Hope For Housing Fund Bill With New Governor, New Reality

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Governor Kathy Hochul. DANA SHAW

Supporters of state legislation that would allow the East End towns to impose a new tax on real estate sales to fund the creation of affordable housing are appealing to new Governor Kathy Hochul to sign the bill into law — something her predecessor refused to do two years ago.

A new governor and a new reality created by the coronavirus pandemic should tip the balance well in favor of allowing the legislation to be cleared to be brought to voters, the bill’s author says.

“The demand for housing on the East End was a crisis in 2019 — it’s a catastrophe now,” said State Assemblyman Fred W. Thiele Jr., who conceived the idea of a housing fund and has shepherded it to passage by the Legislature — first with State Senator Kenneth P. LaValle in 2019 and this year with his successor Senator Anthony Palumbo. “I thought the veto was wrong then and the circumstances are very different this time around. We’re trying to demonstrate to the new governor that this is a local bill and that we have a unique situation that is driving out local residents.”

Mr. Thiele and Mr. Palumbo are in the process of drafting the letter that will accompany the bill  — which was approved by both houses of the Legislature earlier this summer — when it is presented to Governor Hochul early this fall.

Mr. Thiele said that the 2019 veto by Governor Andrew Cuomo had been driven by a desire to keep taxes in check and was killed with several other local bills that created new independent taxes.

Supporters of the bill had already been working with the governor’s office to clarify the impacts of the bill and had been optimistic that Mr. Cuomo would have signed it this time around. With Ms. Hochul in the executive chair now, there is even more reason for hope.

“There is a new governor and she seems to be more consensus-driven that the prior governor,” Mr. Thiele said. “So, I’m hopeful, but I never count my chickens before they’ve hatched when it comes to state government.”

If the legislation is signed by the governor, each of the five East End towns would be cleared to put a ballot measure to voters, asking them to approve a new 0.5-percent tax on all home sales — on top of the 2-percent that is already tacked onto transfers for the Community Preservation Fund, which was created in 1999 and is earmarked for the preservation of open space, creation of recreational facilities and protection of historic structures.

The Peconic Bay Region Community Housing Revolving Fund, as its authors have dubbed it, would be expected to raise $20 million annually that could be used in a variety of ways to help boost the availability of housing to low- and middle-income residents that make up the heart of the local workforce.

East Hampton Town officials proclaimed their support for the bill last week and Southampton Town officials have been adamant that the legislation is a desperately needed boost to floundering efforts to have a meaningful impact on the need for housing for low- and middle-income families.

“It’s gotten to the point where between the 2-percent tax cap as a constraint and needing funding sources for housing creation, it’s just such a long, drawn-out process that we just can’t really make any headway,” East Hampton Town Supervisor Peter Van Scoyoc said. “The Peconic region would have taken in, I think, $30 million dollars already if this had been established in 2019 that could be helping move the needle. Now we’re just that much further behind and the need has gotten even greater.”

East Hampton Town, Mr. Van Scoyoc pointed out, has created more affordable housing units per-capita than any other municipality on Long Island, but is still in the most desperate need for housing for its workforce.

Tenants moved into two new subsidized developments this past year — 37 rental units in Amagansett and a 12-unit condo development on Accabonac Road in northern East Hampton. The town has purchased two additional properties in Wainscott and on Pantigo Road in East Hampton with as-yet-unannounced plans for new developments. The East Hampton Housing Authority, an independent entity from the town government, has purchased a 14-acre parcel off Three Mile Harbor Road and has proposed a 60-unit complex of rental apartments. But with an estimated need of more than 1,000 additional units, the town still faces an uphill battle.

Southampton Town is in even more dire straits, with more than 4,000 units needed. The town cut the ribbon on its first two multi-family housing developments ever in 2019, a total of just 68 units. There are no other municipal projects currently in the works.

The tenor of the cries for help on the housing front on the East End have changed considerably since the bill last wended it’s way through Albany.

The supply of rental housing for those who cannot afford to purchase a home at the East End’s inflated prices was decimated in the last decade by the rise of Airbnb and other online rental sites. In 2020, the pandemic and the frenzied flight from the city drove a steep spike in demand for homes — mostly second homes — that has further pushed home ownership out of reach for more local residents.

The housing shortage has led to more families seeing younger generations leave the region, ever-worsening traffic jams and hamstrung businesses unable to find enough workers to fill needed positions.

The soaring price of real estate is, of course, also making it more difficult and expensive for any municipal efforts to create affordable housing.

“This is the last chance to do something,” said Diana Weir, Southampton Town’s recently retired director of housing and community development and a former vice president of the Long Island Housing Partnership. “The land is going to be gone and then you’re going to be looking at redevelopment, but you don’t have the strip malls like in Brookhaven, that they are allowing for apartments now. It’s an island and you are not making more land, so something has to give.”

Ms. Weir said that the wide array of options the housing fund would give local communities to create affordable living options — from zero-interest loans for building accessory apartments, to down payment assistance to helping pay for maintenance of existing homes so owners don’t “cash out and get out” — is critical to the viability of the local community.

“If you don’t have a workforce, you won’t have an economy,” she said. “It’s not going to happen this year or next year, but eventually — no transportation, the hellacious traffic — it’s going to happen. You can’t have a bedroom community on an island that can’t grow and people can’t get to where they need to get to.”

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