117-unit Melville development, nearing completion, brings new type of affordable housing to Long Island
With about 75 prospective purchasers in attendance, a lottery was held at Huntington Town Hall July 12 to choose the order in which 171 applicants will be contacted to continue the qualification process for the 117 town house units at Highland Green, Long Island’s first limited equity cooperative, which is nearing completion on Ruland Road in Melville.
The lottery was conducted by the developer, D&F Development Group, in cooperation with the Long Island Housing Partnership and the Huntington Community Development Agency. The Town’s community development director, Joan Cergol, helped pull the names. She was joined with the lottery in progress by Huntington Supervisor Frank P. Petrone and Council Members Mark Cuthbertson and Tracey Edwards, who were delayed by a lengthy Town Board meeting (the meeting’s length also relocated the lottery to a Town Hall conference room instead of the scheduled Town Board room).
Both Supervisor Petrone and Councilman Cuthbertson, in speaking to the prospective cooperative shareholders, noted the importance of the limited equity cooperative concept as a new approach to affordable housing on Long Island. Supervisor Petrone first raised the idea in 2014 as the settlement of lawsuit brought against the Town more than a decade ago.
Of the 117 units, 93 will be available to persons whose income does not exceed 60 percent of the area median income ($45,780 for an individual, $65,400 for a family of four). The remaining 24 units will be available to persons whose income does not exceed 80 percent of the median ($55,800 for an individual and $79,650 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.
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 $2,212 and $3,000, depending on the income level, and the monthly maintenance charges would be between $1,106 and $1,500.
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.
Persons with questions can call the developer at 516-437-0900 or the Long Island Housing Partnership at 631-435-4710.