INHS tries new affordability angle with $500K accessory dwelling unit program

ITHACA, N.Y.—Addressing Ithaca and Tompkins County’s affordability issues has been a years-long struggle, one that has seen a variety of mitigation tactics emerge. Those have included the creation of new housing as well as efforts to preserve existing affordable housing through community housing trusts and efforts to limit sharp increases in rent.

In exploring all available options, one of the ideas hatched by affordable housing advocates in New York is the “ADU Plus One” program [ADU meaning accessory dwelling unit]. Through that program, Ithaca Neighborhood Housing Services was recently selected to receive over $500K in funds available for homeowners who can’t otherwise afford to create ADUs on their property.

The premise of the program is to help homeowners who either have ADUs that they can not rent out because they are not up to building code, or homeowners who have the capacity to build an accessory unit on their property, whether a basement unit or in-law apartment or a converted garage, but can’t afford to do so without assistance.

The ADU Plus One program provides funds to build or renovate and create an income-producing rental unit to supplement the lower-income homeowner’s earnings, hopefully making it easier for them to keep their home. It also allows for a subtler density approach, less likely to stir opposition to the degree that large new housing proposals often do.

The state has allocated $85 million towards the effort, with $20 million being made available to designated housing non-profits and their partner municipalities. While the large majority of awarded funds have gone to downstate communities, Ithaca is one of three upstate communities to receive an ADU Plus One grant, a $571,781 award jointly received with Ithaca Neighborhood Housing Services (INHS) as the designated ADU developer.

“There are no limitations of the kind of ADU, it just has to conform with the regulations of the municipality,” said Delia Yarrow, the director of homeownership for INHS. “In Ithaca, that means accessory dwellings that are within existing buildings, or standalone separate units on the same lot, that are smaller than the primary unit. The projects have to comply with zoning.”

The program is aimed at one group that tends to fall through the programmatic cracks of the aforementioned mitigation tactics: existing lower-income homeowners. While a fairly small demographic locally compared to renters, these individuals are increasingly priced out of their homes—squeezed between regular maintenance and taxes that come with home ownership.

An area with rapidly rising home values like Ithaca means that as everyone’s home values go up, so do their property taxes, often at rates well beyond the growth rate of their own household incomes. There are local programs that provide assistance to lower-income homeowners for needed repairs, though that doesn’t address rapidly appreciating home values.

Between job loss, health limitations, and any number of other difficulties, there are plenty of circumstances where home ownership is or becomes a struggle, especially when assessments are rising so quickly and the population in question is already in a financially vulnerable situation.

Regarding the initial award to INHS, Yarrow said funding will be limited to homeowners within the city of Ithaca, with five households serviced—putting aside administrative costs, that will leave around $100,000 per participant for rehabilitating an existing unit, or building a new accessory dwelling unit. Applications from qualified lower-income city of Ithaca homeowners for the first round of funding are still being accepted.

Yarrow said INHS has a pre-application available on its website, with an addendum asking questions regarding unit size and any repairs needed, which when completed enters people onto a waitlist for potential funding.

“We are working with NYS and the City of Ithaca Planning Department to figure out exactly what they’re going to allow us to do under the program,” Yarrow said. “How much wiggle room do we have with the ADU, can we do repairs to the owner’s primary unit, those are things we are working with NYS and the city Planning Department on to which folks might qualify for the funding.”

Per the program’s guidelines, the renter of the Accessory Dwelling Unit is not subject to income limits. However, the program cannot be used for short-term rentals like AirBnBs for a minimum of 10 years. To ensure compliance, the homeowner will enter a legal agreement in exchange for the renovation work that states they will comply with the guidelines. INHS will work with the City of Ithaca, which will be checking websites like AirBnB to monitor properties, and potentially ask for copies of the lease agreement with future renters of the ADU.

Lynn Truame, INHS’s Director of Real Estate Development, says the goal is to have construction start as homeowners are selected and construction bids are solicited for the work required at each property. The goal is to have all five units completed by March 2025.

However, even in the intervening timeframe, INHS is looking to partner with other municipalities interested in applying for ADU Plus One grants of their own. While this initial round is for just the city of Ithaca, INHS is hopeful that they’ll be successful in subsequent rounds with the city, or other towns and villages across Tompkins County.

“If we can make it possible to help more people, we want to do that,” said Truame.

It is possible multiple municipalities may apply on the same grant, though Truame and Yarrow stressed that the grant application with the state becomes trickier, to ensure all applicants qualify for funds.

“As someone who has parents and in-laws in town, one thing we hear a lot is that having a multi-generational household is something that families are looking to do,” added Yarrow. “This might be a way we can provide folks a way to do that. We’re aware of the strains on caregivers, and this could help provide them a place and a way to help provide that care.”

Brian Crandall reports on housing and development for the Ithaca Voice. He can be reached at [email protected]. More by Brian Crandall