Community Housing Funds Raise $44M as East End Rolls Out Plans

David and his wife Jessica knew they were making a big, possibly risky, purchase. After three years of house hunting in East Hampton, they were finally negotiating on a modest three-bedroom, two-bathroom home. They stretched their savings thin, received some assistance from family, and kicked themselves for not having bought a home earlier when they were cheaper, like a decade ago when the median price in the Hamptons was $997,000. Today, it’s $2 million, according to a first-quarter report from Douglas Elliman.

Then, just as David and Jessica were nearing the closing date, they heard about East Hampton’s Down Payment Assistance Program, part of a new initiative funded by a 0.5% tax on real estate transactions. They applied, were approved, and received a $30,000 check just in time. Now, their monthly payments feel more like an investment than money lost to rent.

“We feel so happy to be able to have a house for our children, a backyard,” said David, who asked that Dan’s Papers not publish his last name. “It’s awesome. It feels great.”

Their relief was made possible by a proposition passed two and a half years ago by voters in four East End towns — East Hampton, Southampton, Southold, and Shelter Island — that authorized the tax that funded the creation of the Community Housing Fund to address the area’s increasingly grim affordability problem. So far, the towns have together accumulated at least $44 million, with the money going toward housing assistance and affordable home initiatives.

Riverhead was the only East End town not to pass it. The proposition never made it onto the 2022 ballot.

Meanwhile, the towns that moved forward with it have built momentum, and, of course, revenue. Southampton has led the way, having collected $27 million since it officially began collecting the tax in April 2023. East Hampton follows with $12 million, Southold has collected $4.8 million, and Shelter Island over $1 million.

SOUTHAMPTON CASHES IN

While all participating towns are required to use the tax revenue for affordable housing, they have discretion over what types of projects to support. Shelter Island, for example, has opted not to pursue larger, multi-family buildings. Southampton, on the other hand, appears to be moving forward with a 79-unit building — scaled back from a previous proposal of 104 units — that received backlash from parts of the community and even a lawsuit from the Westhampton Beach School District.

At a public hearing this past January to consider whether to use $2.7 million of Community Housing Funds for the Westhampton project, a few residents expressed familiar concerns about increased traffic and potential strain on schools and emergency services. This kind of resistance is typical and expected, so much so that the term NIMBY, which stands for “not in my backyard,” is widely used to describe local opposition to housing developments.

Michael Daly, a realtor and founder of East End YIMBY (“Yes in my backyard”), says that this cycle of community pushback and then political hesitation is what hampers significant progress. He points to a double standard in zoning regulations that make it relatively easy to construct massive luxury homes, some as large as 15,000 square feet, while affordable housing proposals of similar scale can be bogged down in years of public hearings just to obtain permits.

Despite the friction often seen at public hearings, Southampton has not only brought in the most Community Housing Funds, but it’s also allocated the most. The town’s 54-page Community Housing Fund Project Plan, adopted in January 2024, lays out their strategy to build more housing.

Kara Bak, the town’s director of housing and community services, said in an email that the median home price of $2 million is making it increasingly difficult for residents, particularly young families, to remain in the area.

“Now more than ever, local businesses are having difficulty finding and maintaining employees because people don’t want to sit in the traffic to commute back and forth to work,” Bak wrote. “Schools, the hospital, town workers and tradespeople need housing to be affordable as do our EMS and fire department volunteers, the workers at the grocery stores, restaurants and other businesses.”

Daly, who is critical of Southampton’s restrictive zoning, echoed those concerns.

“As long as the decision to make those kinds of developments is in the hands of the elected officials, it will be very difficult to create the quantity of housing that’s really needed for our local human infrastructure,” he said. By “human infrastructure” Daly refers to essential community pillars like schools, fire department, and other services, all of which he says are at risk if the town doesn’t address their housing needs. In March, the board approved $3.26 million to assist the Town of Southampton Housing Authority (TSHA) with the land acquisition and closing costs of purchasing three parcels of land that’s slated to be developed into 13 single-family homes. Each home will be 1,200 square feet, priced for families earning between 80 to 100 percent of AMI, or between $124,000-156,000.

Another $200,000 was approved at the same time to help TSHA develop a single-family, rental home with an accessory dwelling apartment.

Two weeks earlier, $2.7 million was approved to help with the land purchase of another parcel that TSHA plans to develop into 10, one-bedroom cottages that will be available for rent by seniors. Each 600-square-foot unit will be available for seniors 62 years and older, with incomes capped at 50% of the Annual Median Income, or between $54,000 and $62,000.

In total, the board has rubber-stamped nine projects, including 36 rental units and 26 single-family homes. According to housing director Bak, many of these projects wouldn’t be possible without the Community Housing Fund.

Experts see the fund as an important step in the right direction, but not enough to fix the whole mess. A reform of zoning laws, they say, would be equally critical. “If we don’t reform zoning to allow for local residents and business people and employees to live here,” Daly said, “they will turn into just a Disney World, where all the employees you know are transported in every day and transported out every night.”

Southampton Town Councilmember Michael A. Iasilli called the fund a progressive step forward, though acknowledged that they are still in the early stages of the process.

“This is rewarding work,” he said. “And we haven’t even really moved exactly in the direction where I think we can be going,” he said, before explaining that they are beginning to look at projects which focus on disability housing.

EAST HAMPTON EYES BIG PICTURE

On the other side of the South Fork, the Town of East Hampton has accrued at least $12 million in its fund and has so far approved six housing projects and six down payment assistance rewards for first-time homeowners.

In January, the town approved its first round of allocations, approving $3.3 million across five proposals. The largest award of $1.5 million went to the East Hampton Housing Authority (EHHA) to support the development of a new middle-income building that could contain up to 50 apartments. They also provided a $338,000 loan to Windmill I to help them add an additional 20 homes for seniors. An additional $345,000 went to supporting renovations at an already existing affordable rental site, known as the Whalebone Village Apartments.

In addition to supporting larger projects, East Hampton is using the funds to help first-time home buyers lille David and Jessica. The town awarded them the maximum of $30,000 in an interest free loan, though the loan has to be repaid upon selling the house.

East Hampton Town Councilmember Ian Calder-Piedmont said that it’s been a learning experience so far as the program is still relatively new. He said he thinks the fund has been fantastic, but also pointed out that while the funding is helpful, it’s not sufficient to support large-scale projects on its own — it’s more about getting projects over the hump, he explained.

“Affordable housing is a crisis in East Hampton, and perhaps on Long Island generally,” he said. “It’s the biggest problem we face … so having funds available to help address that problem is key.”

Rachel Fee, the executive director of the New York Housing Conference, noted that the fund is a great first step but needs to be part of a larger strategy, including improved zoning capacities that can accommodate more density. She emphasized how even a modest pool of funding, when compared to the price of building developments, is still critical.

“A local pot of funding can actually … make or break a project to provide that gap financing,” she said.

SOUTHOLD TAKING IT SLOW

The Town of Southold, like Shelter Island, has been slower to roll out its fund. As of now, the town has accumulated $4.8 million and has not yet allocated any of the funds.

Southold, with a population of just 23,732  people according to a 2020 census, faces many of the same challenges as its neighbors: a limited supply of year-round rental housing, a prevalence of short-term rentals during peak season, and high home prices pushing out working families and younger residents. According to their Community Housing Plan, the town hopes to increase its affordable housing stock by offering low-interest loans to developers and to assist first-time home buyers, both of which will be funded by the Community Housing Fund.

Currently, the town is in the process of redesigning its zoning regulations, a move that has potential to make it easier to build more housing. A recently released draft proposes renaming the existing Affordable Housing District to the Community Housing Overlay (CHO) District. This new overlay would allow the conversion of existing buildings into affordable units and permit density at one unit per 3,300 square feet. Public forums are ongoing, so the details remain subject to change.

SHELTER ON THE ISLAND

Across the water, the Town of Shelter Island reached a milestone this April when its Community Housing Fund surpassed $1 million. While theirs is the smallest among the East End towns — which is to be expected for the region’s least populous town — local housing advocates are thrilled to begin using it to address a decades-long housing shortage. Liz Hanley, chair of the Community Housing Board, has been a passionate supporter of the initiative since its inception. In 2022, when the proposal to create the fund was put on the ballot for a referendum, it narrowly passed by 15 votes. Hanley canvased door to door to get it passed.

“It was a nail biter,” she recalled.

Since then, the town has conducted public surveys and outreach to assess its housing needs. One major focus has been promoting the development of Accessory Dwelling Units (ADUs), or small residential units on existing properties (like a backyard cottage or granny flat) that can boost the supply of year-round rentals without changing the neighborhood character. East Hampton and Southold are also promoting ADUs, of which the funding for comes from New York State grants.

Their first project using the Community Housing Fund is currently being proposed. The town issued a Request for Qualifications (RFQ) earlier this year for 10 units to be scattered over three sites. The project would consist of six, one-bedroom or studio units and four, two-bedroom units.

While the program is still in its early stages, Hanley is optimistic.

“It’s created an opportunity to get these projects over the finish line, you know, it’s created the resources to be able to do this, which we wouldn’t have before,” she said. But, what’s most exciting and rewarding to her is seeing a shift in public sentiment. People on Shelter Island have been talking about the housing shortage for 20 years, she said. Now, they actually see something being done about it.

In time, there may be more families like Dave and Jessica.

“Everyone should take advantage of that if they can, if they qualify,” Dave said od the down payment program. “I hope they make it where more people can qualify and make exceptions.”