Governor signs bill authorizing referendum on affordable housing tax in East End towns
New York Governor Kathy Hochul has signed legislation that will allow cities in the East End to establish a new real estate sales tax for community housing funds.
The new law, which was previously vetoed by former Governor Andrew Cuomo, will allow the five towns in the Peconic Bay area to hold referendums on the 0.5% addition to the existing tax 2% of the Community Preservation Fund on real estate transactions in these towns.
Each city should present a plan for the funds to their respective communities before holding a referendum.
“The issue of affordable housing for the workforce in the East End has been a critical issue for a long time and it has only gotten worse. I think due to the pandemic the demand from people who wanted second homes in the East End really pushed up costs and reduced inventory to the point that… affordable housing is a crisis here, ”said the MP Fred Thiele (I-Sag Harbor), who co-sponsored the act with Senator Anthony Palumbo (R-New Suffolk). “This legislation is a major tool I think cities can use not only to build affordable housing for rent and for sale, but also to make the existing housing stock more affordable.”
He noted that community housing funds could be used to provide financial assistance to first-time homebuyers or offer down payment assistance.
The timing of the referendum remains at the discretion of the municipalities. They could hold special elections or wait for the general election next November, Thiele said. “My recommendation would be to do so in a referendum next November,” he added, stressing that special elections tend to see low voter turnout.
A press release from Mr Thiele’s office noted that if the housing fund had been in place in 2020, it could have generated $ 30 million in the region for affordable housing.
More than 35 East End leaders and organizations signed a letter urging the governor to sign the bill in late September. The letter says the lack of affordable housing in the area “has reached crisis proportions,” citing staff shortages at local businesses and volunteer emergency services.
“Local families are leaving the area,” the letter reads. “Traffic congestion on local roads has reached congestion levels due to the need to import labor from western regions with lower housing costs [and] the lack of affordable housing often results in unsanitary and illegal housing conditions.
The letter said high real estate costs in the East End were the main cause of the housing crisis, exacerbated by the flight of New York residents to the area during the COVID-19 pandemic.
“The public will have a say. I think it’s a good benchmark for testing public commitment to affordable housing, ”Southold supervisor Scott Russell told The Times Review.
Mr Russell, who signed the letter to the governor, said in a previous interview that the fund could potentially be used to reduce the cost of acquiring land for private developers or provide grants on a unit basis to offset costs. construction, among others. things.
If passed in every city, the legislation would also increase the exemption on improved East End properties, reducing property transfer taxes for nearly a third of all transactions.
The exemption in the towns of North Fork would be increased from $ 150,000 to $ 200,000 and the exemption on Shelter Island and South Fork would be increased from $ 250,000 to $ 400,000 – ultimately reducing the existing transfer tax on all transactions of $ 400,000 or less on the North Fork, and $ 1 million or less on Shelter Island and South Fork.
The letter to the governor noted that while the legislation may increase financial resources to deal with the affordable housing crisis, it does not extend the powers of the city.
“This legislation will allow each city, on its own, to tell everyone if it cares enough about the issues at stake to tax itself and newcomers to the area, and then use the funds for those legitimate purposes.” , said a separate letter from the Long Island Builders Institute, also sent in late September.
The Long Island Association also sent a letter to the governor in support of the legislation.