News

Housing advisory board presents ideas

The Southold Community Housing Fund Advisory Board presented a proposed spending plan for funds collected to address housing solutions at a work session last week.

The plan would be relevant only if a half-percent transfer tax on real estate transactions is approved by referendum at the polls this week. A slide presentation given during Tuesday’s Town Board work session offered a preview of the contents of the Community Housing Fund Chapter of the Town of Southold Draft Housing Plan.

“We understand the housing crisis is pervasive and real across the U.S. as well as right here at home. And so we wanted to be really responsive to some of the feedback we’ve been getting from the community in regards to what’s going to be in the plan before the vote next week,” said Mara Cerezo, a town planner.

“I do want to just pause for a second to dispel a rumor that has been circulating in the public. This is not a property tax increase. This is specifically related to any sale or transfer of property. So it’s a transfer fee specifically,” she added.

Councilman Greg Doroski also said it’s “outright false” that the town plans to fund the purchase of multi-million dollar homes, a rumor that has apparently been floating around the community.

“I think I can speak for the board and say we have no intent whatsoever to fund the purchase of million-dollar homes here. This is about middle-class housing for the community,” he said.

“Keep in mind, if this referendum passes on [Nov. 8], that doesn’t mean the plan starts. The plan doesn’t start until the Town Board approves it — and that’s after a public hearing. It’s going to take months,” said Councilwoman Jill Doherty. If the referendum is approved, the town will begin collecting money in 2023. The funds will not be used until a housing plan is in place that has been approved by the Town Board after public input.

“Whether the referendum passes or not, I think it’s an important thing for the town to have a housing plan. The Housing Commission is very active,” Ms. Doherty said. “And I just want to say now, in the program that we have, with the little funds that we have, the processes for the loans that we were just talking about, we have that process and the Housing Commission developed a policy and a vetting that they go through.”

She later emphasized in an email to a reporter that the CHF transfer tax would not be added to residents’ tax bill. “It is a one-time real estate transfer fee of 0.5% on property purchased in the town” with “exemptions at certain levels, just like in the land preservation transfer fee,” she said.

“This is not low-income housing. This is working class moderate income housing. You have to make a certain amount to qualify,” Ms. Doherty added. “If you don’t make enough to be mortgageable, you most likely won’t qualify for purchase or rental. The money will also be used for education to help people budget and become eligible. It will be used to lower [the] cost of construction for affordable housing communities. This way, the constructors will be encouraged to do affordable housing.”

Community Housing Fund expenditures will be focused on grants and low-interest loans to increase homeownership opportunities for eligible individuals; to increase the inventory of community housing, for both rental and sale ; and to maintain and support existing community housing.

The CHF advisory board has defined community housing as “a variety of housing opportunities for individuals and families of various economic means.”

The CHF might offer first-time homebuyers grants or low-interest loans for down payments, presenters said. An application process would establish grant limits based on factors such as income, home price and mortgage rates “to ensure long-term affordability over the course of the mortgage period.”

HERO purchase grants would be offered to emergency service volunteers, essential workers such as nurses and honorably discharged veterans. These grants would be provided per unit to eligible first-time buyers to offset costs and would not need to be repaid.

Eligible homeowner purchase loans and grants would offset costs for eligible first-time homebuyers and could be forgiven if the individual remains in the home for 15 years. If not, the funds would be treated as a low-interest loan and paid back at a rate that decreases over time. The percentages are still being worked out in conversations with the advisory board.

Support would also be offered to developers who manage or construct community housing in the Town of Southold, so long as their tenants meet the income limits and rents are consistent with town limits. Loans or grants would support the construction of new community housing units or upgrade or maintain existing community housing.

Maintenance grants would not need to be paid back and applications would be reviewed in consideration of overall benefit and number of community housing units that are supported by the grant. Operational grants meant to subsidize the operation of a housing authority or housing organization within Southold Town that provides or supports community housing would not need to be paid back either.

The CHF would also offer low-interest loans to support the construction of new community housing and help make projects economically viable. The loans could be used for various purposes and the amount would be tied to the number of community housing units being created, according to the presentation. Loan payments would return to the CHF.

For larger projects, developments that set aside units for emergency service volunteers would be prioritized. Low-interest loans could be used to purchase land with a town lien required; to convert or construct multifamily or multi-unit rental properties; to construct accessory dwelling units for community housing; to install I/A OWTS sanitary systems; or to implement renewable/alternative energy.

The slides presented at the work session will be available on the town website.