East Hampton, Losing Money on Permits Amid Building Boom, Wants To Hike Fees

Building fees charged by East Hampton Town for multimillion-dollar construction projects are lagging well behind other local municipalities and shortchanging taxpayers, while the real estate industry reaps massive profits from nearly unbridled pace of development and redevelopment, the town’s chief building inspector told lawmakers earlier this month.

Permits for a $1.7 million construction project in East Hampton Town would bring in just over $3,800 in fees, Chief Building Inspector Joe Palermo told members of the Town Board on April 16. In Southampton Town, those same permits would be $8,800, and in East Hampton Village, those same permits would be more than $17,600.

Permits in East Hampton Town that would be just shy of $9,500 would be more than $41,000 in some neighboring municipalities, where fees are set at 1 percent of estimated construction costs.

The fees charged by the town do not even cover the costs to the town of processing the permits, the inspector said.

“I just wanted to point out how antiquated our fee schedule is — the last time it was revised was April 16, 2015,” Palermo said. “We’re just way behind, and we need to catch up. Salaries are higher, equipment is more money, cost of everything is so much more.”

Palermo said that, on average, Southampton Town’s fees, which are updated every two or three years, most recently in 2023, are 40 to 45 percent higher than East Hampton Town’s.

At the same time, the work of inspectors is steadily increasing.

The town this year began mandating that all certificates of occupancy be updated before any real estate transfers, to ensure that legacy code violations are not perpetuated when a property changes hands. But that has spiked the number of property inspections that building inspectors must conduct in a year.

Palermo said that he has wanted to have the town start conducting mandatory inspections of foundation footings at the very earliest stages of construction, rather than just inspecting a completed foundation, but has not been able to add that to his staff’s workload because the department does not have the manpower.

He recommended that the town increase administrative fees — to $200 for commercial or residential permits, $100 for swimming pools, and $300 for C/Os — and set fees according to either square footage calculations or using a flat half-percent fee on some projects. Southampton, he noted, increases its per-square-foot fees for larger projects, which require more inspections.

Town Board members said they agreed.

“Obviously, we want to consider the regular person, too. We don’t want to hike them in such a way that it impacts an affordable home — but being half of what everyone else around us is, and losing money, it is not doable,” Councilman Ian Calder-Piedmonte said.

Councilwoman Cate Rogers said that the number of tasks and more complicated work building inspectors have to do now necessitates a substantial update.

“We can’t keep throwing things at you without updating the fees as well,” she said. “We have to make sure we’re covering the costs to taxpayers for your work.”