Employed But Still Struggling?

Two new reports investigate cost of living in Hudson Valley

By Jeff Simms

A pair of reports issued by regional nonprofits that track jobs and housing are the latest to examine aspects of a now-familiar refrain: many residents can no longer afford to live in the Hudson Valley.

Studies by Hudson Valley Pattern for Progress and the United Way both found affordability to be a major challenge throughout the region, including in Beacon, where housing prices have jumped 33 percent in the last four years.

“There’s a large portion of our population that lives above the poverty level but still can’t afford basic necessities of life,” said Kimberly Kochem, vice president of community impact for the United Way of Dutchess and Orange counties. “This is really a survival budget and it’s not feasible.”

The subjects of its report are referred to as ALICE, for “asset-limited, income-constrained and employed,” or people who are working but don’t make enough to pay essential bills and have little savings.

In its study, Hudson Valley Pattern examined regional gentrification and how it can both benefit and burden communities. Its research includes detailed looks into housing costs and other effects of growth in Newburgh, Hudson, Kingston and Beacon.

While the word gentrification often carries a negative connotation, it actually refers to upward economic growth, to a point, explained Ken Kearney, a developer building an affordable housing complex in Beacon who took part in a Pattern-sponsored forum Dec. 15. “Before you have gentrification, stabilization must occur,” he said. “In the early 1990s, Beacon needed stabilization first. You don’t go from zero to 100.”

After stabilization, he said, “gentrification occurs when people who have lived there are not able to stay.”

The wooded area on the far side of the Beacon City Hall is being developed as affordable housing. (Photo: Google Maps)

According to Pattern, nearly half of the renters in Beacon and a third of homeowners are in unaffordable or severely burdened housing situations. The organization considers a home unaffordable when it costs more than 30 percent of a household’s monthly income. A cost of more than 50 percent is considered severely burdened.

Pattern’s statistics, which are based on U.S. census data, show that the median monthly rent in Beacon in 2015 was $1,082, a more-than 64 percent increase from 15 years earlier. The median value of a home in Beacon rose 75 percent to $240,300, from $166,000, adjusted for inflation.

The Pattern report calls Beacon a great example of a city that, after experiencing economic decline, “has witnessed a reversal, reinvestment and in-migration of a relatively well-off middle and upper-middle class population.” However, it warns that with those successes can also come the negative impacts of gentrification, namely the “pricing out” of longtime residents.

While gentrification often brings an influx of increased amenities — shopping, entertainment and dining — it’s the residents who work in those establishments that often feel the crunch.

“I know many people who are working, but they have to work in the service or retail industries and they have trouble making ends meet,” said Beacon Councilperson Ali Muhammad. “We need more skilled positions in Beacon that are going to be more secure. We have a tourist economy that relies on the service industry, but there’s no security in that industry.”

The United Way report found that 46 percent of Beacon residents earn less than the average income a household needs to afford basic necessities such as housing, child care, food, transportation, health care and taxes.

While the decades-old definition of “poverty-level” income has not been adjusted to account for cost-of-living increases, the United Way says its ALICE threshold provides a clearer picture of which residents are struggling. In Beacon, 13 percent of residents live in poverty, while an additional 33 percent meet the criteria of being “asset-limited, income-constrained and employed.” In Putnam County, 5 percent of residents are in poverty and another 28 percent meet the ALICE criteria, for a total of 33 percent.

The United Way calculated the “household survival budget” for a family of four with two young children to be $73,212 in Dutchess County and $77,724 in Putnam. That’s far too much to receive government assistance (the federal poverty level for a family of four is $23,850) but only just enough to cover the basic costs of living, according to the report.

“These are not just retail industry employees,” Kochem said. “They’re teachers and auto mechanics. This is the fabric of our community that we rely heavily on.”

A handful of initiatives are underway to address cost-of-living issues in Beacon. In October, the city sold 3.14 acres adjacent to City Hall to Kearney, a Carmel-based developer who plans to build a 72-unit affordable housing complex on the site.

Rents for the 22 middle-income units and 50 artists lofts will be tied to the area’s median income, which Dutchess County says is $87,100 annually for a family of four. The lofts would be priced for renters earning up to 60 percent of the median income and the middle-income units for those making between 70 and 120 percent, Kearney said.

The U.S. Department of Housing and Urban Development defines affordable housing as that which requires a household to pay less than 30 percent of its gross income on housing costs, which include rent and utilities or a mortgage payment, utilities, insurance and taxes. Therefore, households earning within those ranges would be able to rent Kearney’s units at a cost not exceeding 30 percent of their income.

Kearney said he submitted an application earlier this month to the state’s highly competitive Middle Income Housing Program, which has funded similar projects he’s done in Peekskill and Poughkeepsie. If the project is funded and then approved by the Beacon Planning Board, construction could begin next fall, he said.

During the Pattern for Progress forum, Beacon Mayor Randy Casale said he also expects the City Council in 2017 to revisit legislation that would increase the number of affordable units that must be included as part of new developments. Those units would be an example of the “inclusionary” zoning that the Pattern for Progress report recommends to mitigate resident displacement due to gentrification.

Beacon currently requires developments of 20 or more units to include at least 10 percent “affordable” housing. Discussions earlier this year proposed upping the number to 10 percent of developments of 10 or more units.

The council could also consider parking meters on Main Street, which would increase revenue while promoting walking and mass transit. “We’re trying to use every tool we have to keep this city affordable,” Casale said.

One thought on “Employed But Still Struggling?

  1. This is a well-researched and well-written article on a very important, practical and timely topic. Thank you.