More Affordable Rental Units Coming to Long Island

Since the crash of the American real estate market in 2008, financial regulators and legislators have taken many steps to prevent another housing bubble from forming and growing out of control. The efforts have effectively paid off; however, the market has been veering toward a housing affordability crisis that has been getting worse in recent years.

In the Long Island regional market, the housing affordability crisis has impacted both home prices and monthly rents. According to the United States General Accounting Office, the first signs of an affordability crisis were observed in 2016; since then, the issue has become more problematic for home buyers and tenants in the working-class and middle-income earning brackets.

While there is a chance of the market correcting itself in a decade or so, prospective renters need to find places they can afford now. To this effect, one of the most practical strategies to alleviate the crisis is to address the shortage of affordable housing directly. In East Hampton, one of the most upscale towns of Long Island, the housing authority is working on a project to develop 50 affordable residential units on a site located in Wainscott, a hamlet known for its executive airport offering 30-minute helicopter flights to Manhattan.

Wainscott may seem like an unlikely hamlet for affordable housing units; after all, it borders the village of Sagaponack, which is known as the "Billionaire's Playground" of Long Island. Most of the Sagaponack workforce can't afford to live there, so the idea of moving to nearby Wainscott makes perfect sense. Two vacant lots measuring 6.5 acres were released by East Hampton officials to the housing authority; the site is located south of Route 114, and it will be the second affordable housing project in the hamlet in more than a decade.

This new project aims to support the working families of Long Island that make significant contributions to the local economy despite their lower household incomes; however, town officials are seeing more senior citizens and young people being priced out of the Long Island rental market. When the town purchased the parcels a few years ago, the housing affordability crisis was not as dire as it is today. The situation is getting more acute, and it could derail the sustainable development of the East Hampton hamlets and villages.

Another project recently completed by the East Hampton housing authority is The Green at Gardiner's Point, which is also a 50-unit affordable housing structure located south of the Three Mile Harbor Marina. The qualifying factor for this project is an income limit equivalent to 60% of the median $94,375 for East Hampton. For the Wainscott project, the percentage will be higher because the median income in that hamlet is $172,500. Monthly rents at The Green apartments start at $1,500 for a one-bedroom unit with one bathroom. Two-bedroom units rent for $1,784, and three-bedroom units with two bathrooms go for $2,045.

Governor Kathy Hochul recently issued a certificate to East Hampton for the town's efforts to tackle the housing affordability crisis, thus making up to $650 million worth of funds available for this purpose, which is being augmented by a new 0.5% tax on real estate transfers. Even with these efforts, the housing authority had to hold a lottery for prospective tenants who applied for lease contracts. According to census data, almost 40% of East Hampton renters are paying more than $3,000 per month.

Other Long Island communities that Governor Hochul has issued pro-housing certificates to are Long Beach and Hempstead Village. To get these certificates and their attached $650 million in funding, municipalities must increase their issuance of building permits for multifamily projects by at least 1% in a year; plus, they must also commit to streamlining the development of affordable housing units. It took a couple of years for East Hampton to arrange the 50-unit project near Route 114, but the new management approach will speed up construction, thus anticipating delivery in less than 14 months.

Elsewhere in Long Island, a 13-acre lot in East Farmingdale was acquired by state officials as part of a new affordable housing initiative. The number of units for this project was not immediately known when the land was acquired, but the initiative requires at least 20% of units set aside for affordable housing. This is an infill development project near the Republic Airport; the land was previously used by an aviation company that stopped operations in the late 1990s, so the state is getting a great deal on the acquisition.