EDITOR'S NOTE: The following column appeared in the Friday, Jan. 12 edition of the Finger Lakes Times newspaper in Geneva, NY.
Homes versus vacation rentals
By Michael J. Fitzgerald
Economic progress in Watkins Glen, NY is colliding with a growing housing shortage, a byproduct of a village-wide rush to convert homes to seasonal vacation rentals.
In the last few years the homes-to-vacation rentals phenomenon has pulled as many as 30 units out of the housing stock in the hamlet of just 1,900 people. Another 30 units of housing are predicted for conversion in the next two years.
Even a small apartment atop a former health food store is now in the short-term vacation rental pool after years as a year-round residence.
For owners of Watkins housing – and investors looking to make a profit – the math is hard to argue with.
Renting a house (or part of a house) to vacationers on a short-term basis is considerably more lucrative – and often less risky – than leasing to a permanent, year-round tenant.
But not having sufficient, affordable non-vacation housing may be keeping out some of the very people Watkins Glen needs most to support its growing prosperity – the workers.
In recent years new restaurants have been popping up in the downtown. Most report they are doing a brisk business. The 104-room Harbor Hotel is booked solid nearly year round and winning awards for excellence. A slew of other successful tourist-related businesses are making a go of it well past normal summer-visitor months.
These enterprises all need workers who in turn need a place to live within a reasonable distance from the village – or in the village. Plus young professionals moving into the area need housing, too.
Watkins’ economic growth includes a $10 million Downtown Revitalization Grant from New York State, the proceeds of which are the topic of sometimes-heated public discussions on how best to spend the state’s money.
High on the discussion list is a proposal from the Watkins Glen Housing Authority to build 50 units of affordable housing on two separate parcels. One project is proposed for a vacant lot across the street from the 48-unit Jefferson Village apartments near the shore of Seneca Lake. A second project is proposed for closer to Watkins Glen High School.
But the WGHA has struggled with internal squabbling that kept the proposal from moving forward until last week.
Given how fast year-round housing is disappearing – plus the current opportunity to get major projects funded – moving forward quickly is critical.
One oft-stated misconception is that Watkins Glen DRI officials can dole out the $10 million to projects they deem worthy. But NY state officials ultimately decide what projects to fund based on their potential to revitalize the village.
Boosting affordable housing stock is a good bet.
A second misconception is that the WGHA proposal is to build low-income units, often referred to as Section 8 housing.
The WGHA is proposing affordable housing, something that would rent for roughly half of the $2,200 to $2,500 rents charged by a recently constructed – and mostly vacant – apartment complex adjacent to the Elks Club.
There have been few takers for those new apartments. Rents are likely too high given prevailing village wages.
The WGHA’s modest proposal to provide reasonably priced, affordable housing might be just that – too modest. The proposed apartment and townhouse-style units are probably insufficient to counter the continuing momentum of homes-to-vacation rental conversions.
Perhaps additional units could be added. Or another affordable housing proposal from a developer could surface while the DRI advisory group ponders a long list of ideas the village hopes will snag the state’s blessing and be funded.
In the meantime, Watkins Glen and the DRI might consider using this paraphrase in their application to the state, a spin on a famous line from the 1989 film, “Field of Dreams.”
“Build it and they will come.”