To purchase price-controlled units at 123 Sterling Ave. applicants must prove they’re first time homebuyers, according to a new declaration of covenants and restrictions that was approved by Greenport Village trustees on Thursday night.
Potential buyers must also demonstrate that they do not own any other residential property and that they fall within individual income restrictions set by the state mortgage agency’s non-target low interest program for Long Island counties, according to the agreement.
Village trustees tightened buyer stipulations after a resident expressed concern about potential resale abuse at a village board meeting last month, prompting trustees to temporarily table a vote on the agreement. Patricia Hammes, who is also a member of the village Planning Board, pointed out that the agreement would have allowed any Greenport resident — regardless of wealth or assets — to apply to purchase a price-controlled unit in the waterfront condominium.
The five units, set at $175,000 apiece, are still only available to those who have primarily lived and/or worked full-time in Greenport for at least two consecutive years prior to purchase. The units also still need to be the buyers’ primary residence. The approximately 600-650 square foot price-controlled apartments cannot be merged.
The project sponsor must provide public notice when the units become available, according to the covenants and restrictions.
Subsequent sales can be at market rates, although any sale made within two years of closing will be subject to a “flip tax,” equal to 25% of the difference between the sale and purchase price, that would be evenly split between the developer and Greenport Housing Authority.
The agreement does not address how unit owners will be selected, despite several village residents requesting a lottery system at past board meetings. Greenport residency and unit merger restrictions will continue “as deeded restrictions.”
Neighbor Frank Macken criticized the flip tax at Thursday’s meeting, prompting Mayor George Hubbard to respond that the tax had been incorporated in the stipulation agreement from 2007 and could not be changed.
Mr. Macken also argued that income restrictions on the units should continue in perpetuity, which Mr. Hubbard said would not be possible once the apartments are sold at market rate.
“When they become market-rate, which it says in the stipulation agreement — that’s been there since 2007 — then if you have income restrictions on that, people would not be able to afford it when it goes to market rate,” Mr. Hubbard said.
Trustee Mary Bess Phillips emphasized that the agreement for 123 Sterling Ave. had been “settled back in 2007.”
“It was a concept that was supposed to start building within a year or two. It didn’t happen. It lingered. But the original concept of those five restricted resident purchases were for first-time homebuyers,” she said. “Those restrictions of living two years within the Village of Greenport continue on with whoever buys the unit the next time around.”