Overview and Cost Analysis of Proposed Construction of Community Housing

The proposal focuses on creating a portfolio of high-quality rental properties, specifically designed for long-term affordable housing, on land currently owned by the town of Shelter Island.

The plan involves developing three properties—12 S Ferry Road, 69 N Ferry Road, and 16 Manwaring Road—to create 10 units, comprising six one-bedroom and four two-bedroom apartments.

Six one-bedroom units will be located on S Ferry Road, with the remaining two-bedroom units distributed across two structures.

The land will either be contributed or leased to the developer at no cost. A private developer will be selected through a Request for Proposal (RFP) process to carry out all necessary work to secure a Certificate of Occupancy.

The winning proposal will also include property management services. The model assumes standard market-rate development costs and uses 2024.

HUD guidelines to determine rental assumptions for the units.

Property-level expenses are based on typical multi-family margins, excluding property taxes. It is assumed that property taxes could be waived or eliminated, depending on the ownership structure.

Purchasing a home on Shelter Island is prohibitively expensive, and rental units are difficult to find.

However, this challenge is compounded by a significant increase in material and labor costs, driven by widespread inflation, which has greatly impacted the cost of constructing new housing.