IDA housing tax breaks and affordable rents
The Riverview Lofts at 221 East Main St. in Riverhead, a housing development. Credit: Newsday/Thomas A. Ferrara
Why IDA tax breaks are good for LI
Long Island faces a housing crisis and a critical need to build more multifamily housing in our downtowns. Many of these developments require private financing to build. Higher interest rates, besides increased land, labor, material and insurance costs, make these developments harder to get financing.
Additionally, if these developments were burdened with the full tax value, there would not be enough return on investment for capital partners to finance, especially during the construction phase when no income is generated.
This is where an Industrial Development Agency can step in and approve a Payment in Lieu of Taxes (PILOT) to phase in full taxes over a set period [“Say no to IDA housing breaks,” Editorial, June 28]. Unfortunately, these are often reported as a “giveaway” to developers, but it’s important to understand that these PILOTs are substantially higher than if the project never went forward.
In the Riverhead project, the current vacant lot in the middle of downtown generates $24,307 in tax dollars per year, compared with the PILOT payment, which would be hundreds of thousands of dollars when phased in at full value. The IDA’s support benefits the entire region, creating a huge multiplier effect with a critical mass of residents living downtown supporting local businesses, stimulating tremendous economic activity.
By enabling multifamily housing development that would otherwise be unable to secure private financing, we can increase the availability of housing stock, which is stymieing Long Island’s economic growth and long-term sustainability.
— Mike Florio, Islandia
The writer is CEO of the Long Island Builders Institute.
This is ‘affordable’ rent these days?
How is $2,021 for a new studio apartment in Westbury “affordable” rent [“Affordable housing lottery for Westbury complex,” Long Island, July 3]? Affordablehousingonline.com lists $1,536 as fair market rent in Westbury. Many say rent should be 30% of income, so a single renter would need a monthly salary of $6,000 a month. “Middle class affordable”? Maybe.
— Christine Gietschier, Westbury
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