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First Time Home Buyers On The North Fork And Affordable Housing In The Hamptons: A Conversation With Assemblyman Fred W.Thiele, Jr.

Originally Posted: September 18, 2012

John A. Viteritti

Assemblyman Fred Thiele represents Assembly District 2 in the New York State Assembly.

Assemblyman Fred Thiele represents Assembly District 2 in the New York State Assembly. His district includes the Towns of East Hampton, Southampton, and the southeastern portion of the Town of Brookhaven. Shelter Island is also soon to be included in Mr. Thiele's District.

Prior to serving in the State Assembly, Mr. Thiele served as Southampton Town Attorney, Southampton Town Supervisor, and Suffolk County Legislator for the 16th District.

JAV: As circumstances have dramatically demonstrated since 2008, real estate does not happen in a vacuum. It affects all aspects of everyday life. As one who has served in many different capacities, you have observed and dealt with the problems of the need for affordable housing, work force housing, conservation and preservation, as well as housing for seniors, from a particular vantage point. Please provide us with your views as to how these sometimes competing needs can be addressed.

FWT: Let me start by saying that a comprehensive plan that takes into consideration all of those needs is essential, and I think that the Towns have done that. Also, the Towns have a certain amount of control of how land is used through its zoning powers and other regulations, but primarily, over the past twenty-five years and at least up until the recession in 2008, the market is what has had the greatest impact on the issues you raised. Our proximity to New York City, the availability of cheap money through low interest rates was the driving factors. We have become a community of not just second homes, but in some cases third and fourth homes.

JAV: I have often heard people who live on the East End say, "I couldn't afford my house today."

FWT: Absolutely. I'm one of those.

JAV: What are the steps we need to take to develop affordable housing?

FWT: I don't think that the efforts to develop affordable housing have been as robust as they could be, but basically there are only two approaches you can take. Either you have to increase density, or you have to subsidize the cost of the housing. But even if you increased density and did nothing else, the second home market will crowd out the affordable housing because the free market will drive up prices. I think that the issue with increased density is largely a political one, with a small "p" because of infrastructure issues, the quality rather than the quantity of water, the limited highways, and a desire to retain the historic character of the area. Over the past forty years the desire has been to decrease density. The rule of thumb on the South Fork has been one third of the land for development, one third for preservation, and the remaining one third is up for grabs.

JAV: Please explain the "Peconic Bay Region Workforce Housing Opportunity Act."

FWT: I introduced the bill in the Assembly and Senator Kenneth LaValle introduced it in the Senate. It is co-sponsored by the entire legislative delegation in the Peconic Bay Region. It gives the towns the authority to establish a dedicated fund to provide loans of up to $200 thousand to residents and families below the median income level of the town who are first-time buyers. The loan would be repaid when the dwelling is sold. It would be financed by a combination of state and local funds including a fee on new residential construction on the square footage over 3,000 square feet up to $8.00 per square foot. The fund would have to be approved by the voters and would exempt workforce housing.

JAV: You were instrumental in the creation of the Community Preservation Fund in effect in the five towns of Eastern Long Island. Has the land preservation that resulted form that fund driven up prices?

FWT: Not in comparison to other factors. Since 2008 prices have actually declined. The stock market and interest rates have had a much greater impact, and the areas that have been preserved would not have been developed for affordable housing anyway. The CPF had the support of bankers, developers, realtors, conservationists, environmentalists. One of the dangers that we wanted to avoid when we passed the legislation was that the CPF did not become a tool for "not in my backyard."

JAV: How have the receipts changed since the downturn in the market?

FWT: In 2007 the fund generated $95 million. In 2009 it declined to $40 million. It has since increased. It's a good indicator of the market. At the height of the market, you couldn't buy a house in Sag Harbor for less than $650, $700 thousand. Today it's possible to find one for $450 thousand.

JAV: The legislature has allowed each of the Towns to exempt, among others, qualified first-time buyers. Easthampton, Southampton, and Shelter Island have chosen to do so. Southold and Riverhead have not. Do you know how that exemption has impacted your constituency?

FWT: It has benefited many first-time buyers who meet the requirements. It also exempts not-for-profit corporations, but the funds do not go to The Peconic Land Trust as many believe.

JAV: When is the tax due to expire?

FWT: In 2030.

JAV: If density is a key to the development of affordable housing, where should it be located?

FWT: Where you have the infrastructure to support it. Near public transportation, a water supply and sanitary facilities, access to shopping, generally around the hamlet centers. We should be transferring development rights to encourage affordable housing as well as subsidize the cost of construction. The biggest limitation is the Suffolk County Sanitary Code. Until the Health Department adapts its rules to accommodate new technologies, it will continue to be a problem.

John is a St. John's University graduate, licensed Real Estate broker, lecturer, teaches real estate license classes at LIU, NYU, and Cook Maran Real Estate School, and is a well-respected consultant to the real estate industry. www.johnaviteritti.com

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