Help for Accessory Apartments

There’s a new tool on the East End for homeowners looking to help with the affordable housing crisis by renovating or building an accessory apartment on their property.

The Plus One ADU Program, funded by New York State, is now in place in the towns of Southampton, Shelter Island and will be officially rolled out in Southold in October, providing homeowners up to $125,000 to create more safe, year-round living space on their property.

Each of these three towns, in partnership with a non-profit housing developer, applied to the state for the funding, totaling $2 million in each town, which will be administered by the non-profits. 

The Community Development Corporation of Long Island is overseeing the program in Southampton and on Shelter Island, and the Long Island Housing Partnership is administering the program in Southold Town.

Homeowners who apply to the program must prove the property where they want to build the apartment is their primary residence, and they must earn no more than 100 percent of area median income, which for a family of one is just over $109,000, and for a family of four is $156,000 per year, said James Britz, Executive Vice President and COO for the Long Island Housing Partnership.

They also must agree to occupy either the accessory dwelling unit or the original house on the property as their primary residence for 10 years after entering the program, and to rent the unit they’re not occupying to someone who will use it for their primary permanent residence for 10 years as well, or pay a portion of the funding back if their plans change. The program could also be transferred to a new owner of the property if they agree to the original terms. The non-profit housing partner is charged with ensuring the property is being used in compliance with the 10-year restrictions.

Gwen O’Shea, the President and CEO of the Community Development Corporation of Long Island (CDCLI), said her agency has received about 120 applications from people interested in the program in the three towns her organization is working with — Southampton, Shelter Island and Babylon.

Many people who’ve expressed interest in the program want to occupy the new dwelling unit themselves, she said.

“We’re hearing from people who have children and want to rent their house to their family, or who would like to build an accessory dwelling that is more accessible than the house itself if they’re looking to age in place,” she said. “Creating something much more user-friendly is definitely something we’re hearing from people who are interested in the program.”

Ms. O’Shea said many people who’ve applied to the program, which opened in July, either have pre-existing space on their properties that they’d like to bring up to code, or had already begun the process of designing and getting permits for the project and found the process cost prohibitive.

Mr. Britz said the Long Island Housing Partnership has already received more than 60 phone calls from residents in the three towns his agency is working with — Southold, Huntington and Brookhaven.

“Our priority is to help people at lower income thresholds,” said Mr. Britz, who added that there’s a point system implemented by the state that grants greater priority to applications for units that will be rented to people who make below 80 percent of the area median income. “From the standpoint of the homeowner who may not have discretionary funding, or the fear of bringing it up to code, this is giving people the opportunity to create or legalize living space.”

The towns that are participating in the program already have zoning codes that allow for accessory dwelling units, and projects constructed through the program must meet the local zoning codes. While the state funding does not require that the units be offered as affordable housing, some towns, such as Southold, require ADUs to be “affordable,” with affordable being defined as being available to someone making up to 130 percent of area median income, said Ms. O’Shea.

Ms. O’Shea said that when residents begin the process by contacting CDCLI either via email at PlusOneADU@cdcli.org, by phone at 631.364.5646 or by filling out an online form at www.cdcli.org, staff at CDCLI will meet with homeowners to get an understanding of their individual needs, and to help put them in touch with designers, permitting agencies and contractors.

“We will work closely with the homeowner to identify design experts and contractors within their municipality to plan for the type of construction they’re looking for, and whether it’s financially feasible,” she said. “We have a number of contractors who have already reached out to us, and are looking forward to working with more who are locally based.”

Homeowners can choose their own design and building professionals to do the work, as long as they carry liability insurance and are licensed in the town where the work is being done. Any existing structures on the property that were constructed without a permit, such as decks and pools, would also need to be brought up to code.

The Long Island Housing Partnership plans to unveil its application process in mid-October, posting more details on its website: lihp.org.

Outdated or undersized septic systems are proving to be one stumbling block for the construction of ADUs, and while the state allows residents to use the funding for septic improvements, Ms. O’Shea said septic upgrades would likely push the project above the maximum grant award from the state. She said towns have been working with homeowners to help them seek other funding sources for septic upgrades, including the Suffolk County Septic Improvement Program and, in Southampton Town, the I/A OWTS rebate program, which uses Community Preservation Fund money allocated for water quality to help homeowners install advanced nitrogen-reducing septic systems.

“The towns have been very good to make sure resources are available,” said Ms. O’Shea.

She added that CDCLI also has a lending arm that can provide financing.

At up to $125,000 per grant, $2 million per town can go quickly, but Ms. O’Shea said the state has not yet allocated all of the $84 million available statewide through the two-year program, and more funding could be in the pipeline.

“There are many opportunities here for homeowners,” she said. “For new homebuyers, the costs of so many things have gone up. For someone who’s been living in their home for 50 or 60 years, disposable income is really limited, and if you’re on a fixed income the additional revenue will help you be able to cover increased costs. For a first-time homebuyer, this is also a great way to generate additional revenue and provide you with breathing room and units of housing along the way.”

Ms. O’Shea said some residents have been discussing ultimately selling their property to their renter after then 10 year period. In that instance, she said, CDCLI “has the ability to provide counseling and down payment assistance.”

“There are great opportunities here,” she said.  ­ — BHY