Assemb. Fred Thiele, Sen. Anthony Palumbo press for East End affordable housing money 

East End officials are rallying behind a state bill that, if signed by Gov. Kathy Hochul, would allow a new real estate sales tax to fund affordable housing initiatives on the North and South forks.

The Peconic Bay region community housing act, co-sponsored by Assemb. Fred Thiele Jr. (I-Sag Harbor) and state Sen. Anthony Palumbo (R-New Suffolk), would levy an additional half-percent real estate transfer tax.

If adopted, the law would need voter approval in the East End towns of East Hampton, Shelter Island, Southampton, Southold and Riverhead.

The bill has passed both the Assembly and the Senate and will soon be brought to Hochul’s desk.

Former Gov. Andrew M. Cuomo vetoed a similar bill in 2019, citing its impact on taxes.

Thiele said he had been in touch with Hochul, but did not want to presume what position she would take.

"The housing situation on the East End is critical and has worsened because of the pandemic," Thiele said in an email to Newsday.

"The bill would be the best option available to bring real resources to the problem," Thiele said. I'm hopeful that after looking at the facts, the governor will reach the same conclusion."

A Hochul representative did not immediately respond to a request for comment.

Affordable housing has long been an issue on East End, where many local residents find it difficult to afford homes.

Officials say the pandemic-driven real estate boom has worsened the problem.

The existing Community Preservation Fund is funded through a 2% tax on East End real estate transfers, but can only be used for preservation and water quality purposes.

If the new tax had been enacted in 2020 it could have generated $30 million for housing, with the majority of new revenue coming from home sales of $2 million or more, Thiele said.

The proposed state legislation also would increase exemptions and reduce the tax for all transfers under $1 million on the South Fork and Shelter Island, and for those under $400,000 on the North Fork, Thiele said.

East Hampton Town Supervisor Peter Van Scoyoc and other elected officials have signed a letter in support of the bill.

Thiele is seeking others outside government to sign on to the letter, which is expected to be submitted to Hochul in the next few weeks.

"It's mission critical that this gets passed," Van Scoyoc said.

"These pressures on housing are going to have such a negative impact to our economy, to our viability, to the fabric of our community," he said.

By Vera Chinese

vera.chinese@newsday.com@VeraChinese

Vera Chinese 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.