Hamptons Real Estate: How is the Town of Southampton Trying to Preserve the Land?

The Hamptons is a thriving year-round community with a healthy tourist industry. It is the preservation of land that since the 1970’s has kept the vistas serene. We wondered, just what is Southampton doing to preserve the natural landscapes? The answers might surprise you.

“Suffolk County is the leading agricultural county in New York State in dollar amounts of agricultural products grown,” according to Wikipedia, the free online encyclopedia. “The eastern end of Suffolk County supports a thriving tourist industry because of its many miles of sandy beaches, open spaces, and rural atmosphere.”

I met with Town of Southampton Planning Director, David Wilcox, to discuss ways that the Town in the heart of the Hamptons is attempting to preserve the rural character of Southampton. The concerted effort began in the 1970’s when the newly elected Suffolk County Executive, John Klein, envisioned the idea of purchasing farmland development rights.

By the early 1980’s, Suffolk County towns, including Southampton, sold bonds to raise money to purchase development rights. This effort toward, land preservation was followed in 1998, when residents of the five towns of Eastern Long Island – Southampton, East Hampton, Shelter Island, Southold and Riverhead – voted to approve a referendum creating the Community Preservation Fund, financed by a 2% tax on the transfer of real property, known locally as “The 2% Tax” at a closing.

In Southampton, East Hampton, and Shelter Island, the first $100,000 of the sale of unimproved properties is exempt, and the first $250,000 of improved properties is exempt. In Southold and Riverhead, the first $75,000 of the sale of unimproved properties is exempt, and the first $150,000 of improved properties is exempt. Southampton, East Hampton, and Shelter Island allow an exemption from the tax for qualified first-time purchases of a primary residence. Currently, Southold and Riverhead do not. In 2006, the voters in the five towns extended the program from 2020 to 2030. The County also sets aside 1/4% of the sales tax for preservation.

The Town of Southampton began its participation by identifying properties that qualified for preservation based on the environmental benefits to be derived from their purchase. Owners of properties not on the qualified list who are interested in selling the properties may ask the Town to amend the list. The Town may also purchase properties of historic value.

Another tool that the Town may use in its efforts to achieve preservation and achieve an orderly development for a variety of housing choices is the use of the transfer of development rights (TDR Program). If the town purchases those rights, it may “bank” them if the right to do so is included in the resolution authorizing their purchase. These rights can then be transferred to developers as an incentive to preserve other properties or build affordable housing. The Town is in the process of creating a registry of rights the Town has acquired and make it available to developers who may use them for sanitary sewer credits for Department of Health approval.

The Town has also identified “sending” districts, areas of high density, and “receiving districts,” areas of low density. In some cases, the TDR Program will allow development of greater residential density than would be allowed in the receiving districts. The Pines Barren Area, although not administered by the Town of Southampton, is a residential receiving district. The town also tries to encourage the development of affordable housing in its zoning code by allowing increased density for affordable housing. Another attempt at making housing more affordable is the planned clustering in sub-division approvals. The Town has the authority to make the planned clustering mandatory.

A further attempt to encourage preservation is the exclusion of properties gifted to the Town and the payment of the Community Preservation Fund Tax. Non-profits involved in preservation, such as the Peconic Land Trust, are also exempt from having to pay the tax, although contrary to popular belief, the CPF taxes do not go to the Peconic Land Trust.

In addition to purchasing properties and development rights with the CPF funds, the Town may also borrow from anticipated revenues through 2030 when the fund is due to expire.

On May 31, 1931, the Town of Southampton created the Town Planning Board. Before that date, “Old File Maps” determined property uses. The Town did not have the benefit of zoning or planning board review. Properties on Old File Maps are non-conforming, and although non-conforming permits the use that was conforming before the change in zoning, the Town does place restrictions on the development of these properties out of environmental concerns. To implement the TDR Program, the Town Board created the Southampton TDR Clearing House & Bank pursuant to Town Code Chapter 244(6). The bank will issue TDR Certificates through a procedure set forth in the Town Code section 244 and monitor their use in receiving areas. The Town is hopeful that developers will seek the opportunity to take advantage of the granting of these Certificates. The landowner does not have to wait to find a buyer to receive the Certificates. The Town can issue the credit to the owner, the land is preserved freeing the owner of tax payments, and the Certificates can be marketed.

Anyone interested in learning more about this program may contact David Wilcox, Planning Director, Town of Southampton Department of Land Management. He can be reached either online at [email protected] or via 631-702-1810.