By Paul Post
A recent Warren County study indicates strong demand for all types of housing, from downsizing empty-nesters to the seasonal workforce that’s vital to the region’s tourism industry.
But the report also reveals a striking gap between what many full-time workers earn and the cost of home ownership, creating a major negative economic impact.
“Even if we were to pretend that the housing needs of the seasonal hospitality industry didn’t exist there is still a mismatch between the wages provided by year-round employers in most of our region’s industries and the cost of housing in Warren County,” said Ethan Gaddy, Warren County planner. “Wages for the majority of occupations do not pay a sufficiently high enough salary for a single-earner household to afford the median single-family home in Warren County at current prices.”
“What this means is that existing businesses in our area are struggling to fill positions because workers can’t afford to live here,” he said. “This also means that we will have difficulty creating new businesses as well. This is impacting schools, hospitals, municipalities, emergency services and community organizations.”
The $46,000 study was done by Novogradac Consulting in Bethesda, Md., funded by Warren County, Warren County Economic Development Corporation and New York State Homes and Community Renewal.
The report says Warren County’s sales inventory, now at a 10-year low, decreased 74 percent from 2018-23 compared with a nationwide decline of 44 percent. At the same time, the median sale price for homes in Warren County increased 33 percent since 2019.
“There is a shortage of affordably priced inventory,” the study says. “In May 2023, the median list price for active listings in the county was $414,000, which is unaffordable for Warren County’s median household income.”
“I’ve been talking about this challenge for a decade,” said Adam Feldman, Glens Falls Area Habitat for Humanity past executive director. “There are almost no homes in our community valued between $200,000 and $500,000, what the report calls the ‘missing middle’ for first-time home buyers, young professionals and downsizing seniors.”
Gaddy noted that missing middle housing is about more than price point. It is also about the diversity of housing styles that exist between large single-family homes and dense apartment complexes.
“There is a market for a diversity of housing types in walkable, amenity rich areas like downtowns and main streets,”
he said. “Building this type of missing middle housing is something that many developers are well versed in, they just need the regulatory support and appropriate infrastructure.”
Joe Leuci, owner of Queensbury-based Foothills Construction, said local housing inventory is low because “a lot of people are locked into really good rates, so they don’t want to move and take on higher interest rates than they currently have. It’s not freeing up existing inventory.”
Providing affordably-priced homes is quite difficult in this current economic climate, he said. “Our costs have soared over the last couple years,” Leuci said. “Labor rates are certainly up from where they were five or six years ago, but it’s across the board. Materials are up from lumber to siding, shingles, insulation, sheetrock, you name it. Every expense associated with construction of a new home is higher than what it was pre-COVID. So it’s really difficult to sell a new construction home that’s within reach of a first-time home buyer or people looking to downsize.”
The report clearly identifies the problem, but solutions are most apt to be long term, Feldman said. Last July he founded his own business, Feldman Consulting LLC, working with builders and municipalities alike to help area residents realize the American dream of home ownership.
Government at the state, federal and local levels can play critical roles.
Much of Warren County’s new-home construction is high priced, quite often for more affluent people moving here from outside the area, attracted by the region’s high quality of life.
“We’re certainly seeing a lot more people coming from downstate, a lot of retirees who want to get away from the hustle and bustle,” Leuci said. “A lot of people can work remotely now, too, and take advantage of everything we have to offer — Lake George and the Adirondacks, close to a really nice small city like Glens Falls with great restaurants, arts and culture. A lot of times they’re the people who can afford higher price tags.”
So why should builders focus on lower-priced housing with slim profit margins?
One of the keys, Feldman said, is state and federal incentives that reduce costs to make such projects more profitable. A low-income tax credit is available at the federal level, quite often applicable to high-density affordable rental housing with from 60 to 120 units.
“Higher density implies lower cost per square foot, meaning there’s lower cost to the end buyer, which drives affordability,” he said.
The state Affordable Homeownership Opportunity Program provides a $150,000 per unit incentive.
Local government can assist, too, by streamlining zoning and planning issues, helping builders identify places best suited to new construction, and providing critical infrastructure such as water and sewer.
“You can get a relatively quick turnaround if planning and zoning is line and you have the public infrastructure,” Feldman said. “Those are the two big ones that help move the needle.”
But well-paying, private sector jobs are critical to growth, too. The Town of Malta has been very supportive of new housing during the past decade, in large part because of GlobalFoundries.
Gaddy said positive steps are already taking place throughout Warren County to implement the report’s recommendations since its completion last fall. For example, the study is assisting with development of local comprehensive plans in the towns of Bolton, Queensbury and Johnsburg, and is supporting creation of a countywide Housing Strategy.
“The Housing Strategy is intended to sort through the opportunities and identify where county resources could have the most impact,” Gaddy said.
In response to one recommendation (Add Housing Supply with Focus on Addressing Identified Gaps), Warren County Economic Development Corp. has hosted educational sessions to connect developers with available state and federal housing resources. Also, Warren-Washington Industrial Development Agency is exploring ways to use its incentives to fill housing gaps and Warren County Local Development Corp. is exploring incentives to support pre-development costs for housing providers.
In addition, Lake Champlain Lake George Regional Planning Board is actively pursuing funding for pre-development of housing.
“Our municipalities are in various stages of updating infrastructure, community plans and land use regulations to support more housing,” Gaddy said. “As follow-up to the study, the county Planning Department applied for and won a competitive $105,000 grant from the state Conservation Department’s Adirondack Smart Growth program to identify and address regulatory and infrastructure barriers to development in Adirondack Park Agency-designated hamlet areas.”
But ultimately, how fast or slow development occurs could be determined by public opinion because not everyone wants significant new housing in their community.
“Some people would rather have farmland and trees,” Feldman said. “Then as a political leader you have to take everyone’s opinion into consideration.”