Thursday, October 19, 2023

A one-man land bank

man in front of a brown building

I spent a recent weekday morning in a former Saranac Lake Cure cottage with contractor Shawn Duheme, who had a plan to convert decrepit old Adirondack homes into affordable housing. This pursuit led him to the tax auction, a Mecca for flippers, bottom feeders  and homebuyers looking for a bargain, usually with no idea what they’re getting themselves into.

Shawn’s idea was to act almost like a one-man land bank, fixing up old homes for sale and then using the profit to fund the next purchase. To keep the sale price affordable, he would “subsidize” the sale by curating a YouTube following more or less following his journey and highlighting the pitfalls that these old properties present.

“It didn’t work,” Shawn said. He got hundreds of subscribers, not the hundreds of thousands he needed to achieve critical mass. He was competing with dozens if not hundreds of other DIY programmers — and he was selling a message people didn’t want to hear: These fixer-upper projects are way over the heads and budgets of people without proper training and skill.

Still, Shawn hasn’t given up; he still wants  to find a way to help on the affordable housing front. And he was also able to better explain the paradox that it’s next to impossible to find housing in Saranac Lake, even though many big old homes sit empty.

In some ways, cure cottages are the original short-term rentals. A bunk in the dilapidated, 3,000-square-foot home Duheme bought at the tax sale for $10,000 would have rented for $11 to $19 a night more than a century ago, enough of a profit at the time to encourage a housing  boom. Between 1880 and 1920, Saranac Lake’s population exploded from 533 to more than 6,000.

Tuberculosis sent people from the cities streaming into the Adirondacks, just as Covid did three years ago. Duheme has put considerable study into these cure cottages — in the beginning, they were built with care and craftsmanship, but as the haste to build took hold, the quality suffered. “They still had the nice trim so they look pretty,” he said, but beneath the surface shortcuts became more common, meaning that today “the maintenance costs on these houses are huge.”

Porches were closed in and the big houses were cut up into apartments in slapdash fashion. When the maintenance costs became too high they fell out of the rental market and went up for sale. The massive square footage of these homes dictate high selling prices. But a bad foundation or some other structural issue can add a couple of hundred thousands of dollars to the cost. Sellers don’t want to settle for less than the house is “worth,” but buyers aren’t interested in a $500,000 home that will cost another $250,000 in repairs.

In a sense, Shawn said he was caught up in the same uncontrollable forces he was trying to warn other people about: Covid exponentially drove up the cost of building supplies. A private investor called in a loan. A retaining wall that held in the fill upon which the house was built gave way. Because of his expertise, Shawn will be able to make a small profit on the venture, but only after emptying out his retirement accounts to keep the project going.

And he’s not giving up. He believes there will be a way to reclaim these old homes in such a way that will benefit the planet and the community. “I want my legacy to be something my daughter can be proud of,” he said.

The New York State Homes and Community Renewal’s Small Rental Development Initiative (SRDI) has awarded $1.3 million to an affordable-housing project in the Town of Wilmington.

Plans are for six homes in three duplexes on Route 86 west of the hamlet. The units will serve households at or below 80 percent of the Area Median Income. Supervisor Roy Holzer said the duplexes will be rentals, but he hopes the development will eventually include three affordable houses for sale.

The New York State Small Rental Development Initiative provides funding for not-for-profit housing organizations to preserve and create high-quality multi-family projects of five to 20 units. Applicants may request between $500,000 and $2 million in SRDI direct resources for new construction or rehabilitation of projects that would otherwise be unfeasible.

At top: Shawn Duheme. Photo by Tim Rowland

This first appeared in Adirondack Explorer’s “Taking Stock of Housing” newsletter. Click here to sign up.

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Tim Rowland is a humor columnist for Herald-Mail Media in Hagerstown, Md., and a New York Times bestselling author. His books include High Peaks; A History of Hiking the Adirondacks from Noah to Neoprene and Strange and Unusual Stories of New York City. He has climbed the 46 high peaks, is an avid bicyclist, and trout tremble with fear when they see his approaching shadow. He and his wife Beth are residents of Jay, N.Y.

One Response

  1. Marge Villanova says:

    Excellent! Keep up the good work – it’s a worthy challenge!

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