Express Sessions: Locals Tell Governor Housing Plan Will Not Help Affordability Here

A panel of East End officials and affordable housing advocates told representatives of Governor Kathy Hochul’s office last week that a state proposal to spark more housing development would, on the East End, only result in more luxury residences priced far out of reach for local residents.

With three of Hochul’s housing officials on hand for the most recent Express Sessions forum in Southampton Village last Thursday, March 23, representatives from Habitat for Humanity, East Hampton and Southampton towns’ housing programs and the Long Island Builders Institute repeatedly warned that the governor’s plan to mandate a 3 percent increase in housing every three years in all communities served by the Metropolitan Transportation Authority would have sweeping unintended consequences on the East End.

An incentive system, more state funding for transportation and infrastructure improvements like sewer systems, and a measured approach that allows the budding Community Housing Fund to put new financial support behind local efforts to expand affordable housing would be a wiser approach than the mandates that the governor’s office has proposed, they said.

“I want to applaud the governor for recognizing the depth and breadth of this problem and trying to address it — and taking a bold approach,” Suffolk County Legislator Bridget Fleming said, speaking to a full house audience at Union Sushi & Steak. “But here the question is not so much how do we create units, it’s about creating affordable housing. We’ve been talking about this here forever, and we have had a very successful run with creating affordable housing though the state tax credits that are driving private investment in the type of housing that we need to build.”

The governor’s proposal, named the New York Housing Compact, calls for a 3 percent increase in the housing stock in downstate communities and a 1 percent increase in upstate communities every three years — for a total of 800,000 new units statewide in a decade.

If a community cannot spur development on its own, the compact would mandate that local municipalities make changes to their zoning to remove roadblocks to new private development efforts.

Among the changes a municipality would have to choose from would be allowing accessory dwellings up of to 1,500 square feet on almost any property, allowing residential lots to be subdivided into two lots with no lot-size minimums, and rezoning at least one-third of the already developed land in the region for multifamily development up to 25 units per acre.

The law would put no controls on the costs of the new housing created except in a late-phase option where a developer whose applications to create housing have been denied could appeal to a state review board for an override of local regulations that would require only that at least 20 to 25 percent of new units in a multifamily development be priced at below-market rates.

“There is a housing crisis in New York State — it’s true downstate and it’s true upstate,” said Kate Van Tassel, director of special projects for the state’s Homes and Community Renewal agency, which is leading the new-housing push. “The housing cycle is broken. Seniors want to stay in the community but there’s nowhere for them to downsize into and our adult children aren’t finding places to buy. The families that need homes are what’s driving this.”

The local representatives agreed with Van Tassel’s assessment but countered that in resort communities like the East End, where second-home buyers hyper-inflate demand pressures and deep-pocketed developers and investors are snatching up nearly any property that becomes available, forced development and dispensing with local zoning regulations without price controls would simply open the door to developers to force through new luxury condo developments and do nothing to address the shortage of housing.

“Creating million dollar condos near our train station is not going to help anyone,” East Hampton Village Mayor Jerry Larsen said.

Larsen harked to a number of large commercial properties within the half-mile radius of the train station the governor’s plan would target that would be ripe for redevelopment into multifamily residential complexes — but would be unlikely to create any new affordable options.

The local housing officials on the panel said that the newly adopted Community Housing Fund will be a substantial boost to helping create more affordable housing without state mandates.

“Our housing here is among the most expensive in the nation and there is no guarantee under this plan that a single unit is affordable,” Kara Bak, Southampton Town’s director of housing and community development, added. “Even if you rezone, it’s still going to just be more luxurious upscale housing. Our goal under CHF is to create housing that is affordable.”

“The beauty of the housing fund is that the local municipality will be able to determine how the funds are spent,” Katy Casey, director of the East Hampton Housing Authority, said. “Construction, repurposing existing housing, land banking; there are a lot of tools in that box. I’m very excited, it’s going to do a lot to help us craft affordable housing that is appropriate in our community.”

Fleming also harked to components of the governor’s proposal that appear at first blush to potentially free development proposals from environmental review and from local zoning rules that limit housing density and size as especially problematic in a region that draws all its drinking water from the aquifer below and has carefully tailored zoning and land preservation efforts to protecting it.

“For a community that has spent so much time and money … protecting groundwater, that is a very difficult pill to swallow,” the county legislator said. “As a former town board member I can tell you that the structure of the SEQRA law itself serves a very important purpose in environmental review, and to suggest that it could be set aside, that’s difficult to accept.”

Van Tassel said that the governor’s plan as proposed would still require that a state reviewing agency contemplate the environmental impacts in any proposal, and that if there are major negatives that the proposal be rejected.

“The bill does still include significant environmental review — waters, wetlands, septics, those are still important pieces of the review,” she said. “If a project is proposed and there is no sewer and it is shown that it would be harmful to the environment, then it would not advance.”

She said that the point of mandating development with the threat of removing local zoning roadblocks is to ensure that the housing growth occurs equitably. Incentives alone have simply not worked to create evenly dispersed housing development in any other part of the country she said.

“We want everyone to play their part,” Van Tassel said. “Historically, some places can ignore incentives and other areas end up carrying the whole load for the rest of the state or region.”

But incentives, if applied correctly, could work to spur housing development in aways that would make it both affordable and equitable, critics of the governor’s proposal have said.

“As a builders organization, the idea of creating 800,000 units of housing, we’re all for it — we’re excited about that,” said Mike Florio, executive director of the Long Island Builders Institute, a construction industry lobbying group. “The question is, how do we get there? The governor’s plan is bold, it’s ambitious, but we think more incentives need to be used instead of mandates. There has to be some stick. But to mandate a one-size-fits-all approach is probably not the way to get there.”

Van Tassel said zoning can be a very powerful tool in steering development but said the governor’s office shied away from mandating blanket zoning changes around the state to make way for multifamily housing.

Florio said that allowing local municipalities to change zoning where they see it is suited to multifamily housing will work to create more affordable units but that in places like the East End, major infrastructure upgrades — sewers primarily — will be needed for such developments to be possible.

Casey said that there are other legislative changes that could be made that would help the affordability of housing on the East End. The Long Island Workforce Housing Law, adopted in 2015, requires, among other things, that at least 1 in 10 units of a multifamily development be priced as “affordable” for those earning less than 130 percent of the region’s median income. But the law also allowed developers to buy their way out of the requirement by making a financial contribution of just $200,000 per required affordable unit into a community housing fund. The low ratio of affordable to market rate and the buy-out loophole need to be reconsidered, Casey said.

“Having the option of putting $200,000 into a fund instead of creating a unit — that’s worthless,” she said. “$200,000 here might buy you a vacant 1/8 acre.”

The region’s historical focus on single-family home development rather than higher-density, multifamily housing is going to have to be shed in order to address the need for affordable living arrangements, all acknowledged. But how that is done, will be the difference between wholesale change and improvements, they said.

“There are 10 acres in East Hampton Village that are subdivided and being built with 11 homes, each about 5,000 square feet … 53,000 square feet of living space, 56 bedrooms, 71 bathrooms,” Jaine Mehring, an Amagansett resident who closely tracks local development trends and advocates for more regulatory restraint. “That would have been enough space for at least 50 affordable housing units.”

Bak noted that county wastewater rules also make single-family homes the only option in many cases. A 12-bedroom house can be built on a parcel of land that county rules would not allow 12 one-bedroom apartments on, she said.

“Also, the optics of it, people are more accepting of a large home rather than 12 affordable units,” she said. “So a change in that perception is needed.”

Fleming lamented too the deeply ingrained aversions to multifamily homes and the perception that they would change the “character” of local communities — and acknowledged that the governor’s plan would force a change in that view, or at least being held hostage by it.

“Not having community buy-in to make that transition away from single-family homes is dangerous for everybody,” she said. “I live in Pine Neck, that was all tiny cottages … now it’s all massive homes.”

She suggested that towns could use CHF and CPF funds to buy “easements” from homeowners through which they would put a legal cap on the redevelopment of their home in perpetuity, but be able to reap some financial benefit from it while they still lived there without having to sell.

The three-term legislator also noted that she had proposed legislation that would have required that the county dedicate any properties it seizes for nonpayment of taxes — which can be dozens of homes a year — to municipal or nonprofit affordable housing projects, rather than auctioning them off to the highest bidder as it does with most of them now. The legislation, she said, was “immediately shot down” by another county legislator — who is a real estate broker.

The irony of the housing proposal being tied to MTA service in an area where train service is scant and focused mainly on transporting seasonal visitors to and from the city, has not been lost on locals either. “Smart growth” principals that would focus development around downtowns with public transportation hubs are well intentioned, they said, but the lack of useful public transportation on the East End has been decried for decades.

“It’s fine to say you want to base your housing on transit,” East Hampton Town Planning Director Jeremy Samuelson said. “But where is the transit?”