Syracuse is facing a housing affordability crisis like the rest of the United States. A way out, housing experts and elected leaders have posited, is to build more housing, and build it quickly.
Gov. Kathy Hochul has said that the region needs at least 30,000 housing units to meet demand, as Micron Technology’s chip manufacturing plants are built. A CenterState CEO report found at least 2,500 units need to be built every year for the next decade to keep up with growing demands.
However, Central New York is not on pace to meet that rising housing demand. Syracuse Mayor Sharon Owens said during her state of the city address that there are over 1,000 housing units under construction in the city — less than half of the number required to keep up the momentum. Last year, the city on its own approved 14 permits for one and two-family homes, as well as 23 for multi-family buildings.
Central Current spoke with six of CNY’s preeminent housing experts and developers to answer a critical question: Why is the region not on track to meet the projected housing demand?
Local developers have pointed to a litany of reasons that serve as bottlenecks to housing production in the area at a time when building more, at scale, can faster solve housing issues in the city. They cite zoning, financing and permitting.
“We already have a housing crunch, and it’s only going to be exacerbated by Micron,” said Ben Lockwood, the president and CEO at Housing Visions. “I think we’re really kind of going to have to get slapped in the face before we change some of our ways.”
Experts did not agree on any one factor being the main culprit driving up the costs of housing, instead noting that streamlining bureaucratic processes can boost construction.
Procedural housing reforms aiming to dynamize and encourage the production of housing have seen positive results in cities like Austin and Minneapolis.
For instance, streamlining the permitting process and reducing zoning regulations have yielded positive results in Austin, said Jared Shepard, the director of research and planning at CenterState CEO. A study shows that median rents have gone down more than 18% in just four years in the city.
Overall, the production of housing is connected to the cost of renting and buying a home, according to a recent study produced by Middlebury College. Researchers concluded that rents and home prices in Minnesota’s Twin Cities were up to 34% lower than they would have been without local government orienting itself to build new, dense buildings, creating more options for low- and middle-income families.
Affordable housing developers have blamed delays and increased costs on a drawn out permitting process. The city’s Neighborhood and Business Development Commissioner Michael Collins, however, defended the permitting process. Collins said that the difficulties developers face with securing financing leads to further delays.
Still other developers point the finger elsewhere: at zoning.
Developers are not able to look for financing or begin the permitting process without first ascertaining if their project will be in compliance with local zoning ordinances.
“Outside of the city, there’s very, very little land that is zoned as of right or for apartments, so that makes it tough,” Lockwood said.
Click a link to read more about one of the cornerstone issues in housing construction:
‘Reform zoning… only way we will build housing at scale’
Meeting the region’s demand, experts say, necessitates building at scale. The zoning codes in several CNY municipalities have not been tuned to fulfill that demand, they added.
With the expected population growth in CNY, success in providing housing will be measured by the number of shovels that can hit the ground for massive apartment complexes, Lockwood said. At least four or five of those massive apartment complexes, measured at more than 200 housing units each, will need to be built in the next decade, he added.
The recently proposed Widewaters Parkway complex, where Sovereign Partners LLC wants to build nearly 700 units at eight apartment buildings in DeWitt, is a good example, Lockwood added.
“I think we’re at a point where for us to meet the demand, you’re going to have to see just those types of complexes going up pretty routinely, and we don’t see that right now,” he said.
Zoning, however, has been a major barrier to building such large multifamily apartment complexes. Without that inherent match between housing projects and the zoning laws in the land where developers want to situate them, developers have to go in front of municipal planning boards to request “special use permits.”
Oftentimes, hearings on these permits draw resistance from zoning officials themselves and from nearby community members who want their idea of their communities to remain untouched. Conducting outreach and attempting to persuade community members is time consuming and adds to the costs of development in a way that is similar to permitting, experts say.
“Zoning and planning… that can just be very time consuming sometimes,” said Audrey Farwagi, the former director of development at Christopher Community Inc.
Christopher Community usually develops projects outside Syracuse, where there is a dearth of land zoned for the construction of housing at scale.
A 2023 report from CNY Fair Housing that analyzed the zoning codes and maps of 34 municipalities in the region showed that 74% of the “urbanized” zoned land exclusively allows the development of single-family homes. Only 3% of the land allows multifamily housing developments without special permission from municipalities, the report stated. Outside the city, the number further goes down to only 1%.
Only about 10% of the land is available for developing duplexes, row houses, small apartment houses and mobile homes, a category that experts call the “missing middle.”
Zoning reforms, experts say, are necessary to unlock housing production at scale. Shepard said zoning codes have prevented that development at scale from happening for the past 50 years.
CNY Fair Housing released a documentary earlier this year chronicling the history of exclusionary zoning in CNY and its impacts on the region’s housing issues.
“We need to reform zoning across the Central New York footprint to allow for a greater density of housing in our towns, in our villages, and in our cities. It is the only way that we will build housing at scale to solve this,” Rob Simpson, the president at CenterState CEO, said in CNY Fair Housing’s documentary titled “Blurring the Lines: How Policy Shaped a City.”
Katelyn Kreisel, a Manlius Town Board councilor, said in the documentary there is fear of changing local zoning laws among residents.
“We can’t let that unknown stop us from moving forward,” she said.
Garnering local support for housing developments at the point when they are presented to the planning board is a crucial step, Farwagi said. She noted that this helps local officials and residents to buy into a project that will address housing issues in their community.
“If you can’t get support, you’re really not going to get to the next step of applying for financing,” Farwagi said. “NIMBYism is very real, and it’s something we encounter in every municipality that we develop in.”
‘Takes everything and the kitchen sink to make the numbers work’
A key step toward starting housing development involves developers trying to secure financing: locating and securing the right mix of federal, state, and local subsidies and incentives, striking favorable deals on bank loans and finding additional funding from programs that reward the development of specific housing — like repurposing a historical building into an apartment complex.
A competitive environment for developers vying for those incentives, as well as high interest rates that eat into investors’ margins have stifled development in the area in the past decade, Shepard said.
For the past three years, Christopher Community has been looking far and wide for funding that can shore up the costs of developing La Madre Landing. The project at 104 Smokey Hollow Road features 52 units of affordable housing in Baldwinsville, said Farwagi, and it will cost $18.8 million to develop, according to estimates from New York’s Homes and Community Renewal agency.
It will have three ADA accessible units, two units for people with hearing vision impairment and seven units for people with intellectual disabilities.
To bring La Madre Landing to life, Christopher Community required several sources of funding, including:
- Onondaga County Housing Initiative Program: $250,000
- Housing Trust Fund: $880,000
- Supportive Housing Opportunity Program: $4.3 million
- 9% Low Income Housing Tax Credit: $11.3 million
- Office for People With Developmental Disabilities: $825,000
- Community Corporation preservation: $626,000
Using multiple funding sources is typical for developers in the current construction market, she noted.
“Some have in the double digits of funding sources,” Farwagi said.
To secure financing, developers have to jump through several hoops. First comes identifying a site. Then developers have to put together a team of architects, engineers, attorneys, and a general contractor to craft site plan applications for the local planning board.
Public comments at the planning board meetings can often be challenging and lead to certain compromises on the proposed plan due to community pushback and the idiosyncrasies of local codes, Farwagi said.
Securing funding is also dependent on meeting state and federal funding application deadlines. This can sometimes lead to long periods of stagnation for a project while developers submit applications, wait to hear back, and resubmit if the application is rejected. Multiple resubmissions lead to a sink of time and resources that strains housing development, Farwagi said.
“You have to sort of play this like a jigsaw puzzle to fit and make sure your timeline is working,” Farwagi said.
Some state subsidies are conditioned on developers building affordable housing units tailored to individuals at different income brackets. For instance, some units are rented or sold at a lower rate and are only accessible to individuals earning a certain percentage of the area’s median income.
Projects can also qualify for funding if they commit some units to serve a specific population. In the case of La Madre’s Landing, the developer received state subsidies for sectioning out units for people with disabilities.
Building affordable housing units, which is often touted by local leaders as the bandaid necessary to quell issues of homelessness and lack of housing affordability, can prove difficult.
Lockwood said that depending on project type, housing units meant for individuals earning 60% below the area median income can be quite expensive. Per unit costs could range anywhere between $400,000 to $600,000, he said.
Costs are exacerbated by paying attorneys and accountants who help navigate the nuances of applying for low-income housing tax credits. Insurance rates, too, have skyrocketed 40% since the pandemic raising the cost of construction.
As New York is a strict liability state, the cost often gets split among every house that is being built, Home HeadQuarters Inc. CEO Kerry Quaglia explained. Strict liability in insurance terms means that a party is responsible for any damages even if they undertook the necessary precautionary measures to prevent said damages.
“It kind of takes everything and the kitchen sink right now to make the numbers work,” Lockwood said.
The delays are compounded by several goalposts that developers must meet to receive state subsidies, modeled after aspirational goals for the state, like New York’s push to divest away from fossil fuels. The state’s zero emissions climate roadmap has pushed developers to adopt technologies like heat pumps in order to comply with state requirements.
While heat pumps are good environmentally, the expenses often have a trickle down effect, Quaglia said. The requirement to use minority-owned businesses often lead to the continual hiring of the handful of certified contractors which stretches them thin, Quaglia said.
“It’s just a snowball effect,” Quaglia said. “All of these things are good public policy, but maybe not when you’re up against this type of a crisis with housing,” Quaglia said.
Declaring a moratorium on some of the additional requirements and allowing developers to phase in some of the changes might be responsive to the issues, he added.
“From my perspective, declaring a moratorium on some of these add-on requirements would truly be responsive to the fact that this is indeed a crisis,” Quaglia said.
‘One of the cost drivers that needs to get addressed: delays in permitting’
Zoning and financing are merely two facets of a broader, complex problem. Permitting, too, poses a significant challenge and is a major cost-driver.
Speeding up permitting is one of the variables that municipalities have control over to facilitate faster housing development, Shepard said.
“Throughout the country, one of the cost drivers that… we have control over is delays in permitting,” Shepard said. “If there’s delays throughout the process, it’s important to understand that the developers are going to pass on that cost.”
City officials have sought different ways to streamline and speed up the permitting process since 2018. Jessica Brandt, the director of the city’s Central Permit Office, told Central Current that it became a focus of her office at that time.
The permitting process for construction of a new multi-family residential project now takes on average around four to six weeks to be completed, Brandt said. That timeline varies from applicant to applicant and largely depends on the type of project, she added.
That timeline is a step-up from 2019, when that same process, on average, would take 70 days, according to Sol Muñoz, a city spokesperson.
To shorten that window, the city in 2020 hired three full-time project managers who are responsible for shepherding residential and commercial permits.
The city also digitized their permitting process after 2018 in an effort to expedite permits, Collins said. Prior to that, applicants could only file permit applications and receive feedback during hours of business. Now, applicants can submit an application at any time of day and even pay their application fee online, he added.
“That system provides transparency. I think it provides convenience, and it certainly is easier for our staff,” Collins said.
Collins said he expects to continue ramping up toward that 30,000 new housing units figure, by continuing to streamline the regulatory permitting process. Last year, according to Collins, the region added about half of the yearly projection. Collins said the bulk of that is concentrated in Syracuse.
“I feel optimistic,” Brandt said.
Former Mayor Ben Walsh also sought to include a third-party permitting system to expedite the process as one of his last showings of political might before leaving office. But the city’s Common Council proposed cuts to that system earlier last year— a move the former mayor criticized.
Councilor Corey WiIlliams, the chair of the Finance, Taxation and Assessment Committee, said at the time that the council would not fund the program if they ran out of money.
Lawmakers changed their minds after Deputy Commissioner of Code Enforcement Jake Dishaw provided the evidence of revenue collected by the city to the councilors. According to Dishaw, of the 635 permits issued — both commercial and residential — 57 were sent for third-party review. The city collected a revenue of $2 million of which over $913,000 was collected from the third party reviewed assignments, Dishaw said. The city paid a little over $140,000 to the vendors for the permitting process.
In this year’s budget, Owens is seeking to double the funds to pay for third-party permit review services from $250,000 to $500,000 to keep up with the pace of development.
The city is also looking to use artificial intelligence to streamline the permitting process. City officials are vying for a $1.5 million grant from the U.S. Department of Housing and Development which could allow them to integrate AI into the city’s permitting process, hoping to expedite the review of architectural drawings for commercial projects.
Ultimately, when faced with the question of whether the region can meet its housing demands and solve its issues of housing affordability, the group of developers and experts interviewed by Central Current showed optimism. Shepard said community members and their elected representatives will have to show more disposition, and adopt a “YIMBY” or “yes, in my backyard,” mentality to allow for more housing density to be built.
Shepard believes the political will exists to solve these problems in part because the “pressure from the market” will help push along housing, he said.
But Quaglia believes the path will be difficult.
“We need some of the folks in power to become ultra-focused and try to level the playing field a little bit, make it a little bit easier to get this done,” Quaglia noted. “Things happen usually by necessity, and we’re going to have a time pretty soon where everybody’s going to say ‘this is absolutely necessary.’”
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