Long Island businesses turn to worker housing as employees get priced out

The lot at 350 Pantigo Rd. is pretty much just that, paved over with cracked asphalt and creeping greenery.  A Stern’s department store stood there decades ago; the property has been vacant for years. But when Kirby Marcantonio looks at the site, he sees condos — and what he believes could be a step toward a radical new solution to a growing labor crisis on the East End.

The longtime magazine publisher has proposed 47 condos on Pantigo Road in East Hampton that would be sold to local businesses, which could then rent the apartments to employees. More than 70 Hamptons employers have reached out to inquire about purchasing a condo, which may cost more than $800,000 each, Marcantonio said.

“Local population evaporating? We can do something about that,” he said. “If we don’t, there won’t be anybody here to teach your kids. There won’t be anyone here to plow your roads in the winter. There won't be anybody here to bind your wounds or serve your cocktail at [restaurant] Nick & Toni’s.”

Marcantonio said the project represents a $25 million investment. Once approvals are secured, he estimates construction would take less than a year.

While proponents say the development could house workers who otherwise couldn’t afford to live in the area, critics argue that putting housing in the hands of employers creates a power imbalance that could have a chilling effect on workers’ ability to advocate against unfair labor conditions.

“It’s a dangerous position to put an employee in,” said Samuel Kramer, a local attorney and former chair of the East Hampton Town Planning Board who has criticized the proposal at public hearings.

The town needs affordable housing, he acknowledged, but he doesn’t see the potential development at 350 Pantigo Rd. as a solution. Among his primary concerns is that connecting employment with housing could make it more difficult for people to report inequities or poor conditions in the workplace.

“They’re vulnerable to start with and this only makes them more vulnerable. I don’t think the town should be facilitating that vulnerability,” he said.

The concern is not entirely theoretical. A New York Times investigation last year reported allegations of mistreatment involving J-1 visa workers at a Long Island nursery who paid $200 per month to live in company trailers that were infested with mice and cockroaches, sometimes sleeping two to a bed. 

Marcantonio has described his backer as a South Fork businessman with deep roots in the community, someone who has experience in business and management, but said the investor wants to maintain his privacy as he navigates a devastating illness.

Marcantonio did not disclose how much the investor is contributing toward the project’s estimated $25 million cost. Deed records did not reveal further details.

The development remains in limbo as the East Hampton Town Board considers legislation that would permit the private sector to build employer-sponsored housing with certain restrictions.

The pending law would permit up to 60 units in employer-sponsored developments and would require third-party management approved by the town. Tenants could remain in a unit for six months or the remainder of their lease after leaving the sponsoring employer, according to the draft legislation. The proposed law also indicates that tenant income would be capped at 130% of the area median income and that tenants could be charged affordable housing rates — which, at Marcantonio's proposed development, would be up to $2,400 per month for a two-bedroom and $3,500 for a three-bedroom, he said.

Just two properties in East Hampton would qualify for employer-sponsored housing under the proposed legislation. One is 350 Pantigo Rd.

While the model pitched for Marcantonio's development might be new to Long Island, employers stepping in to provide workforce housing are not.

On Long Island — and especially on the Twin Forks, where limited waterfront property just hours from New York City drives up prices — a lack of affordable housing has made it increasingly difficult to recruit and retain workers. Businesses over the decades have tried to solve the problem by supplying employees with places to live, including several on the East End with pending housing developments.

A crisis decades in the making

Expensive housing on Long Island is nothing new. Neither is the struggle to hire. But in the years since the pandemic, the crisis has grown to new heights.

The Long Island Housing Partnership, a Hauppauge-based nonprofit, has for decades run an employer-assisted housing program that matches employer contributions with public funds to help workers buy homes on Long Island.

The program has included more than 130 employers over the years, including Northwell and Catholic Health, and is meant to help employers struggling to recruit and retain employees because of Long Island’s high housing costs, said James Britz, executive vice president at the Long Island Housing Partnership.

But home prices have risen out of reach for many employees within the qualifying income range, driving a drop in successful applicants in the past few years, he said. Only a handful have participated in recent years, whereas a decade or more ago, 30 to 50 people might have been approved annually. 

Since the pandemic, house prices on the East End in particular have skyrocketed amid an influx of second-home owners, and rents have begun to exceed the pay of many hourly jobs, said Laurie McBride, president of the Long Island Farm Bureau.

If they aren’t driving in the daily trade parade that can stretch commutes by hours, workers might be living in illegal or otherwise tenuous conditions, business owners said. Some sleep on boats, in someone’s basement or even in the woods. 

Tracy Mitchell, executive director at Bay Street Theatre in Sag Harbor, said the nonprofit spends about half a million dollars each summer to house seasonal workers in nearby hotels, private homes and dormitories at Stony Brook’s Southampton campus.

Scott Rubenstein, owner and operator of East Hampton Indoor Tennis and The Clubhouse Hamptons, said he once rented summer housing for workers but rates have become unaffordable in recent years.

Years of struggling to hire have prompted Stony Brook Medicine to start planning workforce apartments on its campuses in Stony Brook and Southampton. Finding workers for its hospitals and offices on the Twin Forks has been especially difficult, Stony Brook Medicine officials said.

Many doctors, let alone nurses or other healthcare workers, can't afford to buy homes east of the Shinnecock Canal, and there’s a lack of affordable rental properties, putting employees — especially those early in their careers — at a disadvantage, said Dr. William Wertheim, executive vice president at Stony Brook Medicine.

Those living west of the canal in Hampton Bays face hourlong commutes even without trade parade traffic in the summer, he said, noting that someone driving toward the peninsula during the busy season for a 7 or 8 a.m. shift could be facing a three-hour drive.

“I’ve heard stories of employees who come in at 3 or 4 in the morning so they can avoid it and sleep in their cars in the parking lot,” he said.

Tough to build

Providing housing might relieve some of the pressure around hiring, but it’s not easy to do. Employers trying to build face the same obstacles as other developers and often spend years seeking municipal approvals.

Thomas Wickham has been trying to expand and renovate workforce housing on Wickham Farm in Cutchogue since 2022. Since then, he has invested hundreds of thousands of dollars in renovating a kitchen and bathroom, adding two bedrooms and building a new water source and a state-of-the-art septic system. The process remains ongoing as he waits for a certificate of occupancy.

“If farmers don’t provide some form of housing, it’s really very difficult to get employees,” said Wickham, noting that building requirements have been stringent. The family farm has provided housing to workers for decades, including a house on site rented to workers below market rate. The farm also participates in the H-2A visa program, through which it provides free housing for participating workers.

Angel Solomon Pirir, 42, has worked for Wickham Farm for nine years through the visa program. He said in Spanish that he’s had good experiences living on the farm and likes the community he’s formed with his coworkers.

Other Wickham Farm workers acknowledged how expensive it can be to find housing at market rates, especially on the East End.

Roshard Hunt, a Montauk server, said he was quoted $20,000 to rent a studio from Memorial Day through Labor Day.

Hunt, who works at 668 The Gig Shack, lives in Jamaica during the winter and shares a Montauk apartment with family from April through October. The three-bedroom house the 36-year-old usually rents costs $5,000 per month, an expense he splits with his parents, sister and cousin, who all work in the area.

Restaurant owner Gray Gardell-Gross provides seasonal housing for some employees, but Hunt isn’t one of them.

The tips Hunt makes as a server allow him to carve out a living in Montauk, he said. It would be more difficult to cover rent if he worked a job that relied on hourly wages, such as a dishwasher or supermarket worker.

“It’s too expensive,” he said.

‘Victims of their own success’

Long Island may have birthed the suburbs, but in the decades since, it has not developed a reputation for innovative housing, said Richard Murdocco, a Stony Brook University political science professor.

“Affordability has been the largest planning failure in this region since the 1950s,” he said.

The fact that East Hampton is considering a development as unorthodox as the one proposed at 350 Pantigo Rd. demonstrates the “depth of the affordability crisis in the region,” he said. “This conversation would have never taken place 15 years ago.”

The seasonality of the economy and extraordinarily high home prices in East Hampton and other South Fork municipalities make the region a bit of an outlier, he said, to the point that real estate data often excludes most of the East End.

“They are victims of their own success,” he said.

He added: “As costs continue to climb and we see the next generation struggling to get what their parents got, it's going to necessitate more unorthodox solutions like this workforce-sponsored housing.”

The proposed legislation in East Hampton has gone through two public hearings and could be considered by the town board in September. 

Before adoption, the board would need to review an environmental assessment form prepared by the town Planning Department, said Town Planner Eric Schantz. If no significant adverse environmental impacts are expected, the legislation would go to the Suffolk County Planning Commission. If the commission has no objections, the town board would then take a vote.

Several residents have criticized the proposed law during two public hearings, citing concerns about traffic, environmental impact and worker welfare, among other things.

At one hearing, East Hampton resident Mary Waserstein pointed out that employees would be building equity for their employers by helping pay the cost of a condo through their rent. She also highlighted the nearly $1 million price tag as a barrier to participation by mom-and-pop businesses. 

"Housing built for workers should give them security. However, when the boss is also the landlord, there is a chilling effect on a worker/tenant to speak up for themselves,” said Marty Glennon, a labor attorney who commented on the proposed legislation by email. 

“That is not the intended purpose of providing ‘workforce housing,’ ” said Glennon, a partner at Melville-based Archer, Byington, Glennon & Levine. 

Alaina Varvaloucas, executive director of Worker Justice Center of New York, raised a similar concern.

"Employer-provided housing sets up a situation where someone relies on the same person or entity for both their home and their livelihood," she said in an emailed statement. "Any one of us would consider losing one's job or one's home to be an inordinately stressful event, so the potential of losing both at once creates a power imbalance where workers are less likely to come forward about unlawful conditions."

Marcantonio alleged that much of the worker housing already tied to employment in East Hampton is illegal and unregulated.

"We're trying to bring transparency to the relationship between an employer and an employee by taking all of that out of the shadows," he said.

Councilman Ian Calder-Piedmonte, who sponsored the local law, said while it's "not ideal for workers to be tied to their employers for their housing ... that is currently the reality" and it's not improving. 

"It's harder and harder for individuals to find places to live. Anybody who speaks to a business owner will hear that this is one of the biggest concerns that they have. So I think this is something certainly worth trying," he said at an Aug. 11 work session.

Calder-Piedmonte and two other council members indicated that they'd be willing to move forward with the law. Two others, including Supervisor Kathee Burke-Gonzalez, said they do not support the legislation as written.

"I would only support this legislation if it called for eight units per acre and did not have the ability to have a special permit that would take up to 12 units per acre. And I still think that the AMI should be increased from 130% to 150%," Burke-Gonzalez said.

Marcantonio said if the development is built, only local businesses would be allowed to purchase units. 

He didn't deny that money would be made off the development, one of the complaints leveled by critics at public hearings.

“If you invest $25 million over five years, yes, you're going to make some money," he said. "You’d better.”

Newsday's Melissa Azofeifa contributed to this story.