A new tool to help solve the housing crisis in the city
A 0.5% real estate transfer tax, if approved by voters, would allow East Hampton Town to provide greater housing opportunities to eligible residents. Residents of the Manor House condominiums, the first ownership opportunity in the city’s affordable housing efforts, took possession last year.
If voters approve a 0.5% real estate transfer tax in a referendum on the November ballot, East Hampton Town will have what Supervisor Peter Van Scoyoc called Tuesday “perhaps the most powerful tool important” to address the shortage of affordable housing.
The Peconic Bay Area Community Housing Act, co-sponsored by Assemblyman Fred W. Thiele Jr. and State Senator Anthony Palumbo and signed by Governor Kathy Hochul last year, authorizes five East End towns to create community housing funds financed by the 0.5% tax, which would be in addition to the 2% transfer tax that subsidizes the community preservation fund.
Money from the community housing fund could be used to help first-time home buyers who live or work for the city with financial assistance in the form of a grant or loan. It could also be used to acquire real estate for housing offered for sale or rental; create housing for sale or rent; rehabilitate existing structures to convert them into housing; providing financial support for housing through a public-private partnership for employer-supported housing and housing counselling.
The legislation increases the full transfer tax exemption from $250,000 to $400,000 for properties developed in East Hampton, Southampton and Shelter Island, and from $150,000 to $200,000 for properties developed in Southold and Riverhead.
The exemption only applies to transfers of $2 million or less. First-time buyers would be exempt from paying transfer duties.
In order to act upon the authority conferred by the Peconic Bay Area Community Housing Act, each city must first develop its own enabling legislation. On Tuesday, Jennifer Nigro, the city’s assistant attorney, briefed the city council on a proposed law.
The state law language was added to the city code regarding the existing Community Housing Opportunity Fund, she told the council. “Our bill essentially mirrors that law.”
This fund “was decades ahead of this legislation in preparation for this day,” Van Scoyoc said. “So we’re really ahead of the game.” Money from the existing Community Housing Opportunity Fund would flow into the new Community Housing Fund, he said.
The enabling legislation would create a Community Housing Advisory Council that would review and make recommendations regarding the Community Housing Opportunity Fund. Van Scoyoc likened that advice to the city’s Water Quality Technical Advisory Committee, a group that makes recommendations about which sanitation projects are worth funding with a portion of the CPF. The council would consist of between seven and 15 town residents who would serve without compensation. It would include one representative each from the construction, real estate and banking sectors, and three representatives from local housing advocacy or social service organizations.
The plan will be discussed further next week, Mr Van Scoyoc said, and the council would like the enabling legislation to be finalized and passed by next month “so that people are clear about what is going on before the referendum”.
“It’s important for people to understand that it will work much like the CPF functions,” the supervisor said, “in terms of the money received [that] will be held in a housing fund to be administered by the finance department. The fund will be audited annually, he said, to ensure that all expenditures are in accordance with the law.
“I think this is perhaps the most important tool the city will have to deal with the housing crisis,” he said. It is “now up to us to pick up the slack and cross the finish line so that we can have a meaningful impact on solving this crisis.”
A public hearing on the bill will take place next month.