Community Housing Board wrestles with finances to build affordable units

With all the effort the Community Housing Board (CHB) has put in to date, the most difficult work is happening now in putting together financing for construction of 10 rental units.

Councilwoman Liz Hanley, who chaired the CHB prior to her election last November, outlined the sources of funding and the reality that grants come and go and until a specific grant is awarded, it’s necessary to continue searching for other sources.

Community Development Long Island (CDLI) stepped up to negotiate an agreement with the Town and has been fleshing out its agreement, bringing a developer to the project who is putting up some money. New York State and Suffolk County could bring money to the effort.

Ms. Hanley said she had a “fruitful” conversation with a County representative but said more information is needed about how the finances are looking, perhaps by September. At this stage with what seems likely, there would still exist a $900,000 gap. If money is forthcoming from the County, that would close the cap, Ms. Hanley said.

“Money is really tight and there is less available right now,” she said.

Rather than ignore that possibility Ms. Hanley has been working with CHB members to determine if there are other possibilities that could use money the Town gets from the transfer tax that could be a loan to the close the gap. She told her Town Board colleagues she wants them to think about that alternative and offer their thoughts.

If the Town Board is willing, such a loan could give the borrowing entity more time to pay it back.

At the same time, the CHB and Town Board need to think about what could happen if in 10 years, the management agreement were to become something either side might want to discontinue. How then would management of the properties be handled?

Another major factor is to consider more carefully who the new housing is meant to serve. It has always been talked about as affordable housing, but the reality of “affordable” comes into question as figures used for Suffolk County affordability enter the mix.

As the math works out, a tenant might have to earn $95,000 a year to pay enough rent to cover the property and debt service.

Ms. Hanley acknowledged that when she and CHB Chairman Bran Dougherty-Johnson heard the figure, they found it startling. The CHB has been thinking they were preparing to build for workers and it no longer felt like low-income housing, Ms. Hanley said. But given median incomes in Suffolk County, that number may be realistic, she said.

Councilman Benjamin Dyett said his concern is that while there may be little cost for maintenance in the first few years, after about five years, maintenance costs can be expected to increase. It’s another matter for the CHB to contemplate.

Meanwhile, the CHB is working with its attorney, Miriam Milgrom, on contracts for management and lease agreements.