Melville development, scheduled for Spring construction start, brings new type of affordable housing to Long Island
Huntington Supervisor Frank P. Petrone announces that the developer of Long Island’s first limited equity cooperative – a 117-unit town house project planned for a site on Ruland Road in Melville – has obtained the necessary financing and that construction should begin in the Spring.
“This is a major step toward building the first example of what could become an important affordable housing option for Long Island,” said Supervisor Petrone, who first raised the idea last year as the settlement of lawsuit brought against the Town more than a decade ago. “I am, happy that the financing is in place and that the project is ready to proceed.”
The developer, D&F Development Group, obtained its financing from a variety of sources, including the New York State Housing Finance Agency, the New York State Affordable Housing Corporation, the Suffolk County Department of Economic Development and Planning and the Long Island Housing Partnership, which will administer the lottery for the units in cooperation with the developer and the Town. Private banks are also involved.
“D & F Development wants to thank all of our partners who have worked diligently to bring us this far, the Town of Huntington, the State of New York Housing Finance Agency , Suffolk County and the Long Island Housing Partnership,” said Peter Florey, principal of D&F. “We look forward to moving ahead with the development and are confident that Highland Green will be a model that encourages a long term commitment to our community and provides a new prototype of economically accessible equity housing for Long Islanders.”
“I look forward to continuing to work with the Town and D & F Development as this development proceeds and we assist the future co-op owners,” stated Peter Elkowitz, president of the Long Island Housing Partnership.
“The limited equity cooperative is an innovative method and another tool to enable Suffolk County to provide much needed housing to retain our workforce and to implement our economic development initiatives, particularly, within the growing commercial Route 110 area,” Suffolk County Executive Steve Bellone said. “It was no small effort to secure the funding sources and to bring all the parties together but working with D&F Development, LIHP, Supervisor Petrone and the State, we were successful.” The County supported the program as part of its Connect Long Island initiative that aims to create new mass-transit connections between major roadways, Long Island Rail Road stations and transit-oriented downtowns to relieve traffic congestion, increase mobility, and spur economic growth.
Of the 117 units, 93 will be available to persons whose income does not exceed 60 percent of the area median income ($44,150 for an individual, $63,050 for a family of four). The remaining 24 units will be available to persons whose income does not exceed 80 percent of the median ($58,850 for an individual and $84,100 for a family of four). Ten percent of the units will have preference for certain veterans, 10 percent will be for handicapped persons and four percent will be for the hearing or visually impaired. The development will have 72 one-bedroom units, 39 two-bedroom units and six three-bedroom units.
Last year, Supervisor Petrone proposed the limited equity coop as a way of settling the
litigation that stemmed from a development, then called the Sanctuary at Melville, that was to be built as part of the approvals that allowed for construction of the over-55 community The Greens at Half Hollow. The developer for that project, as one of the provisions allowing in return for increased density at the Greens, was required to construct affordable one-bedroom units at the Ruland road site. At issue in the suit were both the one-bedroom restriction and the fact that the units were to be for sale and no rentals. In suggesting the limited equity co-op alternative, Supervisor Petrone noted that they had been successful elsewhere in the country as a way of creating units where residents could earn equity while making rental-level monthly payments.
Limited equity cooperatives are designed to provide affordable home ownership to qualified income eligible residents by allowing residents to purchase shares in the development for a minimal amount of equity investment.
In the case of this co-op, purchasers will pay the equivalent of two months’ maintenance as a down-payment and there is no mortgage or other type of financing required for the purchaser. For the one-bedroom units, it is anticipated that the down-payment would be between $1,880 and $2,600, depending on the income level, and the monthly maintenance charges would be between $940 and $1,300.
Residents will build equity because part of their monthly payments will go towards the reduction of a $10.8 million tax exempt bond used to finance the construction. The equity build up is equivalent to the remaining amount of the bond after amortization. The Limited Equity cooperative is structured to encourage long term stakeholders in the community. As such, shareholders will accrue equity benefits over time through the payoff of bond debt.
Florey said he expects to break ground in the spring and for the project to be complete by November 2016.
Persons with questions can call the developer at 516-695-9339, or the Long Island Housing Partnership at 631-435-4710.