A Zillow search for East Hampton results in only four stand-alone houses selling for less than $1 million in the town. The lowest, a two-bedroom, one-bath, 900-square-foot home, is listed for $945,000.
Imagine then, a local police officer married to a local teacher. Likely, the couple would make more than the maximum income restriction of $162,450 annually that would allow them to qualify for the limited number of affordable housing units offered by the town, Eric Schantz, East Hampton Town’s housing director, told the town board on Tuesday. If combined they were making, say, $175,000 a year, they still would struggle to afford a low-end house in the East Hampton market.
With that in mind, Mr. Schantz presented an idea to create a new use in the East Hampton Town Code dedicated to employee housing — employee housing overlay districts — but the idea was met with skepticism by a town board that has prided itself on creating affordable housing solutions.
The new overlay districts could not meet the definition of affordable housing because they wouldn’t have income restrictions. For example, a real estate agent with hundreds of millions in sales, employed by a brokerage with an East Hampton address, could live in one.
The initial sales price on the units also wouldn’t be capped.
“It’s an attempt to provide an avenue for private development of a needed form of housing,” Mr. Schantz told the town board on Tuesday. The higher density (12 units per acre, as opposed to the eight units per acre allowed at present for other kinds of housing developments) granted to private developers would be in exchange for ownership and tenant restrictions. (In a separate presentation to the board, on Tuesday, Mr. Schantz pushed the board to increase density on all affordable housing, not just affordable senior housing, to 12 units per acre.)
The legislation has been pushed by Kirby Marcantonio, who with an investment group owns 350 Pantigo Road and has been hoping to develop it for work-force housing, with an eye on future employees of the Stony Brook-Southampton Hospital’s new emergency department building under construction at Pantigo Place. Mr. Marcantonio sat through Mr. Schantz’s presentation, but did not offer comments.
“We’re trying to reach people who don’t qualify for affordable housing but still can’t afford to live here,” explained Councilman Ian Calder-Piedmonte, who worked with Mr. Schantz to develop the idea.
To be an eligible owner of an employee housing unit, one would have to have at least four full-time employees, have a physical business location in the Town of East Hampton, or have a valid contractor’s license here. In addition, a permit would need to be obtained from the town Department of Housing and Community Development. Tenants would either have to be employees of the owner’s business, part of the employee’s family, or currently work or reside in East Hampton. If tenants were “none of the above” but could prove they met “moderate income” requirements, they too would be allowed to live in such a development.
Even though they would not be deemed affordable housing, rents would be restricted in the same way they are for affordable housing, not exceeding 130 percent of the “area fair market rent.” (Right now that’s $2,220 for a studio, $2,787 for a one-bedroom apartment, $3,260 for two bedrooms, and $4,219 for three.)
The new employee housing overlay district, or districts, would be delineated by the town board. Mr. Schantz acknowledged that some properties would overlap with those now in the affordable housing overlay district. While the town would impose some rules and restrictions on where development could occur, Mr. Schantz said it wouldn’t have any part in otherwise overseeing them; they would be administered by a condominium board set up by the builder.
Councilwoman Cate Rogers wanted clarification on the restrictions. “We say local businesses, but your definition of a local business means that it has a physical location in the Town of East Hampton. So, if some multi-international corporation had a physical address here, that fits the definition. So ‘local’ is an interesting word to use there.” Along with Town Supervisor Kathee Burke-Gonzalez, she wondered why a private developer could not just use an existing code section for multi-residences. “The difference between that code section — what we’re trying to get around in this new use — is the limit of eight units on an acre. We’re trying to get around that usage, even though they’ll be privately owned. Specifically, we’re solving one problem, increase the density and that’s it.”
“The rent restriction is real,” said Mr. Calder-Piedmonte, “which makes it different from a multi-family development which has no restriction.”
“The hope here is that this is going to be the hospital using it, this is going to be the mom-and-pop shops buying into this, but the reality might not be that,” said Councilman Tom Flight. “As Kathee pointed out, this is a kind of compensation. It gets into some gray areas that make me uncomfortable. Are we supporting a benefit in-kind that people are potentially not taxed on? If you’re above the income threshold and you’re being given this rent-controlled apartment by the company you work for, and you’re being paid adequately well, if that’s taking away from affordable housing, that could potentially be problematic.”
“I don’t think it’s competing with affordable housing,” said Mr. Calder-Piedmonte. “I think the idea is trying to bring private money in. So many affordable projects are limited by funding. And you could pretty quickly earn your way out of a place to live, and this would prevent that.”
“Some businesses we need to prioritize versus others, and this doesn’t have a mechanism for delineating that,” said Councilman Flight. Along with Ms. Rogers, he feared abuses. Many questions were swirling, which indicated more work was needed.
“You’re peeling back some really good questions, which is why I wanted to bring this to the board,” said Councilman Calder-Piedmonte. “I don’t think it’s fully figured out. My goal is to bring this back in October, hopefully with more opinions. I think it’s worth trying to hone a little further. I would like to get it to public hearing whether we go forward or not. I know that may be a personal risk for me, as the guy who is sort of bringing this forward, but it’s a worthy discussion and an issue our town has.”
