Legislation that could have allowed a new real estate sales tax to fund affordable housing initiatives in the five East End towns was vetoed earlier this month by Governor Andrew Cuomo.
The nixed legislation, known as the Peconic Bay Region Community Housing Revolving Fund and sponsored by Assemblyman Fred Thiele (I-Sag Harbor), proposed levying an additional half-percent tax on real estate transfers in the towns of Riverhead, Southold, Southampton, East Hampton and Shelter Island.
The fund would have also needed voter approval in each town.
“Although the intent of this bill is to help individuals purchase a home in a region they would otherwise be priced out of, which is laudable, the imposition of additional taxes on current residents should be considered in the context of the state budget,” Mr. Cuomo said in a memo following last Friday’s veto. He also argued that the program may violate an article of the constitution that prohibits towns from providing a direct benefit to individuals.
In a statement, Mr. Thiele disputed that opinion.
“Housing assistance programs to individuals have long been held by the courts to be a valid public purpose and not in violation of the State Constitution’s prohibition against the gift or loan of public funds to an individual,” he wrote. “I am committed to working with the governor’s office on affordable housing, just as I did 22 years ago on land preservation, to pass this legislation in 2020.”
The bill was approved by the State Legislature in June and would have been used to provide financial assistance to first-time homebuyers, build new housing, rehabilitate existing buildings, enter into public/private partnerships to create housing, and provide housing counseling. Thiele estimated that the legislation would have raised $15 to $20 million annually for affordable housing on the East End.
The bill also called for transfer tax exemptions on all real estate transfers of $1 million or less in East Hampton, Southampton, and Shelter Island, as well as transactions of $800,000 or less in Riverhead or Southold.
Town officials on the North Fork appeared to support the measure, though it was largely out of their hands.
“I’m not in a position to say I oppose it or I support it because ultimately, it’s up to the voters,” Southold Town Supervisor Scott Russell said earlier this year. “The reality is, there is just no other perceivable way to create financial resources to promote affordable housing.”