Why working young professionals still can’t afford to live here.
Young professionals leave for greener (and cheaper) pastures.
Kevin J. McCarthy, pictured at his parents’ home in White Plains, is dissatisfied with Westchester’s housing options.
The future is leaving. In case you haven’t noticed, young people are packing their bags, their professional skills, and their contributions to Westchester’s future and moving away. Why? Because, bubble or no bubble, the cost of real estate here has denied them access to the great American dream: home ownership.
Ask 26-year-old Kevin J. McCarthy, a senior associate with CB Richard Ellis, who sums up the options for a young professional in Westchester this way: “You can either live at home with Mom and Dad, or go up to some place like Fishkill or Poughkeepsie. Or you live in a six-hundred-square-foot small apartment.”
McCarthy is just one of thousands of young adults starting their careers (and families) in the face of nearly insurmountable hurdles in the local housing market. While current homeowners relish the lucrative run-up in home values over the past several years, those trying to get their foot in the door are finding it harder and harder, even now that prices have leveled off. That’s the main reason more than 21,000 Westchester residents aged 25 to 34 moved away during the last five years. The county’s total population increased about 4 percent from 2002 to 2006, but the young-adult segment fell by 17 percent.
Ana Morais, 27, lives with her parents in Ossining, even though she’s had a good job with Key Bank in Tarrytown for three years. She doesn’t feel she can afford to live anywhere else. “My friends and acquaintances either live in the city in a small apartment with maybe three other people, or they move to
She tells of a friend who teaches in Larchmont but was forced to buy a starter home in Putnam County, giving her a long, grinding commute each day. If you doubt the effect, just watch the Hutch, the Taconic, I-684, and the Tappan Zee during rush hour—not all of that traffic is going to Manhattan.
Morais would love to own a home of some sort in the county, but she simply can’t—her mid-$40,000 salary isn’t enough to afford a place of her own. The median price of a single-family home in Westchester hit $685,000 recently. The average condo is creeping up on $400,000. It’s wonderful for those of us who already own some real estate, but a nearly impossible hurdle for those who don’t. And it’s especially frustrating for young people starting their careers and hoping to make Westchester their home.
And they want to live here. Bridget Kennedy, 27, handles catering sales for Abigail Kirsch at Tappan Hill. She was born and raised in Ossining, went to school at Emerson College in Boston, then came home to finish school at Purchase and find a job. She really loves Westchester. “It’s a great community,” she gushes. “I live a mile and a half from where I work. It has what I want in terms of career development. It’s also where my parents live—and my friends are here.” Right now, she’s living with two friends in a pre-war walkup apartment in Sleepy Hollow, an arrangement that’s tenuous as best.
“To afford someplace, I need to make one-hundred-and-fifty thousand dollars,” Kennedy maintains. Even with a sizable bonus on top of her $50,000 salary, that’s a stretch. While single-home prices increased 39 percent from 2002 and condo prices shot up 49 percent, Westchester’s per capita income grew just 17.8 percent, to $43,780. “I’ve been able to put away some money for a down payment,” Kennedy says, “but it will be awhile before I get there.”
Many young people will turn to the First National Bank of Mom and Dad for help with their first real estate purchase, but as Morais points out, “My parents would help, but that’s a burden on them also.” Unless Mom and Dad have a tidy nest egg not already committed to their retirement, they’re probably going to have to borrow against the equity in their own home to help their offspring buy one of their own. And just who is going to pay off that loan?
New Rochelle realtor Thomas J. Ralph points out that even a starter home—something around $500,000—requires a pretty hefty financial outlay. “If you put ten percent down, that’s fifty thousand, then you can expect to pay another twenty-five thousand dollars in closing costs and prepaid expenses like tax escrow, plus you need a cushion to handle moving and miscellaneous expenses of setting up a new household. Altogether, it can approach one hundred thousand dollars just for a starter home.”
A condo is less expensive, but the 10 percent down payment and closing costs are still largely beyond the means of a 20-something earning $50,000 per year.
Using some minimal assumptions about monthly debts like car payments and student loans, low-end property taxes and homeowners insurance, and a substantial down payment ($40,000), standard mortgage calculators show someone with $50,000 annual income can just barely afford a $120,000 home. An MLS search in this price range in Westchester turned up 41 co-ops, exactly one condo, and a boat slip in Croton. With 55,000 households in the county in that income range competing for a place to live, South Carolina is looking better and better.
The situation weighs on the minds of the young professionals working and trying to live in the county, according to Morais. “We get on the pity train,” she laughs ruefully. “A lot of us are going into our thirties living at home or sharing an apartment with friends. We all have car payments and health insurance. That’s what we talk about—the lack of money.”
Even those with a little equity to work with have trouble staying in the county. Jessica Davis, 33, and her husband, Rob, finally bought a house in New Fairfield, Connecticut, because they couldn’t find something in their price range in Westchester. “It’s unfortunate because we would have loved to have stayed here,” she says. Rob has an excellent job as the head golf professional at Anglebrook Golf Club in Lincolndale. “It’s very tough for a young family just starting out in Westchester,” Davis says. “We chose Connecticut because the taxes are so much lower.”
Ah yes, the taxes—a particular joy of home ownership in Westchester. They’re going up, too, as anyone who isn’t comatose would have noticed. Noam Bramson, New Rochelle Mayor, points out the obvious: “It’s the largest single bill most of us have to pay every year. It affects not just the young
people trying to buy their first home, but many older people on fixed incomes as well.”
Since our population is growing anyway, why does it matter that the young people are bailing out? Al DelBello, chairman of the Westchester County Association, is adamant about the danger to the local economy. “This is potentially very damaging to Westchester County,” he insists. “Unless we start to do something about the cost of housing, I can see companies starting to leave because their work force can’t afford to live here.” As far as we know, that hasn’t happened yet, but who knows how many companies have considered moving here but have chosen not to? Companies don’t just provide pay rolls; they pay taxes, too. I don’t even like to think about what would happen to my tax bill if IBM or Pepsi packed up and moved away.
“There isn’t any one clear solution,” says Kennedy. “Everything from property taxes to the lack of available housing in that price range contributes to the problem.”
Most of the solutions being floated demonstrate just how thorny the problem is. Bill Merz, a 28-year-old assistant VP at Commerce Bank, has a mid-five-figure income and lives in an 800-square-foot apartment in Fleetwood that he rents for $1,230 per month.
He thinks the private sector might provide some help, but recognizes a dual-edged sword when he sees one: “One option could be employers providing housing stipends, but would that deter big companies from locating in Westchester?”
Then there is potential governmental assistance, which also has its drawbacks.
“Communities also can offer incentives for young people to live there,” Merz says.
Thinking outside the box, Morais suggests, “We build housing for seniors. Why not something for thirty-year-olds?”
Public assistance for young professionals will face stiff resistance from lawmakers who are continually pressured to provide a solution to a similarly persistent Westchester problem: the shortage of housing for low-income families. Both groups are hampered by another condition, according to Bruce Berg, executive VP of developer Cappelli Enterprises. “In most communities around Westchester,” he says, “there is a tremendous anti-development sentiment, so it’s not likely we’ll be able to build our way out of this problem.”
Still, as White Plains City Commissioner of Planning Susan Habel notes, “One of the biggest burdens buyers face is not the income to qualify for the loan, it’s the down payment. We need programs to assist people with that.” She adds, “There is a need for young professionals who bring discretionary income to the county. They are the future home buyers and the future life blood of our communities.”
where are they going?
“Many people don’t need to stay in the metropolitan New York area for their careers,” Kevin McCarthy points out. “They go to Phoenix or San Diego or the Carolinas and enjoy the cost of living there.”
Despite the anecdotal evidence, young people aren’t just moving north of I-84 or across a bridge and commuting back to
The only county in the area showing an increase is Dutchess (+5,965), and that’s not nearly enough to account for all the defections.
Dave Donelson lives and writes in West Harrison. He wishes his son, Jeremy, and daughter-in-law Amy could afford to live in Westchester, too.