Gov. Kathy Hochul has signed the Peconic Bay Community Housing Fund Act, which authorizes each of the five East End towns to establish a community housing fund.
The authorization to create such a fund is a home rule decision by each town board, subject to a mandatory referendum, but word of the act’s passage was cheered by East Hampton Town officials this week. A referendum will be held in November 2023, East Hampton Town Supervisor Peter Van Scoyoc said on Tuesday.
The fund can be used to provide financial assistance to first-time homebuyers of up to 50 percent of the purchase price; to acquire property to be used for housing offered for sale or rent; to create housing for sale or for rent; to rehabilitate existing structures for housing, and for housing counseling. The legislation could also be utilized to enter into public-private partnerships to provide housing opportunities and employee housing for local businesses.
“Governor Hochul is committed to making housing more affordable across New York,” Avi Small, Ms. Hochul’s first deputy press secretary, told The Star in an email. “This new law will allow the Peconic Bay towns to create community housing funds, a major step to expand housing affordability on the East End.”
The fund would be financed by a .5 percent real estate transfer tax, in addition to the existing 2 percent transfer tax that funds the community preservation fund. The legislation increases the exemption on the entire transfer tax from $250,000 to $400,000 for developed properties in East Hampton, Southampton, and Shelter Island, and from $150,000 to $200,000 for developed properties in Southold and Riverhead.
The exemption applies only to transfers of $2 million or less. If implemented, the law will result in a tax cut for transfers under $1 million on the South Fork and on Shelter Island, and $400,000 or less on the North Fork and in Riverhead, according to a statement issued by Assemblyman Fred W. Thiele Jr., who co-sponsored the legislation with State Senator Anthony Palumbo.
The law provides for an advisory committee to assist in the preparation of the plan. Each town would be required to pass a local law creating the fund and imposing the transfer tax with the higher exemptions.
In a Sept. 28 letter to the governor, Mr. Thiele, Mr. Palumbo, and co-signatories including Mr. Van Scoyoc and Southampton Town Supervisor Jay Schneiderman wrote that the act would be a “sister initiative” to the community preservation fund, “which has preserved more than 10,000 acres of open space, armland, parks, and historic places as well as protected water quality since its enactment in 1998.”
According to the United States Census, the median value of an owner-occupied house in Suffolk County was $397,400 in 2019. In East Hampton, however, the median value was $869,600, and in Southampton it was $671,600.
“The unique demographics and economics in the Peconic Bay Region contribute to these high costs,” Mr. Thiele and Mr. Palumbo wrote to the governor. “The combination of the Peconic Bay Region’s attractiveness, proximity to the dense population of the New York metropolitan region, and to that region’s extraordinary wealth, makes the Peconic Bay Region a prime location for seasonal and luxury homes.” The result, they wrote, is “a housing crisis for local middle-class and working-class families.”
Had the fund been in place in 2020, when the Covid-19 pandemic drove many people from New York City to the South Fork, eliminating available housing stock and pushing real estate prices higher, “it would have generated more than $30 million across the region to provide financial assistance for first-time home buyers and for the actual production of new affordable housing opportunities,” they wrote.
Mr. Thiele said on Tuesday that he was “really excited” about the bill’s passage. “I’ve worked on this literally for 20 years — we had public hearings and issued a report in my office with a recommendation for the same bill back in 2002, almost 20 years ago.”
Both houses in the State Legislature passed the same bill in 2019, but former Gov. Andrew M. Cuomo vetoed it. “Finally,” Mr. Thiele said, “all the stars lined up and each town will have the authority to set up a housing fund with the extra transfer tax.”
Mr. Van Scoyoc credited Mr. Thiele in remarks on Tuesday, adding that he had met with the governor in August to “tell her how dire the need is” for affordable housing in the town. Of the more than $30 million estimated to have been generated had the fund been in place last year, “it would have produced over $8 million in funds for East Hampton to use toward affordable housing,” he said.