March Virtual Open House for the Syracuse Housing Study
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Housing Challenges
Syracuse's housing challenges in 2023 can be summarized as two large and closely connected gaps
An Affordability Gap
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Due to low incomes, there is a gap between what many Syracuse households are able to pay for housing and what it actually costs to develop new housing or keep existing housing well-maintained.
Poverty is not caused by a lack of affordable housing, but a lack of housing affordable to households with low incomes worsens their economic circumstances.
A Market
Gap
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Due to prevailing rents and home prices that are still generally low—and despite increases in recent years—there is a gap between the amount of investment that needs to take place in the Syracuse market (to improve conditions) and the levels of investment that make financial sense to property owners
Source: 2021 American Community Survey 5-year estimates
The decades-long concentration of the county’s lower income households within the City of Syracuse is at the core of the city’s current affordability gap. A very large portion of Syracuse households struggle to pay for housing because their incomes are low and their ability to pay for housing is low—not because housing costs in Syracuse are unusually high.
For example, over 16,000 households have incomes of less than $20,000 per year and can afford to spend no more than $500 per month on housing, and fully 88% of all renters in this income range spend more than 30% of their incomes on housing and are considered cost-burdened. The likelihood of a household being cost-burdened drops dramatically when its income rises above $35,000.
Just over 18,000 households (or 32% of all city households) earn less than $35,000 AND are cost-burdened. 15,000 of these households are renters and are particularly threatened by housing instability.
Assisting these 15,000 most vulnerable households would require a nearly 200% increase in the number of households that currently receive some form of housing assistance in the city. An average housing voucher of $400 per month to assist these 15,000 households would cost roughly $75 million per year.
Building new homes, or rehabbing old homes, is not inexpensive
The cost to rehab a home will
often outstrip the value of the
home in Syracuse
The gap between what it costs to rehab a distressed house
and the end value of the rehabbed house gets smaller as you
move from softer to stronger markets in the city.
While Syracuse’s affordability gap is substantial, there are still nearly 24,000 households in the city with incomes above $50,000 per year who can technically afford to pay rents of $1,250 or more and buy houses priced at $150,000 or more. These households—and the 94,000 households in the suburbs with similar incomes—represent current and potential housing demand in Syracuse.
But what are these households willing to spend on housing in the city? Whether they live in the city or the suburbs, they generally enjoy housing costs that are well below 30% of their incomes because of the city’s (and region’s) relatively soft housing market. They don’t spend as much as they can afford because they don’t have to—there are plenty of relatively low-cost options.
While these soft market conditions give such households a lot of housing for their money, they also stand in the way of the levels of investment that are needed to improve the overall condition of the city’s housing supply. Rehabbing distressed homes will often—especially in the city’s softer markets—exceed what a home is worth. And developing or maintaining high-quality rentals (without use of any public subsidy) will often exceed the rents that households are willing to pay.
And the cost to build or rehab an apartment unit will often require rents that overshoot what renters can afford
These market gaps need to be filled—by a combination of subsidy and improved willingness to pay—for substantial improvements to overall housing conditions to occur. In terms of the city’s five market types, the softest ones will require the most subsidy to overcome these gaps.
These gaps call for carefully balanced housing strategies
Current conditions and historical context of Syracuse’s housing market all suggest that these affordability and market gaps exist, that they are large, and that addressing them is likely to require resources and action that go well above and beyond what existing policies and programs are designed to achieve.
They also suggest, based on the interconnectedness of the two gaps, that housing strategies need to be carefully balanced if both are to be addressed, because an improvement on one gap can have both positive and negative impacts on the other gap.
Let's look at what progress on the market gap would look like and how it might impact the affordability gap:
A Market Gap
Home values rise to reflect a city homebuying market, and neighborhoods, that are more desirable and competitive
Rising home values make homeowners more willing to invest strongly in home improvements
Rents rise to reflect a city rental market, and rental locations, that are more desirable and competitive
Rising rents improve the ability of good landlords to invest in strong rental conditions
A higher share of households in the region view the city as an appealing residential option and choose city housing
An improved tax base allows the city to invest more heavily in infrastructure and amenities, boosting market confidence and long-term private investment
An Affordability Gap
Positively, if properly balanced
Middle-wage homeowners see their home values rise and enjoy a gain in equity
Greater investment in the city’s rental housing supply improves standards and expectations
A more fiscally stable city is more capable of investing in all neighborhoods and putting local resources towards affordable housing activities
Negatively, if improperly balanced
Lower-wage homeowners may struggle with higher assessed values and tax bills (if overall rates aren’t lowered)
Lower-wage renters may struggle with higher rents (if subsidies aren’t expanded)
Lower-wage households may struggle to compete with demand from higher-wage households (if affordable opportunities aren’t set aside)
Now let's look at what progress on the affordability gap would look like and how it might impact the market gap:
An Affordability Gap
Housing opportunities affordable to low-wage households are expanded in volume and in geography—creating more opportunities in parts of the city and suburbs that have economic opportunities but few affordable housing options
The number of cost-burdened households begins to fall through a combination of improved incomes and expanded subsidies to help people pay for good housing
Concentrations of poverty diminish in the city, improving the economic mobility of families and their children
Improved socioeconomic conditions accelerate improvements to the city’s fiscal outlook and its ability to invest in affordable housing
A Market Gap
Positively, if properly balanced
Mixed-income housing opportunities make neighborhoods within the city and suburbs more functional and adaptive to changes in housing and location preferences
Growing housing wealth in traditionally soft market neighborhoods is leveraged to improve conditions
Expanded affordability subsidies are leveraged to improve private rental conditions
Negatively, if improperly balanced
Markets with softer housing demand remain soft and subject to underinvestment (if high concentrations of poverty go undiminished)
The city continues to miss out on its fair share of the middle class (if making the city a first choice is not tended to)
Housing investments become less feasible (if subsidies to cover market gaps are absent)
View the Station #3 Housing Challenges posters as a PDF
The information on this page was part of the March 2023 Open House for the Syracuse Housing Study.
Please click here to take the Syracuse Housing Study survey, which includes opportunities to provide feedback on information presented at this virtual open house.
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