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Housing Fund Tax Vetoed

Tue, 12/31/2019 - 19:49

Gov. Andrew M. Cuomo has vetoed legislation that would have allowed residents of the five East End towns to vote on imposing a .5-percent real estate transfer tax to create the Peconic Bay Community Housing Fund.     

The legislation, sponsored by Assemblyman Fred W. Thiele Jr. and Senator Kenneth P. LaValle, would have established a funding source to be used to build new housing and rehabilitate existing houses for affordable programs; to provide financial assistance to first-time homebuyers, to create public-private partnerships to develop housing, and to offer counseling to potential buyers.     

“Although the intent of this bill is to help individuals purchase a home in a region they would otherwise be priced out of, which is laudable, the imposition of additional taxes on current residents should be considered in the context of the state budget,” Gov. Cuomo said in a Dec. 20 statement. “Moreover, while I recognize the public purpose of this bill is to encourage workers to live in the community, the program may violate Article VII, section 1 of the [state] constitution, that prohibits towns from providing a direct benefit to an individual.”     

Mr. Thiele disputed the latter idea. “Housing assistance programs to individuals have long been held by the courts to be a valid public purpose and not in violation of the state constitution’s prohibition against the gift or loan of public funds to an individual,” he said in a statement.     

The transfer-tax legislation, conceived as similar to the community preservation fund, was not a new state-mandated tax, Mr. Thiele argued, but rather a mechanism to allow voters to decide the fate of the Peconic Community Housing Fund in a referendum.     “The veto denies voters that opportunity to make this decision,” he said.     

The proposal had the potential to create $15 million to $20 million for affordable housing each year, Mr. Thiele said. For example, on a $2 million home sale,  it would have generated $15,000 for the new housing fund.     

In June 2019, State Comptroller Thomas DiNapoli reported that housing in Suffolk County was one of the five least affordable in the state. The problem is exacerbated on the East End, Mr. Thiele said, because “the demand for second homes has driven prices up even higher.”     

“The Peconic Bay Region housing bill would have given towns an additional tool to not only build new housing, but also make existing housing more affordable,” he said. “This home rule bill was crafted after a year of meetings with housing stakeholders across the region to best address issues of housing affordability.”     

Mr. Thiele plans to reintroduce the bill during an upcoming legislative session. He compared it to the initial attempt to establish the community preservation fund, which was vetoed after the legislature first passed it in 1997.     

“We worked with the governor cooperatively to pass the bill the following year. Now, the C.P.F. has raised more than $1.5 billion for land preservation and water quality protection,” Mr. Thiele said. “It has been replicated dozens of times across New York State. I am committed to working with the governor’s office on affordable housing, just as I did 22 years ago on land preservation, to pass this legislation in 2020.”

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