Dollanst
0_ s ' 0 •U • 0 O Ci L OLD
PRICED HOUSE
•
Average and median household income in Ithaca is less than family
income. Looking again at the income required by banks to approve
a mortgage for a $65,000 single family house ($31,000-$33,300) ,
only 20% of households would be able to purchase that home under
typical lending conditions existent in June, 1986 (Figure 34) .
-44- •
FIGURE 34
PERCENTAGE OF HOUSEHOLDS WHO CAN AFFORD A 565,000 HOUSE
CITY OF ITHACA, 1986
Only those households with more
than a$30,943 annual Income
and enough savings for a down
payment and closing tees can
afford a median priced single
family house in Ithaca(1986)
25x -
20x -
15% -
20%
10% —
5x
0x . d I t t t •
Below 67,519 $11,277 $15,036 $22,554 $30,072 $37,590 $56.626 Above
$7,518 to to to to to to to $75,180'
11,276 15,035 22,553 30,071 37,589 56,625 75,179
Source; 1980 Census of Population and Housing, Neighborhood
Statistics Program, income inflated by 6% per year.
As soon as one realizes that a household must also have saved
nearly $11,000 for a down payment and closing fees, one can
conclude that in all probability fewer than 20% of households
could afford a median priced house.
FIRST BUY THE HARDEST
According to Carol Anderson, News Editor of Builder Magazine,
"almost everyone agrees that first time buyers are less able to
afford both new and existing houses" . Over and over again
Tompkins County realtors have observed that the biggest hurdle in
buying a home is the ability to set aside and maintain savings
sufficient for the down payment and closing fees. Families with
incomes in a range around Ithaca's median family income, $23,000,
have to exert extraordinary effort and reorder budget priorities
in order to save upwards of $9,000 - $11, 000. Ithaca
Neighborhood Housing Services reports that on its list of over
100 potential homebuyers (households who have completed a
financial report, application and are actively searching for a
home in the INHS target area) , of the 25 households with incomes
of $27,000 or more, only five had savings of $6000 or more in
February, 1987 .
-45-
As house prices escalate dramatically with each passing year,
managing to come up with a 10-15% downpayment and 5-8% of
mortgage amount in closing fees becomes increasingly more
difficult.
INCREASES IN COST OF HOUSING VERSUS INCOME
The increase in median price for a single family house between
1984 and 1985 in Ithaca was 12%, from $47,500 to $53,000.
Between 1985 and 1986 the increase was even greater, 23% ($53,000
to $65,000) ! However, family and household income was only
increasing by 6% per year over that same two year period. The
increasing cost of purchasing a house is fast outstripping the
income increases of families and households.
It is also important to note that, while prices of single family
homes in Ithaca were increasing by 12% and 23% respectively
between 1984-1985 and 1985-1986, sales prices in the Northeast U.
S. Region were only increasing 7% and 16% for the same periods.
Prices are rising faster in Ithaca than in the Northeast in
addition to prices having outpaced the ability of the average
local family to purchase one.
PROVIDING A RENTAL UNIT CAN INCREASE AFFORDABILITY
C
Some purchasers have been able to achieve homeownership by
purchasing a duplex, with rental income from the additional unit
making up the difference between income available for housing
expenses and 40% of gross income. In fact, this was a strategy
employed by Ithaca Neighborhood Housing Services ( INHS) in its
House Recycling Program between 1981-1984. Twenty two buildings
were entirely rehabilitated with Community Development Funds and
sold at market prices with subsidized interest rate loans to low
and moderate income households . Usually, the buildings had 2
units in them at the time of INHS purchase; occasionally a second
unit was added to a single family building. Rents for the
apartments were set at HUD Fair Market levels. The apartments
were then eligible for Section 8 Certificates, and available to
lower income households who might have those subsidies. Thus, a
duplex served two low/moderate income households, while providing
the extra income necessary to make the building affordable to the
owner.
This same model is applicable to today's home buyers and may be a
way for some households with moderate incomes to become
homeowners. However, duplexes are likely to have a higher
purchase price (compared to a single family house in the same
condition in the same neighborhood) , and will require a larger
down payment/closing fee and higher mortgage payments. Generally
-46-
duplexes have higher maintenance, repair, cleaning, taxes and
insurance costs. These costs must be offset by the rental income
generated. Ordinarily, banks will allow no more than 60-75% of
rent to be considered income to the owner.
In addition, renting an apartment may require certain management
- and human relations skills. Those skills, not necessarily those
associated with homeownership, are additional nonmonetary costs
of duplex ownership. For example, six low/moderate income
purchasers of duplexes financed by INHS have had to give up their
homes or face foreclosure due to an inability to collect rents
and/or keep the apartments up to code. INHS now requires that
new duplex owners participate in a course on rental management
before purchase will be approved.
Notwithstanding the additional committment and skills in
management required in leasing a rental unit, given a median
priced duplex (January 1, 1986 - December 30, 1986) and median
rent levels of an apartment in Ithaca ($400, without utilities,
all size apartments) , a family would need an income of $30,000 in
order to afford the costs of owning a duplex in 1986.
M1
1
-47-
RENTAL AFFORDABILITY
Rents in Ithaca are high compared to other Upstate New York
cities of comparable size (1980 Census of Housing, New York
State) . The high rents are influenced to some extent by what the
captive student market can be charged in a low vacancy
situation. Figure 35 estimates the percentages of renting
households in the City of Ithaca who are spending more than they
should on housing.
A general rule of thumb used by financial counselors is that rent
should not exceed 30% of household income. This guide is also
used by the U.S. Department of Housing and Urban Development to
determine rent reasonableness for federal housing programs.
As shown in Figure 35, high rents are clearly a burden on
households from $10.000 to S16,000 because they are paying more
, - 0 I .- • , • . 0 • i - • _ el 4 • t • . - • • ! I = -
income brackets represent nearly 23% of all renting households in
the city or 1, 135 renting households . When one removes all those
with incomes below $16,000, only 33% of all Ithaca's non-student
households who do not receive rent subsidies can afford a
modestly priced 2-bedroom rental unit. The combined number of
below $10,000 per year households (44%) and the $10-$16,000
income per year households (23%) represent 67% of households in
the city.
FIGURE 35
INCOME AND PERCENTAGE OF INCOME FOR RENT FOR 1135 RENTING HOUSEHOLDS*
RENTING A $400/MO. -2-BEDROOM APARTMENT
CITY OF ITHACA. 1986
Income of % of Income Required to Rent a
Renting Households $400/mo. apartment (inc. utilities).
$10,000 48.0%
$11,000 44.0%
$12,000 40.0%
$13,000 36.0%
$14,000 34.0%
$15,000 32.0%
$16,000 30.0%
*Income levels for 1135 renting households with incomes falling
between $10,000-$16,000 annually.
Source: HUD Fair Market Rent Levels, Tompkins County, N. Y.
1980 Census of Population and Housing updated to 1986
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In coming to this conclusion, the research team used "Fair Market
Rent" (FMR) which is $400 per month including utilities for a 2
_ bedroom apartment in the City of Ithaca. While it is understood
that rents on East Hill and Upper South Hill exceed Fair market
Rents, units in downtown neighborhoods are more in line with FMR
as established by the federal government (Department of Planning
Survey of Rents, June 1985) . Naturally, affordability for a one
bedroom apartment would increase and affordability for a three-
bedroom apartment would decrease.
Secondly, the research group assumed that households below
$10,000 are either households receiving some sort of housing
subsidy (e.g. Section 8 certificates, or vouchers, Social
Services Housing Allowances) , or are student households. Thus,
this approach attempts to isolate that critical group caught in
the middle of the affordability squeeze and to eliminate students
and those already subsidized.
It is recognized that there are limitations to these assumptions,
however, the estimate of those for whom rent levels are
unaffordable is felt to be defensible and yet conservative.
I
-49-
CONCLUSIONS
' 0
The Ithaca area housing market is undergoing significant changes
due to a growth in population and the continued formation of new
and diverse types of households. Increasingly, new households
will include nontraditional families and individuals living alone
or in groups. In general, households will be smaller, many will
be in the prime home buying age groups and the majority will be
hampered in searching for suitable housing by low and moderate
incomes.
The development of new housing in the City has not kept pace with
the changes in population and income, thus there is an increasing
problem of housing supply and housing affordability. Innovative
and consistent public direction and management must be exercised
to improve and increase the supply of housing in the City, while
efforts are made to slow rapid price increases which make much of
Ithaca's housing unaffordable.
Without efforts to direct production of affordable housing, we
see the future city as housing more off-campus students,
subsidized lower income individuals and families (through public
housing, housing vouchers and certificates, federal and state
homeownership subsidies, etc. ) and wealthier individuals and
families (in the top third of the income scale) . Younger
individuals and families of moderate means have been and will
continue to be forced to seek housing outside the City. Not only
does the loss of young households threaten the political, social
and economic future of the city, but the commuting patterns of
this group to city and near-city work, shopping and recreational
facilities negatively affects city neighborhoods and buildings.
Street congestion, heavy traffic, demolition of buildings to
create parking "wastelands" and heavy on-street parking and
loading are just a few of the costs of forcing people to go
elsewhere to locate housing.
In addition, one of the attractive features of Ithaca has always
been the nearby countryside. Within a fifteen minute drive, one
could see farms, fields and forests, a privately owned, but
publicly enjoyed "greenbelt" . That greenbelt is disappearing as
cornfields typically become one-acre home sites stretched along
highways and country roads.
To maintain city vitality as well as our rural hinterland, we
must seriously examine land use and zoning patterns, construction
requirements, administrative procedures, and residential
financing structures. In the City alone, based upon predictions
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of the increase in the number of households and the trends in
residential construction, a growing gap between supply and demand
will result in a need for between 500 and 1800 additional housing
units to meet the demand created by newly formed households.
Additional housing is needed for both rental and ownership
tenure, in a variety of locations and with a variety of
amenities. II order to address the growing affordability
.
priced.
Design considerations of the future call for smaller, more energy
efficient housing units. In selected locations, land from side
yards and deep lots could be employed for row housing and mid
block housing construction or adaptation. Where apartments are
appropriate, well designed, moderate density buildings could be
constructed which limit undesirable affects on neighboring
buildings and people. Some clearance of obsolete, worn out
buildings may be desirable to create sites for residences.
Conversion of some large houses to add an apartment or two may
provide some additional housing opportunities, however,
relatively few opportunities exist in this category due to past
conversion activity and present zoning limitations. The adaptive
use of non-residential structures converted to housing can result
in additions to the housing stock. Ithaca possesses a number of
industrial and commercial buildings which could be turned into
housing. Underutilized space over ground level retail stores and
offices may also offer residential site opportunities, especially
in the Central Business District and West End neighborhoods.
Shared living arrangements among several households may offer
cost efficient solutions to local housing shortages.
Financing at below market rates to assist in construction and
subsidizing the purchase or rental of a dwelling has been shown
by the Ithaca Neighborhood Housing Services to be one way of
increasing affordability. With federal sources of funding cut
back, local and state resources must be sought to continue the
efforts of INNS and to expand upon them in terms of wider
geographic areas, larger groups of consumers and more types of
housing. A Housing Fund financed through special taxes and fees,
developer exactions or linkage payments, municipal or agency
bonding and profits from housing management, could provide a pool
of funds which would offer alternatives to the constraints of
bank financing and other factors affecting affordability of
housing.
These proposals represent initial thoughts about actions which
can address the challenge we face in housing. Upcoming detailed
investigation of action strategies and evaluation by public
officials and the community at large will be the next step toward
meeting the mandate given the Planning and Development Board and
the Planning and Development staff by Common Council.
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Selected Bibliography
Alonso, William. "The Population Factor and Urban Structure, " in
Roger Montgomery and Daniel Mandelker, eds. , Housing in America:
Problems and Perspectives, Indianapolis: Bobbs-Merrill, 1979 . pp.
123-133.
Best-Shaw, Hazel, Director, Personnel Department, City of Ithaca,
Information on Increases in Wages and Salaries of Civil Service
Employees since 1980.
Casaburri, Neff, Associate Dean of Students, Cornell University.
Presentation to the Housing and Neighborhoods Strategic Plan
Technical Advisory Committee Meeting: City of Ithaca, Department
of Planning. Ithaca, New York, August, 1986.
Connolly, Edward. "Increasing the Housing Supply, " in Frank
Schnidman and Jane Silverman, eds. , Housing Supply and,
Affordability, Washington, D.C. : Urban Land Institute, 1983. pp.
221-224.
Cornell Indicators, the Office of the Registrar, Dean of Students
Offices the Division of Residential Life, Cornell Daily News.
Cornell Alumni News, Cornell Institute for Social and Economic
Research, Ithaca: Cornell University, 1985, 1986, 1987.
Correnti, Richard and Brian Mcare, Vice President for Student
Affairs and Director of Housing Office (respectively) , Ithaca
College, Interview on Ithaca College Housing, Enrollment, etc. ,
June 20, 1986.
Gesslein, George, Vice President, Citizens Savings Bank.
Presentation to the Housing and Neighborhoods Strategic Plan
Technical Advisory Committee Meeting: City of Ithaca, Department
of Planning. Ithaca, New York, August, 1986.
Gurowitz, William, Vice President of Campus Affairs, Cornell
University. Interviewed by City of Ithaca, Department of Planning,
June, 1986.
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Permit Construction, Demolition and Conversion 1980-- June 30,
1986.
Insurance Rates (property) , rates and trends reported by Boothroyd
Agency, Ithaca Agency, Citizens Savings Bank, Ithaca Neighborhood
Housing Services.
-52-
Ithaca Neighborhood Housing Services, Information on income
characteristics of home buyers, information on current
-rehabilitation costs and various homeownership programs, 1986.
New York State Department of Commerce, Official Population
Projections for New York State Counties: 1980-2010, Albany: New
York State Data Center, 1985.
New York State Department of Commerce, State Data Center.
Conversations with Robert Scardamalia, Associate Demographer, July,
1986.
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York.
Messitt, Michael, Director, Tompkins County Human Services
Coalition, Information on Salary and Wage Increases in 34 selected
Human Service Agencies in Tompkins County.
Schnidman, Edward and Jane Silverman, eds. Housing Supply and
Affordability, Washington, D.C. : Urban Land Institute, 1983. pp.3-
9 s
Schiefen, L.., Superintendent of Residential Costomer Services,
NYSEG, Information on Average Utility Use, 1986.
Sieverding, Herman, Assistant Vice President, American Home
Funding. Interviewed by the City of Ithaca, Department of
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Neighborhoods Strategic Plan Technical Committee meeting; City of
Ithaca, Department of Planning, Ithaca, New York, August, 1986.
Southern Tier East Planning and Development Board, Tompkins County_
• 9 -t = = • -Ct. Y _- t t. ; • • . , . {I
Development Programs, Binghamton: December, 1984. pp. 3-8.
Tompkins County Planning Department. Surveys on apartment vacancy
rates for the City of Ithaca, the Town of Ithaca, Lansing Village,
and Cayuga Heights Village. Semiannual surveys conducted by Harry
Missirian, Associate Planner, 1983, 1984, 1985, 1986. Population
projections and information on proposed housing developments
developed with assistance of County Planning Department.
Tompkins County Assessor's Department, information on assessment
rates and current value to assessment ratios, 1986, 1987. Sales
data from 1983 - 1987 .
Tompkins County Budget Office, information on tax rates for
municipalities in the Housing Market Area.
r
-53-
Urban Land Institute, Development Trends 1986, Washington, D.C. :
Urban Land Institute, 1986. pp. 5-10, 27-48 .
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County, information on closing costs .
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