Building Together: The Need for Joint Efforts in Long Island’s Housing Market

Photo credit: Bisnow/Ciara Long

Long Island needs a stronger spirit of cooperation between municipalities and private developers if the region is going to find realistic solutions to its many housing challenges.

That was the prevailing theme at last week’s Bisnow Long Island State of the Market event in Garden City, where a panel of industry experts focused on ways to attract capital and new construction to a region notorious for inflexible and inefficient layers of government. Often, they said, a lack of collaboration leaves developers fighting through Long Island’s many roadblocks alone.

“There has to be a greater meeting of the minds between private developers and the municipal world,” said Rich Humann, CEO of H2M Architects and Engineers. “When the developer has to create momentum on its own, it’s a significant challenge.”

TRITEC Executive Vice President and Partner Jimmy Coughlan said municipalities should at least have commercial real estate experts guiding them on the financial framework and benefits of potential developments. This type of input, Coughlan said, would help municipalities see “what’s going to pencil, what’s not going to pencil, and how you could get the formula right to make sure projects still move forward.”

Coughlan cited TRITEC’s work in Patchogue, where cooperation with local government paved the way for 50 new businesses around its New Village mixed-use development, increased tax revenue and generated a $5 million surplus to the local school district.

“That’s a tried-and-true business case that happens across Long Island,” Coughlan said.

In contrast, Joseph Graziose Sr. of RXR pointed to an MTA project on Post Avenue in Westbury that failed to progress because it did not make sense financially. “Developer input early in the process can guide projects,” he said.

Ultimately the burden is on Long Island governments to create an environment that welcomes new developments to address regional housing needs. “You can’t scream about people leaving and affordability,” Humann said, “and at the same time provide no opportunity for a more effective process for developers.”

The panel discussed New York State bill A7532B, which if passed would require Industrial Development Agencies to have a representative from a local school board or a school superintendent. Gwen O’Shea, president and CEO of Community Development Corporation of Long Island, said some projects, especially affordable housing, would never work financially without the assistance of IDAs. She also questioned whether influencing the location of residential development falls within a school district’s authority.

Coughlan said the school representation issue leaves him “puzzled.”

“School districts are letting teachers go because they don’t have enough kids,” he said, “but they also don’t want any housing because it might bring more kids. At the same time, there have been countless studies out there that show [IDAs] are putting properties back on the tax roll and increasing the tax revenue to the town for that property.”

In terms of capital investment, Steve Simonelli, senior managing director of JLL Capital Markets, described Long Island as a “double-edged sword” because of the market’s great promise and potential but also its slow speed compared to other regions, some as close as New Rochelle and White Plains.

“Capital wants to be here, it just doesn’t have the patience to be here,” he said. “Huge institutions like JP Morgan want to be on Long Island. They know how safe and strong it is.”

Graziose Sr. is confident Long Island is at “the bottom of the U” in today’s turbulent economic climate and that projects will begin to advance more quickly over the next 12 to 18 months.

“You’ve got to stay the course on Long Island,” he said. “The developers on Long Island recognize it might take a few years, but if you don’t give up, you’ll actually get things done.”

“I see good in the future.”