Opinion: Urge Town Board to Vote NO to Excessive Affordable Housing Fees

I write today to sound an alarm about an affordable housing measure up for Town Board vote at our August 16th meeting at 7pm, to which I will be voting a resounding no.

This resolution proposes to quadruple administrative fees paid to the Town’s Community Development Agency (CDA) by the owners or tenants of affordable units upon their resale or re-lease.

Incredibly, this resolution seeks to increase the current administrative fee from 1% to 4% for the resale of affordable units. And for rentals, it seeks to raise the current administrative fee of $1,000 to one month’s rent, which also constitutes a steep hike.

According to the resolution sponsor, the rationale to quadruple the CDA’s administrative fee is to make the CDA’s fees “consistent with that which a private real estate broker would charge for the same transaction.”

Here’s the problem: the resale or re-lease of income-restricted and price-restricted affordable units is not the “same transaction.” The Town CDA is a public entity and not a private real estate broker, it does not perform the same services as a private real estate broker, and therefore should not liken itself nor expect to be compensated as a private real estate broker whose private clients are enjoying unprecedented home resale values.

Conversely, the CDA’s clients are individuals and families who qualify for affordable housing based on meeting various program criteria that includes strict income limits, and in the case of senior housing, asset restrictions. Down the road, when these same individuals and families are ready to move out of their affordable units, unlike a home in the open real estate market, the resale value of their affordable home is tied to modest Consumer Price Index increases only, and not private open market value.

A possible and wholly unacceptable scenario of this proposed administrative fee increase is that upon sale of an affordable unit, an individual or family could end up getting less than what they paid for it.

To impose an administrative fee commensurate with what a real estate broker would capture in the open private real estate market is simply inapplicable in the affordable housing arena, and moreover, undermines the entire reason our affordable housing program was created.

As an example, at one of our senior affordable developments the administrative fee charged by the Town CDA for the lowest-priced unit at resale would move up from $2,927.50 at the current 1%, to $11,710 at the proposed 4%.  Even starker, the administrative fee charged by the Town CDA to the seller of the highest priced affordable unit in that same development at resale would skyrocket from $5,056.87 at 1% to $20,227.48 at 4%.  It’s unthinkable.

As a former affordable housing executive, I well understand the administrative demands of a public housing organization, which is why I believe the 1% fee at present is more than fair.

I voted in June to advance a public hearing for this measure in anticipation of allowing the public to weigh in. However, as is sometimes the case for seemingly benign proposals, especially during the summer months when people are on vacation or otherwise distracted, despite my efforts to elevate public understanding of my concerns over this proposal, there were no speakers or emails urging the Town Board to reject this ill-conceived proposal.

The good news is it’s not too late. You can still share your input with the Town Board before it casts its vote on August 16th.

Our meeting begins at 7pm and you can either sign up to speak during the public portion or send an email urging the Town Board to vote NO to quadrupling administrative fees that would cripple the Town’s affordable housing program as well as the buyers, sellers, landlords and tenants who qualify to participate in it.

Joan Cergol is a Democratic member of the Huntington Town Council.

Op-Ed: A Sad Day for Huntington Housing

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