East Hampton, Southampton, Southold mull next steps after voters pass Peconic Bay Region Community Housing Fund initiative

Officials in three East End towns are preparing to implement new affordable housing initiatives after voters approved a program that is expected to bring more than $20 million annually to address the region's housing shortage. 

A Peconic Bay Region Community Housing Fund referendum, which would levy a 0.5% tax on most real estate transfers, creating a fund in each town to use for programs they establish under the law, was passed in East Hampton, Southampton and Southold Tuesday, and the measure may still gain approval on Shelter Island after all absentee ballots are counted and election results are certified. Officials hope the new revenue source will address housing needs for the workforce, young families and seniors on the East End, where real estate costs have skyrocketed in recent years. 

The legislation mirrors and would supplement the existing Community Preservation Fund, which generates revenue by a 2% tax on real estate transfers used for preservation and water quality initiatives. It also increases exemptions of the tax for those buying at the lower end of the market. A similar affordable housing bill was vetoed in 2019 by former Gov. Andrew M. Cuomo, who cited its impact on taxes.

“I think people understand the need,” said Assemb. Fred Thiele Jr. (D-Sag Harbor), who along with State Sen. Anthony Palumbo (R-New Suffolk) sponsored the legislation state lawmakers approved last year to establish the program.

East Hampton Town Supervisor Peter Van Scoyoc estimated the program will generate between $6 million and $12 million each year in his town, depending on market fluctuation.

“That’s a significant amount,” Van Scoyoc said. “It will certainly help, especially if we apply that to the various projects we already have going.” He cited 50-unit projects on Three Mile Harbor Road in East Hampton and Route 114 in Sag Harbor as examples of recent initiatives to address the housing stock. 

On the lower end, Southold officials have estimated the fund will bring in about $1.5 million annually. The program will begin in January and revenue is expected to start flowing in come April 2023, Southampton Town Supervisor Jay Schneiderman said. 

In the interim, each town has been tasked with developing plans and establishing committees to oversee how they will use the funds. The law dictates that at least one member of each town’s advisory board represent the construction, banking and real estate industries, and at least three come from local housing or human service programs. Villages can also choose to participate in the program and be represented on the boards, which are limited to 15 members.

While each town’s final plan may differ, officials said funds can be used to acquire properties for development, purchase existing housing stock and subsidize affordable housing, down payment assistance, low- or no-interest loans or to create accessory apartments.

“There’s a broad menu of things towns can do,” Thiele said. “We’ll see which ones work best.”

Southold Town Supervisor Scott Russell said the new revenue source will allow his town to begin talking about affordable home ownership again, after being forced to focus more on rental projects in recent years as funding sources did not exist.    

On Shelter Island, unofficial results from the Suffolk County Board of Elections show the referendum was voted down by eight votes, with 113 mailed absentee ballots still unaccounted for. Supervisor Gerry Siller expressed disappointment in the possibility of the plan being rejected.

“We’re the only town that had a vocal fight against it and it was by a well-funded group [of residents] who spread untrue information,” he said, including paid advertisements in a local newspaper that stated the funds could be diverted to high density housing initiatives. 

The Riverhead Town Board opted against placing a referendum on the ballot but could still do so at a later date, Thiele said. 

By Grant Parpan

grant.parpan@newsday.com@GrantParpan

Grant Parpan covers Suffolk County courts and federal courts for Newsday. A Long Island native, he joined Newsday in 2022.