More than 35 East End leaders and organizations have signed a letter urging New York Gov. Kathy Hochul to approve legislation that would establish a community housing fund for the Peconic Bay area.
The bill, which had previously been vetoed by former governor Andrew Cuomo, would authorize the five towns in the region to hold mandatory referenda on establishing the fund. If passed, the new fund would add a half-percent to the existing 2% Community Preservation Fund tax on real estate transactions in those towns.
The Sept. 28 letter notes the lack of affordable housing in the region “has reached crisis proportions,” with local businesses struggling to hire and retain employees. Volunteer emergency services are also struggling to retain recruits and local families are leaving the area, it said. The need to import labor has increased traffic gridlock as well and the lack of housing “often results in substandard and illegal housing conditions.”
“The Peconic Bay Region is experiencing one of the most severe affordable housing shortages in the State,” the letter said. “The lack of housing opportunities is adversely impacting the local economy and the region’s quality of life.”
It attributes the housing crisis to high property costs that skyrocketed even further during the COVID-19 pandemic with the flight of urban residents to the East End, contributing to the Peconic Bay region’s current status as “one of the most expensive housing markets in the state.”
“The only way you’re going to create housing is to find revenue sources to offset the cost to developers and that’s certainly a revenue source that’s badly needed,” Southold Town Supervisor Scott Russell told Times Review. “However, you have to stop and consider: How many taxes can you layer on transfer of homes?”
Mr. Russell, who signed the letter to the governor, suggested that the housing fund could be used to lower the cost of land acquisition for private developers or provide grants on a per-unit basis to offset construction costs, among other things.
Riverhead Town Supervisor Yvette Aguiar, who supports the bill and plans to sign the letter, said Riverhead has “been very responsible about providing affordable housing for its residents,” with over 2,000 affordable units. She pointed to a recent study that found the town has enough affordable rental units and, in fact, needs a better balance with market rate units.
“Other East End towns desperately need affordable rental housing — which is why they have the trade parade traffic jam every morning. However, Riverhead is not in the same position; what we need in Riverhead is a way to get people out of rentals and into a position of equity — to purchase condos or houses,” Ms. Aguiar said via email.
She added that she’s inclined to propose using funds captured through the tax initiative to provide first-time home buyers with down payment assistance, and to provide low- or no-interest loans to first-time homebuyers in Riverhead’s historic district, which would hopefully encourage historic renovation.
Before holding the required referendum, each East End town would need to adopt a plan demonstrating how the fund would produce affordable housing in that community.
The legislation would also increase existing tax exemptions on improved properties — effectively reducing the existing real estate transfer tax on transactions of $1 million or less on the South Fork and Shelter Island, and $400,000 or less on the North Fork. A press release from Assemblyman Fred Thiele (I-Sag Harbor) estimates it would cut real estate transfer taxes for nearly a third of all real estate transactions in the area.
The Long Island Association and the Long Island Builders Institute both endorsed the legislation in separate letters of support to the governor.