The East Hampton Town Board on Tuesday heard the first round of pitches for affordable housing projects angling for money generated by the half-percent community housing fund real estate transfer tax, which has produced more than $10 million since it went into effect in April 2023.
The seven proposals combined represented a nearly $4 million ask from the Community Housing Advisory Board (C.H.A.B.). The town board agreed to take five to public hearings, rejected one, and deemed one other ineligible for funding. The largest award recommended was $1.5 million for the Route 114 Middle Income Housing Project.
Applications were made to the advisory board over the summer and were reviewed between August and November. Eric Schantz, the town’s director of housing, said projects needed to “result in an increase in or improvement to community housing opportunities through the creating, rehabilitation, conversion, design, or maintenance of community housing” to be considered.
Andrew Garvey, chairman of the housing advisory board, called the housing fund a “scarce resource” that should only be used for “high-impact projects.” In the judging, he said the advisory board made a simple calculation: How many affordable units would be preserved or created per dollar spent? Loans were preferable to grants, he said, so that the money could be recycled into future projects.
The town owns two lots at 776 and 780 Route 114, on which the East Hampton Housing Authority hopes to build what it calls the Route 114 Middle Income Housing Project, consisting of 50 new rental apartments. The housing authority, which applied for the $1.5 million grant, said if it receives the full amount from the town, it may not need to seek outside money from the state and federal governments, thereby ensuring at least 75 percent of the units are reserved for middle-income applicants. Taking money from state or federal sources would mean less control over who is eligible for housing. However, having applied for $3 million more in 2025 and 2026, the East Hampton Housing Authority’s request was seen as premature.
“We’re noncommittal on the rest of their request,” said Mr. Schantz. “You have to apply each year.”
Responding to questions from Councilwoman Cate Rogers, Mr. Schantz said that the money would go to up-front “soft costs” like design and engineering. Thus far, he said, the town isn’t requiring applicants to explain where each dollar of the grant will be spent, though in future, it may ask more pointed questions during the application process.
Future inhabitants of the Route 114 Middle Income Housing Project could earn up to 130 percent of the median household income in the town. For a single person, that number is $132,340; for a couple, $151,190; for parents and a child, $170,040, and for a family of four, $188,890. Town Supervisor Kathee Burke-Gonzalez noted that the town has only one other middle-income housing project, the Springs Fireplace Road Project, which is only 27 units and has a waiting list hundreds of names long.
“I’m very supportive,” said Councilman Ian Calder-Piedmonte, who highlighted the importance of creating middle-income housing. “There’s a real need out here that typically can’t be met through state or federal funding. I think the community housing fund is valuable to us in that we can address this large middle [area]. All levels are important, but I think this gets at the heart of an issue that only C.H.F. funds or private money can do.”
Harder questions were asked about another one of the C.H.A.B.’s recommendations: a $1 million grant for a project that has already been built and should have residents moved in by the end of the year, The Green at Gardiner’s Point. The $35.4 million project was a partnership between the East Hampton Housing Authority and Georgica Green Ventures. Between private interests and the county, state, and federal governments, Georgica Green secured nearly $24 million for the project but encountered a “funding gap” because of rising interest rates.
“Interest rates go up and down,” said Councilman Tom Flight. “It would be helpful to see here what was their assumption with interest rates and what was the miss? We don’t want to run into this again.”
Councilman David Lys also said he didn’t look favorably on that recommendation, which divided the board more than the others.
“The miss was Covid,” said Ms. Burke-Gonzalez. “They were looking at 3-percent rates and they went up to 8 percent.”
“Going forward, it’s not my preferred use of the funds,” said Mr. Flight.
However, Mr. Calder-Piedmonte and the town supervisor reasoned that on the $35 million project, the town had only contributed $25,000 yet would benefit immensely from it. “This isn’t a ton of skin in the game,” Mr. Calder-Piedmonte said.
Ms. Rogers acted as a swing vote on what she described as a significant affordable housing project. “We have to review how we got here and what guardrails to put up, but that doesn’t help this project at this time. I think this should go to [a] public hearing.”
Three other projects were recommended to the board. Despite an initial requirement that grant money go to construction costs, two of the recommendations were to help maintain or renovate existing housing units: $500,000 to The Cottages and $345,000 for renovations to the Whalebone Apartments. The lone lending proposal among the recommendations, for $338,000 to Windmill I, an affordable senior housing development, would help pay for the planning of 20 new units.
The public hearings for each of the five recommended projects will take place on Dec. 19.
Mr. Schantz said a second application to use C.H.F. funds would be opened in the spring, but that other town projects, such as the accessory dwelling unit construction assistance program and the first-time homebuyer down-payment assistance program, would be competing for the same pot of money.
