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There are growing signs the rent is too damn high in Rochester.

A previous post reported that more than half of Rochester’s renters pay more than 30 percent of their income on housing. That’s considered burdened. Nearly a third of renters are paying more than half their incomes on housing. That’s considered severely burdened.

There are several recent reports showing affordable rental housing is an issue here.

Rents On Way Up

The Buffalo News reported rents in Rochester have risen 7.2 percent in the last three years, to an average rent of $1,154.57. That’s about twice the rate of inflation. This is troubling because many renters have not seen wages grow that much in the last few years. Meantime, the median home price is up only 3.3 percent since 2012.

The Buffalo News speculates rising rents, which are happening across Upstate, are the result of a stabilizing population and new jobs. Many Millennials and empty-nesters do not want to own homes, preferring the flexibility of renting. Many younger people cannot afford to own a home, especially amid tighter lending restrictions.

The Poor Hard Hit

The Urban Institute came out with a study showing there are not enough housing units for extremely low-income households. These are households of four earning no more than $20,000.

The UI found there are only 22 “affordable, adequate and available” apartments for every 100 extremely low-income household. There are more than 35,000 such households in Monroe County. This data includes federal housing subsidies.

Fewer Owning Homes

The census released a fact sheet on Rochester housing in 2013. It shows 64 percent of units were owner-occupied. That’s way down from 74 percent in 2007.

The fact sheet also shows a vacancy rate of 8.2 percent for all units. It’s interesting rents are on the way up with so many vacancies. The question is where are these vacant units. They are not in places in demand, apparently.

Another interesting thing about the fact sheet: The largest category of renters are people 35 to 44 years old.

In conclusion, there seems to be a shift in the local housing market, with more people renting. There also appears to be a shortage of desirable apartments.

Graphic of Day:

 

Rochester Metro, U.S. Census, 2013

Rochester Metro, U.S. Census, 2013

 

Links of the Day:

 

– The owners of Victoire and Murphy’s Law plan to convert Irondequoit library into a restaurant.

– What a life: William B. Konar, Holocaust survivor, successful and generous, dies at 85.

– Why South Carolina’s Confederate flag isn’t at half-mast after church shooting (and why they have one at all).

For the second time in a week, The Democrat and Chronicle has published a flawed real estate article. This one is titled, “Walkable neighborhoods are in demand.”

The first red flag is that the piece features a picture of a street with no sidewalks.

 

Screenshot, Democrat and Chronicle website, 5/16/15

Screenshot, Democrat and Chronicle website, 5/16/15

Two of the neighborhoods featured in the article are decidedly not walkable.

The Estates at Beaver Creek in Farmington backs up to a trail. That’s apparently enough for real estate agents to sell this as a walkable neighborhood.  But WalkScore, a website rating a place’s walkability, gives this neighborhood a 6 out of 100 points, an indication this area is about as car-dependent as it gets. This tiny, semi-rural development is surrounded by high-speed roads with no sidewalks. There are virtually no amenities, such as restaurants, stores, libraries and schools, within walking distance. It’s also not accessible to public transit.

Another featured neighborhood is the Black Watch subdivision in Perinton. WalkScore gives this neighborhood 23 out of 100 points, saying almost all errands require a car. While many houses are within one to two miles of businesses, these streets do not have sidewalks or streetlights. The winding roads in the street grid mean people have to walk longer distances to get from Point A to Point B. The businesses sit on high-speed, five-lane roads. This neighborhood is also not well-served by public transportation.

The other neighborhoods featured are more walkable. Roselawn in Brighton has a WalkScore of 60, meaning it’s somewhat walkable, and it’s also somewhat well-served by transit. But Spencerport and Scottsville villages, while wonderful, get scores in the 30s, probably because they’re surrounded by more semi-rural areas.

Just because you enjoy going out for a stroll, doesn’t mean you have a walkable neighborhood. Just because you have a trail in your backyard, doesn’t mean you have a walkable neighborhood. Just because you can and do walk around your neighborhood, doesn’t mean you have a walkable neighborhood. Just because there are parks and amenities nearby, doesn’t mean you have a walkable neighborhood.

Walkable neighborhoods value pedestrians. They have sidewalks, crosswalks, lower speed limits, narrower roads and streetlights. They have destinations. They are denser. They are not designed solely around cars. They have life and activity. Pedestrians feel safe. They have places to go. They enjoy the experience of walking. These neighborhoods have almost everything one needs.

The East End scores a 91, Park Ave. scores a 75, South Wedge scores a 78, Village of Pittsford scores a 74 and Village of Fairport scores a 70. Jeff Speck wrote a whole book about what it means to be a walkable place and why these places are so valuable. It’s an awesome read and could change the way you think about how we’ve designed spaces around cars.

The D&C article was right. Walkable neighborhoods are hot. But the paper and the real estate agents seriously misrepresented what it means to be walkable. It’s not a small error, as walkability means so much to people who are passionate about making our communities more accessible and vibrant.

Note: Earlier this week, I fiercely defended the D&C for standing up for access to information. Later in the week, I took the paper to task for two bungled articles. I love the paper. If I didn’t value the institution, I wouldn’t bother writing about its work. Accountability is important for all journalists, myself included.

 

Links of the Day:

 

– You don’t often see $1.6 million homes in the Rochester area.

– The Village of Pittsford’s politics are truly insane. Twenty-five percent of its budget is for legal fees?

– If you grow up in Monroe County, you’re less likely to be married by age 26.

– Binge drinking has increased in many places, including Monroe County.

– Syracuse police have a pattern of withholding information.

– Is there science backing up Chipotle and Whole Foods on GMOs?

Here are the highest-paid CEOs of 2014.

HouseThe Democrat and Chronicle published a story titled, “Single women buying homes with more regularity.”

The piece made it seem women are suddenly realizing they can handle home ownership:

…a trend that real estate brokers said has been on the rise — single female homebuyers as a growing part of the market. Year ago, brokers said, women tended to wait until they married before buying a home. That’s not the case anymore…

“Twenty years ago, a single girl was not supposed to buy a house, because who’s going to fix something if it breaks,” (Catherine Wyble) said. “So many people had it in their heads that you don’t buy a house until you’re married. You would have to have a husband to have a house. Now, it’s not a big deal.”

You don’t say!

…Wyble, who herself is single and owns a home, said she has an agreement with a guy friend to help him with his laundry in exchange for his mowing her lawn…

Single guys want to see the garage and the basement, Wyble said, while single women are drawn to the kitchen, the bathrooms and “having the big stuff done.” Single women tend to avoid ranch houses out of fear of being more vulnerable sleeping on the ground level, she added.

After I stopped gagging, I wondered if it’s really true that more “single girls” are buying homes in the Rochester area. I decided to look up some statistics on the U.S. Census website, since this piece lacked any data to back up these anecdotes.

It turns out, women own more homes in the Monroe County. Even us single gals!

In 2010, there were 30,707 women heads of households in owner occupied units in Monroe County who were not in non-family households, meaning they didn’t live with relatives. The vast majority live alone. About 40 percent are senior citizens. This compares to only 23,091 men who are heads of households in nonfamily situations.

Single women who own houses made up 16 percent of homeowners in Monroe County in 2010, up from 14 percent in 2000. But the share of single men homeowners also went up 2 percent during this time, from 10 to 12 percent. That’s probably because the rate of married homeowners fell five percentage points.

If there was a headline defining this era, it wouldn’t be that more women are jumping into home ownership. It would be that more single people are buying houses.

Monroe County is not alone in more women owning homes. Nationwide data shows that since 1990, more single women than single men have owned homes. The rate of single women owning homes has been steady in recent years.

If more women than men have owned homes for decades, why is it still news when single women buy houses? Why has this been a “trend” for two decades?

Let’s foreclose on this bogus trend once and for all.

 

Links of the Day:

 

– I agree with Gary Craig. Thomas Johnson’s defense team did its job and took pains to say Daryl Pierson was not to blame for his death.

– Start-Up New York has only created 76 jobs and has not “supercharged” the state economy as the governor promised. What’s more, “Of the businesses currently running, however, just four came from out of state. In some cases, the companies have not even crossed county lines.”

– Dinner for two? NY bill would let dogs into outdoor dining areas.

Housing Costs

 

We like to say Rochester is a really affordable place to live. But one-third of households in the Rochester region are struggling with housing costs, according to a study by Harvard University. (See interactive map.)

A household is considered “burdened” if it is paying more than 30 percent of its income on housing costs. Thirty-three percent of households in our region are burdened, slightly lower than then 35 percent national rate. Approximately 1 in 6 households – 16 percent face severe housing costs, meaning they’re spending more than half their income on housing. Nationally, 17 percent of households are severely burdened.

 

Housing Costs

 

The picture for renters is bleaker. More than half – 53 percent – of Rochester area renters are spending more than 30 percent of their income on housing. That’s higher than the national rate of 49 percent. Thirty percent of Rochester area renters are severely burdened, paying more than half of their income toward housing costs. That’s also higher than the national rate of 27 percent.

The median household income for Rochester area renters is $26,000. The median monthly cost for renters is $770.

Rochester ranks 103rd out of 381 metros in the share of renters who are burdened. It seems the area needs more affordable housing options.

 

Housing Costs

 

But even homeowners are feeling pressure. The study says nearly 1 in 4 homeowners  are burdened. Nearly 1 in 10 are severely burdened. The median monthly home ownership cost is $1,019. The median household income for homeowners is $65,000. Rochester ranks 193rd out of 381 metros on homeowner burden.

The report calls on the federal government to take a strong role in assisting the housing market. Mortgage rates, as well as FHA insurance and guarantee premiums play a role. The study also says rental assistance is also extremely important for lower-income households, not only to ease the financial burden, but to help families live in higher-quality housing in better neighborhoods.

 

Links of the Day:

 

– Wegmans PILOT has expired in Geneva and now it wants its assessment lowered.

– There’s a big risk in asking colleges to take over high schools. They can just up and leave.

– One in three Americans has been arrested. Even if the charges are dropped, an arrest may come back to haunt you.

– Now we’re militarizing school police officers, too.

– Los Angeles wants to reduce the number of students arrested in schools. Here’s a thought: Don’t have cops in schools if you don’t want them to act like cops.

– Are you noticing there’s not a lot of Ferguson in your Facebook news feed? There’s a reason.

How Kansas City is luring Millennials.

– The “eternal flame” is drawing people to Orchard Park.

– Should viral memes dictate our charitable giving? I got killed on Facebook for saying I resented the peer pressure involved in the ice bucket challenge. But the distortion of my words and the vicious personal attacks on me that resulted from my post seemed to validate my point. Peer pressure? What peer pressure!

Young Renters

 

More than half of Rochester area Millennials who rent apartments could afford to be homeowners. That’s according to a study from Harvard University, which found 52 percent of people aged 25 to 34 could afford a mortgage.

The study found a big drop in home sales to first-time buyers in 2013. This is happening even though houses and mortgages in most cities are becoming more affordable.

What’s going on? The study notes that while a lot of young adults can afford a mortgage, it’s also true that a huge number cannot. Many are having trouble finding jobs and some are living with their parents. Access to credit could be also be tight.

“Aside from covering monthly homeowner costs, unemployment and income stagnation mean that even in the lowest-cost metros in this analysis, many potential buyers cannot afford at least $5,000 for a 5 percent downpayment,” the study notes.

One thing the study did not address is lifestyle choices. Surveys have shown Millennials want a more urban lifestyle. Many want flexibility to move. This has implications for the local housing market, which has seen a dip in home ownership rates, from 69.9 percent in 2006 to 66.9 percent in 2012.

 

Links of the Day:

 

– A reminder that Terry Pegula’s Bills bid is fueled by fracking.

– Even Buffalo radio stations refuse to play Bon Jovi.

– I don’t buy that the Rochester City School District has no schools on this list. Data must be fishy.

– “All 10 states with the largest percentages of uninsured adults now have Republican governors and legislatures.”

– The little discussed suicide problem at America’s firing ranges.

“You know what’s really dangerous to your child? Getting in a car.”

The epic fail of baby car seat design.

– The University of Michigan is building a fake city for driverless cars.

JOSANA

 

We’ve often talked about the neighborhood surrounding Sahlen’s Stadium as a perceived barrier to drawing more visitors. It’s been proven time and again if stadium offers great programming, people have no hesitation going, but the perception problems remain.

The neighborhood, called JOSANA, has been gradually improving over time. A new public square and garden have been built. Habitat for Humanity has built about 40 homes. Cornerstone is building more. Now the city is putting 29 lots up for sale. Some are in the stadium’s sight line.

JOSANAThe city has issued a Request for Proposals for the 29 lots. The city is hoping for affordable housing, including single family homes. If nothing else. the RFP will gauge developer interest. There might not be any. That’s because the area is incredibly poor.

According to a 2010 market study, there are 2,930 residents of JOSANA and slightly less than 1,000 households. The population is dropping. The media family income is $20,800. The per capita income is $9,250. Nearly half of households don’t own cars. The housing stock is very old, with two-thirds having been built before 1939.

Make no mistake, this is an effort to rebuild and save a neighborhood. The proposals are due in March.

Links of the Day:

– The guy who closed Scotch ‘N Sirloin in Rochester blames our economy and competition.

– He ran for governor. Now he may run for school board. Carl Paladino wants to take out a “bunch of incompetents.”

– Online degrees have jumped the shark. One college awards them based on current knowledge, even if you’ve never taken a class.

– An Albany church that counts Founding Fathers among former members celebrates 250 years.

Remembering Urban Renewal’s toll on Syracuse.

The Fringe Festival is expanding.

The number of renters is creeping up in Monroe County.

Census figures show a decline in the rate of home ownership:

  • 2008: 68 percent
  • 2009: 67 percent
  • 2010: 66 percent
  • 2011: 64 percent

In 2011, the largest category of mortgages, encompassing 37 percent of households, cost between $1,000 and $1,499 a month. One out of five homeowners has a mortgage that costs more than 35 percent of their income.

One-third of renters pay between $750 and $999 a month. The rate of renters paying more than 35% of their income for rent has gone up:

  • 2009: 43 percent
  • 2010: 47 percent
  • 2011: 51 percent

That indicates many renters are struggling to pay the bills.

Links of the Day:

– Wegmans is acquiring two houses adjacent to its Mt. Read store. Many think it will be a liquor store.

– MCC is going to be hard-pressed to leave a renovated Sibley Building with a brand new bus station built out back.

– An ongoing panhandler fight over a Syracuse corner may have led to the killing of a homeless Syracuse woman.

– The Thruway hot dog wars have begun. Hofmann’s out of Syracuse is seeking to go national, but Buffalo insists it will remain loyal to Sahlen’s. Not mentioned: Zweigle’s.

A study from Trulia shows it is cheaper to buy than rent in the 100 largest metropolitan areas of the United States:

With a 20% down payment, a 30-year fixed mortgage rate at 3.5% and at the 25% federal tax bracket, homeownership is cheaper than renting in all of the 100 largest metros by a wide margin. There is no market where the financial decision is even close, so long as you plan to stay in the home for at least seven years, get 3.5% mortgage, and itemize your tax deductions. However, how much cheaper it is to buy a home than to rent really depends a LOT on where you live.

In Rochester, the study found the monthly cost of home ownership is $790, while the monthly cost to rent is $1,358. Trulia based monthly costs on the average across all properties, for sale and for rent. Home ownership costs include mortgage, maintenance, insurance, property taxes, closing costs and other costs. Renting costs included rent, security deposit and insurance.

I think those rental figures are high. The 2010 census shows only 27.9 percent of housing units with a mortgage had monthly housing costs below $1,000. Only 18.1 percent of rental units cost more than $1,000 a month.

Buying a home has tax advantages and builds equity, but it’s far more economical for me to rent, according to numerous calculators. Try this one.

Links of the Day:

– Chicago teachers and the school district have reached an agreement in principal and teachers could be back to work on Monday.

– Kodak may abandon its patent sale, meaning the scramble for cash is on.

– Fuji is getting out of the motion picture film business, which is a boost for Kodak.

– In Rochester and elsewhere, doctors are “firing” parents of patients who refuse to get vaccines.

If you live in one of Rochester’s majority black and Latino neighborhoods, odds are you have a higher-cost government backed mortgage.

That’s according to a study, Paying More for the American Dream, first reported in the Rochester Business Journal. Among the organizations conducting the study were Empire Justice Center in Rochester.

The report looked at 2010 Federal Housing Administration and Department of Veterans Affairs loans.

In Rochester, these loans accounted for 86.4 percent of all home loans in minority neighborhoods. About a third of refinance loans in black and Latino neighborhoods were government backed, twice the rate as white neighborhoods. Forty percent of black borrowers got government backed refinance loans, compared to 23 percent of Latinos and 15 percent of whites. The study says:

The findings indicate persistent mortgage redlining and raise serious concerns about illegal and discriminatory loan steering.

(snip)

FHA loans can offer certain advantages. Borrowers with lower credit scores, for example, can qualify for FHA loans, which also typically require smaller down payments than conventional loans. Indeed, government backed loans may be the only viable loan option for many borrowers. FHA loans can also present drawbacks, however. They are typically more expensive, for example, and can take longer to be approved than conventional loans.

The report calls for more government oversight and enforcement.

Links of the Day:

– Few kids pass summer school in the Rochester City School District. I’m not sure why this is so surprising. If there’s a massive failure rate during the school year, why would anyone think students will suddenly get their acts together in six weeks? The article did shed light on chaos and computer problems that are not helping matters.

– State senate Republicans say gun control measures are a non-starter.

– Five people are accused of beating and robbing migrant workers in Wyoming County.

Are suburban office parks in trouble?

– A former skinhead writes about what he would have told the Wisconsin Sikh temple shooter.

Anne Hathaway digs the Finger Lakes. 


More Links of the Day:

– Data compiled by Zillow shows 12 percent of homes in Monroe County are underwater, meaning they’re worth less than the owners owe on their mortgages.

The figure seems high, because Monroe County homes didn’t depreciate that much during the housing bust. But zoom into the City of Rochester. Northeast neighborhoods and Maplewood are in big trouble, with a third of the homes underwater. Some zip codes of those zip codes in northeast Rochester emptied out over the last decade.

While not as bad as the housing crisis in Atlanta and Las Vegas, this is not a good situation for Rochester. Neighborhoods can be further destabilized and these houses can more easily fall into the hands of banks and absentee landlords. Properties can be abandoned, becoming targets for arsonists and vandals. Maplewood has so far been able to stave off blight. Northeast Rochester has been in decline for a long time.

– 19th Ward neighborhood leaders are frustrated with young families moving out because of the schools.

– See U.S. prisons from the sky. This is a stunning map.

– New York State has a new I Love NY campaign. You can draw a picture in place of the heart. Or just watch this commercial:

Links of the Day:

– Home ownership rates in the United States are at a 15-year-low, slipping to 65.4 percent. Reuters reports:

“You are seeing the perfect storm of age, financing and the business cycle coming together to push down the homeownership rate,” said Steve Blitz, chief economist at ITG Investment Research in New York.

The homeownership rate, which was measured at 66.0 percent in the fourth quarter of 2011, peaked at 69.4 percent in 2004 at the height of a housing market boom fueled by cheap credit.

The collapse of the U.S. housing market bubble triggered the 2007-09 recession. With house values tanking, many – especially the younger generation – are rethinking the so-called American dream of owning a home.

Rochester has certainly seen a dip. Here are first-quarter home ownership rates over time:

  • 2007: 74.1
  • 2008: 73.4
  • 2009: 70.5
  • 2010: 68.4
  • 2011: 73.4
  • 2012: 67.5 

Even with Rochester’s relatively stable housing prices, a greater percentage of the population has been able to afford buying a house.

 – An out-of-town visitor to Rochester left thinking our city is horrible. The woman wrote to the Democrat and Chronicle about seeing Jersey Boys and coming out to find her car window smashed. She was shocked police would only take a report over the phone. Welcome to the urban life.

– The RCSD’s deputy superintendent is leaving to join Jean-Claude Brizard in Chicago.

– The state might drop the global history exam requirement. Teachers are mad.

– Could police departments one day be able to fly drone aircraft to monitor neighborhoods?

Stick shifts are dead. Long live stick shifts!

City of Rochester Communications Bureau

A report from Brookings Institution will not come as a surprise, but it’s a sobering reminder that our community remains segregated and has a giant opportunity gap.

The study looked at the role zoning and housing costs play in students’ access to high-performing schools. The report found anti-density zoning laws and rules discouraging affordable housing lead to economic and educational segregation. This is bad, because studies show economic integration raises the performance of low-income students.

The Rochester metro area scored poorly in the study:

  • Rochester has the 22nd most restrictive zoning laws in the country.
  • Rochester is the 20th most economically-segregated area in the country. 47% of low-income students would have to change zip codes to achieve an equal income distribution across schools.
  • Housing costs near high-scoring elementary schools are 2.7 times higher than housing costs near low-income elementary schools.
  • High and middle-income students score 31 percentage points higher on standardized tests than low-income students. The size of the gap is the 7th highest in the country.

Here are excerpts from the study’s discussion:

When large numbers of students are not educated up to their potential, it drains the pool of potential inventors, researchers, civic leaders, and skilled laborers that would otherwise nurture innovation and economic prosperity.

(snip)

For many families, it would be cheaper to send a child to a parochial or even more expensive private school than to move into the attendance zone of a high-scoring school.

(snip)

Discriminatory zoning that forbids the construction or use of inexpensive housing in affluent neighborhoods is still widespread in metropolitan America…zoning today keeps poor people out of rich neighborhoods, and accounts for a significant portion of the school test-score gap between low-income and other children.

(snip)

(Education) reform ideas certainly have merit and should be carefully evaluated and considered, but they do not address one very important mechanism that sorts poor students into the lowest-scoring schools: housing policy.

I thought this was a powerful study. But in their conclusion, the authors left out the notion of a countywide school district. Given the data, it seemed obvious.

City of Rochester Communications Burear

The City of Rochester wants to continue giving 10-year tax breaks to rich people who buy condos downtown.

The city first started giving incentives to downtown homeowners in 2007. Anyone who buys a newly-constructed or converted unit in an existing building gets 90 percent off his tax bill the first year, 80 percent off the second year and so on. The goal is to increase home ownership and the availability of affordable housing units downtown.

The program expires in May and the city wants to renew it. According to legislation submitted to City Council, the program hasn’t substantially met its goals. Of 2,914 downtown housing units, only 94 are owner-occupied. Only 20 homes have been built since the program went into effect.

Most downtown housing is high-end and the tax breaks have done nothing to change the dynamic. The average assessment of the 20 new homes built is $230, 323. That’s not exactly affordable housing. People who want to live downtown are choosing a lifestyle and the market indicates price isn’t a concern.

Finally, most downtown developers get tax breaks and other incentives before they sell a single unit. For example, the state awarded $335,000 in Restore NY grants to a developer building only two condos and retail space on East Ave. for $1.2 million. The developer plans to live in one of the units, which he won’t have to pay full taxes on for 10 years.

I understand wanting to get people to own homes downtown.  But the market says only the wealthy can afford it right now – tax breaks or not.

City of Rochester

A Rochester housing project that made the Coburn-McCain list of bad stimulus projects is expanding.

According to legislation submitted to City Council, El Camino Estates will enter its second phase. The second phase looks very much like the first.

Rochester Cornerstone Group and Ibero American Development Corporation plan to build 25 homes in the Conkey Avenue neighborhood for $6.3 million. That’s about $250,000 per home in an impoverished neighborhood where the median home price is less than $50,000.

These aren’t palatial homes for the money. They’re modest three and four bedroom houses with less than 2,000 square feet of space. The houses will initially be for rent and offered for sale after 15 years.

As in the first phase, the developers get a $800,000 fee.

The project is heavily subsidized by taxpayers. The city is proposing a payment in lieu of taxes. El Camino Estates is relying on a $1.2 million state grant and a city loan.

The developers have explained the project costs so much because of strict regulations surrounding government grants, including labor agreements and environmental standards.

Of course, this project is not just about dollars and cents. It’s about improving a neighborhood and providing safe, affordable housing to low-income residents. No one is going to build houses on Conkey Avenue without subsidies.

I’d like to see a long term study on El Camino’s impact in that census tract and the broader neighborhood. Has crime been reduced? Have neighboring property values increased? Has the population of the neighborhood rebounded? Fifty new houses may provide the critical mass needed to help the area turn the corner, but we shouldn’t make assumptions when the costs are so high.