Propose New Housing Fund

State Assemblyman Fred W. Thiele Jr. last week introduced legislation to allow the five East End towns to establish community housing opportunity funds using money from a .5-percent increase in real estate transfer taxes. 

Under the proposal, the money could be used to provide financial assistance to first-time homebuyers for up to 50 percent of the purchase price of a house, the “production” of housing to sell or rent, “rehabilitation of existing buildings for community housing,” housing counseling, and “education impact payments to local school districts.” 

In addition to a .5-percent addition to the 2-percent real estate transfer tax that finances the community preservation fund, the housing fund legislation would increase the exemption for transfer tax payments. For improved properties, the exemption would increase from $250,000 to $350,000 in East Hampton, Southampton, and Shelter Island Towns, meaning the first $350,000 of a home purchase would not be subject to the tax. The exemption would go from $150,000 to $250,000 in Southold and Riverhead Towns. In all cases, the exemptions would apply only to transfers of $2 million or less. 

Should the legislation pass, it would allow the individual towns to put the funds before their voters in mandatory referendums. Before the funds could be established, the towns would have to adopt community housing plans that would include a “regional housing strategy agreed upon by all five East End towns.” At least 20 percent of the money collected would have to be used to implement this strategy. Towns would also have to establish their own community housing advisory boards to advise the town boards. 

Based on 2017 community preservation fund revenues, Mr. Thiele’s office said, the fund could generate $22.7 million for housing across the East End, with $4.5 million of that available for regional housing initiatives. 

The income cap for a one or two-person household would be $140,040, and the purchase price for a single-family home would be capped at $938,649. 

“This legislation will provide towns with a meaningful tool that can make a difference by providing housing opportunities . . . at a much greater rate than they can with existing resources and programs,” Mr. Thiele said in a Jan. 30 release.

His proposal will next go before the Assembly’s local government committee, which Mr. Thiele chairs.