NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2633
SPONSOR: Thiele TITLE OF BILL:
An act to amend the town law and the tax law, in relation to authorizing
towns in the Peconic Bay region to establish community housing funds to
be funded by a supplemental real estate transfer tax
PURPOSE OR GENERAL IDEA OF BILL:
Authorizing towns in the Peconic Bay region to establish a community
housing funds to be funded by a supplemental real estate transfer tax
SUMMARY OF SPECIFIC PROVISIONS: Section 1. Legislative Findings
Section 2. Cites the Peconic Bay Region Community Housing Act
Section 3. Amends the Town Law by adding a new Section 64-k relating to
the Peconic Bay Region Community Housing Act for the towns of East Hamp-
ton, Riverhead, Shelter Island, Southampton and Southold.
Section 4. Section 1449-bb of the Tax Law is amended to authorize each
town within the Peconic Bay region, acting through its own board, to
adopt a local law imposing a supplemental real estate transfer tax for
the sole purpose of funding an established community housing fund
Section 5. Subdivision 3 of Section 1449-ee of the Tax Law is amended to
provide for certain exemptions from the supplemental real estate trans-
fer tax
Section 6. Amends subparagraph 1 of paragraph (a) of subdivision 4 of
Section 1449-ee to increase the purchase price limit for the exemption
for first-time homebuyers in the towns of East Hampton, Southampton and
Shelter Island from 120% to 150% of the purchase price limit defined by
the State of New York Mortgage Agency (SONYMA).
Section 7. Severability Clause
Section 8. Provides for an immediate effective date and shall remain in
full force and effect until December 31, 2050, when upon such date the
provisions of Sections four and five of this act shall expire and be
deemed repealed.
JUSTIFICATION:
The adverse impact resulting from the lack of housing opportunities is
severe. Local employers have difficulty hiring and retaining employees
because of housing costs and availability. Local volunteer emergency
services agencies experience difficulty in recruitment-and retention.
Long-time residents are forced to leave the area. Traffic congestion is
intensified by the importation of labor from areas with lower housing
costs. Finally, the lack of housing opportunities is resulting in resi-
dents being forced to live in substandard, illegal conditions.
The unique demographics and economics in the Peconic Bay region and a
lack of affordable dwelling units are contributing to this housing shor-
tage. The combination of the Peconic Bay region's attractiveness, prox-
imity to the dense population of the New York metropolitan region and to
that region's extraordinary wealth, makes the Peconic Bay region a prime
location for seasonal and luxury homes. While this combination of
extraordinary attractiveness, population density, and wealth has created
a strong local economy for the Peconic Bay region, it has resulted in a
housing crisis for local families. The demand for seasonal homes has
driven up housing costs for local families. In the Peconic Bay region,
more than 40% of all housing units are seasonal.
The unique demographics and economics in the Peconic Bay region that
have historically contributed to the housing shortage have only been
exacerbated by the COVID-19 pandemic. The pandemic has resulted in a
flight of residents from urban areas such as New York City to more rural
areas such as the Peconic Bay region. The demand for housing in the
region is currently at an all-time high. This increased demand has
further driven up housing costs and has reduced the supply of housing
units available for the local workforce. The increased demand for
affordable housing opportunities resulting from the pandemic makes the
need for increased community housing more acute.
In summary, the demand of land for luxury and seasonal homes and
seasonal rentals has left a short supply of housing opportunities for
moderate income and working class local residents. The pandemic has only
exacerbated this problem. The Peconic Bay region requires a balanced
housing policy where there exists a variety of housing types and oppor-
tunities across the region's economic spectrum.
It is the public purpose of this legislation to give the towns of the
Peconic Bay region the authority and resources needed to establish a
dedicated fund to provide needed housing opportunities. Specifically,
this legislation would permit each town to establish a community housing
fund to increase housing opportunities in the region. Further, a town
housing plan adhering to smart growth principles would be required to be
approved and implemented to ensure that these new housing opportunities
are enacted in the context of a comprehensive plan.
Said fund would be financed by a combination of state and local funds,
including a 0.5% supplemental real estate transfer tax, which would be
in addition to the existing 2% real estate transfer tax for the Peconic
Bay region community preservation fund. The supplemental real estate
transfer shall be enacted by a local law subject to a mandatory referen-
dum.
In addition to the authorization of the supplemental real estate trans-
fer tax, the exemption amounts from the entire real estate transfer tax
would be increased to $400,000 in the towns of Southampton, East Hampton
and Shelter Island and to $200,000 in the towns of Riverhead and Sout-
hold. This will insure that in the towns of East Hampton, Southampton,
and Shelter Island, the real estate transfer tax burden will be reduced
for property transfers with a consideration under $1,000,000. The real
estate transfer tax would be reduced in the towns of Southold and River-
head for property transfers with a consideration under $400,000.
Finally, the purchase price limit for the exemption for first time home-
buyers in the towns of East Hampton, Southampton and Shelter Island
would be increased from 120% to 150% of the purchase price limit as
defined by the state of New York mortgage agency. These amendments to
the exemptions will mitigate any adverse impact from the transfer tax on
the provision of community housing.
PRIOR LEGISLATIVE HISTORY:
2020:A.9082/S.7332
2019:A.4941-B/S.4040-A Veto 247 of 2019
FISCAL IMPLICATIONS:
To be determined
EFFECTIVE DATE:
This act shall take effect immediately; provided, however, that the
amendments to Section 1449-bb of the Tax Law and subdivision 3 of
Section 1449-ee of the Tax Law, made by Sections 4 and 5 of this act,
respectively, shall not affect the repeal of such sections and shall be
deemed to be repealed therewith.
