Tuesday, October 4, 2022

Breaking point | Long Island Business News

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When people are holding rallies and marches over the lack of affordable places to live here, government officials may need to take notice.

In fact, that was one of the primary goals of a coalition called H4ALI (Housing For All Long Island), which rallied in front of a homeless shelter and marched through several local communities Saturday, trying to call attention to a housing crisis that’s been brewing here for years and is beginning to boil over.

The coalition of more than a dozen social activist groups is advocating for the passage of proposed state legislation that would cap rent increases and protect tenants, but it is also amplifying the premise that housing is a human right, which its members chanted throughout last weekend’s rally and march.

“We have reached an inflection point when it comes to the affordable housing crisis on Long Island,” said Hunter Gross, president of the Huntington Township Housing Coalition, who joined H4ALI’s call to action. “Young people, seniors and working families are leaving in droves, school enrolment is declining, and local small businesses can’t find anyone to work because employees can’t find local affordable housing.”

HUNTER GROSS: The president of the Huntington Township Housing Coalition says local and state officials must step up to address Long Island’s housing crisis. Photo by David Winzelberg

Gross said that local and state elected officials must act and expand accessory apartment legislation, tackle exclusionary zoning laws, address parking minimums, enact stronger tenant protections and consider converting vacant commercial properties into mixed-used and transit-oriented developments that include affordable housing.

Developers of market-rate apartments have argued that increasing the supply of rental housing will result in lower rents or at least slow the pace of price hikes, but despite the addition of thousands of new apartments on Long Island in the last few years, demand hasn’t been sated and rents continue to climb. In fact, rents in the New York area are up 26.7 percent in just the last year, according to a new report from Rent.com, and it’s not unusual to find monthly rents of one-bedroom apartments on Long Island now priced at over $3,000.

That’s leaves the burden to a handful of affordable housing developers who can offer rents of less than half the market rate, because their projects are subsidized with public dollars. But lately, some developers say the state funding they’ve been relying on has been getting harder to come by.

“The funding that we use to develop housing is competitive funding,” said Ralph Fasano, executive director of Medford-based Concern Housing. “And Long Island has traditionally gotten less than the rest of the state on a pro-rata basis of its share of affordable housing dollars.”

Most of the public money that funds affordable housing projects comes from a division of the state’s Homes and Community Renewal known as Housing and Community Renewal. Over the last five years, the agency says it has funded 19 affordable housing projects on Long Island, with a total of more than $400 million.

And while Fasano and others contend that Long Island is being short-changed when it comes to state funding, based on its population, HCR spokesman Brian Butry defended the agency’s support for affordable housing here, citing the more than $400 million it has invested on Long Island since 2017.

“Clearly, the state’s commitment to the residents of Nassau and Suffolk counties is strong and we welcome the partnership of local municipalities and developers to address the demand for affordable, high-quality, energy-efficient, and safe homes for Long Island’s working families so they can create a better future,” he said via email.

The state also points out the challenges of developing multifamily housing on Long Island, including local zoning and land-use policies, as well as local politics, which often slow the process to a crawl.

Concern Housing has been working on a project to bring 60 affordable apartments to a 5-acre site in Southampton for more than five years. The Town of Southampton recently postponed a hearing on a zoning change to accommodate the project until Oct. 25.

LIBERTY GARDENS: More than five years in the making, Concern Housing is seeking a zoning change from the Town of Southampton to build 60 affordable apartments on 5 acres off County Road 39. Courtesy of Concern Housing

“What a shame it would be if after all this time, and we brought in about $35 million of state money to build this housing, if this didn’t move forward,” Fasano said. “If various localities start rejecting good housing, what interest does the state have in risking future dollars in approving applications that may not go forward?”

Levittown-based D&F Development Group, one of the area’s most prolific builders of affordable housing, has developed about 3,000 affordable rental units here. The company has just started work on a 71-unit affordable rental project called Sterling Green at Farmingdale, where apartments will be rented to people with annual incomes between $35,000 and $80,000, and monthly rents will start below $1,000.

D&F principal Peter Florey agrees that funding projects has become more difficult lately.

STERLING GREEN: D&F Development Group has begun work on this 71-unit affordable rental building in Farmingdale. Courtesy of D&F Development Group

“Right now, the biggest challenge that we face is that the funding sources including the biggest provider, New York State, derive from a scarce resource and this has been exacerbated because interest rates have gone up and costs have gone up,” Florey said. “As that happens, the same amount of dollars fund less units even though New York State does more to fund housing than any other state in the country.”

Another prolific developer of affordable housing on Long Island is Jericho-based Georgica Green Ventures, which is currently building a $33.5 million project called Three Mile Harbor, which will bring 50 affordable rental apartments to part of a 14.3-acre site on Three Mile Harbor Road in East Hampton.

Georgica Green principal David Gallo says some towns have been more welcoming than others when it comes to affordable housing. The company had proposed to build 24 affordable townhouse apartments in Cutchogue but was rebuffed by the Town of Southold.

DAVID GALLO: High land prices and the long approvals process continue to challenge affordable housing projects on Long Island. Photo by Judy Walker

“We spent a lot of time and there was a lot of support, but we still couldn’t get it done,” Gallo said. “But I really believe that we will have a project that will come to fruition there because there’s a real need.”

Georgica Green is also currently constructing a $32.3 million project that will bring 55 workforce-priced rental apartments to a 1.5-acre site at RXR’s Garvies Point mixed-use development in Glen Cove. Monthly rents at the development, which is expected to be completed in Q1 2023, will start at around $1,200.

Gallo says development challenges continue to be high land prices and that the process to get properties rezoned and approved takes time.

“The process takes a lot of time, and a lot of things can happen during that time. Interest rates go up, construction costs go up, it’s not linear, it’s not just time,” he said. “If you had a project that started a year ago, interest rates have doubled. And we all know that inflation has caused a lot of material to go up. That combination just makes it hard.”

The poster child for how long it can take to develop affordable housing is the Matinecock Court project, which is now 44 years in the making. First pitched in 1978, the East Northport development has survived multiple court challenges, one of which went all the way to the U.S. Supreme Court, as the Town of Huntington and local residents have tried in vain to derail it.

D&F took over the Matinecock Court project in Jan. 2021, after the previous developer bailed. The plan now calls for building 146 limited-equity co-ops with monthly maintenance fees ranging from $1,300 to $1,900, depending on the size of the unit.

Florey said he had hoped to break ground by the end of the year, but the project may be further delayed as it awaits its public funding commitment.

“We have all of our approvals in place right now,” he said. “We’re waiting for the greenlight from the state and they’re going through their underwriting process right now.”

Florey says a lot more affordable housing is needed.

“We’ll never be able to meet the demand and we lag way behind all of our neighbors in New Jersey, Westchester, and Connecticut in terms of the ratio of rental housing to home ownership,” he said.

An informal LIBN poll of readers last week found that 73 percent of respondents believe Long Island municipalities should be doing more to promote affordable housing projects in their communities.

“There is an intractable Long Island Gordian knot confronting the construction of multifamily housing, specifically affordable housing, that will never be resolved unless we address the region’s use of a local zoning system that offers an auto-opposition response to even the most modest of changes within our communities,” says Kyle Strober, executive director of the Association for a Better Long Island, a group which lobbied for direct rental assistance during the pandemic, but against a cap on rent increases because it would strip rights from property owners. “Long Island is at a crossroads where it will either adapt and encourage diverse housing options or it will continue to fall behind competing regions in attracting new businesses dependent on a young and vibrant workforce that refuses to live in their parent’s basement.”

Gross says the area’s housing crisis has reached a breaking point.

“We have a supply and demand issue,” Gross said. “It is fiscally and morally irresponsible to not pass laws that enable the creation of more housing. We must and can do better. The economic sustainability of our island depends on it.”

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(Except for the headline, this story has not been edited by PostX News staff and is published from a syndicated feed.)

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