Syracuse, N.Y. — The Central New York home building industry has steadily withered. Thirty years ago, builders in the Syracuse metro region constructed four times as many houses and apartments each year as they do today.
But a dramatic reversal is coming. Soon local home builders will be called upon to help house tens of thousands of new residents expected to move to the Syracuse area because Micron Technology plans to invest up to $100 billion building chip fabs in the suburban town of Clay.
It’s a huge opportunity, and a huge challenge.
One of the promises Onondaga County Executive Ryan McMahon made while courting Micron was that the region could build enough housing to accommodate up to 50,000 workers who are expected to take jobs at Micron or at companies that expand in Syracuse because of Micron.
County officials foresee a building boom that is heavy on apartment buildings, according to a presentation officials made to Micron last March. The presentation referred to Micron’s initiative as “Project Yankee.”
Although thousands of new single-family homes are expected, especially in Clay and other northern suburbs, the county document estimates that three out of four new housing units created in the coming years will be in multifamily buildings. About two-thirds of those apartments are likely to be in Syracuse, the county predicted.
Exactly how and where all the housing would get built remains to be seen. Clay and the other suburbs north of Syracuse would be likely to see big growth. But eventually the housing boom would affect the entire region, from the Syracuse Inner Harbor to southern Oswego County and beyond, experts say.
McMahon is asking town planning boards to consider loosening some restrictions on lot sizes or housing density if they stand in the way of development. Home builders say they are looking for guidance on when the workers will start coming, how many are likely to rent and how many to buy.
To meet the demand for housing, local construction companies would have to recruit laborers at the same time that Micron is building its first gigantic chip fab and New York state is starting the massive job of rerouting Interstate 81.
“There’s been a lot of enthusiasm, a lot of buzz,’’ said home builder Mark DeAngelis, of Mark Antony Homes. “But overall, I think there’s just a lot of questions, right? We don’t know how this is going to unfold.”
The biggest town gets bigger
Clay Town Supervisor Damian Ulatowski knew right away what Micron’s selection of the town for a $100 billion semiconductor fabrication plant would mean for Clay – a lot more residents.
At nearly 61,000, Clay already has the largest population of any town in Onondaga County. It has more residents than Binghamton and Troy and many other small cities in the state.
The creation of 9,000 jobs at the Micron plant – plus more than 40,000 additional jobs at businesses attracted to the area by Micron — would likely mean an influx of 20,000 new residents to Clay over the next decade, a gain of more than 30%, Ulatowski said.
Such an influx of people means the town would likely see a big increase in housing construction to meet the expected demand. Ulatowski said 50 to 100 homes are built each year in the town. That would likely increase to 500 to 600 homes annually, he said.
Micron does not expect to begin producing computer chips at the plant at White Pine Commerce Park on Route 31 until the second half of the decade, but town officials are already thinking of forming a committee to plan for its impact on housing and traffic.
“We’re talking about putting together people from business, housing, residents and the town board to get a feeling for this thing because we’re definitely going to have to build out,” said Ulatowski.
Many of the workers Micron brings to Clay would likely want to live within an easy commute of the plant, so that means many will want to reside in the town, he said.
Most development in the town is limited to the areas south of Route 31 because sewer lines do not extend to areas north of Route 31. But that is going to change. The county plans to run a sewer line from its wastewater treatment plant on Oak Orchard Road to White Pine Commerce Park to service Micron.
“As soon as you do that, you’re going to see housing tracts go in,” said town Planning Commissioner Mark Territo. “That opens it up.”
Clay would not be the only municipality to see an influx of people from the Micron project. Robert Simpson, president of the economic development organization CenterState CEO, estimated the county will see an increase of 125,000 in its population over the next 20 years. That would represent growth of more than 25% in its population, which currently stands at 478,000.
McMahon makes even more bullish predictions of population growth. He thinks the county could grow by as much as 60%.
Either way: “There’s going to be a massive amount of new housing,” Simpson said.
Planning for ‘Project Yankee’
Much of the new housing could be built in Clay, but nearby Oswego County also could provide homes, Simpson said. In addition, the city of Syracuse could see an influx of residents as its underutilized housing stock is rehabilitated, he said.
The city’s Inner Harbor, still largely undeveloped despite a decade of effort, will see a sudden surge of investment, McMahon predicted.
“The Inner Harbor is going to probably blow up with housing,’’ he said. “I would think that you’re going to see mixed-use development there the way that we thought it would be – and see it quickly.”
McMahon pointed out that other major housing initiatives are underway in the city. A tri-state developer plans to build 300 units at the former Syracuse Developmental Center near Burnet Park. And the nonprofit Blueprint 15 organization, working closely with city officials, plans to revitalize a 27-block area on the South Side that will include hundreds of new housing units.
In March, county officials presented Micron with an overview of how the local housing supply could grow to accommodate Micron’s planned mega-fab.
According to the document, local builders and developers are planning to build 5,300 housing units in the near future, most by 2024. The bulk would be apartments in urban areas and villages, the presentation said. As an example, the county cited The Laurel, a 193-unit student apartment building that Gilbane Development Co. is building near Syracuse University.
Over the longer term, county officials told Micron they expected about 12,000 new housing units to be constructed – 3,000 single-family homes and 9,000 apartments. They did not specify a timeframe.
The largest concentration of single-family homes – 1,350 – was projected to be built in Clay. Other northern and western suburbs – Cicero, Lysander, Van Buren and Camillus – were projected to get 300 to 450 single-family homes each.
Even in suburban towns, the county indicated that it expected hundreds of units to be developed in multifamily apartment buildings.
County officials this week cautioned that the March document was a theoretical framework for development, not a firm plan.
At their meeting with Micron, county officials said they aimed to pursue “transit oriented” development that would optimize public transportation. They also expressed a commitment to adaptive reuse of buildings, walkable neighborhoods and waterfront revitalization, among other goals.
The county Industrial Development Agency is prepared to offer tax abatements to incentivize housing “in support of Project Yankee,’’ the report said.
Ultimately, the county can accommodate more than 40,000 new homes and a population of more than 700,000 without significantly expanding its water, wastewater and transportation infrastructure, the report said.
“Onondaga County is prepared for population growth,’’ it said.
Turning an industry around
Dan Bargabos, president of Heritage Homes, said he will welcome an increase in homebuilding after seeing the Central New York market go the other way for years.
In the 1980s, about 2,000 single-family homes a year were being built in Onondaga County, he said. But as the county lost big employers like General Electric, General Motors and New Venture Gear and its population stagnated, the number of new homes being built dropped to about 300 a year, he said.
Bargabos said he built 55 homes in 2005 but only 20 last year.
“I’m looking forward to thriving instead of just surviving,” he said.
To meet the needs of the new market, he said he is considering expanding his offerings. Currently, he builds only single-family homes (with an average price of $700,000). He said he may begin building townhomes, both for rental and purchase.
In addition, he said towns may have to lower their minimum lot sizes to increase the density, or number, of homes that can be built in a subdivision. Some communities in the county require lot sizes of nearly 1 acre. Bargabos said lowering the limit to a third of an acre would allow more homes to be built and keep prices affordable.
“We’re going to have to change our mentality,” he said. “We have to have a mix of homes, and towns are going to have to revisit density.”
As the local housing industry shrank over the years, workers left, either for other professions or other regions, said DeAngelis, of Mark Antony Homes. At this point, there is a shortage of skilled labor to build houses.
Even though new home construction has fallen sharply from years past, local builders are “flat out busy’’ trying to keep up, he said.
“We’ve really struggled to maintain a lot of our tradesmen in this area. For whatever reason, they have left,’’ DeAngelis said. “There seem to be a lot more guys retiring than a lot of guys coming in.”
That opens the door for national firms to move into Syracuse as demand for housing increases.
Virginia-based Ryan Homes, for many years one of Central New York’s leading builders, left the area several years ago. Now local officials anticipate that companies like Ryan Homes or Pennsylvania-based Toll Brothers may take an interest in Syracuse.
In the late 1980s, home builders each year constructed more than 3,000 new housing units (including single-family homes and apartments) in the three-county Syracuse metro area, according to Census data compiled by the Home Builders and Remodelers of Central New York. During the past four years, that number has averaged fewer than 750 a year.
The right mix
Over the decades, builders have typically put up three or four single-family homes for every new apartment, the Census data shows. One of the questions facing builders now is what mix of housing options the region will need when Micron arrives.
Many of the out-of-state construction workers who come to build the chip fab likely will want apartments. And Micron employees new to the area may look for apartments before they decide where to buy.
“The first crunch is going to be, where do we put all the construction workers?” DeAngelis said. Builders and developers will look to town and county planners for guidance on what needs to be built, and how quickly, he said.
Even though Micron salaries would be high – on average, more than $100,000 a year – a critical factor in planning for new housing will be the addition of affordable homes for low-income residents, advocates say.
Already, close to half of all renters in the Syracuse metro area spend more than 30% of their income on rent. And often that money buys accommodations of poor quality.
If the demand for housing fueled by Micron exceeds what the market can satisfy, it could push rents up across the board. That could be tough on people who already struggle to pay for housing.
“It would have an impact,’’ said Ben Lockwood, president and CEO of Housing Visions, a nonprofit affordable housing developer. “Like everything in this world, who would it most impact? The poorest among us.”
Kerry Quaglia, executive director of Home Headquarters, a nonprofit housing and community development organization in Syracuse, said the construction of smaller homes and the rehabilitation of antiquated housing in the city will be needed to expand the area’s supply of housing and keep prices from getting out of reach for the average homebuyer.
“It’s never a bad thing to have more jobs in your community,” he said. “But we need to plan more affordable housing. You’ve got to have a lot of different options for people.”
McMahon said county officials plan to work closely with builders and developers to pave the way for a wide variety of new housing, including affordable units. He said there is so much work to do that he has encouraged local companies to work together rather than compete, to undertake large-scale efforts.
Ultimately, McMahon said, it will be up to private industry to meet the need.
“We have to have (development) projects,’’ he said. “The government can’t just drive this.”
Published by Syracuse.com