Two-family houses proposed for E. Pine Street in Long Beach

East Pine Street, in Long Beach’s North Park section, has long been a reminder that there are residents in the City by the Sea who struggle, but life on East Pine might soon be changing for the better.

A Long Beach developer has partnered with Habitat for Humanity in the hope of converting six homes on East Pine, in largely Black North Park, into two-family homes that would be rented at federally approved affordable rates. Through this program, officials said, more homes for families in need would be created, complete with outdoor decks, central air conditioning and backyards.

Darren Gallo, of Long Beach Living LLC, appeared at a virtual meeting of the Zoning Board of Appeals on Feb. 25 to ask for variances to convert homes at 24, 26, 82, 88, 114 and 118 East Pine into two-family dwellings.

Under the plan Gallo outlined for the ZBA, the homes would be rented for 10 years, and the renters would be given the first opportunity to purchase them. Rents would be about $2,650 a month for the houses, which would have three bedrooms and two bathrooms.

The ZBA reserved a decision on the matter, but might reach one later this month.

The rentals would not be limited to Long Beach residents. Six of the 12 renters would be selected by Habitat for Humanity. The proposal raised questions from ZBA members, who asked how renters would be able to afford to purchase the homes. Gallo said that Habitat for Humanity was working to see if there are government programs to help those who want to buy.

The houses are in a federally declared Opportunity Zone, where they can be rented at below-market rates. Gallo said that federal guidelines allow $2,650-a-month rents. Long Beach real estate brokers said last week that the market rates for the three-bedroom homes would be in the high $3,000s per month. Gallo told the ZBA that regulations governing Opportunity Zones prohibit their sale for a decade.

Opportunity Zones were created by the Tax Cuts and Jobs Act of 2017, and are aimed at stimulating investment, economic development and job creation in economically distressed areas. There are other such zones in Nassau County.

Dennis Kelly, Gallo’s attorney, said that Gallo wanted to install staircases in the homes to allow them to accommodate two families. The house at 82 East Pine, Kelly said, is currently occupied. No. 11, he said, is a “shell” that needs to be completed. No. 88 was abandoned, but is now rented and occupied.

No. 82 is already occupied; Nos. 114 and 118 are “shells,” according to Kelly. Nos. 24 and 26 are just foundations; No. 88 has not yet been demolished.

Gallo said that converting the homes to two-family residences would benefit the surrounding community and Long Beach as a whole. The six homes, he said, would comply with Federal Emergency Management Agency regulations, and be protected against storm damage.

“The rest of the houses on the block are not FEMA-compliant,” Gallo said. “These would be an improvement.” He said he got involved in the project to refurbish the homes to help the neighborhood and the city.

He would also be eligible for tax breaks. According to federal regulations for investments held for at least 10 years, investors pay no taxes on capital gains produced through their investment in an Opportunity Fund, the investment vehicle for an Opportunity Zone.

Capital gains are the profits made when investments or properties are sold for more than the purchase price.

Myrnissa Stone-Sumair, executive director of Habitat for Humanity in Nassau County, told the ZBA that renters would be “mortgage-ready” before they were offered the chance to buy a house. She said they would be people with good jobs who might need a hand to purchase a house. They would also receive financial advice on how best to save to buy their homes one day.

James Hodge, chairman of the Martin Luther King Center in Long Beach, appeared before the ZBA and said he backed the plan. “I’m excited by this,” he said. “This is such an amazing opportunity.” Hodge said that when the Rev. Dr. Martin Luther King Jr. visited Long Beach in 1968, a few weeks before he was assassinated in Memphis, Tenn., “There was talk then about the deplorable condition of East Pine Street.”

But Gallo’s proposal raised questions among ZBA members. Its chairman, Rocco Morelli, said the plan “is like a tease,” because the renters might have a hard time finding the money to buy the homes. “This is a tough economy for everybody,” Morelli said. “It’s tough to save money these days. I worry about people being disappointed when somebody else comes along and buys” the houses.

Morelli and several other board members asked whether some of the rent money could be set aside as a down payment on the homes. “We’re going to talk about this in the future,” Gallo said, referring to his company and Habitat for Humanity.

Morelli said it would be “a good idea not to rush” a decision.