Housing ‘Out of Reach’ for Many in the Hudson Valley

NEWBURGH—Hudson Valley Pattern for Progress followed up its analysis on the high cost of migration out of the Hudson Valley released yesterday, with a troubling report issued earlier today (July 16) appropriately titled “Out of Reach 2024,” which focuses on the rental and purchase housing markets in the Hudson Valley.

The Center for Housing Solutions at Hudson Valley Pattern for Progress report illustrates the steep rise in housing costs over the past year, as surging rents and stagnant wages worsened the strain on tenants throughout the entire region. While a significant part of the report highlighted the sizable gap between wages and median rents, the term “Out of Reach” definitely applies to the purchase home segment as well.

In terms of the for-sale market, the available housing is out-of-reach for many prospective homebuyers While housing stress is most acute for those who earn the least amount of money in our economy, the latest data show that even the core of our middle class in the Hudson Valley is now struggling to find an affordable place to live, Pattern officials stated.

The report noted that “The majority of households in the Hudson Valley cannot qualify for enough mortgage (funding) to purchase the median-priced home in any of our nine counties. This is true for one-person, two-person, and four-person households making median wages in each county.”

Data indicates that a two-person household falls anywhere from $99,665 (Sullivan) to $280,410 (Rockland) short of qualifying for enough mortgage to buy the typical home in each county. Consequently, data show that more middle-class households are leaving the region in search of more affordable options in our neighboring states, or in Southern states such as Florida, North Carolina, and South Carolina.

The purchase gap to qualify for a mortgage for the median-priced single-family home for a two-person household in addition to the aforementioned counties was:

Columbia County (AMI: $85,120), purchase mortgage gap: $215,876
Dutchess County (AMI $91,840), purchase mortgage gap: $153,024
Greene County (AMI: $77,280), purchase mortgage gap: $118,436
Orange County (AMI: $91,840), purchase mortgage gap: $143,624
Putnam County (AMI: $78,080), purchase mortgage gap: $251,730
Ulster County (AMI: $93,760), purchase mortgage gap: $131,710
Westchester County (AMI: $124,960), purchase mortgage gap: $249,470

“The struggle to create housing that is affordable for people across the entire spectrum of income will be the defining civic issue for this generation of leaders in the Hudson Valley,” Pattern CEO Adam Bosch said. “There is ample evidence that the housing crisis is exacerbating our regional workforce shortage, as more people pack up and leave the Hudson Valley in search of a more affordable standard of living elsewhere. We cannot look away from this challenge. To preserve our wellbeing and quality of life, the Hudson Valley must allow and encourage more housing, rather than opposing and protesting it.”

A single worker making average wages cannot afford fair-market rent in any of the nine counties served by Pattern. The gap between tenant wages and fair-market rent grew substantially in every county except one, as rents increased by more than $200 per month in many places over the past year.

Other notable conclusions from the report include the following:

Single adults working 40 hours per week on average wages cannot afford a one-bedroom apartment in any of the nine counties. Tenants’ hourly wages would need to increase between $2.50 and $31.67 to afford fair-market rents in their respective counties.
Fair-market rents would need to decline anywhere from $130 to $1,647 per month to make them affordable for a person earning average renter wages across the region.
The gap between wages and rent has gotten larger in every county except Greene. In recent years, rent increases have outpaced wage increases by about double. However, this comparative rate of change increased significantly over the past year. For example, average tenant wages in Dutchess, Orange and Ulster counties remained nearly flat while fair-market rents in those counties increased by approximately 15%. The biggest gap was in Westchester County, where average tenant wages dropped by 9% and fair-market rents increased by 16%.
The outlook also worsened for people seeking a two-bedroom apartment. For households that include two earners making average wages, rent remains unaffordable in Orange, Putnam, Rockland and Ulster counties. The positive margins are fairly small in the remaining five counties.
Wages earned by a typical renter ranged from 34% to 51% of the area median income in each county, a key metric for housing policies and programs. In 2023, average renters earned 39% to 61% of the area median income. This change underscores that greater wage growth is happening in the higher income brackets, while renter wages remain stagnant.

The data in Out of Reach indicate that renters and homeowners in the Hudson Valley have little to spend on necessary and discretionary expenses because the cost of housing is gobbling up a large proportion of their incomes. Recent research by Pattern also found that an influx of wealthy households into the region during the pandemic caused very fast gentrification in certain counties, exacerbating the housing stress that already existed. For example, households that moved into Columbia County during the brunt of the pandemic brought an average adjusted gross income of approximately $160,000, while those who left the county earned an average of just under $70,000.

This same trend occurred at different scales in Dutchess, Greene, Sullivan and Ulster counties. The influx of new wealth pushed up the cost of all types of housing—along with the assessed values of land and homes – making it less viable for low-and moderate-income people to move or buy a home in the region.

The affordability crisis in housing has also exacerbated a workforce shortage in the Hudson Valley, as working-class families move out of the region and have fewer children. The latest migration data from the Internal Revenue Service found that the Hudson Valley lost a net of 12,257 people in 2021, the largest net out-migration since 2005. The region has lost more people than it gained to migration for 25 of the past 26 years – a trend that has resulted in a net loss of 146,763 people, according to federal data. In 2022-2023, there were 47,865 fewer students attending public school in the Hudson Valley than at the peak of enrollment in 2003.

Pattern officials also noted that data on migration and school enrollment indicate that the workforce in the region is likely to continue shrinking over the next decade, especially as the Baby Boomer generation retires in greater numbers. These challenging trends are connected to and partially caused by, the forces of stagnant wages and higher housing costs that are underscored in the Out of Reach 2024 report.

The Out of Reach 2024 report utilized county-by-county data from the National Low Income Housing Coalition, which examines hourly wages and fair-market rents to analyze the affordability of rental housing. (Fair-market rent is the 40th percentile of renters who have moved within the past two years, which means it is lower than median market-rate rents.) Affordability is calculated by the standard that no individual or family should spend more than 30 percent of its total monthly income on housing.

The Hudson Gateway Association of Realtors is one of a host of supporters of the Center for Housing Solutions.

To read the full Out of Reach report go to: https://www.pattern-for-progress.org/portfolio/outofreach2024/