Suffolk offering bigger tax breaks for affordable housing developers

Developers in Suffolk County now have bigger financial incentives to create affordable rental housing as well as designate units for veterans and those with physical and intellectual disabilities.

The Suffolk County Industrial Development Agency's board of directors voted unanimously Thursday to implement a policy offering “enhanced” benefits to developers in exchange for creating additional units.

The policy notes it has been the agency's long-standing practice to award benefits to projects that set aside 10% of units at reduced rates for people earning less than 80% of area median income. That equals $102,000 annually for a family of four on Long Island in 2023, according to the U.S. Department of Housing and Urban Development.

Enhanced financial assistance will be available to projects that set aside more than 10% of units as affordable, those that have even lower income eligibility requirements and those that reserve units for veterans and disabled people.

The benefits will be decided on a case-by-case basis and could include longer terms for tax abatements or larger tax reductions in the early years of a project, according to Suffolk County IDA acting Executive Director Kelly Murphy.

“We need housing of every kind in Suffolk County, but the intention of this policy is to create as many affordable units as possible and to ensure the variety of housing needs for Suffolk County’s diverse populations are met,” Murphy said. “Especially true in today’s climate, margins can be razor thin when constructing multifamily housing, which is why this policy seeks to provide a scale of increasing benefits based on the number of affordable units and their designations to be created.”

David Gallo, president of Georgica Green Ventures LLC, which has developed around 1,000 units of affordable housing across Long Island in the past 10 years, called the policy “forward thinking.”

“I hope it's successful in creating more diversity in housing,” said Gallo, who has an 11-year-old daughter with physical and intellectual disabilities.

But Legis. Al Krupski (D-Cutchogue) noted that while the policy addresses a short-term need, the region must create more units that will be affordable in perpetuity.

“That’s the goal, creating something not just for today,” Krupski said.

IDAs can only mandate that projects designate units as affordable during the life of the tax abatements, which typically run from 10 to 15 years, according to Murphy.

Mike Florio, CEO of the Long Island Builders Institute, which represents home builders and remodelers, said the group supports the policy. 

Suffolk County Legis. Nick Caracappa (C-Selden) and Legis. Jim Mazzarella (R-Moriches) had advocated including veterans and the disabled in the policy. Legislation sponsored by Caracappa and signed into law this year requires affordable housing projects that receive county funding to set aside units for veterans and disabled residents. Both legislators attended the IDA meeting to speak in favor of the policy.

Also Thursday, the IDA board voted 5-0 to recapture 75% of the benefits awarded since 2016 to a Copiague cleaning product company. Ecoclean Solutions Inc. owner Eric Sternberg told the board he sold the business’ assets in 2020.

Newsday reported in 2016 the Suffolk IDA had awarded the company, which produces environmentally friendly cleaning products, $258,700 in tax breaks over 12 years in exchange for creating five jobs.

Sternberg asked to terminate the agreement without paying the money back, arguing that he created jobs while the company was active. The board denied his request. The total amount the company must return has not yet been calculated, Murphy said.

"If clients don't fulfill their promise to the constituents, then they have to return the money," Murphy said.

By Vera Chinese

vera.chinese@newsday.com@VeraChinese

Vera Chinese covers Suffolk County government and politics. She joined Newsday in 2017 after working as an editor for the East End lifestyle publication northforker and a general assignment reporter for the New York Daily News.