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Aug 6, 2014 10:35 AMPublication: The Southampton Press

Southampton Town Looks To Stock, And Tap, Its TDR Bank To Build Affordable Housing

Aug 6, 2014 10:35 AM

For the past 15 years, the five East End towns have been buying thousands of acres across the region with money from their respective, and robust, Community Preservation Fund accounts—removing those properties from consideration for development as housing subdivisions.

But the authors of the CPF have noted that in the drafting of the founding legislation in 1998, the language expressly stated that the “rights” from any land purchased with money from the fund would not necessarily be extinguished. Instead, it could, at the town’s direction, be transferred to other properties to allow additional and denser development than current zoning would otherwise allow. The so-called transferable development rights, or TDRs, were a concession, in the name of coalition building, to the demands of the construction trades, whose representatives did not want potential future jobs taken off the table entirely because land was being preserved.

Nonetheless, the clause was rarely applied by town leaders, who quickly prioritized tamping down the pace of development, and its subsequent stresses on infrastructure and the environment.

Until now.

Since the start of this year, Southampton Town has been “banking” the development rights off all of the purchases it has made with CPF money. The rights, or credits, are being held in reserve, in hopes they can someday be used in the town’s long-running struggle to create more affordable housing. Since the credits must be extracted from a property at the time of the authorizing resolution, the town cannot go back and attempt the retrieval of TDRs that were left on the table by earlier transactions.

The town already has added more than 20 development credits to its bank through purchases since the start of the year. Each credit represents the right to build one unit of housing. By transferring multiple credits to a given property, the town could greatly increase the allowable development on it, and thus lower the base costs of developing the land, passing on the savings to eligible buyers.

“We live in an area where the very high land value is the number-one impediment to developing affordable housing,” Southampton Town Supervisor Anna Throne-Holst said recently. “The TDR is a tool, then, that could reduce the development cost and make affordable housing a more viable thing.”

The Town Board endured heaps of criticism from residents earlier this year when it approved the Sandy Hollow Cove affordable housing project, which will create 28 apartments in three buildings on a 2.6-acre lot in Tuckahoe that would have been eligible to be developed with only a single house under its original zoning. But without the increase in density, the developers and their partners would have been unable to construct the affordable apartments, according to Southampton Town Housing Authority representatives.

That project, through the rezoning of a planned development district, created development density that region-wide zoning guidelines had not taken into account—a point of staunch criticism by opponents. But the transfer of credits from preserved land—chosen, according to CPF guidelines, for its value to groundwater protection, the preservation of farmland, wetlands protection or recreational opportunities—would not create any new development, officials noted; it would merely allow the shift of development from areas less suited for it to communities where new housing could be a plus.

“It’s not creating density—the density was already considered under zoning,” Southampton Town Planning and Development Administrator Kyle Collins said. “The TDRs were put in there to offset the effects of the town being the 800-pound gorilla in the room, buying up all this land. When you buy land, the other land gets more expensive. If you put those TDRs back in the system, that was supposed to offset the impact.”

One of the authors of the CPF law, State Assemblyman Fred W. Thiele Jr., said that, instead of seeking to offset the impact of their purchases, the towns shelved the idea of transferring rights as they desperately sought to reduce the ultimate build-out of the town.

“It was a time when the towns were up-zoning and looking to reduce density,” he recalled. “There was not much talk of using it to direct development in some areas. There’s been more discussion of that recently.”

With the Sandy Hollow model now in its rearview mirror, Housing Authority officials and members of a task force appointed by Ms. Throne-Holst have been looking for ways to create more affordable housing, and researching places where increases in density could allow for condominiums and moderately priced apartments.

“CPF was never intended to be a density-reduction program—it was a land preservation program,” said former Town Board member Steve Kenny, now a member of Housing Authority’s board and the affordable housing task force. “Everyone agreed that it was important to shift development away from sensitive areas. But part of the trade-off there was always to shift some of that development to places where it is appropriate.”

Mr. Kenny noted that one of the visions of the transferable credits was that they would promote a “smart growth” form of development, with large swaths of farmland and open space preserved on the outskirts of hamlets, and denser development around villages. That trend did not develop, because housing demands over the last two decades skewed toward larger lots with large individual houses, not apartments and condos close to downtowns. Nonetheless, with house prices once again lofting into the stratosphere, officials say the town needs a release valve for its middle-income residents.

In the 15 years since the CPF took effect, drawing money from a 2-percent tax on most real estate sales, the fund has brought in more than $500 million to Southampton Town alone. Through the end of 2013, the town had spent $457.5 million on 305 individual purchases, preserving 3,612 acres, primarily farmland and wooded open spaces for groundwater recharge.

As the need for affordable housing has grown larger and larger on the radar screen of elected officials, some have lamented the failure to bank more development credits from the acres purchased in the past. With the Town Board appearing poised to take a more aggressive posture toward the creation of affordable housing, spotlighted by its unanimous support of Sandy Hollow Cove, the development credits could prove to be a crucial tool that’s in short supply.

“It’s a shame we didn’t do it earlier,” Ms. Throne-Holst said. “But we’ve started it now and better late than never. There’s no question it will be helpful.”

The approach is not without its critics. Attorney Joe Gazza, in a letter to The Press this week, argues that the voters who approved the CPF at the polls, and reauthorized it for another 10 years in 2009, thought that the program was intended to reduce development, not direct increased density to certain neighborhoods.

Mr. Gazza, a developer who has used credits deftly in creating new building lots across the town, and still holds more than two dozen credits himself, said he thinks most voters would not have supported the program if they had been told that they would be permitting denser development elsewhere.

“I feel like I was misled,” he said in an interview. “I thought I voted for open space preservation, and, to me, preservation means preserved in total. Now those homes can go somewhere else? To me, that’s a double dip.”

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By Mr. Z (11847), North Sea on Aug 7, 14 8:42 AM
First time i have ever agreed with Joe.
By North of Highway (280), Westhampton Beach on Aug 7, 14 11:17 AM