Town Looks To Sell Development Rights To Replenish Affordable Housing Fund

Southampton Town officials are hoping to raise more than $4.2 million by selling the development rights on a vacant town-owned parcel in North Sea to help replenish the town’s struggling affordable housing fund.

On Monday, Southampton Town Director of Housing and Community Development Diana Weir said that the town’s affordable housing fund balance stands at roughly $100,000. “Basically, we’re in the red,” she said. “Hopefully, we’ll be able to replenish the fund.”

The town purchased the nearly 10-acre property, located at 36 Cedar Lane, in 2006 for $1.5 million. Of that, $500,000 came from the Community Preservation Fund, and the remaining $1 million came from the town’s affordable housing fund, according to Southampton Town Supervisor Jay Schneiderman.

He said that the town originally purchased the lot with the intention to build affordable housing on a portion of it, but the property was never properly subdivided. Neighbors have since argued that the parcel is protected as parkland, as it was partially purchased using CPF funds, Mr. Schneiderman said.

Now, the Town Board is preparing to strip the property of its development rights. That would guarantee that the parcel would remain as open space, while—under the town’s Transfer of Development Rights program—allowing someone who purchases one or more of the development rights to use them to increase the density of another parcel within the Southampton School District, build on a previously undevelopable lot, increase sanitary flow rights or build a carriage house. The town also could sell those development rights and use the proceeds for the affordable housing fund.

At a Town Board work session on May 2, the board met with Elinor Brunswick, an appraiser with Rockville Center-based Brunswick Appraisal Corporation, who was hired in the fall to determine the value of the Cedar Lane property.

She estimated that each development right—of which the town is selling 15.3, according to Town Planning Director David Wilcox—is worth $275,000, or more than $4.2 million combined. The town requires a minimum purchase of a half of a development right, according to Southampton Town Planning and Development Administrator Kyle Collins.

“That’s much higher than I was anticipating,” Mr. Schneiderman said of the appraisal. “That would be an absolute home run for our affordable housing fund.”

At last week’s work session, Assistant Town Attorney Kathleen Murray noted that the appraisal value is typically valid for six months to a year. She added that the town is not permitted to accept bids for less than market value.

Mr. Schneiderman said the next step is to release a notice to bidders “and we hope that we get our number.”

“It sounds like this is going to have a happy ending,” he said.