Southold Seeks Housing Solutions

Pictured Above: The Cottages in Mattituck, a 22-unit community of affordably owned homes, was built in in 2007 and is now considered a guidepost for how Southold Town can make affordable housing work here.

If anecdotal tales of the difficulties regular people face trying to stay on the North Fork haven’t swayed your understanding of the need for attainable housing here, the data gathered by Southold Town’s consultants and volunteers working on the town’s Community Housing Plan make the problem quite clear, and offer some solutions tailored to Southold’s unique geography.

Only 50.4 percent of Southold’s workforce lives in a town where 63 percent of respondents to a recent survey said they know someone who left town due to the lack of housing options, according to a draft of the Community Housing Plan presented to the Town Board April 25.

The skyrocketing prices of houses here relative to the modest increase in incomes over the past 20 years tell more of the story. 

While the median income of Southold Town residents increased from $49,898 per year in 2000 to $87,109 in 2020, the median home value nearly tripled in the town overall, from $218,400 to $604,800 — and home values as much as quadrupled in some hamlets. 

In order to be qualified for a mortgage to purchase a $604,800 home, a homebuyer now would need to have an income of at least $137,733 per year, said Town Planner Mara Cerazo, who presented the plan to the Town Board at its April 25 work session. She added that there were fewer than five houses currently on the market for less than that median price.

Meanwhile, renters have gone from paying between $500 and $999 dollars per month for housing to more than $1,500 per month in 2020, which many housing advocates believe is an outdated figure due to the surge in demand for rental housing over the past three years since Covid.

In the meantime, there were 16,298 housing units in Southold in 2020, 41 percent of which were classified as vacant — most of those were seasonal residences. The town found through the website airdna.co that there were more than 730 active short-term rentals in town being advertised in the month of February 2023, accounting for nearly 4.5 percent of the housing in town.

The Community Housing Plan is being drafted by consultants Nelson, Pope and Voorhis and the 10 members of the town’s Community Housing Advisory Board. The Advisory Board is charged by New York State with drafting the guidelines for spending a new .5 percent real estate transfer tax for community housing, overwhelmingly approved by voters in a November 2022 ballot referendum.

“This all volunteer committee, set up by the statute, has people from all walks of life. They jumped in with both feet,” said Councilwoman Jill Doherty, who helped convene the committee in September of 2022 and serves as its town board liaison. “It was an amazing group of people.”

The plan calls for four different ways of addressing the need for housing: Increasing the stock of year-round housing, maintaining existing housing, helping first-time homebuyers with down payments and providing education and counseling services.

If the plan is approved, the housing fund would be used to provide low interest loans for construction of community housing and accessory apartments, along with low-interest loans for first-time homebuyers and no-interest loans for first time homebuyers who are first responders. 

It would also be used to provide maintenance grants to keep existing housing in good repair and make it more energy efficient, and to provide housing education and counseling services, which would be multilingual.

The plan recommends Southold create a Housing Department, which answers to the Town Board, and not a separate Housing Authority.

“It was suggested this board was not really interested in a Housing Authority at this point,” said Ms. Doherty.

“A Housing Department leaves the decision making in the hands of the Town Board,” agreed Town Supervisor Scott Russell. “The buck stops here.” 

The Housing Department would establish the new programs, coordinate the volunteer committees working on housing, administer the town’s housing registry and oversee the application and selection process, said Ms. Cerazo.

Much of the reaction from members of the Town Board was in response to the proliferation of short-term rentals.

Town Supervisor Scott Russell said enforcement of the town’s eight-year-old two-week minimum rental code was “one of my biggest embarrassments” of his 18 years as Town Supervisor.

“We had a legal department at the time thought it was insurmountable to enforce it. It was a big disappointment. Hopefully we have new perspectives and will be able to bring much better enforcement,” he said.

Assistant Planning Director Mark Terry said at this point many houses in Southold are already set up by LLCs as short-term rentals, which cater to bridal parties and other groups of tourists that drive Southold’s wedding destination and winery economy. He added that the town has very few hotels, with very high room rates. Some towns have set a cap per hamlet on the number of short-term rentals allowed, he suggested.

Mr. Russell said he had trouble with the idea of saying “we’re going to allow 50 of you to violate the code,” and added that the town had drafted an amendment to the short-term rental code in 2021 to allow short term rentals in commercially zoned areas, but it “ultimately did not succeed.”

“Families need a place to go (on vacation),” said Mr. Russell. “They’re not going to shoreline resorts anymore. There’s a changing demographic of actually tourists, which isn’t necessarily good.”

Ms. Cerazo said there’s new software available that the town could invest in to better track short-term rentals that are listed on major websites.

“This is an issue countrywide,” said Councilwoman Sarah Nappa. “There’s software out there. We need to figure out how to enforce this. There’s been a lot of movement in this area.”

Ms. Doherty said the Housing Advisory Board hopes better enforcement of short term rentals will help free up housing stock, particularly accessory dwelling units — small attached or detached apartments that have become a big piece of the affordable housing puzzle.

Ms. Doherty said Southold has just learned that it has received a $2 million grant from the Long Island Housing Partnership, which will be used to provide grants to residents who want to construct or improve apartments on their property.

She added that the town will have to quickly decide how to administer that grant program, but has not yet received much information on how to do so.

Mr. Terry added that most local accessory apartment permit programs require people to submit income verification annually, and when their income exceeds a certain limit, they have to find a new place to live. 

He said that requirement highlights the importance of the public understanding that “community housing” is not just affordable housing.

“Community housing can allow you to purchase a house up to $1.2 million,” he said. “That’s not affordable housing.”

The Advisory Board did take some time to debate whether the loans provided to first-time homebuyers, particularly those for first responders, should be forgiven if people stay in a home for a length of time, similar to the Suffolk County Down Payment Assistance program, which is a loan that is forgiven if someone stays in a home for more than five years.

Some on the board felt that it would be best if the money returned to the Community Housing Fund over time to help more homebuyers, while some pointed out that volunteer first responders are often too busy volunteering to hold down a second job like many new local homeowners here.

Respondents to the town’s housing survey showed an interest in a wide variety of housing types, an interesting shift in focus in a town where 90 percent of the housing stock is single-family residences. 

While single family homes were the preferred housing type of respondents, accessory apartments and mixed-use buildings with apartments also topped their preferences, followed by two-family homes and manor houses. “Townhome developments” and apartment complexes were the least favored options. Most respondents said they were interested in housing with two or three bedrooms. 

“Healthy communities contain a mixture of housing types,” said Ms. Cerazo, quoting the Suffolk County Planning Commission. “We’ve seen from the survey results that folks are willing to embrace a diversity of housing types…. Our guiding goals include increasing the diversity of housing types to meet the needs of the population at different income levels.”

The volunteer committee members include Mark Levine, Tanya Palmore, Cathy Demeroto, Scott Edgett, Mary McTigue (and alternate Erin Kaelin), William Areno, Stephen Gaffga, Beth Cashel, Lori Cohen and John Stype.

“It was an amazing group of people,” said Ms. Doherty. “We gave the review board homework every week, and they all got A+’s. It’s a people’s plan. It’s not just the Town Board throwing something together.”

The Town Board will hold a public hearing to seek comments from the community before adopting the Housing Plan. The full plan is on the town’s website.