Taking Stock of Housing: Market mayhem

Why we can’t ‘single family home our way out’ of this dilemma

By Tim Rowland

Thumbing through a 2023 report underwritten by the Lake Champlain/Lake George Planning Board, Jeremy Evans, director of the Franklin County Industrial Development Agency, was stopped cold by one particular factoid: The cost of building a 1,000-square-foot home in the Adirondacks is $250,000 to $300,000.

This is beyond the means people who are typically the backbone of the community. This gap between wages and home ownership can run up to $100,000, meaning that no back-of-the envelope cost recalculating, such as choosing cheaper carpet or fewer windows, can cover.

In other words, there is no free-market remedy, because the housing costs checkmate many of the proffered solutions — zoning changes, hamlet expansion, rehabilitation of derelict properties — to Adirondack housing woes. 

There are multiple reasons why this is so, among them scarce land, expensive building supplies, a paucity of contractors, lack of sewer and water, high taxes and a construction industry more attuned to vacation- and luxury- home markets.

Some of these phenomena are common to the rest of the state and nation, but some are not, making the crisis more acute in the Adirondack Park than it is elsewhere.

“We’re not Syracuse, we can’t just run out and find more land around the city,” said Garry Douglas, president of the North Country Chamber of Commerce.

What this all means is that to afford a home, a middle-class Adirondack worker needs, either directly or indirectly, government or philanthropic help. There is plenty of precedent for this, from public housing to the GI Bill to cheap, bond-funded mortgages.

But the task is complicated, because even with financial assistance, affordability is still difficult. Small economic tailwinds aren’t enough.

“Contractors have no incentive to build a three-bedroom, 2,200 square-foot house,” said Nicole Martinez, owner of ​​Wildlight Business Solutions, a Keeseville company that provides business services to contractors in the northern Adirondacks. She said increasing the size of hamlets or easing regulations would have little impact on construction because of greater barriers to building.

“I wish we were at the point where zoning mattered,” Martinez said. “I agree that it is an issue, but there’s no money to build, so why even talk about it?” 

Nor in many cases, do they have the help, as trades workers have vanished from the North Country landscape — by as much as 25% over the past five years, according to one study. Builders retired; trades for a time were de-emphasized in schools; more lucrative opportunities opened downstate: and hired hands themselves had nowhere affordable to live. 

“They have to commute, but they may not have gas to get to the job site, and it’s 50-50 whether they have a vehicle in the first place,” Martinez said. “The first question you have to ask is do they have gas money? That’s how bad it is.”

And rather than worry about tight or nonexistent margins of starter homes, most established contractors have bigger problems. “There are not really any starter homes being built, not that I’m aware of, anyway,” Martinez said.

Instead, there has been a transition “to very fancy homes,” Martinez said, with wealthy owners who will employ a contracting crew to perform a lengthy makeover of an estate so it will have a fresh look for the two weeks in July they spend there.

Even programs meant to incentivize workforce housing fall short because luxury homes are more profitable, and don’t come with governmental red tape and complex paperwork. 

Martinez said she has worked with contractors who have done their best to build lower-cost housing even if it meant less profits, “but to be honest it’s not really a success  story.”

And as contractors are building (or remodeling) bigger homes, they are also building fewer homes, a trend that predates the pandemic.

The subprime mortgage crisis of 2007 halted construction nationwide. Momentum returned in most markets, but not in the Adirondacks.

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Comparing the aughts to the teens, “Development rates have largely been cut in half,” said Peter Bauer, executive director of Protect the Adirondacks, an environmental group that tracks North Country data. Building permits ticked up during the pandemic, a good percentage for improvements for the newly homebound and vacation rentals, not for residential housing.

Other resort areas have tried to fund affordable housing initiatives by placing surcharges on real estate, short-term rentals or hotel rooms, but “even so, money is going to be a challenge,” Bauer said. “It’s going to be tough to change the marketplace.”

To Franklin County IDA’s Evans, the overarching message is “that we’re not going to single-family-home our way out of this.” he said. It’s not particularly anyone’s fault, Evans said, noting that high housing prices are now more or less a way of life across the country — which indicates some of the issues that are blamed for Adirondack housing shortages might not be as blameworthy as is often suggested.

Twin Falls, Idaho has plenty of buildable land and little in the way of land use regs. It also has modest houses selling for $300,000 to $400,000. “Twin Falls has none of those constraints, but it has a housing problem too,” Evans said.

What this all suggests is that no one reform is going to help; it will take a concerted and coordinated effort across multiple disciplines to reverse a trend that looks a lot like the housing haves and have-nots of the Great Camp era.

For example, speaking of the costs of construction, Martinez said she doubts the public understands the money and time that go into homebuilding.

A contractor may hire a carpenter or electrician might at $35 an hour. Workers compensation and unemployment insurance, benefits, taxes and other costs can double that figure. Solutions to ease the financial pressure, such as universal health care or streamlining state paperwork, aren’t likely.

“Construction is at the top of the mountain of bad policy,” Martinez said.

Evans the state could be more helpful by to small developers with modest projects. The incentives that are presently offered are “not well advertised, and the paperwork is incredibly difficult to access.”

“What’s unique to the park is the added pressure of (land-use) regulations,” said Jim Carroll, principal and senior community planner for Asterhill Research, which studied housing in Essex County. “There is a finite amount of land that can really be developed.”

Many Adirondack housing advocates believe the most obvious way to take costs out of housing is through denser development. This creates economies of scale, spreading the expenses of land, permitting, access roads and among multiple housing units.

Yet here there are pitfalls too, most notably a dearth of required public sewers and water lines. State and federal grants and low-interest loans can help, but even so, communities with only a couple of hundred people can’t afford utility projects that cost millions of dollars.

Evans said the challenge is large, but tenacity, creativity and financial help from government and nonprofits can pay off. Studies have shown Franklin County needs an additional 940 housing units. Three ongoing government-assisted projects in Tupper Lake, Saranac Lake and Malone, would add 200 homes, and in time, even small projects begin to add up.

“If we can keep housing on the front burner, I’m optimistic,” Evans said. “Let’s be Adirondackers and be independent and do what we can do.”

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This series is funded in part by the Generous Acts Fund at Adirondack Foundation. And by the Annette Merle-Smith Community Reporting Fund at Adirondack Explorer. Click here to help fund community reporting such as this.