Senator Marcellino And The Long Island State Senate Delegation Announce New Housing Initiative

 

Long Island’s nine-member New York State Senate Delegation today unveiled a new, $25 million program to make housing available for more Nassau and Suffolk County residents. As developed and funded by Long Island’s State Senators and administered by the Long Island Housing Partnership ("LIHP"), the Homeownership and Economic Stabilization for Long Island Program ("HELP") provides downpayment assistance and rehabilitation grants to eligible homebuyers.

At today’s announcement, Long Island’s State Senators—Dean G. Skelos (R-Rockville Centre), Owen H. Johnson (R- Babylon), Caesar Trunzo (R- Brentwood), Kenneth LaValle (R- Port Jefferson), Kemp Hannon (R-Garden City), Senator Carl Marcellino (R - Syosset), Michael A.L. Balboni (R-East Williston), Charles J. Fuschillo, Jr. (R-Merrick) and John J. Flanagan (R- East Northport)—were joined by LIHP President and CEO Peter Elkowitz and representatives from the region’s business and labor communities.

Senator Carl Marcellino said, "This program is about ensuring that more Long Islanders will realize the American Dream of home ownership. However, it is not just a housing program but an economic program and a revitalization program as well. It's about our quality of life now and in the future so that our communities remain strong and that businesses have the workforce that they need to prosper."

"Too many of our young people have been priced out of Long Island’s housing market," said Senator Skelos. "This has made it difficult for employers to attract the best and brightest to Long Island and hurt parents whose children have relocated to other parts of the country where housing is more affordable. HELP is a first-of-its-kind, public-private partnership that provides real assistance to homebuyers, encourages reinvestment in our neighborhoods and helps more working families."

Peter Elkowitz, President and CEO of the Long Island Housing Partnership, said, "The Long Island Housing Partnership is delighted that this pilot program will help those families who want to live and work on Long Island, achieve that goal. Employers will be able to retain and recruit the high caliber workforce that Long Island needs to maintain a strong economy into the future."

Beginning January 1, 2007, the LIHP will begin administering HELP. The Program will offer three key forms of assistance:

State Employer Downpayment Assistance Matching Grant

To encourage the creation of downpayment assistance programs by Long Island employers, HELP provides a 3-to-1 state match for these funds. To be eligible for state matching funds, employers with fewer than 50 employees must provide a minimum contribution of $3,000, with the minimum for larger businesses rising to $5,000. The total downpayment assistance package cannot exceed $40,000 ($30,000 state, $10,000 employer) and the appraised value of the purchased home cannot exceed Long Island’s median home price (currently $450,000).

· State Housing Rehabilitation Grants

To encourage community reinvestment and further lower upfront purchase costs, HELP provides homebuyers with up to $20,000 in additional funding for necessary repairs and the rehabilitation of existing homes.

· Local Workforce Housing Incentive

To encourage smart-growth policies in local government, HELP provides downpayment assistance in those municipalities that create "workforce" housing and revitalize downtown areas. The Long Island Index’s recent "Room for Growth" poll found that 60% of Long Islanders surveyed would be interested in living within easy walking distance of the downtown area of their town or village. Under HELP’s Smart Growth Development for Workforce Housing incentive, any developer who works with a municipality to provide workforce housing in downtown areas and hamlet centers in accordance with "Smart Growth" principles can obtain a project set aside of up to $25,000 per home to be contributed towards the homebuyer’s downpayment. The sale price of each workforce unit cannot exceed three times the median income on Long Island for a family of four, which currently amounts to $273,000.

"Smart Growth" development may include, but is not limited to, one or more of the following components: mixed-use development to increase economic activity in downtown areas or hamlet centers through the integration of commercial and residential land use; location near transportation hubs to utilize existing infrastructure and create "walkable" neighborhoods; compact building design as an alternative to conventional, sprawling development; and inclusionary zoning to create a range of housing opportunities.

Most existing affordable housing programs limit participation to individuals and families with incomes 80%, or less, of the median. Unfortunately, Long Island’s median home price is now more than five times its median income. As a result, homeownership has become unaffordable for families at, or above, the region’s median income. To address this problem, individuals and families earning up to 130% of Long Island’s median income qualify for HELP. This includes singles earning up to $82,800 and families of four with annual incomes of $118,300.

Hofstra University President Stuart Rabinowitz said, "The HELP program is sorely needed and I applaud our Senators' initiative. At Hofstra University we want to continue to attract the very best faculty to educate our students, and we want our graduating students to be able to live and work on Long Island if they so choose. We need programs like HELP to help make affordable housing a reality."

Ken Morrelly, President of LIFT, said, "The HELP initiative is a practicable near term solution to assist younghome buyers in purchasing a home. This initiative, which significantly leverages numerous company supported programs, makes it particularly focused on regionally retaining skilled workers, future scientist and engineers, a critical need in keeping the Island vibrant. Industry thanks Senator Skelos and the regional delegation for their insightful efforts tocreate such a program."

Bob Klein, Vice President of Engineering, Logistics and Technology, Northrop Grumman Corporation, said, "The HELP program will significantly improve our ability to both source and retain the talent needed for our high technology programs. We greatly appreciate the leadership and vision of Long Island's State Senators to implement this program in collaboration with industry."

Bill Wahlig, General Manager, EDO Corporation, said, "EDO Corporation has made a substantial long-term commitment and significant investments on Long Island. With this investment comes the need to retain a talent-ready workforce to meet the challenges for today and the future. This program will undoubtedly assist in meeting those challenges. EDO looks forward to reviewing the details of the HELP Program and seeing how it best fits our workforce needs.

Robert A. Wieboldt, Executive Vice President – Long Island Builders Institute said, "The HELP program touches all of the important workforce housing bases, purchasing, rehabbing and redevelopment, and is a real a home run by our Long Island leaders in Albany. This funding will make a genuine difference and help Long Island remain economically competitive."

In the past, the Long Island Senate Delegation created the Affordable Homeownership Program to encourage the development of affordable housing, funded low-interest mortgages through the State of New York Mortgage Agency ("SONYMA") and successfully lobbied the federal government to raise both the income and purchase price limits for SONYMA mortgages in Nassau and Suffolk counties to the federal maximum (90% of the regional median).

HELP LI – Fact Sheet

Program: Homeownership and Economic Stabilization for Long Island Program (HELP)

Purpose: The purpose of the HELP pilot program will be to assist Long Island employers with retaining and recruiting qualified employees by providing those employees with the financial assistance needed to purchase and rehabilitate housing on Long Island. It will also encourage developments and redevelopments in downtown areas and hamlet centers to improve the economic vitality within the community.

Most existing affordable housing programs limit participation to individuals and families with incomes 80%, or less, of the median. Unfortunately, Long Island’s median home price is now more than five times its median income. As a result, homeownership has become unaffordable for families at, or above, the region’s median income, yet they cannot qualify for existing programs. To address this problem, individuals and families earning up to 130% of Long Island’s median income qualify for HELP.

Background: Recognizing that housing plays a critical role in the economic well-being of New York State, the current shortage of affordable housing, especially for younger working people and those now entering the workforce, is the single greatest threat to Long Island’s regional economy. According to the 2000 U.S. Census, the number of 18 to 34 year-olds on Long Island decreased by 20 percent between 1990 and 2000. Moreover, a 2006 survey by the Long Island Index found that more than half of this age group has recently considered leaving Long Island, with an astounding 70 percent saying they are likely to leave within five years.

Clearly, as rising home prices continue to far outpace gains in wages, Long Island’s next generation is choosing to look elsewhere for a place to call "home". This dynamic not only tears at the fabric of communities by undermining the ability of Long Island families to stay together, but also stifles job creation as employers are confronted with a rapidly shrinking workforce.

In fact, both the business and labor communities on Long Island are united in their concern about the immediate and long-term impact of the "housing gap" on the region’s economic well-being. Many recent economic surveys show that businesses feel the number one obstacle to Long Island’s economic success is a lack affordable housing opportunities. In numerous news stories published over the last year, major Long Island employers have bemoaned the diminishing pool of new workers – especially skilled college graduates – with housing costs cited as the primary cause of what is now being termed Long Island’s "brain drain."

If this trend is not stopped and reversed, Long Island’s economy will soon face a lack of qualified employees to support its growing economic demands. Meaningful actions must be taken to ensure that Long Island communities remain strong and that its economy has the workforce it needs to drive future prosperity.

Funding: $25 million in Senate Majority Economic Development Funds.

Administrator: Long Island Housing Partnership ("LIHP")

Eligibility: Applicants must have an annual income at or below 130% of the HUD median income guidelines based upon family size:
Family Size Maximum Allowable Income
1 $ 82,800
2 $ 94,650
3 $106,450
4 $118,300
5 $127,800
6 $137,300
7 $146,650
8 or more $156,150

Program Components:

1. EMPLOYER ASSISTANCE HOUSING BENEFIT PROGRAM

An employer with one or more non-related employees who has or creates a recognized housing assistance benefit program as part of their employee benefit package may receive 3 to 1 state matching funds from HELP for each of their qualified employees.

Matching funds will be triggered by a minimum employer contribution of $3,000 per employee (businesses with fewer than 50 employees) or $5,000 per employee (50 employees or more). Employer contributions may not exceed a maximum of $10,000 per employee, for a total of $40,000 (employer + state). Funds will be provided at closing for downpayment assistance on the purchase of a primary residence by an applicant.

In addition to the principal reduction assistance, homebuyers will be eligible to receive up to an additional $20,000 in funding to make any necessary eligible repairs if they are purchasing a pre-existing home. The LIHP will assist the homebuyer in determining the type and costs of repairs required, as well as provide them with assistance in selecting a licensed contractor.

Eligible housing for the employee would be any new or pre-existing single-family residences located within Long Island, to be occupied as a principal residence, including Condominiums, Co-operatives or Manufactured homes. Residences cannot contain any rental units. The appraised value of the property to be purchased must not exceed the median price of a home on Long Island (currently $450,000).

HELP employer assistance benefits may be combined with existing employer assistance programs for qualified applicants.

2. SMART GROWTH DEVELOPMENT ASSISTANCE FOR WORKFORCE HOUSING PROGRAM

When a developer enters into an agreement with a municipality to build 5 or more workforce homes in downtown areas, hamlet centers or redeveloped properties in accordance with "Smart Growth" principles, and certifies such to the HELP administrator, the buyers of those workforce units can obtain a grant of $25,000 (per home) to be provided directly for downpayment assistance, not exceeding $1,500,000 per development. Eligible housing for the "Smart Growth Development Assistance for Workforce Housing" is limited to those developments approved by the local municipality to provide homeownership opportunities to those who meet the workforce housing criteria – the sale price of each unit may not exceed three times the median income on Long Island for a family of four, which currently amounts to $273,000.

"Smart Growth" development may include, but is not limited to, one or more of the following components: mixed-use development to increase economic activity in downtown areas or hamlet centers through the integration of commercial and residential land use; location near transportation hubs to utilize existing infrastructure and create "walkable" neighborhoods; compact building design as an alternative to conventional, sprawling development; and inclusionary zoning to create a range of housing opportunities.

Development must be located within Long Island, occupied as a principal residence which are single family dwellings including Condominiums, Co-operatives or Manufactured homes. Residences cannot contain any rental units.

This benefit may not be combined with HELP Employer Assistance.

Example of HELP Employer Assistance Benefit

This example illustrates how HELP would assist a typical Long Island family. Even with a household income of $110,000 (120% of median) and $30,000 saved for downpayment and closing costs ($20,000 down, $10,000 closing costs), this family cannot afford a house priced at $440,000, or just below median. With taxes at $6,000 annually, homeowners’ insurance at $1,200 annually and a 30 year fixed-rate mortgage at 6.5%, their monthly PITI payment (principal, interest, taxes and insurance) would be $3,255. This exceeds the 35% of gross income threshold to qualify for, and maintain, a mortgage. However, with a $5,000 employer contribution under HELP, this family can add $20,000 ($5,000 employer + $15,000 state) to their downpayment, bringing their monthly payment down to $3,128, which would qualify them for this home.