LI developers say IDA ratings discourage affordable housing support

Local developers are calling for a change in how the state reviews housing projects that receive tax breaks from Industrial Development Agencies, saying the review criteria undermine the construction of affordable units.

The Association for a Better Long Island, which represents real estate developers, has requested that IDA-supported housing projects be judged on the number of units created, not the number of permanent jobs created and/or retained. The latter criteria have been used for years by state agencies to judge the effectiveness of IDAs.

Housing developments generally create a handful of permanent jobs, though dozens of construction workers are employed for months and, in some cases, a couple of years.

The association’s request to the state Authorities Budget Office, one of several IDA regulators, comes as demand for affordable housing soars among millennials and middle-class workers. It also coincides with growing concern that the Island is losing its young people to lower-cost regions in the South and West.

State-mandated IDA reporting requirements that focus exclusively on employment and exclude the number of new housing units “ignore the real and quantifiable economic benefit of having diverse housing options,” said Kyle Strober, the association’s executive director.

“Equally troubling, it punishes our region’s IDAs if they encourage housing projects that benefit our region’s very economic underpinning,” he said, adding the reporting requirements are a disincentive for IDAs to support affordable housing.

Developer Anthony Bartone of Farmingdale-based Terwilliger & Bartone Properties said tax breaks from the Nassau IDA helped him to construct several apartment buildings in downtown Farmingdale. The projects’ value to the community “is not necessarily as simple as looking at it from an employment-generation point of view,” said Bartone, who is not an association member.

Many of the Island’s eight IDAs have backed housing developments if they include some affordable units. Some are in downtowns or near Long Island Rail Road stations in Patchogue, Mineola and West Hempstead, among others.

The developers’ request, in a July 17 letter to the Authorities Budget Office, has been publicly endorsed by the Nassau County IDA and Babylon Town IDA.

“If we want to encourage the future, the ABO needs to properly account for housing units," Babylon IDA CEO Matthew McDonough said. "The ABO’s outmoded practices do not properly account for housing."

ABO director Jeffrey Pearlman said this week that he recognizes the need for affordable housing on Long Island, having grown up in Huntington.

The developers “are raising a very important point,” he said. “But this is a statewide policy question, and it would be best to have the [state] legislature hold hearings and possibly make changes” to the law governing IDAs, before the ABO then changes the reporting requirements.

Pearlman and others said the state law that established IDAs didn’t include housing among the types of projects eligible for IDA tax breaks.

“Once the State Legislature includes housing in the statute, ABO can go ahead and change the standard to include housing units as well as jobs created, jobs retained,” Pearlman said.