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Half-Percent Tax Just Half the Solution

Wed, 07/13/2022 - 11:58

Editorial

We have said it before and it is still true today: East Hampton is never going to build its way out of its affordable housing crisis. That acknowledged, however, a plan for a townwide half-percent real estate sales tax could help, if just incrementally.

The tax would be applied to the vast majority of property deals; only the first $400,000 and purchases by first-time homebuyers would be exempted. Those paying $2 million or more for real estate would be subject to the entire half-percent charge. For buyers paying less than $2 million, only the amount above the $400,000 threshold would be taxed. A town official said this week that, had the half-percent been collected in 2021, it would have totaled about $17 million. That is a large enough sum to make a dent in the need.

East Hampton Town Board members have been thinking about the wording of a referendum on the housing tax that they hope will be included on November’s ballots. A town lawyer suggested language for it during a board meeting on Tuesday. While a good start, it still seemed too much governmentese in a single convoluted sentence. As far as we know, there is no election law moratorium on the use of the period in punctuation — one or two would be helpful in this instance.

The idea is sound. If approved by a majority of voters, East Hampton Town would place the money from the half-percent tax into its community housing opportunity fund, whose advisory board would work with other officials to conceive and pay for a range of possible initiatives. One thing not included in the plan is a way to make the business sectors most responsible for the housing shortage pay a little more than the buyers of residential properties.

East Hampton has a problem with the supply of places to live for people of ordinary incomes, but it cannot solve it without also taking a very serious look at the demand. Growth is the enemy as much as, if not more than, any other factor in the housing crisis. Until that truth is confronted head-on, there can be no truly effective answers.


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