The recent public forums organized by the Common Ground Alliance and the Adirondack Explorer shined bright spotlights on housing needs and challenges in the Adirondack Park. The various housing advocates and housing non-profit leaders who spoke at these events outlined the problems and challenges facing their work and Adirondack communities. Tim Rowland’s ongoing reporting on the Adirondack housing challenge for the Explorer (see here, here , and here for some good ones) has admirably gone deep into this issue.
The common denominator among advocates and in Rowland’s reporting points to inadequate public funds to deal with the issue, meet the challenge. With more money, it seems, many of the advocates and non-profits who work on this issue every day could bring more affordable/low income/work force housing onto the market. State funding is a big question now with the State’s projected $9 billion deficit and state leaders unable to develop a statewide affordable housing program. The various existing programs, spread widely across New York, don’t meet the current need, and are often a hard fit for small rural communities.
The two forums spotlighted recent housing successes in Lake Placid, Keene, Ticonderoga and other communities. But these successes, which could be replicated in other communities, show the ad hoc, incremental nature of housing programs in the Adirondacks.
The housing challenge in the Adirondacks is not that we don’t have enough houses, but rather it’s about how we choose to use those houses. In Hamilton County, where I live, we have more houses than people and we’re not alone. There are plenty of other Adirondack communities where we have more houses than people. At current rates of slow population decline and ongoing building trends, we’re likely see a point in the near future where the Adirondack Park has more houses than people.
Many of these houses are used only a few weeks a year and stand empty the rest of the time. They’re usually heated, and all the utilities are running, but they stand empty except for a few weeks or months here and there. More than half of Adirondack towns have more than half of their total residential buildings owned by non-residents. The towns with the lowest rates, still have 20 to 25% of their homes owned by non-residents. Many towns have more than 75% of their housing stock owned by non-residents. Some of those may be rented long-term, some may be rented short-term, but a great many stand empty most of the year.
Housing advocates and Rowland’s reporting tells us that the Adirondack housing construction market is largely geared towards the vacation home market. The demand for a vacation home in the Adirondacks is both steady and high. Many contractors choose to work exclusively in the vacation home market because these projects are far more lucrative, and the work is reliable and steady.
Beyond the strong vacation home market in the Adirondacks, the housing challenge is compounded by the short-term rental market where many long-term rentals have been converted to the short-term market or lower-cost housing has been bought up and converted to short-term rentals. Property owners tell me that the money is both better in the short-term market, sometimes more than double, sometimes triple, compared with the yearly rents of long-term rentals, and the headaches of renting to affluent customers are far fewer.
In short, in many ways, the Adirondack housing market is driven by the vacation home and short-term rental markets. In talking with local leaders about the housing challenge there’s not a lot of solutions about how to change these dynamics or disrupt the overall Adirondack housing marketplace. Is the Adirondack Park housing marketplace hopelessly skewed towards vacation homes and short-term rentals and is there anything to do about it?
I’m 61 years old, but at one point, believe it or not, I was a young person in my twenties who freely chose to move to the Adirondacks. In the 1980s in Saranac Lake, where I first moved, there were lots of young people around who had bought crappy houses that they slowly fixed up around the Village or in the outskirts in places like Bloomingdale, Onchiota, Lake Clear, and Vermonville. It was pretty common to go to a party or spaghetti dinner at somebody’s house and none of the doors or windows were framed, the floors were plywood, or there was a wall with just insulation, but folks were living in these places as they fixed them up, and they owned the place. I remember visiting one house where the owner proudly showed off the well he was hand-digging. I could barely see the bottom; it seemed like a ladder to the ends of the earth. In North Creek, where I have worked for years, the rafting industry that grew up there was underwritten in a way by cheap housing around the area in the 1990s and early 2000s. Rafting company owners and rafting guides bought up beat-up houses and these beaters were slowly fixed up.
My wife and I bought a beater in Blue Mountain Lake in the mid-1990s, and we did a lot of the rehab work ourselves (and, unfortunately, it shows). Today, the fixer-up/beater housing stock is now far less available for working families because there’s fewer of them around, and the beaters that are available are drawing high prices. Paying $250,000 or more for a beater doesn’t add up for most working folks in the Adirondacks.
As mentioned above, one common denominator in the housing challenge is available funding for affordable/low income/work force housing projects. It’s clear that more money is needed to fund the good works of housing advocates and non-profits across the Adirondacks. It’s also clear to me as somebody who has long lobbied in Albany that state funding is often inconsistent and inadequate for Adirondack projects.
Perhaps one thing to look at is using the existing skewed Adirondack real estate marketplace and make it part of the solution.
Other communities place a surcharge on residential property sales for non-resident purchases. Currently, the State of New York has a Real Estate Transfer Tax. The tax is computed at a rate of two dollars for each $500 paid for the residence. For homes that sell for $1 million or more, an additional transfer tax of 1% of the sale price is imposed (the so-called “mansion tax”). The seller is generally responsible for the tax. Nantucket Island, which has struggled with intense housing challenges, where local families cannot compete with the vacation home market, funds an aggressive affordable housing program through a surcharge on its Real Estate Transfer Tax. The Adirondack Park could do the same. A surcharge on non-owner-occupied residential property sales could be one way to generate useful and sustainable funding.
Across the Adirondacks, many counties also manage an Occupancy Tax, or bed tax, on motels and hotels and Airbnb and other short-term rentals. This is not uniform across the Adirondacks, but it could be. Bed Taxes have also been used to fund affordable/low income/work force housing programs elsewhere in the U.S. and that too could be done in the Adirondacks. A surcharge on lodging and short-term rentals could help to generate funds for an Adirondack housing program.
Some type of Adirondack Housing Fund, funded by Park-wide surcharges on non-owner-occupied residential property sales and on hotel beds and short-term rentals, could generate several million dollars each year, which year-in and year-out, could help with the overall Adirondack housing challenge, in addition to what Albany and federal programs support. Such an Adirondack Housing Fund would need state legislation to authorize a tax on non-owner-occupied residential property buyers. Local and state leaders could determine how the fund is equitably administered.
One model for Adirondack communities is on the east end of Long Island. In 1998, the five towns of East Hampton, Southampton, Shelter Island, Southold and Riverhead established a “Peconic Bay Tax.” This is a Real Estate Transfer Tax that applies to all home purchases in the five participating towns. The first $150,000 of the purchase price in Riverhead and Southold and the first $250,000 of the purchase price in East Hampton, Southampton and Shelter Island are exempt from the tax. After that, the remainder of the purchase price is taxed at 2%.
Revenue from the Peconic Bay Tax goes into the Peconic Bay Region Community Preservation Fund, which is used to protect historic structures, open space, farmland and wetlands. The Fund is also used to purchase development rights to keep building density under control. In 2018, the town of Southampton generated revenues of $27.3 million from the tax and expended $16.4 million on various conservation projects. This, of course, is driven by the exceptionally high real estate prices around South Hampton.
This program was expanded recently to deal with housing challenges in these communities. The Peconic Bay Region Community Housing Act was signed into law by Governor Hochul in 2021. The legislation allows the towns of East Hampton, Shelter Island, Southampton, Riverhead and Southold to create a dedicated fund to assist with affordable/work force/low income housing. Among other things, the fund can be used to provide financial assistance to first-time homebuyers, production of community housing, and housing counseling. The Act, as adopted by four of the five East End towns (Riverhead is the exception), provides for an increase in the real estate transfer tax of 0.5% to fund the affordable housing initiative. The tax increase went into effect on April 1, 2023. The text of the Act can be found here. This shows that collective local action can gain traction in the State Legislature. This is something for Adirondack leaders, housing advocates, and Adirondack lobbyists in Albany to take a hard look at.
In this way, some kind of Adirondack Park Community Housing Act may be able to use our dominant skewed real estate marketplace as part of a solution to the Adirondack housing challenge.