The latest Pattern for Progress report contains worrying news for our area. Released last week, the report puts into data a sad fact everybody already knows — the cost of housing has ceased to be affordable for most people here. For instance, Pattern observes a $100,000 gap between the price of the average home and the mortgage that typical families would be able to afford in every county in the Hudson Valley.

“The data we analyze each year tell a clear and troubling story: most of our neighbors cannot afford to live in the communities where they work,” Pattern CEO Adam Bosch said. “As our neighbors choose to leave the region, have smaller families and our workforce slowly shrinks, the Hudson Valley is starting to feel some of the most painful ramifications of stagnant housing and zoning policies. Civic leaders at every level must rally around evidence-based solutions to solve our regional crisis of housing affordability and availability. The vibrancy and viability of our communities will depend on actions that encourage the production of more housing at prices our working-class neighbors can afford.”

The report titled “Out of Reach” examines the affordability of rental housing throughout the nine counties that Pattern covers: Columbia, Dutchess, Greene, Orange, Putnam, Rockland, Sullivan, Ulster and Westchester. The numbers come mostly from the data published by the National Low Income Housing Coalition (NLIHC), and it compares fair-market rents with average renter wages.

Over the past five years, rents across the region have jumped 25 to 45 percent and wages have not kept pace, increasing by 18 percent in Ulster County, only 12 percent in Dutchess, 15 percent in Sullivan and 18 percent in Orange. And that was in a situation where wage growth had been sluggish for decades.

Roll into this the inflation burst that was kicked off by COVID-19 and lower-income families, even many two-income families, are stretched to the breaking point.

One result is that employers repeat the same refrain everywhere here — they have jobs, but cannot fill them. Meanwhile young people have to leave the region and often the state if they want to find something they can afford on middle-class incomes.

Earlier this year, Pattern released "The Great People Shortage and Its Effects on the Hudson Valley," which found that our region has lost more than 130,000 people to migration since 1996. A national survey by the U.S. Census Bureau found the top reasons cited for leaving New York State were housing-related: either the need for more affordable and higher-quality housing or the opportunity to buy a home.

Pattern has been highlighting the gap between wages and rents or mortgages for years. But the new Out of Reach report catalogs the intensification of the already difficult trends that were apparent in the reports from 2016 through 2019.

A chart in the new report on “Rent Gaps” illustrates the issue clearly. For a family to live, not just survive, affordable rent must be no more than 30 percent of their income. Above that and the combined costs of health insurance, keeping a car or two on the road, school taxes (yes, renters pay them via rent) and the basics (food, water, electricity, gas or some other heat source) become overwhelming. What results is parents who skip lunch, children in shoes that don’t fit, a family unable to afford a computer or internet access and the constant terror of automobile failure and the huge repair bills, to name a few.

The Rent Gap

The rent gaps in the new report are alarming. For Ulster County, an “affordable” level of rent for someone making an “average renter wage” is set at $754 a month. Fair-market rents mentioned are $1,155 for a one bedroom, and then on to $1,498 for two bedrooms. For Orange County the numbers are $812, with one-bedroom rents at $1,233 and two bedrooms at $1,583. Go farther south, towards the city and the gaps become enormous. Rockland, highly desirable commuter territory, leads the pack with “affordable” rent pegged at $827, while a one bedroom would be $2,170.

The report’s conclusion on renters is gloomy. “Single adults working 40 hours per week on average renter wages cannot afford a one-bedroom apartment in any of the nine counties. Renters would need to earn anywhere from $1 to $26 more per hour to afford rent in their respective counties. Renters in every county are considered “cost-burdened.”

Another chart a few pages later in the report demonstrates that rents are outpacing wages. That is something that has been going on for a long time, and even now with wages, including minimum wages, finally rising in the state, the change, year on year continues the same trend. Ulster County has renter wages listed with a $125 gain annually, while rents increased $134. That trend over the years grows into a gap that makes renting unaffordable.

And this issue is sending people out of the region, even as jobs increase and employers are desperate to find workers.

The Homeownership Gap

Then there is the American Dream, which is essentially, owning one’s own home, one’s own house and a yard. Home ownership is steadily slipping out of reach, however. The new Pattern report lays out the cruel equations to demonstrate the degree to which this is true.

Pattern calculated a “Homeownership Gap” based on the estimated mortgage for which households earning Area Median Income (AMI) in each county would qualify. They used HUD (U.S. Department of Housing and Urban Development) adjusted income levels for one- and two-person households.

The mortgage estimate was based on an escrow payment for property taxes of $650 per month, an insurance payment of $90 per month, and a 7 percent interest rate on a 30-year loan term.

While the mortgage needed to buy a house in Westchester or Rockland dwarfs those needed upriver, there is still an alarming gap between income resources and mortgage requirements. And as noted earlier, overall there is a crippling $100,000 gap between what most people can afford and the cost of the average home.

Add to that the effect of investment buyers: the report estimated that one in four home sales are to an investor who will rent, not sell.

NIMBY-ism and Other Causes

The causes of all this are both complex and simple. Overall, the biggest takeaway and the problem for all our leaders, county and municipal, comes down to the stagnation of incomes for low-, moderate- and middle-income earners over the past decade or so. Lower-income workers are steadily being priced out of the region.

To that issue add the NIMBY, (Not In My Backyard) phenomenon, which is a global issue. The first people to arrive in the suburbs took the nicest lots. Succeeding waves took the rest. Everything is and was zoned for “single-family” housing. Apartment buildings were what they had left behind. This perfectly human and rational process produced sprawl, with latecomers forced to look farther and farther out. With sprawl came many problems. And forget about apartment buildings.

The same process has spread over the nine counties of the Mid-Hudson region. From being a backwoods area only crowded in the summer from Borscht Belt visitors, Ulster County has undergone several waves of recent settlement. Land is now at a premium, and as we all know, they aren’t making any more of it.

Zoning, which only began here in the early 1970s, followed and has steadily grown more restrictive. NIMBY really began to bite in the 1990s; in more recent years, it’s seen local homeowners pack planning board meetings due to fears of apartment buildings and certain kinds of Jewish developers.

The Oxford English Dictionary added NIMBY in 1989. The view of NIMBYs have changed as well, going from those protecting their views and communities to selfish hoarders of housing. To go with that is the steady decline in the size of American households with about a third now consisting of one person.

Pattern’s Bosch spoke to Kingston Wire about the new report and the situation we face.

“This year we decided on a mathematical analysis approach. That’s where we found the $100,000 gap. We can say that today, the ‘starter home’ that our parents and grandparents bought simply doesn’t exist.”

And that means, Bosch said, “More and more renters are stuck. The graduation process to homeownership is shut down and that is leaving people as renters who shouldn’t be. Basically, we can say that market economics are not working for our housing market.”

Another view would be that politics surrounding NIMBY-ism and zoning restrictions is distorting the market. A perfect example of social control creating scarcity. Economics students can graph that in their heads.

Bosch moved past the numbers, noting in passing that land costs, combined with building materials costs and a grave shortage of labor, are making house prices soar. Bosch also mentioned the extremely long planning board approval process, which can add hundreds of thousands of dollars in extra costs.

“The entire system is steering towards failing,” said Bosch. “We need the people who stock the shelves in our markets. We need the people who keep our medical records ready for the doctor when we visit.”

All those people, from assistants at our veterinarians to bartenders to wait staff to all the retail workers we deal with every day, need housing.

“We don’t take care of those people and increasingly they can’t afford to live in the region. We are starting to see the effect of that all over the region,” Bosch said. Things like hospital executives going out and hiring contract nurses from outside at double the rate for those who live here. We’re going to see more school districts shut down bus routes due to the lack of school bus drivers.”

Bosch noted that 134,500 people have left the region in the past 25 years. “This is steadily hollowing out our communities.”

Bosch singled out Ulster County for being more aggressive about acting against these forces than other counties. “We have to be smart about this,” he said. “It’s a regional problem. Our town and village boards need professional help. Some of this can’t be done on a part-time basis. Civic leaders need to coalesce around good ideas.”

The challenge is clear. Can we overcome our NIMBY-ism and rework zoning to allow more multi-family housing and apartments? Or will the trends continue until our stores close for lack of workers and our communities dwindle under the pressures?

See the full report here.