Assemblyman Fred W. Thiele, Jr. and Senator Ken LaValle today announced that their legislation to authorize the Towns of East Hampton, Riverhead, Shelter Island, Southampton, and Southold to establish Town Community Housing Funds has been approved by both Houses of the Legislature. As this legislation is an authorization, the decision to create such a fund would be a home rule decision by the town boards and would be subject to a mandatory referendum.

Under the legislation, the Community Housing Fund could be used (a) to provide financial assistance to first-time homebuyers (b) for the production of community housing for sale, (c) for the production of community housing for rent, (d) to provide financial assistance in conjunction with a public/private partnership, including employee housing (e) rehabilitation of existing buildings for community housing, and (f) housing counseling.

Towns would have to adopt a Community Housing Plan before the fund could be implemented. Each Town would also be required to appoint a Community Housing Advisory Board to advise the Town Board on the creation and implementation of the Community Housing Plan.

Town Community Housing Funds would be financed by a 0.5% addition to the existing 2% real estate transfer tax that funds the Community Preservation Fund. In addition, the legislation would increase the exemption on the transfer tax for improved property from $250,000 to $400,000 in the Towns of East Hampton, Southampton, and Shelter Island to provide more relief to affordable housing purchasers. The exemption would increase from $150,000 to $280,000 in Southold and Riverhead. Even with the proposed 0.5% increase, this raised tax exemption would result in lower closing costs for homebuyers purchasing homes under $1 million on the South Fork, compared to those under current law, and for purchases below $800,000 on the North Fork. Approximately 60% of real estate transfers would result in a reduction in closing costs under this legislation.

Based on 2017 revenues, the proposal would generate approximately $20 million for Community Housing across the 5 East End Towns.

Assemblyman Fred Thiele stated, “The lack of affordable housing has reached crisis proportions. Local employers have difficulty hiring and retaining employees because of housing costs and availability. Local volunteer emergency services are experiencing 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. There is no one solution to this problem. However, this legislation will provide Towns with a meaningful tool that can make a difference by providing housing opportunities for its residents at a much greater rate than they can with existing resources and programs. Ultimately, it will be the voters who will get to decide.”

Senator Ken LaValle stated, “Every year, I pledge to work to make Long Island more affordable. This legislation will enable Towns with the consent of local voters, to create a new fund for creating affordable housing for first-time homeowners. After establishment, the Community Housing Funds will go a long way in creating a more affordable future and better quality of life for local residents.”

The legislation will be sent to the Governor for consideration. If signed into Law, it would take effect immediately. The funds shall be enacted by local law subject to a mandatory referendum.