Pioneer Homes is pictured. Credit: Mike Greenlar | Central Current

Syracuse city officials and housing experts want to pitch real estate investors on a new way of financing housing development. They believe the strategy could supplant scarce government subsidies, which all parties agree are vital to building mixed-income affordable housing.

The Greater Syracuse Land Bank is starting “Invest Syracuse,” a program that resembles a “public developer” model of housing financing. A public developer helps offset some costs of development with low or no-interest loans. These are made available through a revolving loan fund. The model provides funding to projects that often takes the place of other federal and state government subsidies like low-income housing tax credits and housing vouchers.

City officials and housing experts say they hope this model will help Syracuse keep up with demand for new housing in the wake of two projects: the demolition of the Interstate 81 viaduct, set to leave behind surplus land; and the arrival of Micron and its promise of an influx of highly paid manufacturing professionals. They say they want the model to be up and running in the next year or two.

“With interest rates being so high right now, some projects just can’t get started. Things just aren’t working,” Katelyn Wright, the Land Bank’s executive director, said. “So we think by bringing lower interest capital to the table, that we can get some projects actually going and leverage that in exchange for a certain percentage of those units being affordable.”

The first step toward establishing a public developer model starts Friday, with a request for information session hosted by the Land Bank at CNY Community Foundation Ballroom. Wright said she hopes to connect with developers to see how public funding could help spur housing construction. 

At the event, experts from the Center for Public Enterprise, a New York-based think tank that works with local governments to expand public investment in housing, will lead a presentation on how the model works. CPE has been retained by the Land Bank as a consultant. 

Wright and other housing experts say the model for funding could exploit the potential in Syracuse’s housing market at a time when opportunity for development looms on the horizon. But to fully maximize that, experts say, there need to be more tools for developers to create mixed-income affordable housing. 

Right now, affordable housing is mainly subsidized with two types of government subsidies. One is low-income housing tax credits (LIHTC) — determined by the federal government and disbursed by the state. The other is housing voucher programs, also devised by the federal government and operated by the Syracuse Housing Authority. Those two resources would require Congressional action for expansion. 

“As more people move to the region, there would be more need for housing and tools like [a revolving loan fund] that are ready to be deployed and add affordability that otherwise wouldn’t be there without needing to use those scarce federal resources,” said Paul Williams, CPE’s executive director. 

How the model could address affordable housing

The costs of development are not aligned with the area’s need for mixed-income affordable housing. 

The city’s housing study, released in 2023, indicates that the required asking rent on an apartment if no government subsidies are involved would be $2,400 a month. The high costs of development and operation could prove difficult to bear for tenants who continue to budget an increasingly larger share of their earnings to go toward rent. About half of the city’s tenants spend at least a third of their money on rent. 

The most sensible solutions for developers and renters is relying on subsidies like LIHTC that ensure affordability over long periods of time, or housing vouchers that guarantee steady streams of revenue for landlords backed by the federal government. 

In 2024, New York received around $40 million in LIHTC subsidies. Developers looking to invest in Syracuse have to apply and compete with others from all over New York to secure these subsidies for their projects. 

“They’re highly competitive,” Wright said of LIHTC subsidies. “There are not enough to meet the demand that we have here.”

Voucher programs are distributed by the Syracuse Housing Authority, which doles out $20 million in rental assistance through the federal government’s housing choice voucher program. This covers about 3,000 households in the Syracuse area. 

The public developer model aims to expand the availability of low-interest capital for developers to use. In return, a local entity, in this case the Land Bank, buys equity in the project. 

“Land banks have the ability to create subsidiary LLCs, and we could either be the property owner in full, or own it jointly with a private developer,” Wright said. “The city has historically avoided being entitled to properties, especially occupied properties, because they want to avoid that liability. So we think that we could perform that function and ensure perpetual affordability.”

The city and the Land Bank are aiming to start a $20 million fund in the next year or two that can be loaned to developers’ projects in exchange for commitments to affordable housing from property owners. The city and Land Bank partnership would determine the percentage of affordable units in a development, as well as the size of the subsidy during the construction phase of the project. 

In other areas where localities have implemented the model, this fund has gotten off the ground through municipal bonding. Montgomery County, Maryland is one of the first areas to implement the project, starting out the fund by bonding for $50 million. They used the interest collected on the loan payments made by developers to pay for their bond obligation. 

“Once it’s built, it should sustain itself,” Wright said. “By being publicly owned, it would basically function like a nonprofit. You don’t need that property to spin off a bunch of profits for the private developer, you just need it to be sustainable.

Syracuse city officials say they are still far away from determining how to kickstart the fund, but that they could do so via bonding, philanthropic partners, and state funding. 

Joe Driscoll, the city’s I-81 project director, said the city is exploring the possibility of encouraging developers to apply for portions of a proposed $50 million fund unveiled in Gov. Kathy Hochul’s 2025-26 budget proposal. Though no details about the $50 million pile are known, the governor wrote in her proposal that it would “create the first-ever mixed-income revolving loan fund to spur development of mixed-income rental housing outside New York City.” 

A spokesperson for the governor did not respond to questions regarding how the fund would work. 

“The public developer model just seems to me like a brilliant idea,” Driscoll said. “It’s really the vision of government that I believe in, where you are taking out the profit motive and doing things in the public interest on a large scale that individuals can’t do.”

How a revolving loan fund could be used in Syracuse

Driscoll and Wright used different contexts under which the fund could be used to build affordable housing. 

For Driscoll, the fund signifies an opportunity to construct housing in surplus land freed up by the demolition of the I-81 viaduct. That land would belong to the state. 

A Congress for the New Urbanism report notes that up to 18 acres of land could be unlocked after the aging highway is brought down. 

“That number is fairly misleading, because a lot of the parcels are very small, awkward, sliver parcels,” Driscoll said. “A lot of the acreage is in land that’s not really largely developed, but suffice to say, there will be some significant parcels, some significant acreage of land that this model could work to create some more affordability.”

So far, there are differing visions of how that land should be used. The city believes it should lead development of the land, Driscoll said. 

A spokesperson for the governor did not respond to questions about how the land could be used and if the city would be granted all or portions of the land for development. 

“We have to make some argument of public benefit, public use, and so this would enable the city to maintain ownership, but do the type of development we would want to do,” Driscoll said. “We would be able to make the argument that we are creating affordable housing and addressing the housing crisis.”

However, Lanessa Owens-Chaplin, the director of NYCLU’s Racial Justice Center, said first priority for the land should be given to “community residents who carried the burden of living adjacent to the highway.” Owens-Chaplin said NYCLU and local residents have been advocating for the State Department of Transportation to allocate more than 4.5 acres of land to a community land trust controlled by the residents near the viaduct.

Residents could build wealth and land ownership an area that was once a predominantly Black residential community, Owens-Chaplin said. 

“Affordable housing is a great first step — but it does not go far enough to restore a community that lost generational wealth at the hands of the original build that razed a community and destroyed 500 homes and businesses,” Owens-Chaplin said in reference to the use of a revolving loan fund to develop affordable housing. “Residents should have an opportunity to organize and reclaim ownership of the land and become the developers of the parcels.”

Wright said the revolving loan fund could also spur the development of other city-owned sites. 

“The city has tried to request proposals on quite a few city-owned parcels and I don’t think they were satisfied with the responses that they received,” Wright said. “We think the fund would make sense for those types of sites, and potentially for some land bank owned sites that will work independently.”

Wright said helping finance affordable housing empowers the city to choose projects in areas of need. 

“I’m trying to do more neighborhood revitalization in the outlying neighborhoods where the Land Bank has a lot of properties,” Wright said. “Can we make it work somewhere like South Salina Street? I’m not sure of that… we just want another tool in our toolbox.”

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Eddie Velazquez is a Syracuse journalist covering economic justice in the region. He is focused on stories about organized labor, and New York's housing and childhood lead poisoning crises. You can follow...