Riverhead should say no to IDA tax breaks for market-rate housing

Despite the critical need for more housing, Long Island builders have been resigned to letting unoccupied retail stores and malls stay vacant rather than face community opposition to change. But in Riverhead, change is afoot with plans to transform the former Sears property on Main Street into a five-story residential building with 165 market-rate apartments.

Such housing is welcome. It would revitalize a tired piece of land and fuel Riverhead's continuing downtown redevelopment efforts, the foundation of the town's revival. Riverhead should be applauded for welcoming more housing. However, town officials and Riverhead's Industrial Development Agency need to pay close attention to the details.

Those details don't add up. The developers are seeking 25 years of tax breaks from the IDA for a project that involves no workforce or affordable housing. Instead, the development team, which includes Heatherwood Luxury Rentals and Metro Group Properties, is proposing 52 studios, 80 one-bedroom apartments and 33 two-bedroom units — all at market rate, in what would be the largest downtown Riverhead housing project.

Officials have said the market-rate project complements other workforce housing in the town. Fine. We are sure the units would be rented very quickly considering current demand. But that doesn't mean this project deserves public subsidies in the form of a 25-year tax abatement. 

The project faces hurdles, including an environmental review, before it can seek IDA help. That means there's still time to rethink the details. A proposal that includes affordable housing for the workers Riverhead needs to attract would be a superior plan that might be worthy of some tax abatement.

The developers have said rising costs and higher interest rates make IDA assistance necessary. But if they're charging full market rate for the units, they should be able to build without the IDA. If they want help, they must provide renters with help, too.

Long Island needs housing, of all kinds. A 2021 report by Newsday's nextLI initiative — a resource and digital community that offers nonpartisan research on issues affecting the region — showed how repurposing retail can help propel that effort. By emphasizing downtown redevelopment and remaking old retail properties to add hundreds of residential units, Riverhead is doing its part.

But if builders can get tax breaks for market-rate or higher-priced housing, why would any developer ever choose to build anything on the more affordable end of the pricing spectrum? The only way to get developers to do so is by motivating such construction. The IDAs can do that if they are willing to say "no" when higher-priced developments come their way.

Riverhead is poised to become a model for what's possible when public officials and private developers come together to revitalize a downtown. But that has to start with meeting the needs of all who'd like to call Riverhead home.