The Issues     Conclusions    Affordability    Availability    Renting to Students    Profitability    Family Access

The purpose of this study is to examine the availability and affordability of rental housing on the West Side of Binghamton. The impetus for the study was the proposed amendment of the Zoning Law of the City of Binghamton by Councilman Joseph Sanfilippo that would restrict landlords from renting an individual dwelling unit to more than three unrelated persons. This study does not directly address the additional Sanfilippo amendment that would allow the legal conversion of structures within R4 and R5 zones to rooming houses subject to inspection by the City. However, the data presented here should support the proposal for legally-established rooming houses.

The present study has been carried out by members of the West Side Neighborhood Association of Binghamton, Inc. We are not trained experts in the fields of Housing, Demographics, or Public Policy. Because of this, we did not create surveys of our own. We made use of publicly available sources of information and combined these to form a picture of the state of rental housing on the West Side as it pertains to the Binghamton University student population.

• Consolidated Plan 2000-2005 of the City of Binghamton, posted on the City of Binghamton Planning Department Web page;

• Binghamton Press & Sun-Bulletin;

• Binghamton University Off-Campus College Housing List;

• Binghamton University Student Life Web site;

• City of Binghamton Tax Assessor's public records;

• The World Wide Web.

Issues Addressed in the Report  [top]

• If students cannot legally rent houses or apartments in groups larger than 3 individuals, will they generally be unable to afford housing on the West Side; i.e. are rooming house situations required to provide affordable housing to Binghamton University students?

•  If students cannot legally rent houses or apartments in groups larger than 3 individuals, will there be a sufficient number of rental units in Binghamton to absorb students that will no longer be accommodated in current rooming houses or multi-person apartments?

• If landlords cannot legally rent an individual dwelling unit in an R-1 or R-2 district to more than 3 individuals, will this prevent the landlord from renting to students, per se?

• If landlords cannot legally rent an individual dwelling unit in an R-1 or R-2 district to more than 3 individuals, will landlords be forced out of business; i.e. is the only cost-effective rental strategy in Binghamton to use single-family dwellings as rooming houses?

The information we compiled supports our argument that the present zoning laws related to rental properties in R-1 and R-2 districts should be strictly enforced, in order to maintain and solidify the land use articulated by past and present Consolidated Plans. Indeed, it supports the Sanfilippo proposal to clarify and strengthen the Zoning Law by allaying many of the concerns voiced about its impact on students and landlords alike.

Our Conclusions    [top]

This study of available, independent surveys and publicly available data shows that the impact of the proposed changes to the Zoning law of the City of Binghamton does not have the widespread economic impact on students and landlords envisioned by, in particular, landlords of dwellings renting to more than 3 persons in R-1/R-2 zones. To be sure, a number of landlords would find their rental income reduced. However, we argue that in those cases, the loss of rental revenue is a self-inflicted hardship: the landlords of such dwellings took a calculated risk to use these dwellings as de facto rooming houses, counting on the very high rents resulting from per capita charges. As much as we regret their predicament, we feel that it cannot outweigh the losses experienced by many more private homeowners as the result of depressed property values in R-1/R-2 areas heavily populated by student rooming houses and the deterioration of core neighborhoods.

n       Affordability : Students will be able to afford housing in Binghamton, even if only three individuals are available per unit to share the rent;

n       Availability: The City of Binghamton has a sufficient number of rental units available to provide housing for the 7000 students said to live off-campus;

n       Renting to Students: Under the Sanfilippo proposal, landlords will be able to continue to rent to students in every part of the city;

n       Profitability: If landlords observe the Zoning Law, they will be able to realize as much income and profit as do landlords operating mainly in the non-student market. This means that some landlords will, indeed, no longer be able to charge the same rent for single-family dwellings as they have, in the absence of adequate zoning enforcement. Indeed, for many landlords, the proposed amendment leaves their student-focused business situation unchanged!

n       Access by Families: If landlords observe the Zoning Law, they will be able to realize as much income and profit as do landlords operating mainly in the non-student market. This means that some landlords will, indeed, no longer be able to charge the same rent for single-family dwellings as they have, in the absence of adequate zoning enforcement. Indeed, for many landlords, the proposed amendment leaves their student-focused business situation unchanged!

Affordability  [top]

Students will be able to afford housing in Binghamton, even if only three individuals are available per unit to share the rent.

The Web site of Binghamton University shows on its Student Life page the cost of living in a dormitory there. Dormitory accommodations fall into several categories: single-, double-, triple-, and quad rooms, as well as shared apartments in the apartment complexes owned and operated by the University near campus.

Explanation of Columns:

n       PER YEAR: reflects actual 2001-02 housing charges, as posted on the BU Web site;

n       PER MONTH (9): room charges for each housing category were divided by 9 months on the assumption that students who enroll in summer courses must find additional accommodations then;

A student whose monthly dormitory cost is as the table describes should be presumed to be able to afford a private rental dwelling of a similar charge. However, many students desire to move off campus in order to reduce their housing costs. Hence, we show in the table below what the unit cost of an affordable apartment would be, if students shared this cost at a savings of 20%, 25%, and30%, respectively.

Apartment Affordability Limits

n       2 BR Apt: a hypothetical maximum rent was calculated for 2- and 3-bedroom apartments in which 2 0r 3 individuals, respectively, paid the same per-person rent as each would have in the dorm room described by each row. Thus, 2 people in a 2-bedroom apartment hypothetically could pay 2 X the rent each paid in a dorm. The same reasoning generated the column 3 BR Apt.

n       2 BR-20%, etc.: calculations of hypothetical apartment rents, if the individuals paid 20%, 25%, or 30%, respectively for their apartments. The same holds for the 3BR-20%, etc., columns.

The perspective on student housing provided by these tables lays the foundation for understanding the larger student-housing picture in Binghamton.

Availability and Affordability: Rental Housing in Binghamton  [top]

Information Cited from Consolidated Plan - Housing Analysis on the Planning Department Web page

The analysis by the Planning Department of the City of Binghamton is intended to provide an overview of the availability and affordability of rental housing in the City of Binghamton. It includes important information the writers of this study use to determine the role of student housing within the larger rental market. Some of the data here refer to housing surveys conducted several years ago. We make the assumption that the housing picture at that time has remained largely unchanged.

RENTAL HOUSING MARKET

 ... renter occupied housing units now comprise  nearly 56% of all occupied housing units in the City of Binghamton ...  Given that 10,064 units in 1990 were owner occupied and assuming that the majority of these are located within single unit structures, with the remaining units located in duplexes or multi-family structures, it can be deduced that the majority of rental units in Binghamton are located in 2-4 unit structures.

Rental Housing Study

 In order to obtain insight into the rental housing market, the Department of Planning, Housing, and Community Development completed a rental housing study in December 1992.   The study consisted of two surveys, one conducted by the Department’s staff   of all rental openings  (the  "primary survey"), and one administered by the SUNY Binghamton Geography Department of off-campus students living in the City of Binghamton (the "student survey"). While rents have increased since the time of the survey, the data still provides a useful analysis of rents by conditions   and rents for student   housing compared to non-student housing.

The rents found in the student survey are shown in Table 17. The rents are higher for each size bedroom than rates found in the primary survey. These rents, however, are still lower than the HUD Fair Market Rents.  The higher rents support the argument that student rentals are higher and may result in inflation of the overall rental  market.  While this  latter assumption  is  difficult to  document, it  is a  concern of the City that demands further attention.

TABLE 17:  Average Rents for Unit Rented by Students by Number of Bedrooms. (City of  Binghamton Rental Housing Market Analysis, 1992)

Vacancies / Availability

The Consolidated Plan Housing Analysis asserts: "The number  of vacant  rental units  in the City  increased by  38.2%  between 1980 and 1990,  with a vacancy rate change  from 5.6% in 1980 to 7.5%  in 1990.  In comparison, the rental vacancy rate for Broome County was 7.6%, and for  Broome County excluding Binghamton, 7.7%, in 1990.

Generally  HUD considers a  rental vacancy rate  of 4-5% to be  normal. Higher rates  indicate a  surplus of rental units, which in effect should drive rental rates down;  however,  other factors  may keep  the rents  and vacancy  rate high,  including the  impact  of  the student  market. The  student  population likely  has  the following  impacts upon  the overall housing market, although it is not possible to estimate to  what extent:"

n       landlords charging student households on a per capita basis, thus inflating market rental charges per apartment and for the market in general, particularly for larger units.

n       students utilizing multi-bedroom units thus leaving few of these types of units available for large families at affordable rents.

AVAILABILITY - Our Analysis    [TOP]

The City of Binghamton has a sufficient number of rental units available to provide housing for the 7000 students said to live off-campus, specifically, the number living on the West Side. Indeed, in view of the high vacancy rate, there seems to be no evidence to suggest any significant exodus of students from Binghamton to other communities, since their housing stock appears to be no better.

Using the data cited in the Consolidated Plan Housing Analysis and numbers taken from the Off-Campus College description of student housing in Broome County, we have made this analysis of available housing within the West Side of Binghamton. In the absence of readily available details of rental housing, we have made assumptions that we think are reasonable. The numbers we have assigned to our conjectures are, of course, subject to revision, but any corrections will likely be not far off the mark that we have set.

Rental Housing on the West Side

These estimates are consistent with the points made in the section, Vacancies / Availability, of the Consolidated Plan Housing Analysis.

Renting to Students    [TOP]

It has always been true that a landlord may rent to anyone, as long as the relevant laws are observed. This is as true under the current zoning law, as it is under the proposed amendment. The zoning issue with which we are concerned is one of numbers: the number of individuals—students or not—that may live in one dwelling, such that the envisioned land use of the dwelling's district is honored. Therefore, no landlord need be concerned about not being able to rent to students. The concern is correctly directed to the number of unrelated students to whom the landlord is renting.

Profitability    [TOP]

The question of the profitability of student rental housing is an issue often emphasized in conversation with landlords. Once again, we examined the proportion of houses and apartments rented to more than 3 students, as suggested by the OCC Housing List - clearly, the fact that many landlords evidently find it cost-effective to rent 1-, 2-, and 3-bedroom units strongly implies that renting to a small number of tenants is not a losing proposition for them:

One of the most important results of examining the student-housing rents is that, on average, landlords charge each student about $200 per dwelling, no matter how many bedrooms are claimed for the property! We can see this graphically by comparing the linear increase in the price of dwellings and the nearly constant level of per-capita rental cost to students. But both phenomena are at odds with the expected behavior of rents, namely that there is not a uniform increase in rent with each additional bedroom and that the proportion of rent paid by each tenant should DECREASE with the addition of each bedroom. This point will again be a reference point in the section concerning access to housing by moderate-income families.

Summary OCC Housing List Data

Moreover, a short examination of rental advertisements in the Press & Sun confirms the impression that it is apparently acceptable to many landlords to rent their properties to non-student tenants at levels either equal to or below those charged to students. Two examples taken from the informal survey of Press & Sun advertisements indicate this:

Press & Sun Advertisement Averages

A full examination of the total rents charged to students, as represented by the OCC Housing List, shown in the table, Summary OCC Housing List Data , provides a perspective on the return on investment derived from multi-person student rentals. It seems fairly clear that, since student-focused rents of units larger than 3 bedrooms exceed the average rents found on the non-student market, student residences are at least as profitable as non-student residences. However, we offer the following table as a snapshot of the impact on typical revenues, if the 3-person limit on dwellings is enforced. Rents that remain unchanged are shaded.

Access by Families    [TOP]

The Planning Department housing analysis described earlier highlighted the problem of affordable housing for families in Binghamton. Thus, we took the median family income cited in their analysis and estimated the maximum amount of rent that this median household could afford at 28% of gross income, a fairly generous estimate:

INCOME AVAILABLE FOR RENT (from Consolidated Report):

Median Gross Family Income- Year 2000:  $44,100

Maximum Affordable Monthly Rent - 28% of Gross:  $  1,029

However, a family in this economic position is in a far better situation than a great many Binghamton families, so we should keep in mind a less optimistic family income and ability to pay rent. With this caveat in mind, a glance at the Appendix page, "Affordability of Binghamton Housing by Families," shows that a hypothetical median-income family is able to afford any of the rents advertised in the Press & Sun. However, this is not uniformly true in the case of student-focused rentals (see also Table 17 of Consolidated Plan Housing Analysis):

These figures require several comments:

§         A typical family includes at most two adult earners, so the need for additional bedrooms usually reflects children or dependent, elderly parents, not additional sources of income.

§         Note that the total average rents remain fairly constant, considering the many different square footages and conditions of the advertised dwellings; compare the resulting graph with that of student rentals;

§         Note that the per-person share of apartment rent decreases with the number of bedrooms, because total apartment remains uniform, more or less.

§         Note that, on a per capita basis, a family faces a high rent in houses, but that the total rent also remains, on the whole, uniform.

 

	Rent/Unit Student	Rent/Unit Family			Affordability
No. BR	All Types	Houses	Half-Houses	Apts.+Util.	Median Family
1	$339.27	$495.00		$450.00	Yes
2	$444.17	$775.00	$595.00	$550.00	Yes
3	$597.83	$750.00		$600.00	Yes
4	$854.79	$775.00		$650.00	Yes
5	$1,041.76				Yes
6	$1,351.82				No
7	$1,333.33				No
8	$1,706.67				No
10	$1,950.00				No
12	$ 2,340.00				No