Mitch Palley Recap

On February 5, Mitch Pally, Long Island Builders Institute CEO, discussed the urgency of redeveloping underutilized shopping centers on Long Island during the LIMBA (Long Island Metro Business Action) meeting. The transformation of these shopping centers would focus specifically on revamping existing office and retail complexes and turning them into residential units. 

Mr. Pally said the demographics of Long Island are changing, with more people living in single-family households than ever before. Many of those people who want apartments are either unmarried, young people, or single parents. As a result, demand for rental apartments will outpace supply. 

When embarking on a project this large, many wonder how much will it cost and what obstacles are going to be thrown their way, Mr. Pally said the cost of development is seemingly at the forefront of the builders’ minds as the cost of land is at an all-time high. Lee Silberman, CEO of Suffolk County Habitat for Humanity, pointed out many Long Islanders struggle to live comfortably while maintaining economic stability. Therefore, redeveloping underutilized centers would provide vast amounts of living space that will benefit the community. 

When remodeling these centers, it is critical to take into consideration the target market and the location, Mr. Pally said. Ultimately, these apartments would be mainly geared toward younger people who are seeking affordable housing with all amenities located nearby. In this particular instance, the apartments are going to be located within walking distance of stores. “If you need your car to get a bottle of milk, we haven’t accomplished anything,” he said. If the development is located near a main corridor, there will most definitely be a bus route in place. While the bus system may require some renovation, officials are willing to undergo these changes to amplify public transportation in hopes of it being an integral part of the new housing units. 

According to Mr. Pally, building codes and regulations sometimes discourage developers from building affordable housing. Building officials in many towns say it’s the zoning laws. These vacant properties at the moment are zoned as retail or offices, “so we have to change the zoning either individually by each property or collectively across-the-board to allow this to happen,” he said. “That is one of the great impediments to making this happen.” 

Another issue that Mr. Pally addressed was how to build affordable housing in the most environmentally friendly way. He said that energy efficiency is an integral part of all of this, and the ability to power more of these types of projects with solar energy is becoming more common because it’s more cost-effective. Additionally, PSE&G said it is starting to work on solar energy, but it would take a while for people to integrate it and get used to it. “Evidently it’s much easier to convert when you have the density available to do it,” he said. “It’s much easier to put solar panels on an apartment complex that has 400 units than it is to go house to house, so you’ll see more of that in the coming years.”

Transforming empty office and retail spaces into residential units has been tremendously beneficial in other parts of the country, Mr. Pally said, so there is no reason why it can’t work on Long Island. “We’re not saying take over the entire shopping center, but take over portions of it and put residential apartments there in that regard,” he said. “It is good for the environment. It is good for the economy. It is good for the local community. It is good for the regional community. And it is good for the state of New York.”