Hamptonville Could Solve Hamptons Affordable Housing Crisis

Riverview Lofts, a $56.8 million affordable housing development built on a site in Riverhead that was severely damaged by Superstorm Sandy in 2012, opened in March 2021.
Riverview Lofts, a $56.8 million affordable housing development built on a site in Riverhead that was severely damaged by Superstorm Sandy in 2012, opened in March 2021.

This November, East and Southampton town residents will find a referendum on their ballots that, if approved, will provide tens of millions of dollars in new funding every year to help local people own or rent homes here. Currently, they cannot. Real estate prices are too high. The locals move away, and the fabric of our hometown culture is torn asunder. This is not only a problem for those leaving, it is also a problem for those who offer employment in the Hamptons. Employers cannot find workers.

Here’s a personal story. When I first moved out here in the 1960s, I bought a small 800-square-foot cottage in the estate section of East Hampton for $9,000. Brokers told me it should have sold for $14,000 and that I’d gotten it at a bargain. I lived in it for three years, then sold it for a huge profit. I got $23,000 for it.

In subsequent years, the cottage was sold again and again and about six years ago, still 800 square feet, it sold for $1.2 million. Last year, the cottage was demolished and replaced by a McMansion ten times its original size which is now for sale for about $5 million.

A few people like me can tell you these stories. But others cannot. Someone paid them $1 million for their home and off they go. Had they stuck around, as I did, they’d probably be able to sell the same house now for $3 million. It’s crazy.

Some of those leaving, still loving this place, find homes nearby that they can afford in Mastic-Shirley, Manorville or Moriches and then commute 45 minutes each way to a job in the Hamptons. Burn a lot of gasoline. Others have moved upstate or to North Carolina. And so our hometown culture vanishes. We become merely a home for the rich, and those who serve them (who cannot find help.)

Here are the specifics on this November referendum. The new tax will require that all real estate transactions exceeding $400,000 be taxed 1/4% of the amount over that threshold. For example, a buyer purchasing a home for $1.4 million would pay 1/4% of $1 million, or $3,500. This is no big deal on a $1.4 million sale. But, had it been in effect in 2021 in Southampton, it would have brought in a total of $10 million.

A further aspect of the law would allow towns to participate in home sales to qualified buyers by providing up to 50% of the funding for the purchase. The town would retain this 50% ownership and its equity for future sales.

As you probably know, currently a tax of 2% is collected on all Hamptons real estate transactions that exceed $250,000. The money raised, called CPF (for Community Preservation Fund), is used to buy open space. In our example, this tax on a $1.4 million transaction brings in $28,000. Over the last 20 years, this tax has generated nearly $2 billion. The results have been new parks, beaches, fields, woods, farms, homes, workshops and studios of departed famous people such as Jackson Pollock, the Dominy family clockmakers, and painters Thomas Moran and John Little, all now turned into study centers and museums. These enrich the towns. These are all wonderful amenities. The former home and studio of novelist John Steinbeck in Sag Harbor is now being considered for purchase.

Here are ways this new proposed 1/4% tax, called CHF (for Community Housing Fund) could be spent.

A winery or farm could build a town-subsidized building for its workers.

A local person could build a subsidized cottage on his property for his children or parent.

A farmer or fisherman could receive funds to build a small cottage for rental income on his property.

A homeowner could receive funds to create a small apartment inside his home for family members or rental purposes.

In our downtowns, the second floors of stores and restaurants which currently are used only for offices could be also used for apartments.

In rural areas that are undeveloped in Noyac or Northwest, whole communities of small cottages could be built, owned by the towns and rented out to people who come here and work as firemen, ambulance drivers, hospital workers, nurses, lifeguards and police officers. Call these new towns East Hamptonville and South Hamptonville.

Low-cost housing developments could spring up on the highway. One is a 9.4-acre parcel, formerly the Southampton Full Gospel Church on the Southampton Bypass where a proposed 64-unit, low-cost housing project has languished in the Southampton building department for five years without approvals. Current laws block such a project.

Or how about someone building a mansion on a site currently occupied by a teardown? Require that they pay to move the teardown away so it could be reused. The de Menils did this with historic cottages in East Hampton.

Present law 255-11-23 in East Hampton Town currently prohibit bathrooms or kitchens in detached artist studios on single family parcels for fear they’d be used as rentals. Repeal this law. New zoning laws passed could encourage rentals and small home sales next to larger ones. Current laws do the opposite.

I recently vacationed in Hawaii. A front-page story in the local daily newspaper on Oahu celebrated the opening of kama’oku, a cluster of 37 tiny homes, each just 10 feet by 10 feet. They have doors and windows, a bed, a desk, a chair and a bookcase. The state owns and rents out these homes for $500 per month. A separate building on the property has a dining room, kitchen, bathrooms and living rooms available to the tenants. And if a tenant can’t pay the $500, the island will pay it for them. The project is for people who find themselves homeless, for a time, currently sleeping in their cars or in tents on sidewalks.

In anticipation of our vote in November here, a group called Affordable Community Housing (or ACH) is holding an all-day session with legislators, developers, bankers and local leaders on May 19 at The Church in Sag Harbor, at 48 Madison Street, with a final “town hall” session free for all at the end. Attend the whole day for $35.

More from Our Sister Sites