Panel Pitches Best Uses for Coast Guard Housing Site

As the federal government looks to sell a former U.S. Coast Guard housing site on the north side of Stewart Avenue in Westhampton, Southampton Town and state officials see an opportunity for affordable housing, though neighbors in Hampton West Estates, on the south side of Stewart Avenue, are urging the town to back off that idea and allow the housing units to be sold at market rate to protect their own property values and the character of their neighborhood.

Representatives on both sides of the issue shared their ideas, desires and concerns last week at Fauna in Westhampton Beach during the Express Sessions conversation “Coast Guard Housing Sale Presents Opportunity — But for What?” hosted by The Express News Group.

The U.S. General Services Administration has paused the sale or auction as it investigates potential hazards on the 14-acre property historically used by the Air Force, so the town and its partners have time to consider the best approach and have a dialogue with the neighbors.

According to the GSA, the property was developed in 1959 and has 24 duplexes, two single-family homes and a mixed-use building. Several units were renovated in 2011.

What’s Possible

Southampton Town Supervisor Jay Schneiderman noted the challenge that the high cost of housing and the limited amount of land pose as there are many jobs on the South Fork that need to be filled.

“As our population continues to grow, our economy continues to grow, it becomes a more and more complex issue that the town has worked on over and over again,” he said. “We have done a number of projects, some quite successful, including in Speonk recently and in Southampton, and there’s a number on the table.”

Those two projects, Speonk Commons and Sandy Hollow, are for affordable rental apartments with 37 and 28 units, respectively.

“It gets harder and harder to do anything where you’re concentrating housing on one piece of land,” Schneiderman said. “You don’t have a lot of opportunities to do that.”

When trying to build 30, 40 or 50 units in one spot, there aren’t many places where “you can do that where you won’t get driven out of town,” he said.

The Coast Guard site is a unique opportunity with 52 existing rental units, he said, though he pointed out that the need for affordable housing is more acute east of the Shinnecock Canal than it is in Westhampton. “Typically we try to focus east of the canal because that’s where we feel the greatest demand,” he said. “And it’s the hardest, but that’s where most of the jobs are — east of the canal.”

That is felt each morning in the traffic congestion over the canal as the workforce commutes east, he noted.

“This is west of the canal,” he said of the Coast Guard site. “So it’s not as high a priority, but still everywhere throughout the Town of Southampton, there is a lack of affordably priced housing. And we have to find ways for our essential workers to live in the community whether it’s a nurse or school teacher, police officer, even a government official.”

Schneiderman said the site was once used for workforce housing — Coast Guard workers — and when it became available, it presented an opportunity.

“You can’t sort of just walk away and say, ‘OK, I’m not going to take a look at that,’” he said.

He explained that the town took a look at the property early on, did some appraisals and made the Coast Guard an offer. “At that point though, the Coast Guard stopped entertaining offers, and then suddenly it was going to be auctioned off,” he said, noting that it’s complicated for the town to participate in an auction because the town can’t commit money without a public hearing first.

In addition to being the town supervisor, Schneiderman is also a Central Pine Barrens commissioner.

“This property is located in the Core Pine Barrens Preservation Area,” he pointed out. “Now, the Pine Barrens is really divided into two areas to protect groundwater: there’s the core areas and then there’s the compatible growth areas.”

Generally, though past development can continue, there is barely ever any new development in the Core Preservation Area, he said, explaining that it requires a hardship waiver from the Central Pine Barrens Commission, which would be very hard to get.

“Could it be a supermarket? Could it be a mall? No, it can’t be,” he said. “This is core — Pine Barrens Core — and all you probably can do is what you currently have.”

A Holding Pattern

Kara Bak, Southampton Town’s director of housing and community development, said affordable housing is essential to the sustainability of the town.

“We need our essential workers — teachers, doctors — we need those people to be able to live in this community, and without that, our community is not going to be sustainable,” she said.

That being said, the town and its partners’ efforts to acquire the Coast Guard site for affordable housing are on pause.

“We’re in a holding pattern, really, because the town brought to the Coast Guard’s attention some issues surrounding the property,” Bak said.

The site is in the New York State Superfund program and at one point had been used as an airfield bombing and gunnery range, she said. “So the Army Corps of Engineers is doing an investigation, and the Coast Guard has put the property auction on hold until that’s further investigated.”

Still, she called the site a “great opportunity” that the town should take advantage of.

“This property is unique in that it has 52 units that have traditionally been used as rental housing for the Coast Guard,” Bak said. “We just don’t have that in our town. The cost of land is so expensive.

“This already has the density there,” she continued. “It really is a terrific spot. One of the other nice things about this spot is it’s down the road from a park. So it really could be a terrific family neighborhood. I could see the kids leaving this neighborhood and taking their bicycles down to the park.”

Open Questions

Curtis Highsmith said when he joined the Town of Southampton Housing Authority in 2014 as the executive director — the position he still holds today — the housing authority was talking about the site then, and he understands that the prior administration had also been talking about the site’s potential.

“Individuals or communities don’t like creating new density in the community,” he said. “They feel it’s overdevelopment. They feel like it could possibly be over-density.”

This opportunity where housing already exists is a rare opportunity that still left questions: “Do you do homeownership? Do you do rental? The quick answer is, just like any other investor, the cost will always lead to the use,” Highsmith said.

The acquisition costs, the debt service, the possible rent price and the possible sale price all come into consideration when choosing a direction, he explained.

Initially, the housing authority considered the site for rental units in light of it being preexisting and eligible for grants and state funding for rehabilitation, he said. “But then we understood that the community wanted vested interest — individuals that own the house, that had ownership in the community.”

Because the community has expressed interest in homeownership, that is a direction they are leaning toward, he said.

Whether that can be achieved raises a number of questions that haven’t been fully answered, he pointed out: “How do you make this workable? Can you get funding? Can you get subsidies? Can you get grants? Can you get low-interest loans? Can you get tax credits? Will the state be involved?”

However, he added, because the need is so great on the East End, state agencies and other governing agencies are invested in making it happen. “They said we never did it before, but we definitely would consider it now because it’s so needed,” Highsmith said.

He said no plan has been decided on yet and encouraged talking as a community.

“We would hate to lose this resource and lose the opportunity when it’s so rare for us to find these opportunities anywhere else in Southampton Town,” he said.

One idea the housing authority has floated is to convert each duplex into an individual affordable house for sale. Instead of one structure divided into two rental units, each duplex would be converted into an owner-occupied single-family home with an accessory apartment contained within and offered as an affordable rental.

Scheiderman said this would be the best of both worlds. “We want people to own, and we don’t want absentee landlords. … You have an apartment, and the homeowner there watching over that. The homeowner doesn’t want someone who’s going to be a problem in the apartment.”

State Assistance

Cathleen McCadden, the chief of staff of the New York State Homes and Community Renewal, represented Homes and Community Renewal Commissioner and CEO RuthAnne Visnauskas and Governor Kathy Hochul at the Express Sessions event.

She said they are flexible in how they can help the community achieve its housing goals and have money available to assist in both homeownership and rental opportunities.

Federal or state property comes with “a lot of hair,” she said, pointing out that in the case of the Coast Guard property, the units are not submetered for their utilities. “It will be incredibly expensive to submeter each individual home,” she said. “… All the units are on one utility, which doesn’t make sense for homeowners or even for renters.”

Getting each unit its own electric and water meters is a cost the housing authority had not considered, Highsmith admitted.

“Whatever you decide to do with this property,” McCadden said, “if you want it to be reasonably affordable, or affordable to people who live here — the first responders, the doctor, the teacher — you’re going to need government assistance. Otherwise, you’re going to have some investor, probably a speculator, come in, buy the property — and it will be a rental, based on our analysis.”

She touted the governor’s other efforts to increase the availability of housing in New York State. That includes an ultimately abandoned plan to encourage and incentivize the development of 800,000 housing units across the state over the next decade. The plan was met with resistance, including on the East End, due to concerns about the state overriding local control.

“This is a crisis,” McCadden said. “We’re at a real inflection point, and we have to do something. We have to do something different. And I have to tell you this site is like a unicorn. … When we got the call, it was like, ‘We are going to drop everything we’re doing.’” She described calling upon federal partners, including U.S. Senators Chuck Schumer and Kirsten Gillibrand, immediately.

“We got on top of it to be responsive to the community to give you the chance to figure out what you want to do here before the Coast Guard auctioned off the site,” she said.

What the Neighbors Think

Sharon Frost, a Hampton West Estates resident for 33 years and former president of the neighborhood association, recalled when the Coast Guard housing was full, and her children would play with Coast Guard children at the park. But she also recalled Hampton West Estates’ troubles.

“When I first moved there, the community was riddled with drug dealers, crime sprees, absentee landlords, transient tenants, and that resulted in a lot of houses on our side of the road becoming in disrepair,” she said.

Frost said her community is already affordable compared to the rest of the Town of Southampton and that the neighborhood association is very concerned about the potential concentration of affordable homes if the town gets the Coast Guard property. “That’s just gonna kill us,” she said.

The notion that the homes would stay in an affordable housing program forever will kill their property values, she elaborated.

Frost also expressed fear that the duplexes would be turned into houses double the size of units in Hampton West Estates, but sold for the same price as a unit in Hampton West Estates.

She argued that the income limits for affordable housing would rule out most of the middle class, including teachers, police officers, nurses and public servants, especially in two-earner families.

Instead of the entire Coast Guard property being used for affordable housing, she proposed it be treated like new subdivisions where 10 percent must be reserved for affordable housing.

“We feel that they’ve overlooked income diversity,” she said.

Forest Markowitz, the president of the Hampton West Estates Resident Association, has owned a home in the neighborhood since 1979.

“I’ve seen, like Sharon, the neighborhood, once described to me as a rural slum, suddenly, and in the last 10 years especially, kind of pick itself up and improve,” he said. “And our rental-to-ownership ratios — the owner side began to increase.”

He said of 175 units, about two-thirds are now owner occupied.

“Over the years, the rentals have been for the most part problems for a number of reasons,” he said. “Primarily, absentee owners. We have a lot of absentee owners. We used to refer to them as the 11978 Club, but because they were all in Westhampton Beach, except those who are in New York, and they were in the 10021 Club.”

But as time went on, the neighborhood became an affordable place in the Westhampton Beach School District with a lot of young families, he said.

“Our main concern, this entire process, is that we want the integrity of Hampton West to remain,” he said. “We don’t want to see it altered in any way for the worse, and if it’s for the better, fine. Terrific.”

Many people have invested a lot into their properties in the last five or 10 years and could go underwater if their property values decline, he warned.

“Our experience with rentals from 1976 until probably sometime in the late ’90s was horrific, absolutely horrific,” he said.

What Affordable Means

McCadden wanted to know what people think affordable means in their community. “I always think it means different things to different people,” she said.

Frost indicated that Hampton West Estates units are affordable. “One just sold last week for $429,000,” she said. “So in the greater scheme of things in the Town of Southampton, that’s affordable.”

Schneiderman said when the town talks about affordable housing, it’s talking about the area median income, and what households that make 80 percent, 100 percent and even up to 130 percent of the median income can afford.

The area median income, or AMI, is determined by the U.S. Department of Housing and Urban Development, which says that the median family income in Nassau and Suffolk counties is $156,300. For a family of four in the region, 80 percent of the AMI is $102,000, and 130 percent is $203,190.

Schneiderman pointed out that at 130 percent of AMI, a home priced at $500,000 qualifies as affordable. “In that particular neighborhood, it actually might lift property values,” he said. He also forecasted improvements to curbs, drainage, lighting and landscaping and said it would be beautiful. “It’s not going to be something that’s run down,” he said.

Federal Relief

“Because it’s federally owned, I had hoped that the federal government would simply transfer it to the town,” Scheiderman said. “Why do they need to make millions of dollars off this property? But the Coast Guard has their own fiduciary process.”

If the federal government gave away the property, it would be a lot easier for the town to “deliver a product” with a reasonable amount of subsidy, he said. “If you put too much subsidy in it, it doesn’t work.”

He said the town needs some relief to deliver homes for $500,000.

“There are a lot of other sites that the economics of are better than this right now, because of the high cost that the Coast Guard is looking at,” he said.

Private Vs. Government

“It doesn’t make sense for a developer to build a house for sale in the community economically, as well as in terms of their rate of return,” Highsmith said. “It doesn’t make any sense. Most developers would look at doing this as a rental project, because they get more density at 52 units, and they are able to get rental units out of this.”

He said when the community deals with the town and its partners, it has a voice in what happens. “When you go to a private developer, you lose that voice,” he said. “He or she or that corporation will build what’s best suited for their profitability. And that may not be what the community wants.”

Bak pointed out that because the existing development is “preexisting, nonconforming,” a developer could not tear down the existing units and rebuild new. If the existing units are razed, the property would revert to its existing zoning, which is one home per 5 acres on a 14-acre property.

“You can’t demo,” Highsmith added. “You lose the density.”

“Because it’s in the Pine Barrens Core, a private developer isn’t building 26 larger homes with swimming pools and tennis courts, the kinds of things that might give them that estate law that they can get to those higher numbers,” Schneiderman said. “You’re not gonna get there. It’s not feasible.”

He said a private developer may even ask for Section 8 vouchers for its 52 units, because there would be guaranteed rental income.

Section 8 is the federal program to assist very low-income families, the elderly, and the disabled to afford homes.

What Hampton West Wants

Frost said she would like there to be 52 individual lots, all for homeowners, sold at fair market price, apart from 10 percent set aside for affordable housing.

“We feel that will not change the character of the neighborhood,” she said.

She called for “substantial upgrading of the homes” and for those who buy affordable homes to have the ability to sell the homes for market value after they have lived there for 10 years. She said that would attract stakeholders to the community.

But Schneiderman said someone could get a housing unit worth $700,000 for $350,000, and then sell it after 10 years when it is worth $1.5 million and get a windfall. “I think the public would resent that, he said.

Frost also called for “absolutely no rentals,” though she said if individual homeowners want accessory apartments, they should have that option. What she does not want is for the town to build in an accessory apartment into each home.

Bak noted that subdividing each duplex into two homes owned separately would require new septic systems for each home because currently each pair of units in a duplex shares one septic system.

Imperative

“This is really a moral imperative to create housing,” Schneiderman said.

It’s hard with any proposal to get to 100 percent agreement, he said, adding that it is still important to address the neighborhood concerns and try to reach a workable compromise.

“We have to do something on the housing front,” he said. “We have no choice, and that means elected officials will have to have that intestinal fortitude — or whatever you want to call it; there are lots of words for that — the gumption to move forward and say, ‘OK, I may lose my office in the vote, they may throw me out, but I have to do this to make the community sustainable.’

“It really is a question of the community being able to survive into the future,” he continued. “When somebody has a heart attack and calls 911, they want an ambulance to show up. And what happens to property values when you don’t have staff at the hospital? What happens when schools can’t get teachers? You fall apart, you unravel. So I think we have a moral responsibility to find ways to do this, and you do not get very many opportunity sites.”

He said, as things stand, the town will never catch up to the pace at which homes are becoming unaffordable, and that is, in a way, because the town is a victim of its own success.

“We have preserved so much land,” he said. “We have created a quality of life that’s second to none. People want to be here. It’s a limited amount of land supply and the prices are going through the roof. And so we need that response. And we need our elected officials to understand that and do what’s in the larger community’s interests. And yes, that might mean you make an enemy here or there, but you’re doing the right thing.”