What if we could get the private sector to build affordable housing in East Hampton without a single dollar of government money being spent. It would be a win-win, right?
Since 2023, a local businessman committed to seeing work-force affordable housing in town and I as his attorney have worked with the town’s housing office, Planning Department, and a member of the town board to come up with a creative solution to a severe local social and economic problem. As the cost of housing has skyrocketed in town, in part due to our very successful efforts in preserving open space, we face a crisis for our local businesses and institutions. They can’t get enough staff who live within a reasonable commuting distance to fill the positions they need filled. Whether it is the kitchen staff at your favorite bar and restaurant, the technicians who take your blood or give you an X-ray, the gentleman who teaches your kids algebra, or the people who respond to our ambulance and police calls, we don’t have enough places for these essential workers to live.
How can we solve this problem and prevent so many of our businesses from dying? We have developed a simple but elegant solution by incentivizing the private sector, the primary beneficiary of the housing, to finance its construction and management.
The problem with affordable housing development in East Hampton to date is that it almost always was paid for and built by the town or the housing authority. Although we believe town government is generally well intentioned, good intentions here are not enough. Our local government leaders are skittish about raising and using the resources, i.e., tax dollars, to seriously address the problem and placing the necessary housing in areas where neighbors object. If we continue to succumb to such skittishness, we will fail to solve the problem.
When the current town code was written in 1984, it provided for affordable housing developments to be created in areas designated as an “affordable housing overlay district” by the town board. This “floating zone” enabled the town board to have flexibility in the placement of affordable housing. However, because of the concern about high-density development in the heady land-rush days of the 1980s, and the lack of advanced sewage treatment technology at an affordable level, the town code limited the densities to eight units per acre. Because of the density limitations and the expense of providing sewage treatment on a small scale, no privately developed housing was done in 40-plus years since that code was enacted.
Seeing that as an issue, we worked with the town’s housing and planning staff to get the town board to expand densities in these situations to 12 units per acre when package sewage treatment plants are provided (which are now economical for small developments), provided a traffic study and study of the impact on the relevant school district could sustain an application. To be extra careful, at the time we convinced the town board to make those changes we also proposed a subsection to the affordable housing overlay district and associated special permit requirements in the code that would specifically authorize what we called work-force housing.
Since 1984, affordable housing in our town code has been defined by a) who can occupy the units and b) what those income-qualified candidates can be charged either for rent or for a purchase price.
After the town board balked at creating a work-force housing section to the code that we drafted in 2023 with the former housing director, we took a deeper dive into the code and determined, by parsing the language carefully, that it actually allows businesses to purchase and own condominium units that meet the definition of affordable housing in the code and rent them to their employees. The reason that can be done, simply put, is because what defines affordable rental housing is who can rent and what rent they are charged. On this basis, we have proposed and are processing a project at the former Stern’s department store site on Pantigo Road for 47 units. Condominium units would be created and sold for prices less than $1 million for two and three-bedroom units that employers would purchase to rent to their income-qualified employees.
That project at 350 Pantigo had been working its way through the planning board when we were able to come up with another site on Three Mile Harbor Road for just such a project encompassing seven acres that the town board itself was proposing to bid on to create affordable housing. Our investors were able to put together a more attractive bid than the town would be able to, and with the town board’s knowledge we moved forward to put together a proposal. As reported in the press, however, that proposal was shot down in December without even getting to a public hearing.
But we didn’t give up. We continued our discussions with town staff and attorneys, but for a while it appeared our efforts had hit a wall.
But lo and behold, the sun has come out. Realizing the merits of the model we proposed, several concerned staff in the planning and legal departments, under the direction of Councilman Ian Calder-Piedmonte, have proposed amendments to the town code creating a special permit process for “rent-restricted employer-sponsored housing.” A slightly embellished version of a code amendment we proposed two-plus years ago is now on the table, with the town board expressing preliminary support. The planning board has expressed its support for the legislation as well. You can’t keep a good idea down!
We applaud the town for acknowledging that our work-force housing model can help mitigate the housing crisis. We would go slightly further by allowing 1) essential workers (teachers, medical professionals, public safety and municipal employees) to qualify regardless of income, and 2) projects outside the limited business district. As written, the model could be applied to lots on only two streets in town.
So then where do we stand? We have an elegant solution to an intractable problem. Our model incentivizes the private sector (we have long lists of businesses willing to buy units for use by their staff). We have a need that is not going away, and we have a way to solve a problem without tax dollars, state or federal grants, or tax credits and in a way that will make affordable housing developments faster and less expensive to build. The most recent project the town built on Three Mile Harbor Road was built at a cost of over $700,000 per unit. We can do much better.
Most important, the town board will hold a public hearing on May 7 at 6 p.m. on the new legislation to allow work-force housing.
And so we ask for your support. Please let the town board know that you think the problem is solvable and that you support the work-force housing solution. Please show up at the hearing or send board members a letter or email urging them to embrace this innovation because we, as a community, need work-force housing now.
Christopher Kelley is a senior partner with the Twomey, Latham, Shea, Kelley, Dubin & Quartararo law firm in Riverhead.