Would you pay $773,000 for an apartment in Syracuse, where the median home costs one-fourth as much?
New York state is doing just that.
The state just broke ground on East Adams Phase I, a $102 million, 132-unit affordable housing development on public land in Syracuse. That’s $773,000 per unit — about as much as it would have cost in New York City.
However, that per-unit cost would be much easier to justify in New York City, where half of all homes sell for more than $845,000. In Syracuse, not a single house is selling for that much.
The median asking price for the 783 Syracuse homes listed at Realtor.com is $195,000. At that price, the $102 million being spent to build Phase I’s 117 apartments and four townhomes could have purchased 523 homes.
I realize that the $102 million could not legally have been spent that way, because the development’s funding streams cannot be used to buy free-market homes. Also, it’s an inexact comparison because many of the existing houses need some work and operating costs for the new, all-electric rentals and townhouses will be lower.
But you have to admit, the 4x cost differential is huge. From a capacity perspective, 523 homes would house about 1,500 more people than the 132 will.
It’s just hard to wrap your brain around the project’s $773,000 per-unit cost when this gorgeous five-bedroom, 3.5-bathroom, 3,700-square-foot house, also in Syracuse, is listed for only $439,900:
Did I mention that the house includes a two-car garage?
The new development, East Adams Phase I, is replacing McKinney Manor, a to-be-demolished public housing complex with $17 million in deferred maintenance. East Adams will house tenants earning 60 percent of the area median income. Project-based Section 8 vouchers administered by the Syracuse Housing Authority will support 63 of the units.
The rest of the funding is coming from state and federal Low-Income Housing Tax Credits ($42 million in equity and $45 million in subsidy from HCR) and Empire State Development (an $8 million subsidy loan). There’s also $2.1 million from HUD, $500,000 from city bonds and $400,000 from Onondaga County.
Only in fantasy land could these funds be used to buy and convert private homes to public housing. That said, if it makes sense for the government to spend $773,000 per unit on East Adams Phase I, it surely makes sense for it to pay $6,000 for this attractive, four-bedroom fixer-upper with original detail and rehabilitate it.
Government housing wonks might call this analysis nonsense. I acknowledge that there is not a binary choice between building the East Adams project and buying existing homes.
Individuals, house-flippers and investors will eventually purchase the listed homes and fix those that need fixing, so the government need not do that. Meanwhile, if the government doesn’t build East Adams, no one will. The purpose of government is to do things that are needed but don’t happen on their own. I get all that.
Still, it’s hard to make sense of paying New York City prices to build affordable housing upstate, where homes are dirt cheap.
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