Panel Offers 'Real Solutions To The Affordable Housing Crisis' At Express Sessions Event

“Real Solutions to the Affordable Housing Crisis” was the title of last week’s Express Sessions event in East Hampton, and thanks to a possible new funding source to address the crisis, the ideas shared by both the panelists and the audience were more than just theoretical or aspirational.

The Peconic Bay Community Housing Fund Act, signed into law by Governor Kathy Hochul last October, allows each East End town to hold a referendum to establish a 0.5 percent property transfer tax to fund affordable housing initiatives. If voters in Southampton and East Hampton towns greenlight the tax this November, millions of dollars would pour into town coffers annually to combat the housing crisis that has driven out local families and made it exceedingly difficult for South Fork businesses and nonprofits to find employees.

The Express News Group hosted the discussion at The Clubhouse in East Hampton with East Hampton Town Supervisor Peter Van Scoyoc, Southampton Town Councilman Tommy John Schiavoni, Sag Harbor Village Trustee Bob Plumb, Southampton Housing Authority Executive Director Curtis Highsmith and Concern Housing Executive Director Ralph Fasano.

Express News Group Managing Editor Bill Sutton was the moderator.

The topic also brought out many affordable housing advocates and other concerned members of the community, several of whom shared their ideas as well as their fears about the South Fork’s future if the crisis is not adequately addressed.

In introducing the discussion, Express News Group co-publisher Gavin Menu laid out the problem: “Longtime residents, people who were born and raised here, are being forced to leave the area because they can’t find an affordable place to live. Young families are unable to begin their lives here. Young professionals might be able to find a job but rarely do the salaries pay for the housing.

“It’s a problem that’s been developing for years but really became an actual full-on crisis with the pandemic. And, obviously, a new year-round population moved in town, and real estate prices skyrocketed as did rental prices.”

With so many affordable housing goals hinging on the Community Housing Fund’s adoption in each town, Sutton got right to it, asking Van Scoyoc and Schiavoni whether their respective town boards will be ready to put the CHF on the ballot this November, or put the referendum off for a year.

Both lawmakers affirmed that the voters will get to decide in 2022.

“This is, I think, the most important topic of our time, really, in terms of preserving our local community,” Van Scoyoc said. He noted that in his State of the Town Address at the start of the year, he made it clear that the East Hampton Town Board is fully engaged with this issue, and it’s “all hands on housing.” Each member of the board is tasked with a different aspect of the crisis, he added.

“We don’t think we can wait another year,” he said. “This is something we absolutely have to put before the voters in November. We have to put together a plan that is going to be supported and really does address the issues we have.”

He called a consistent funding source to help first-time homebuyers and help fund housing projects the most important tool for East End towns to address the crisis.

Had then-Governor Andrew Cuomo signed the CHF bill in 2019, rather than vetoing it, the town could have received between $6 million and $8 million already, according to Van Scoyoc.

The town supervisor acknowledged that, aside from funding, a big limitation on affordable housing is restrictive zoning.

“For decades, we sought to decrease density and to preserve open space,” he said, “and at this point now we have to look at relaxing some of our zoning laws — specifically for affordable housing, though.”

Schiavoni pointed out that Southampton Town is working to update its 1999 Comprehensive Plan, which is a prerequisite to putting the CHF on the ballot.

Towns must identify their specific affordable housing needs and explain how they intend to spend CHF revenue before they can put the CHF before voters for their approval.

“We anticipate that we will have this on the ballot in November,” Schiavoni said. “We believe that we really can’t wait on this.”

He added that 2021 would have been a “fantastic year” to have the CHF in place. It would have raised about $25 million for affordable housing in Southampton Town, he estimated, though he said the town anticipates revenue will average $10 million annually going forward.

The dollar volume of real estate sales on the East End last year was record-breaking due to a pandemic-driven surge in homebuying. As a result, Southampton Town raked in $118.38 million for the Community Preservation Fund. East Hampton’s total was $66.77 million.

Established in 1999, the CPF is funded through a 2 percent real estate transfer tax, and the revenue is dedicated — for the most part — for open space preservation and water quality protection. The architect of the CPF, State Assemblyman Fred W. Thiele Jr., also wrote the CHF legislation.

Sutton wondered if there is time between now and November for town leaders to convince voters to adopt the CHF.

“It will be incumbent on us to make sure the public understands exactly what we’re talking about here,” Van Scoyoc said, adding that there is broad support for affordable housing initiatives.

He pointed out that the CHF tax only affects homebuyers, and the first $400,000 of the home purchase price would be exempt from both the 2 percent CPF tax and the half-percent CHF tax. The current exemption for South Fork homebuyers is just $250,000.

“At the time the CPF first went into effect, the median house price was below $250,000,” Van Scoyoc said.

In 2021, the median price was $1.5 million for a single-family home in Southampton Town — $2.25 million east of the Shinnecock Canal in Southampton — and $1.77 million in East Hampton Town.

Affordable housing developers on the South Fork are in competition with affordable housing developers all over the state for the same funding, Highsmith pointed out. Upstate, where land is much cheaper, developers can build more units at a lower cost, he said. “So in other words, the impact of the money spent on those particular projects goes a lot further outside of Southampton.”

It’s difficult for the town to get funding for 20 or 30 units when elsewhere 300 or 400 units are proposed, Highsmith said.

In extolling the benefits of Southampton having its own funding source in the CHF, he said the town will be able to look outside the box, such as providing funds for home improvements and accessory apartments.

Highsmith said his home was retrofitted so his 26-year-old son could live there, and even though his son has a good job, he can’t afford to get his own place.

“That’s going to be the norm,” he said. “With the cost of living on the East End, it’s going to be a blended family environment where people will have to make availability for their families to live in place.”

That could mean additional housing units on the same property or expanding an existing home, he said. He also pitched making homes more energy efficient to increase their affordability.

Fasano said the biggest source of funding for affordable housing is the low-income housing tax credit. The federal program allocates money to each state to distribute to affordable housing projects.

Attaining a tax credit is a competitive process and it’s expensive just to apply, he said. He explained that the raters look for local contributions to the housing proposals and if the community does not support the project, it’s not rated highly.

If the CHF were to provide a small portion of the total development cost it would be significant to the raters, according to Fasano.

Fasano ran down the list of situations that affordable housing developers avoid: expensive sites, sites where everything requires rezoning, sites where there are environmental issues, like needing sewage treatment, sites that take a long time to develop and sites where developers will receive opposition.

Concern Housing, a nonprofit based in Medford, proposed 60 units on 9.4 acres off County Road 39 in Southampton in 2019, despite the site — land currently owned by the Southampton Full Gospel Church — checking all of these boxes. Concern Housing decided to do it “because we like pain,” Fasano quipped.

After working on the plan for 4.5 years, Concern Housing still hasn’t received the necessary zoning change from the town, he said. Acquiring land and dealing with zoning issues should take two years, not five or six, he added.

The predominance of single-family zoning is another obstacle to affordable housing that the panel addressed.

“The Town of East Hampton has made a number of changes to zoning over the last 10 years or so,” Van Scoyoc said. “We now allow for detached accessory cottages on properties three-quarters of an acre or more. We’re likely to review that and reduce the lot size to a half-acre.”

He acknowledged that the cost to build detached structures is prohibitive and the time it takes to recoup the investment is long.

The town also allows affordable apartments inside of existing homes and will probably relax the size restrictions, he said.

“We just recently increased the allowable density on affordable housing properties to allow more units,” he said. Instead of two detached homes per acre, it will be four detached homes per acre allowed in affordable housing overlays.

To accommodate the density, the town transfers development rights from the open space it purchases, Van Scoyoc said, thus concentrating density in one area while eliminating it from another.

Schiavoni said Southampton Town has instituted code changes in the past five years to expand the ability of homeowners to have accessory apartments, and the town extinguishes a development right taken from someplace else to accommodate it.

The town is considering allowing six units per acre for multifamily housing and looking at mixed-use developments in hamlet districts and business districts with the ability to have apartments over stores and livable, walking communities.

He also pointed out that restaurants, under the existing town code, may have accessory apartments.

Sewers are rare on the South Fork, and sewage treatment plants are few and far between. That means even when opportunities exist for affordable housing units, the infrastructure is inadequate.

Van Scoyoc said Montauk businesses, by right, can build apartments, but because there is no wastewater treatment, they are unable to.

“We’re working on that,” he said. “We know it’s important to do.”

Schiavoni, likewise, said, “The infrastructure has to be brought up to speed.”

He said the town has plans for both a Riverside sewer district and a Hampton Bays sewer district.

Where affordable accessory apartments are legal and possible on the South Fork, homeowners haven’t been clamoring to add them to their houses.

Plumb pointed out that market-rate accessory apartments are legal in Sag Harbor Village. He questioned why anyone would go through the trouble of building out an affordable accessory apartment with a ceiling on how much the rent could be.

“Why would you go through the steps and be stuck with a lower rent?” Plumb asked, though he acknowledged some people have offered to do so altruistically.

A more viable situation would be family members sharing a house, such as a mother/daughter house, he suggested.

The possibility that a tenant could rent a designated affordable apartment but pay extra for it under the table is another challenge he identified.

From the audience, Ed Haye, Plumb’s fellow Sag Harbor Village trustee, said the appropriate incentives need to be in place and a restrictive covenant would have to be on the lease. One incentive could be CHF grants that support the conversion of space in a home into an apartment, Haye said, and he also pitched waiving property tax increases that could happen when adding an apartment.

Reserving affordable housing for locals or for certain professions and volunteers such as police, teachers, firefighters and ambulance personnel was a desire of many audience members.

“I certainly understand why people have concerns that we don’t have to be building affordable housing to solve a housing affordability crisis somewhere else. We have our own,” Van Scoyoc said.

Local professionals are shut out of local housing, he said, and they need an opportunity to set roots and spread their wings here.

The town did provide lots to Habitat for Humanity that prioritized fire department volunteers, he said.

“Without volunteer ambulance and fire services, we’d have to go to paid service,” he added, calling that unfortunate and stating his belief that the best service is from volunteers.

Highsmith, who serves as a commissioner of the Suffolk County Human Rights Commission, said having a priority or preference in affordable housing is not allowed unless an impact study shows that the preference will not infringe on anyone in a protected class.

On the notion that people from all over will flock to the South Fork for affordable housing, he countered that when the Southampton Housing Authority tallied up who the applicants for its affordable housing opportunities were, less than 8 percent were from west of Brookhaven Town, and among those 8 percent there were people from the South Fork who were trying to move home.

Myron Holtz, a retired deputy commissioner for the New York State Division of Housing and Community Renewal, said he supervised over 100,000 units of subsidized housing and is now a member of East End YIMBY, a group that says “yes, in my backyard.”

“There has to be a link between first responders and affordable housing, because otherwise, we are going to lose our ability to man the EMTs, the ambulance, the fire department and maybe even the police department,” Holtz said. “We think about how much money we actually spend in taxes to educate our children out here, only to have them go to college and move away because they can’t afford to come back here.”

He raised a question that he predicted will go before the Supreme Court: If there are no minority members of a volunteer fire department, firefighters can’t be given preference for affordable housing, but does the “greater good” of having firefighters available to respond to an emergency outweigh that?

“The character has changed out here,” said Myrna Davis of the civic organization Save Sag Harbor. “It’s become super-wealthy.”

She pointed to the struggles the middle class has in attaining housing and said there is confusion over who affordable housing is for.

“The average middle-class person, like me — I don’t think I could afford to be here if I didn’t already have a house,” she said.

Van Scoyoc agreed that there is a stigma associated with the phrase “affordable housing.”

“People think that it’s the indigent, the homeless,” he said. But he added that the community has changed to now understand that it means doctors, lawyers, school teachers, police officers.

“Any working person cannot afford to live here unless they already have a situation,” Van Scoyac said.

Davis was concerned that Sag Harbor will lose its beauty and character if every small house becomes a big house. “A lot of us live on streets that are completely dark in winter because people aren’t there,” she said.

Highlighting how affordable housing helps the middle class, Highsmith explained that housing designated for households with an income under 130 percent of the area median income is considered affordable housing, and that puts the cap at $164,000.

Existing affordable housing projects on the South Fork and plans for the future include a mix of apartments, condos and single-family homes and both rental and ownership opportunities.

Schiavoni said Southampton Town plans to offer to help first-time homebuyers by paying for 30 percent of the purchase price. The town would own that equity, in the form of a lien, and the homebuyer could afford a house that would otherwise be unattainable. And the CHF legislation allows towns to purchase as much as 50 percent of the equity in a home to subsidize a first-time homebuyer.

Highsmith said the Southampton Housing Authority, which he said is “not a one-dimensional organization,” has built more than 20 single-family homes for first-time homebuyers and is in the process of building five homes in Riverside with Habitat for Humanity through a program that includes the buyers putting sweat equity into the building of their homes.

A six-lot subdivision is planned off North Sea Mecox Road in Southampton and a two-family home with an accessory apartment is planned in Southampton Village, he added.

Highsmith said the best way to change minds about affordable housing is to show people what’s already been built.

“Not necessarily everyone is going to agree with it,” he said. “Some people will just deny and refuse to want any type of new growth or change, but some could actually come across the finish line with us.”

Chris Fiore, a North Haven Village trustee, noted that he spent 45 years in the retail business and stepped foot inside every mall in America and Canada. He said there are 100 million square feet of empty big box stores and malls in the United States, including the 100,000-square-foot Kmart in Bridgehampton Commons. All that is to say, his idea is to break up the Kmart, renovate it, and build 100 one-bedroom apartments.

Fasano agreed with the idea of redeveloping the Kmart but said he’d prefer to knock it down and build beautiful housing. “We could get the funding to do that if the zoning was in place,” he added.