Long Island has a housing shortage, but developers say they look to other states instead
Long Island Builders Institute hosted a panel titled “Exploring Long Island’s Housing Crisis,” on Thursday in Melville. Credit: Rick Kopstein
Long Island needs more housing but lengthy regulatory reviews, fierce opposition from residents and higher costs are driving local developers to pursue projects elsewhere, several builders said Thursday.
“A lot of our developers that are homegrown companies are looking to other states,” Mike Florio, CEO of the Long Island Builders Institute, said at the association's annual exposition in Melville. “From smaller single-family home builders to larger multifamily developers, they know it’s hard and takes too long on Long Island.”
Recent data has illustrated the supply of housing on Long Island falls short of meeting the demand. Single-family home prices in Nassau County recently hit a record at $752,000 in February, while Long Island has the greatest percentage of cost-burdened renters in the state.
Nassau and Suffolk ranked near the bottom of all large U.S. counties in housing growth from 2012 to 2022, according to a recent analysis. It documented a 2% increase in the number of housing units in Suffolk and a 2.7% increase in Nassau during the period.
“We have done too little in the past 10 years,” Florio said.
Steven Dubb, principal at The Beechwood Organization in Jericho, which has built thousands of condos and homes across Long Island, estimated the developer has now built about 2,500 homes in North Carolina even though it would prefer to build more on Long Island.
One factor, he said, is anti-development opposition from local residents.
“They are so well organized, so vocal and so loud that I think they’re really effective and they have an oversize impact on town board members and town council members," Dubb said. "It has the effect of scaring them, sending the message that if you approve this project, you’re going to lose your job.”
Gabriel Randall, chief operating officer of Jericho-based B2K Development, said about one-third of the developer’s pipeline of housing units are out of state, with about 1,000 in predevelopment in Virginia. He said it can take three to five years here to secure land-use approvals from local governments, while it might take only a year in Virginia.
“That really reduces the risk and it just makes a lot more sense,” Randall said. “There’s not a desire to move business out of state. It’s by necessity.”
Brookhaven Supervisor Dan Panico, who spoke on the panel, was recognized for his push to reduce the time it takes to get projects approved since taking office in January. He moved to dissolve the Town Planning Board, allowing applicants seeking site plan changes to appeal directly to the Town Board.
Panico said Brookhaven needs more financial help from the state to support development.
“The problem is that everything takes too long and we need more funding for sewer infrastructure,” he said.
Gov. Kathy Hochul and the state Legislature are still negotiating a state budget for the fiscal year that began April 1, with housing issues among those yet to be resolved. RuthAnne Visnauskas, the top state housing official, said Thursday at the event she’s optimistic housing initiatives will be in the spending plan.
"We need to build faster to accommodate the job growth, the people who want to move here, want to stay here or whose kids want to come back and start families here," she said.
But even when some of the largest developments do succeed, they’re often out of many Long Islanders’ budgets.
Asked whether it was feasible to build one-bedroom apartments that would rent for $2,000 or for-sale homes for around $500,000, Dubb and Randall indicated they didn’t think it was possible.
“If your land cost were zero, that would be hard to do today without subsidy,” Dubb said. “The delays you experience waiting for permits, and going through a lengthy approval process, that costs money and those costs eventually get passed on to the homebuyer or renter.”
Long Island needs more housing but lengthy regulatory reviews, fierce opposition from residents and higher costs are driving local developers to pursue projects elsewhere, several builders said Thursday.
“A lot of our developers that are homegrown companies are looking to other states,” Mike Florio, CEO of the Long Island Builders Institute, said at the association's annual exposition in Melville. “From smaller single-family home builders to larger multifamily developers, they know it’s hard and takes too long on Long Island.”
Recent data has illustrated the supply of housing on Long Island falls short of meeting the demand. Single-family home prices in Nassau County recently hit a record at $752,000 in February, while Long Island has the greatest percentage of cost-burdened renters in the state.
Nassau and Suffolk ranked near the bottom of all large U.S. counties in housing growth from 2012 to 2022, according to a recent analysis. It documented a 2% increase in the number of housing units in Suffolk and a 2.7% increase in Nassau during the period.
WHAT TO KNOW
- Local developers said lengthy approval processes by local governments, higher costs and local opposition have led them to build more out of state.
- A lack of available housing on Long Island has contributed to higher home prices and rents.
- Brookhaven Town Supervisor Dan Panico said he has worked to get projects approved faster, but needs more help from the state to fund sewer infrastructure to support development.
“We have done too little in the past 10 years,” Florio said.
Steven Dubb, principal at The Beechwood Organization in Jericho, which has built thousands of condos and homes across Long Island, estimated the developer has now built about 2,500 homes in North Carolina even though it would prefer to build more on Long Island.
One factor, he said, is anti-development opposition from local residents.
“They are so well organized, so vocal and so loud that I think they’re really effective and they have an oversize impact on town board members and town council members," Dubb said. "It has the effect of scaring them, sending the message that if you approve this project, you’re going to lose your job.”
Gabriel Randall, chief operating officer of Jericho-based B2K Development, said about one-third of the developer’s pipeline of housing units are out of state, with about 1,000 in predevelopment in Virginia. He said it can take three to five years here to secure land-use approvals from local governments, while it might take only a year in Virginia.
“That really reduces the risk and it just makes a lot more sense,” Randall said. “There’s not a desire to move business out of state. It’s by necessity.”
Brookhaven Supervisor Dan Panico, who spoke on the panel, was recognized for his push to reduce the time it takes to get projects approved since taking office in January. He moved to dissolve the Town Planning Board, allowing applicants seeking site plan changes to appeal directly to the Town Board.
Panico said Brookhaven needs more financial help from the state to support development.
“The problem is that everything takes too long and we need more funding for sewer infrastructure,” he said.
Gov. Kathy Hochul and the state Legislature are still negotiating a state budget for the fiscal year that began April 1, with housing issues among those yet to be resolved. RuthAnne Visnauskas, the top state housing official, said Thursday at the event she’s optimistic housing initiatives will be in the spending plan.
"We need to build faster to accommodate the job growth, the people who want to move here, want to stay here or whose kids want to come back and start families here," she said.
But even when some of the largest developments do succeed, they’re often out of many Long Islanders’ budgets.
Asked whether it was feasible to build one-bedroom apartments that would rent for $2,000 or for-sale homes for around $500,000, Dubb and Randall indicated they didn’t think it was possible.
“If your land cost were zero, that would be hard to do today without subsidy,” Dubb said. “The delays you experience waiting for permits, and going through a lengthy approval process, that costs money and those costs eventually get passed on to the homebuyer or renter.”
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.
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