Greenport Village trustees discussed tighter restrictions for potential buyers of price-controlled units at the 123 Sterling Avenue project last Thursday, with plans to vote on a new agreement at their next regular meeting.
A vote on covenants and restrictions for the site was tabled last month after a village resident expressed concern that, as set, buyer stipulations were “ripe for abuse” and pointed out that anyone who lives or works in Greenport can apply to purchase the units, regardless of income level or other properties owned.
Five residential units in the three-story condominium are set to sell for $175,000 each. Under the current proposal, potential buyers must prove they have either lived or worked full-time in Greenport for at least two consecutive years prior to purchase, and the units must be their primary residence. Any sale within two years of closing would be fined with a “flip tax.”
“We really need to make the effort that this truly is to be for first-time home buyers,” Trustee Mary Bess Phillips said, emphasizing that the village needs to tighten restrictions for buyers of the units. “The original concept was for young couples that were working within the community, to be a starting point for purchasing a home.”
Ms. Phillips suggested several additional stipulations, including income limits set with guidance from the state mortgage agency and requiring that buyers have not owned a primary residence at any time in the previous three years. Buyers should also be required to present their most recent federal or state income tax returns to the Village Housing Authority, she said.
“I don’t think the criteria of first-time home ownership alone has the same impact,” Trustee Julia Robins said. “I’ve known first-time home buyers that have come here, people that had been renting apartments in Manhattan for years. It does not mean that they don’t have a six-figure income, they just have not owned a home before.”
Ms. Robins argued that applicants should be bound by local affordable housing income limits and not have owned real estate anywhere for the last seven years.
Trustee and deputy mayor Jack Martilotta said it’s too late in the process to substantially change the agreement.
“Some of these things you guys suggested seems reasonable, but we gave the contractor permission to build this building, the condominium, on the waterfront and he came up with — I don’t even know how many alternatives he tried to pitch to us — and so far as I can tell, [the village] said no to almost all of them,” he said. “I’m comfortable with making some changes around the edges but we had an agreement. He got approval to do this from New York State.”
Trustee Peter Clarke said he agreed with everything said so far, but he didn’t believe the requests from Ms. Phillips and Ms. Robins “are out of the question or out of scope.” He added that the only thing he’s unsure of is whether the village has the authority to protect the units as affordable housing in perpetuity.
“I think our best bet is to try and work with the developer and agree on some of the concessions requested tonight, such as the lack of property ownership elsewhere and income requirement that is structured within the county or township. That makes sense, as well as the offer to involve the village by providing documentation and posting the information publicly so it’s a transparent process,” Mr. Clarke said.
Mayor George Hubbard Jr. said he agreed with prioritizing first time home buyers and requiring applicants to prove they don’t own other properties, but said it is harder to restrict income because the buyer needs to be able to afford to live in the unit.
Paul Pawloski, owner of the 123 Sterling Ave. property, said he agreed with the evening’s comments on prioritizing first-time home buyers and pointed to a New York Times article published about the project in 2007.
“It says the residency requirement would apply to all future sales and the units cannot be combined into bigger ones. So in theory, they would always be too small for the lofty appetites of hedge fund managers, but right for the young teachers, firefighters or retirees,” he said. “I always have seen this article, I’ve always seen the criteria. We’re fully committed to the intent of the criteria.”
Pat Mundus, a Greenport resident and Sterling Basin Neighborhood Association member, criticized the 25% flip tax — which would be split between the developer and the Village Housing Authority if the buyer sells the unit within two years — as not providing enough of a deterrent for applicants to sell at a profit.
“It’s great that somebody could … profit to use the seed money for their next house, which is a lot bigger than hopefully 650 square feet, but what about the people down the line?” she asked. “There should be a vision for an overall policy down the line for everybody.”
Ms. Mundus also said that “to guarantee fairness and avoid favoritism,” approved applicants should be drawn from a lottery.
Ellen Schnepel, Greenport resident and SBNA chair, emphasized that the application process needs to be fair and equitable.
“I vote for the lottery system; I think our association is behind that as well,” she said.