East Hampton affordable housing plan gets boost with $3 million state grant

East Hampton Town has won a $3.17 million New York state grant to pay for infrastructure to support the construction of 50 new affordable apartments in Wainscott.

The grant will fund a sanitary system, water lines and sewer lines for the apartment complex, which will be built just outside the Village of Sag Harbor on Route 114, also known as East Hampton-Sag Harbor Turnpike. The apartments will be owned and operated by the East Hampton Housing Authority and rented to people earning up to 130% of the median income on Long Island, which is $164,900, according to U.S. Department of Housing and Urban Development, which sets the figure. 

“This funding allows us to put in the water and sewer infrastructure needed to make year-round affordable housing possible,” Supervisor Kathee Burke-Gonzalez said in a statement. “It’s a practical investment that helps support housing while also protecting groundwater and our waterways.”

The town acquired two lots, 776 and 780 Route 114 — that together span a combined 6½ acres — in 2019 and 2020 for $1.86 million. In March 2022, the town granted the properties the Affordable Housing Overlay District designation, increasing how much housing density is allowed on the site.

The town transferred the property to the housing authority in August 2024.

The East Hampton Housing Authority is nearing an agreement with a company to co-develop the project, executive director Katy Casey said in an interview. The development is needed to increase housing options for middle-income families, she said.

ZIP codes in the Hamptons have some of the most expensive home prices in the country, and the median home in the region continues to rise. In the third quarter of 2025, the median sales price for a Hamptons home was $2 million, according to the real estate company Douglas Elliman, which tracks the East End real estate market. 

“In our market, you can make $150,000 a year and probably never get into ownership or rent comfortably, unless you have generational wealth,” Casey said. “So we're targeting that higher income cohort, because they've fallen in the gap.”

Preference will be given to people who already live or work in East Hampton Town, Casey said. The apartments will range from one to three bedrooms, though the final unit mix has not yet been determined, she said.

Casey said the housing authority’s existing apartment complexes have large waitlists.

In addition to the state grant, the project has received $1.5 million from East Hampton Town’s Community Housing Fund. The fund was approved by voters in 2023 and generates revenue through a 0.5% real estate transfer tax.

“It's kind of a drop in the bucket for big, for-profit, residential luxury [builders],” Casey said, referring to the CHF tax. “It's another tax, yes, but I think the community is going to see the benefit.”

The total funding request for the project was $7.5 million, but the town’s Community Housing Fund advisory board recommended only $1.5 million and said the authority should apply for additional funding at a later date, Newsday previously reported.

In addition to new housing developments, East Hampton Town officials are looking at other ways to make housing more affordable, including a new construction loan program for homeowners to incentivize accessory dwelling units. The town is also considering updates to its first-time homebuyer down payment assistance program.