As we emerge from the COVID-19 pandemic, there are reports that downstate residents and businesses are looking to relocate to safer and less expensive locations, including the Mid-Hudson Valley.
The migration of downstate residents to the Mid-Hudson region is not a new phenomenon, but real estate experts contend that this demographic trend could really take hold in coming years. However, there is one problem the region must tackle if it wants to be a truly feasible option for these millennials and others looking for a better quality of live—the affordable housing crisis.
Joe Czajka, Senior Vice President for Research, Development, & Community Planning for Newburgh-based Hudson Valley Pattern for Progress, recently penned a thought-provoking blog entitled “Affordable Housing Development IS Economic Development.” Czajka, who also serves as Executive Director of the Center for Housing Solutions and Community Initiatives, effectively laid out the case for why “a strong affordable housing inventory is critical to the advancement of economic development and the attraction and retention of employment opportunities.”
Czajka, who noted that the region must increase the supply of affordable for-sale and rental housing, stated, “A housing cost burden creates an economic strain on local small business and stifles their ability to expand and in some cases—to simply remain open. The higher the housing costs are—the less “disposable income” is available for other purchases of goods and services. Residents that pay less for housing can afford to spend more on other necessities, including groceries, clothing and health care, which creates a benefit for the small business owner in their home neighborhood. Residents can also afford to save more for emergencies or for major purchases such as a home, a car or for an education.”
With affordable housing stock available, there are more workers available for hire. In addition, businesses have less employee turnover and do not have to expend much-needed funding for new hires and training of new staff. “In today’s economy where competition for workers is so intense, access to affordable housing in close proximity to one’s place of work is essential,” he wrote.
Among the many other benefits of affordable housing development include the creation of jobs and increased taxes and fees during the construction and post-construction once the homes are occupied for state and local governments.
In his blog, Czajka cited a February 2017 study by HR&A Advisors Inc. entitled the “Impact of a Prototypical 50-unit Affordable Housing Development in New York State,” which detailed the millions of dollars of beneficial impacts this type of project brings to the community.
The report prepared by the national consulting firm estimated that the 50-unit project would reap a total of $16.6 million in total economic spending, including the projected $9.4 million in investment. That investment would stimulate an additional $3.9 million in indirect economic spending and an additional $3.3 million in induced economic spending; create 100 total one-time jobs, including 46 jobs in construction-related sectors; 30 jobs in industries supporting construction and 24 induced jobs from their household spending in a range of industries, including construction, architecture and engineering, professional services, restaurants, retail, etc.
Other benefits from the typical 50-unit project in New York State include $6.43 million in total employee compensation that would support $1.5 million in indirect employee compensation and $1.1 million in induced employee compensation. The overall average compensation across all industries (including spinoff effects from indirect and induced spending) would be approximately $63,400 per year.
And Now the Good News…
Orange County and specifically the City of Newburgh will see an affordable housing project even larger than the one cited above, break ground next year.
The Newburgh City Council recently approved a 65-unit to 70-unit housing development called “East End Lofts” at 15 South Colden St., according to a report in Mid Hudson News.
The mixed-use, mixed income rental project being developed by Kearney Realty and Development is geared for those in the arts and literary professions. A total of 40 of the units are earmarked for those sectors and the new development will also include an art gallery.
Ground floor commercial space could accommodate a restaurant with a rooftop lounge. Construction is tentatively scheduled for some time in 2021.
