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Six Months Later, Housing Dollars Are Trickling In

Thu, 09/28/2023 - 05:43

Under the new Community Housing Fund program, which saw a .5-percent real-estate transfer tax take effect in April to gather resources for affordable housing in four East End townships, money has been slowly — very slowly — coming in. Based on its glacial pace thus far, officials say, it will be some time before the money will have an impact on the availability and affordability of housing here. 

As of last week, East Hampton’s Community Housing Fund had taken in about $315,000, according to Eric Schantz, who oversees housing and community development for the town. 

On Shelter Island, Elizabeth Hanley, who chairs that town’s Community Housing Fund Advisory Board, said this week that as of Aug. 31, the town had collected $100,925. 

In Southampton Town, said Joy Cianci, housing fund chairwoman, revenues totaled around $60,000 through the end of June. Updated numbers in Southampton and data for Southold Town were not available by press time this week. 

Riverhead did not put the housing measure on the November 2022 ballot, when voters in the four other East End towns approved the new transfer tax. On Shelter Island, the margin of its passage was just 15 votes. 

Houses purchased in East Hampton, Southampton, Shelter Island, and Southold are now subject to 2.5 percent in total transfer taxes, of which 80 percent goes to the Community Preservation Fund to support open-space purchases, recreational areas, historic lands and structures, water quality improvement, and farmland preservation. The remaining 20 percent will go toward housing programs, which vary by town. 

The first $400,000 of value on properties that close for under $2 million is exempt from the transfer taxes. Firsttime homebuyers are also exempted. 

Suffolk County collects the taxes and disburses them to the towns, which are then responsible for calculating the share that goes to the housing fund versus the preservation fund. 

Several factors are impacting the pace of collecting, among them the newness of the process — similar to the rollout of the Community Preservation Fund in 1999 — and the fact that properties are exempt from the new transfer tax if their buyers can prove the sale was in process prior to April 1. There’s also real estate market conditions, characterized right now by “higher interest rates and more limited available inventory,” Ms. Cianci said in an email. 

Southampton, she noted, expects that revenues “will increase significantly as fewer transactions will be exempt as time goes on.” 

On Shelter Island, Ms. Hanley said the cumulative total has been a pleasant surprise so far. “It’s a little bit over expectations because we’re a very small island,” she said. “We had a couple of large sales go through, so that’s where this money is coming from.” 

In East Hampton, though, “it is difficult to say” how the money has stacked up against expectations, Mr. Schantz said. “I think by January we will have a better idea of what we can expect in a given year, as this will give the county some time to get used to this process and we will have a bigger sample size to consider.”

Assemblyman Fred W. Thiele Jr., who heralded the creation of the housing fund as enthusiastically as he had when the preservation fund was established, estimates that 2023’s sales will ultimately yield about $3 million for East Hampton and $4.3 million for Southampton. “These are rough projections, but I think give an idea of the order of magnitude,” Mr. Thiele wrote. “Most, if not all, exempt contracts should be closed by the end of 2023.” 

That leaves the townships now finetuning how they’ll spend or distribute the money once there’s enough of it in the coffers. “At this time, East Hampton is primarily focusing on its process and procedures with the Community Housing Advisory Board so that we are ready to begin considering allocating the fund revenue to specific projects in early 2024,” Mr. Schantz said. 

Ms. Hanley noted that “in all reality, the fund is probably not going to be significant enough to really be able to build anything for a couple of years. Who knows what’s going to happen with the real estate market, but that’s our guess. We’re looking at this as more of a midto-long-term solution, rather than something that’s going to be able to help immediately in the next year or two.” 

In Southampton, the advisory board has met every few weeks since April “to analyze the affordable housing needs and opportunities of each hamlet within our township,” Ms. Cianci said. “This work is still underway. . . . This planning process has been time well spent as the Community Housing Fund begins to grow revenues.” 

While Southold Town could not provide its total receipts just yet, officials there indicated that the process is going smoothly. “I am proud to live in a town where the community steps up and works hard for the greater good of all residents,” Councilwoman Jill Doherty said yesterday. “It’s been a long road to get to this point. I have high hopes for the future of this town, and it starts with secure housing for all.” 

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