I.P. Housing scandal ends with a whimper

Federal officials, Island Park agree to withdrawal of housing lawsuit


In the early 1980s, affordable housing for minorities sounded like a good idea to federal officials, but implementing that idea in Island Park turned into decades of controversy and legal maneuvering. The contention finally ended on March 4, with a stipulation between the federal government and the Village of Island Park to withdraw a federal lawsuit that had been simmering since 1989.

In 1982, the federal government allocated money to build affordable housing for minorities in communities that were mostly white and where land was available.

Island Park, the home of Alfonse D’Amato, who was then the Town of Hempstead supervisor, became one of the targeted communities, and 44 subsidized homes were quickly built on a tucked-away road, named D’Amato Court. “Qualified owners” were identified, and the homes were bought and occupied.

In 1984, however, an audit by the federal Department of Housing and Urban Development, which had funded and built the homes, found that village officials had rigged the distribution of the houses so that most of them went to “politically connected residents” — including a relative of D’Amato’s, the son of a village board member and other “political insiders.” The minorities who were supposed to get the homes, the audit said, did not. In fact, it concluded, not one of the 44 homes went to a minority family.

The audit also showed that a number of people who did get the homes resold them for large profits. Records showed that they paid between $40,000 and $63,000 for their homes, and resold them a year or two later for as much as $270,000.

In 1999, after years of litigation, Steven Gold, a federal magistrate, ordered Island Park to pay a $5.4 million fine — about $1,000 for every resident of the village. The ruling also called for village officials to actively recruit minorities to move there.

The U.S. Attorney for the Eastern District suggested what some officials considered an even more draconian solution: Moving everyone out of the new homes and redoing the original application process in order to ensure that minorities got them.

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