Housing options take front and center
City hears policy ideas from planning department summer employees
A pair of interns, Francesca Marrapodi and Cara Granata, who have been working in the city since June have taken on the fairly large challenge of creating more home ownership and generally more housing options in Saratoga Springs — especially for the segment of society called “the missing middle,” or households that make between 60% and 80% of the area median income (which is $116,100 in Saratoga County).
The duo presented three options — a revolving loan fund, a community land trust, and a land bank — to the Saratoga Springs City Council on Tuesday, Aug. 5.
They quickly discounted one: the land bank option, which they said would likely not work that well in Saratoga Springs, as it would create an entity that could buy, restore and bring properties back onto the market if they are blighted or turn them into other assets needed in the community, what the interns called creating “productive use” of the property.
“Saratoga doesn't really have a need for returning properties to productive use,” Marrapodi said. “Saratoga has a really strong retail market, and the properties will return themselves.”
Instead, they are looking at the land trust and revolving loan funds. Neither would require the city to create a new entity.
In the revolving loan fund, the city — or a partnership with the city and county or another nonprofit organization — becomes the lender to a private developer of affordable housing.
Under that model, the city puts together a pool of money and loans to an affordable housing developer at a low interest rate. As that loan is paid back with interest, the money is used for another project, loaned again at a low interest rate to an affordable housing developer.
“This would allow for public private partnership, because the public entity would be holding the loan,” Marrapodi said. “So they would have a stake and majority ownership, which means they would be able to allow for permanent affordability.”
The community land trust model has two owners for one housing property: A nonprofit owns the land beneath the house, often the most expensive part of a home’s price, and the home buyer owns of the house itself.
The people who buy the homes are not purchasing — and therefore not paying for — the land. Also, they are required to take only a 25% appreciation in the property if they sell it, and they must sell to people who hit the correct income limit.
“The benefits are that it allows permanent affordability. It allows home ownership, and through that, wealth building,” Granata said, adding: “And third, it also allows a scattered site, so having houses that are for middle income individuals throughout the city.”
Workforce housing — or that “missing middle” — as presented here are families that make between 60% and 80% of the Area Median Income, or AMI, as measured by the federal Department of Housing and Urban Development.
The 60% to 80% is that “missing middle gap that we are looking at,” Marrapodi said.
Market rate housing can be housing aimed at any income level, but the property owner is selling or renting at market rates for that quality of housing. Housing advocates say that a household should spend up to about 30% of their income on housing. Above that, the stress on the family finances becomes too much.
Where the city goes from here
Whether the presentation has a lasting effect remains to be seen.
In an interview on Wednesday Aug. 6, Mayor John Safford applauded the work that he said comes with having great interns and said the presentation “just helps us to envision — the planning department primarily — how we might change things.”
Some housing construction companies have approached him recently with ideas that might help reach the “missing middle,” and he sees how new ideas may fit with what the contractors are talking about. He would not go further on that topic since they are very early discussions, and these things take time.
“It’s still a couple years before you’ll see any of it,” he said.
Commissioner of Accounts Dillon Moran, who has led affordable housing initiatives, said he thought the presentation was solid and liked the revolving lending idea the best. He also agreed that land banks are a non-starter.
“I’ve seen examples with land banks that get political, or worse,” he wrote in a text to the Dispatch.
Granata will pursue a master's in policy in Berlin. Marrapodi is finishing up at Bryn Mawr this spring.