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A02633 Memo:

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December 31, 2050, when upon such date the provisions of Sections four and five of this act shall expire and be deemed repealed.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.
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