The persistent “trade parade” — the daily procession of workers trekking into the Hamptons from points west — has long highlighted how the housing crisis in the Hamptons has outrun years of policy talk.
Available living space for anyone not wealthy remains limited across the East End, even as the region’s policymakers have devoted meetings and discussions to the quandary.
Several years ago, the region, home to several of the country’s priciest housing markets, found a promising tool: the Peconic Bay Community Housing Fund. A 0.5 percent tax was tacked onto home sales in Southampton, East Hampton, Southold and Shelter Island, pivotally shifting revenue from land conservation toward housing. (Riverhead chose not to participate.) The towns passed the measure in 2022, after being backed by Assemblymember Fred Thiele and allowed by a law Gov. Kathy Hochul signed in 2021.
Passing the referendum was “monumental,” Douglas Elliman real estate broker Mike Daly, who has been an agent in the region for more than 25 years and a community housing advocate for 10, said.
It’s “an acknowledgement of the fact that we need to focus on community housing for the East End,” Daly said.
It has met expectations of pulling in cash. Participating towns brought in $79.12 million during the program’s first three years, Assemblymember Tommy Schiavoni reported in March.
But the dollars haven’t morphed into rooftops. Even with funds on hand, zoning remains a massive roadblock. Carving out pockets of affordability often sparks fierce local pushback. Ahead of the referendum vote, lawn signs warned of “high-density housing.”
In addition, environmentalists learned to use state environmental reviews to block projects they deemed undesirable, though recent reforms could change that strategy.
Facing these obstacles, Southampton recently approved an affordable housing overlay district to push workforce projects into pricey enclaves east of the Shinnecock Canal. The rules allow for developments of 10 to 35 units on lots as small as 60,000 square feet, a move meant to break the pattern of clustering affordable units to the west.
Town planners point to Sandy Hollow Cove Apartments — a 28-unit complex, north of Montauk Highway, designed to look like a manor residence — as proof that denser housing can coexist with luxury neighbors.
“The pain of not having community housing is starting to get bigger than the perceived pain of allowing affordable housing.”
Progress remains sluggish, since the town board has to approve each application to the overlay district. Four projects totaling 58 units in Tuckahoe, Water Mill, Shinnecock Hills and North Sea have been waiting for approval. Councilperson Cyndi McNamara noted in December that residents often think these projects are a “done deal” once the money is there, leading to frustration when red tape stops the work.
“It has to go through an entire change-of-zone process…and it’s years and years down the line,” McNamara told 27east. To speed things up, she secured “floating” overlay districts to help projects with community support get moving faster.
Shelter Island is a world of its own, considering its relatively small population. According to the Shelter Island Reporter, the Community Housing Board is hoping to break ground on 10 affordable units by the fall, which would be the first developed in the 21st century.
In East Hampton, the town board recently proposed changes to encourage employer-sponsored housing for workers earning up to 130 percent of the area median income, but most current plans have yet to make a dent in the local shortage.
Cantwell Court in Amagansett hit delays when construction bids came in too high, although a $7 million grant from the state eventually saved the 16-unit project. Meanwhile, a 50-unit plan in Wainscott that East Hampton transferred to the housing authority in 2024 is still tied up in studies with no shovels in the ground yet.
While the Community Housing Advisory Board meets monthly, results are hard to track and meeting minutes are rarely posted on time. For now, the East End continues to rake in millions, but the road from funding to actual housing remains long and full of turns.
It’s “like a big giant ball of wax that needs to be unrolled,” Daly said. “It’s happening, but it’s not happening fast enough.”
One possible push? Towns reworking their funds to deprioritize preservation (which still makes up the larger chunk of the sales tax) and prioritize affordable housing. Towns may be able to hold referendums in the future if they want to rebalance funds
Daly also said that the towns should look for fresh ideas, including relaxed rules around accessory dwelling units and increased interest in building smaller houses on smaller lots.
Recently, the Long Island Builders Institute formed a coalition designed to advocate for issues related to permit delays on projects and renovations, according to Newsday. Increasing affordable housing is part of the agenda.
More than policy or money, a successful affordable housing push might mean changing hearts and minds in addition to complex zoning. That’s starting to transpire in such places as Southold; Daly attended a recent hearing at which a majority of people got up and spoke in favor of affordable housing, one of the first times he’s witnessed that.
“The pain of not having community housing is starting to get bigger than the perceived pain of allowing affordable housing,” Daly added.