housing boom unbowed by pandemic
/
Published on March 22, 2021
Look, up in the sky. It’s a bird. It’s a plane. No, it’s . . . a . . . crane?
“I see a lot of cranes in Yonkers, White Plains and New Rochelle,” Westchester County Executive George Latimer says. “There are a lot of construction projects, especially in the southern parts of the county, and what I see on the books is that we will have a market that will support it.”
Those cranes are symbols of new life, always welcome but especially after the pandemic-related devastation that caused so much pain and loss starting in New York state, then spreading throughout the country.
“2020 was an enormously challenging year in almost every regard, yet the pandemic had almost no impact on economic development,” says New Rochelle Mayor Noam Bramson, whose city has more than 30 approved projects that will within the next few years add 12,000-15,000 residents to the city of 80,000. “No one pulled out of any of our ongoing construction deals, and some construction even continued throughout the year. Some are leasing up right now.”
While all that construction represents a hopeful future, the year of the pandemic has—in real estate terms—been a boon for Westchester.
“Housing sales were robust and apartments at all price levels were moving quickly,” says Marsha Gordon, the president and chief executive officer of the Business Council of Westchester. In recent years the county was fortunate, with development and the housing market, to be ahead of the curve, Gordon says.
Much of the county’s growth has come from people leaving New York City, where the density has felt dangerous since the first days of the pandemic. Low interest rates and a strong stock market also were major contributors to the dramatic shift.
In Westchester, where housing construction had been lagging before the pandemic, supply has actually had a tough time keeping pace with demand across the board. Bridget Gibbons, the county’s director of economic development, says the residential market has been “on fire.”
“People are buying houses sight unseen, and the rental market is also very competitive, with apartments sometimes not staying on the market for even a day,” Gibbons says. “I keep hearing Realtors say, ‘I wish we had more.’”
That’s true in the county’s largest cities and in its small towns.
Ken Wray, the mayor of Sleepy Hollow, says he’s hearing the same comments from brokers about how there just isn’t enough product in the town to satisfy all the house hunters. “It seems like every home that does come on the market in Sleepy Hollow sold in five days or started a bidding war,” Wray says.
A study from the county’s major real estate firm, Houlihan Lawrence, found that 2020 featured year-to-year growth of 13.6% in homes sold, with the median sale price climbing 11.5%, to $947,000. The Douglas Elliman real estate brokerage reported recently that the busiest bracket has been for houses priced between $1 million and $2 million. Not everyone who sold moved away, Gordon says, noting that many seniors took advantage of the opportunity of a booming market to downsize out of their large homes and move into nearby apartments.
The end-of-the-year growth was particularly sharp after a solid first quarter, but one that was largely pandemic free, and a second quarter in which people were locked down for much of the time, causing a steep year-to-year drop in sales of more than 20%. The biggest numbers came in the fourth quarter, with sales climbing by more than 50% and the average price jumping by nearly 20%. Significantly, with people expecting to work from home into the future, the study showed that northern Westchester, with a more forbidding commute to Manhattan than from the south, experienced some of the highest increases in home purchases.
The biggest question, of course, is whether the residential surge might recede as life returns to normal, especially in New York City with its offices and endless cultural attractions and restaurants.
Gordon of the Business Council says some of the renters in apartments may be temporary, but all of the buyers “are new residents who are here to stay.”
As to whether the pace will continue, Latimer acknowledges it likely will slow, but he says that even before the pandemic, the skyrocketing costs in Manhattan and Brooklyn were boosting suburbs such as Westchester. He expects that as the city’s real estate market bounces back, that trend will continue.
“The jury is still out on how much of this is a permanent shift in preferences and practices,” New Rochelle’s Bramson says. But the mayor says that even if the jump in sales last year was outsized, people will continue to look for housing.
“I’m confident in the appeal of our housing markets assets,” he says.
Gibbons says that the construction boom will not slow down. “Even before the pandemic there was a need for housing in the county—for many years there had not been a lot of construction and we were just getting going before the pandemic, so when the economy starts roaring back after this, I expect more,” the economic development director says.
The new construction and all this growth are vital to individual towns, the county and beyond, Bramson says. “If the New York metropolitan region is to remain competitive in the marketplace,” the mayor says, “it’s not reasonable to expect the five boroughs to support all the necessary growth.” But while Gibbons adds that many city-based companies may move part or all of their workforce out of the city as America moves toward a more flexible workplace life, everyone emphasizes that Westchester’s growth will not—indeed cannot—come at the expense of a successful Gotham.
“I do think large cities will recover, and that’s a good thing,” Bramson says. “We move in connection with, not in counterpoint to, New York City.”
“The vibrancy of New York City matters to the whole region,” Latimer agrees. “Westchester cannot succeed unless New York City succeeds.”
While climbing prices are good for sellers and a sign of confidence in Westchester’s future, Latimer wants the county to keep its eye on the bigger picture.
“We have a lot of work to do on affordable housing,” the county executive says, explaining that maintaining socioeconomic diversity is essential.
Countywide, Latimer’s push represents a marked change from the previous administration, which fought against affordable housing in the courts and lost. The 1,400 units happening now nearly double the entire total of Latimer’s predecessor, but Latimer says that’s not enough — a recent study shows the county needs 11,000 new affordable housing units.
Affordable housing is one area where the coronavirus had a negative impact, the county executive says, making it tougher to put together financing packages for projects. The pandemic came on top of years in which affordable housing in the suburbs came under attack from President Donald Trump.
“That [criticism] just showed Trump’s lack of knowledge about life in the suburbs—we have teachers, nurses and firefighters who can’t afford market-rate housing here,” Latimer says.
“Affordable” housing still ain’t cheap—it’s mostly at 80% of the county’s median income, which is quite high. Latimer would like to build affordable housing aimed at families earning 50% or less of the median income. The county executive hopes that state and, with the recent change of administrations in Washington, federal money can help make more units a reality.
That is “absolutely essential,” the Business Council’s Gordon says. “We need housing at all different levels for the workforce that is here and for more people.”
While commercial real estate has been very quiet, Gibbons says, the housing boom will have an impact on business in Westchester in a different way, providing more customers for stores, restaurants and cultural attractions, although the economic development director says that while she expects outdoor cultural attractions to thrive during the summer, indoor attractions will lag a bit.
“There are very positive signs for hospitality and retail,” Gordon agrees. “Many young families are coming in and want to be part of the community as it reopens, and that’s very good news for restaurants and shopping, the sectors that suffered the most during the pandemic.”
Bramson says tower construction is always ahead of street level activity but that has been exacerbated by the pandemic, which closed many restaurants and halted potential openings. Still, the New Rochelle mayor thinks the combination of housing and retail, services and restaurants will ultimately have a huge impact on the composition of his city’s downtown.
All these changes are not just happening in New Rochelle, Yonkers and White Plains, Latimer says, they are happening throughout the county, in municipalities large and small. While smaller villages may not want to build high-rises that would feel out of character, he says, many are taking alternate routes to adding housing stock, such as converting old warehouses into lofts.
In the northwestern corner of the county, Cortlandt has a population of almost 40,000. The town includes the incorporated villages of Buchanan and Croton-on-Hudson and several hamlets. The town’s largest taxpayer and employer, the Indian Point nuclear power plant, is on the verge of closing.
That will take a big bite from the municipal and school district budgets, Cortlandt Supervisor Linda Puglisi says. But the town is surviving and adapting, developing opportunities for retail, green energy and other job-generating avenues, Puglisi says. In addition, she says, there’s a new indoor soccer facility and talk of an indoor skating rink to appeal to families drawn to the area’s open space.
“Our housing market is still pretty good,” Puglisi says. “We amended our zoning code, including making the Town Board the lead agent on requests, to shorten the time [for] approval for developers. We’re not going to overlook traffic studies or environmental impact [studies], but we want to fast-track projects and make the town user-friendly.”
Puglisi points to Pondview Commons, a soon-to-open development of 60 rental apartments next to a shopping center (on the former site of some bungalows) and a new proposal for 200 units near the train station as signs that Cortlandt’s future looks bright.
In Sleepy Hollow, meanwhile, the Edge-on-Hudson project will add about 2,500 people to the town when it is finished in four years, Wray says.
“In a town of 10,000 people,” the mayor says, “that’s a big jump.”
“This fall we will start issuing certificates of occupancy for townhouses and we’ll see the first rentals and it will start to grow quickly,” Wray says, adding that the school system in Sleepy Hollow and Tarrytown anticipated the growth and has rebuilt the middle and high schools.
The town’s public works agency is building a facility, the mayor says, and it has just started a “soup-to-nuts study of public works” that will ensure best practices for manageable growth.
“We are in good shape,” Wray says.