As the Hudson Valley grapples with a mounting housing affordability crisis, Industrial Development Agencies (IDAs) may emerge as an innovative part of the solution. Traditionally focused on fostering economic growth through commercial and industrial development, IDAs like the Orange County Industrial Development Agency are now exploring whether their financial tools could help alleviate housing challenges.
Addressing the Housing Affordability Crisis
The housing affordability crisis in the Hudson Valley is rooted in a mix of supply shortages and stagnant wages. A 2021 report from the Ulster County Comptroller’s Office highlights how limited housing availability has driven up rents and home prices. Meanwhile, a Hudson Valley Pattern for Progress study notes that middle- and lower-income earners have seen wages stagnate over the last decade, compounding affordability issues.
This crisis not only affects residents but also impedes economic development. Bill Fioravanti, CEO of the Orange County IDA, emphasizes that affordable housing is a critical factor for attracting businesses and skilled workers. “We can attract workers because of the number of jobs we’ve created here, but they can’t live here in Orange County,” Fioravanti explains. “They can’t find somewhere affordable to live.”
IDAs and Housing Incentives
The Orange County IDA is considering proposals to incentivize improvements at two housing complexes: Weyant Green Apartments, an affordable housing site in Highland Falls, and the Wallkill Living Center, a senior housing complex in Wallkill. These efforts mark a significant shift for the agency, which has not supported strictly residential projects in over a decade.
Statewide, IDAs have already begun exploring housing incentives. The state Authorities Budget Office reports that there are currently 18 residential projects benefiting from IDA incentives across New York, particularly in areas like Long Island and Westchester County.
Challenges and Opportunities
Industrial Development Agencies operate as public benefit corporations, independent of local governments. They provide financial incentives such as bonds and tax breaks to development projects. While traditionally focused on industrial and commercial endeavors, IDAs are increasingly exploring residential projects to address housing shortages.
Fioravanti’s tenure at the Orange County IDA has brought housing into sharper focus. Since his appointment in late 2021, he has engaged the IDA board and County Legislature in discussions about how to incentivize affordable housing. Fioravanti argues that housing availability directly impacts economic development, as businesses require a stable workforce that can live locally.
Mixed Opinions on IDA Involvement
While some local leaders support the idea, others remain cautious. Orange County Legislator Genesis Ramos, who serves on Newburgh’s Strategic Economic Development Advisory Committee, recognizes the potential of IDA incentives but stresses the need for strong community benefit agreements. These agreements should include anti-displacement terms and ensure affordability for tenants over an extended period.
“IDAs are a vehicle,” Ramos notes. “They are not a driver for all things housing or economic development, but when met with accountability and the right community benefit agreements, they can play a role in supporting housing development.”
Balancing Economic Growth and Housing Needs
Critics argue that IDAs risk overextending their mission by entering the housing sector, while proponents see it as a natural evolution. By incentivizing affordable housing projects, IDAs can help address a critical barrier to economic growth—the lack of housing for workers.
Site selectors evaluating locations for new businesses often assess workforce availability and housing conditions. Without affordable housing, regions struggle to attract and retain the talent necessary for business expansion. “I think we all have to play a role in addressing the housing crisis,” Fioravanti says, underscoring the interconnectedness of housing and economic development.
A Path Forward
The Orange County IDA’s willingness to explore housing incentives marks a pivotal moment in its history. Proposals for Weyant Green Apartments and Wallkill Living Center will test whether IDA tools can effectively support housing development without straying from the agency’s core mission.
Looking ahead, the success of these projects could set a precedent for other IDAs across New York. By combining financial incentives with accountability measures and community benefit agreements, IDAs may contribute to a more balanced approach to housing and economic development. Ramos’ perspective captures this potential: “There are so many layers to this conversation, but IDAs can be part of the solution when used responsibly.”
As the Hudson Valley seeks innovative ways to tackle its housing crisis, the collaboration between public agencies, developers, and community leaders will be crucial. The Orange County IDA’s efforts could offer valuable lessons for the region and beyond.
