The State Assembly on Tuesday approved a bill authorizing towns in the Peconic Bay region to establish community housing funds—similar to the Community Preservation Fund—to help make houses more affordable for first-time homebuyers and boost the production of community housing.
The towns of Southampton, East Hampton, Shelter Island, Riverhead and Southold could create their own housing funds to provide financial assistance through a half-percent real estate transfer tax, a similar model to the existing 2-percent tax that finances the CPF.
Assemblyman Fred W. Thiele Jr., who sponsored the bill, announced the legislation’s passing in a press release on Wednesday. In the release, he said that the funds would generate about $20 million for community housing throughout all five towns based on 2017 revenues.
The housing fund could be used for financial assistance to first-time homebuyers and to partnerships for employee housing, the production of community housing for sale and for rent, nonprofit housing counseling, and rehabilitation of existing buildings for community housing, the release states.
The financial assistance could be in the form of grants or loans. Homeowners with a loan would have to repay it only when they sold the home.
If signed into law, the bill would increase the transfer tax exemption for improved properties in East Hampton, Southampton and Shelter Island from $250,000 to $400,000, and in Southold and Riverhead from $150,000 to $280,000. This would result in lower closing costs for home purchases under $1 million on the South Fork and under $800,000 on the North Fork, affecting about 60 percent of their real estate transfers.
Implementation of the fund would be subject to Town Board approval and a mandatory referendum. Each town would appoint a Community Housing Advisory Board to work with the Town Board to establish a Community Housing Plan to create the fund.
“The lack of affordable housing has reached crisis proportions,” Mr. Thiele wrote in the release. “Local employers have difficulty hiring and retaining employees because of housing costs and availability. Local volunteer emergency services are experiencing difficulty in recruitment and retention. Longtime residents are forced to leave the area.”
He continued, “However, this legislation will provide towns with a meaningful tool that can make a difference by providing housing opportunities for its residents at a much greater rate than they can with existing resources and programs.”
Senator Kenneth P. LaValle has introduced the same bill in the State Senate, but it has not yet been voted on.
27east on Jun 19, 2019