South Fork State Assemblyman Fred Thiele has introduced a new bill that would fund low interest loans for workforce housing on the East End, paid for through a fee on the construction of new large homes.
If adopted by the state legislature, the five East End towns would hold referenda on the program, called the Workforce Opportunity Fund.
The five East End towns held similar votes to create the Community Preservation Fund, a 2 percent real estate transfer tax to fund land preservation that has been in existence for nearly two decades and was also sponsored by Mr. Thiele.
The new program would be funded by a $10 per square foot impact fee on residential construction exceeding 3,000 square feet.
Eligible would-be homeowners could receive no-interest loans of up to $250,000 from the fund toward the purchase of a house, and would receive housing counseling.
“The adverse impacts from the lack of housing opportunities are substantial,” said Mr. Thiele in a press release issued Monday. “Local employers have difficulty hiring and retaining employees because of housing costs and availability. Local volunteer emergency services agencies experience difficulty in recruitment and retention. Longtime residents are forced to leave the area. Traffic congestion is exacerbated by the importation of labor from areas with lower housing costs.”
In the five towns surrounding the Peconic Bay — Riverhead, Southold, Southampton, East Hampton and Shelter Island, 40 percent of all housing is seasonal, and the population here surges from 125,000 to 320,000 during the summer season. The demand for land for luxury and seasonal homes and seasonal rentals has left a short supply of housing for working-class residents who live here full-time.
Loans that are granted through the program would be repayable when the house is re-sold, in an amount equal to the proportion of the original loan to the original purchase price. For example, if the fund provided a $200,000 loan towards the purchase of a $600,000 house, and the house was resold 10 years later for $900,000, $300,000 would be paid back to the town’s fund at the time of the re-sale.
Each town would maintain its own fund for use to provide housing for its residents, similar to the current management structure of the Community Preservation Fund.
Residents who earn 120 percent of the median family income or less would be eligible for loans. In 2015, 120 percent of median income in Suffolk County is $130,800.
“The Peconic Bay region needs a balanced housing policy where there exists a variety of housing types and opportunities across the region’s economic spectrum,” said Mr. Thiele. “This legislation will give the Towns of the Peconic Bay region the authority and resources needed to establish housing opportunities for local families.”
The bill, A. 6287, has been referred to the State Assembly Committee on Housing.