Rentals available at 55-and-over Villas at Oak Run in Middle Island starting at $1,595 through lottery

Long Island renters can apply for 16 town houses available at reduced rents through a housing lottery to live in a new 55-and-over community in Middle Island.

The Villas at Oak Run will open to tenants next month. Two-bedroom townhomes available through the lottery start at $1,595 a month — a discount from the standard $3,675.

The apartments at the 74-unit development are the latest offered at below-market rates in exchange for municipal tax incentives — which in this case were provided by the Town of Brookhaven Industrial Development Agency to developer The Crest Group. But Newsday previously reported these opportunities often receive hundreds of applications for just a few spots, reflecting the intense demand for affordable rentals.

"That’s very appealing, especially to people on a fixed income," said Gail Lynch-Bailey, president of the Middle Island Civic Association, said of the below-$1,600 rents.

Lynch-Bailey said she appreciates that the town houses offer single-story options for seniors looking to downsize.

"A lot of us have been out of the housing market for a long time, so we tend to have sticker shock," she said. "Unless you’re actively looking, you’re unfamiliar with how much things have gone up. These lower-end rentals would be ideal for senior citizens."

However, she said she wishes more of the units had been offered at lower price points.

Four of the 16 two-bedroom units are priced at $1,595, four are priced at $2,149 and the remaining eight cost $3,675 a month.

U.S. military veterans will receive priority in the lottery for four units.

To qualify, prospective tenants must meet income requirements. The most affordable units are available to individuals earning up to $57,550 or couples earning up to $65,750. Lottery applications are due by July 6.

Individual tenants can earn up to $138,000 and couples can earn $157,750 annually and still qualify for the $3,675 units. Those thresholds equal 120% of the area median income, as required by the Brookhaven IDA.

The priciest units are just a $50 discount off advertised prices on the developer’s website.

Through a spokesman, the Brookhaven IDA declined to comment.

All the rents qualify as affordable under the federal standard that households should pay no more than 30% of their income toward housing costs, including utilities, according to the U.S. Department of Housing and Urban Development.

However, rents on these units can increase only at the rate allowed by the federal government, so tenants have greater protection against rent increases than their neighbors, said James Britz, chief operating officer at Long Island Housing Partnership, which is coordinating the lottery.

"We need all types of housing," he said. "There’s not many options for people right now who have their single-family home and may not want to do the maintenance anymore or pay the big tax bill every year."

Long development process

In 2022, Crest Group got involved in the project, taking over a process first initiated by developer Mark Baisch, said Marco Scarda, the company's director of business development.

Crest Group is separately developing a Starbucks near the entrance to Villas at Oak Run in a long-shuttered bank building.

It’s Crest Group’s latest 55-and-over community in Suffolk County, following projects in East Setauket and Port Jefferson Station.

The $35 million Villas at Oak Run community is on 23 wooded acres, with the homes on 11 acres and the rest preserved. Amenities include in-unit washers and dryers, private one-car garages, a clubhouse, walking trails and pickleball courts.

Crest Group received a $934,000 sales tax exemption and a $179,000 mortgage-recording tax exemption from the Brookhaven IDA toward the project. It also agreed to a 20-year payment in lieu of taxes, saving the company an estimated $3.2 million, compared with estimated taxes on the property if the deal had not been authorized.

However, if the project did not proceed, the previous owner would have been paid significantly less in taxes on the land.

The lower rents offered in the lottery are feasible only because of the tax incentives, Scarda said.

"Without tax incentive programs, a lot of these projects would not come to fruition," he said. "If people are upset about where rent is at the moment, if there’s a supply constraint even further, it would only get worse."

More information on applications is online at lihp.org/project/villas-at-oak-run.

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.