Comptroller Levine emphasized that the Adams Administration’s FY26 spending levels, which exceed revenue, and failure to properly budget for known, re-occurring expenses, have led to unusually high budget deficit projections for FY26 and FY27.
Gov. Kathy Hochul’s 2026 State of the State address, delivered on January 13 at the Capitol, sent a clear and long-overdue message to the business community: New York State must become a more business-friendly place to invest, build, and grow—without abandoning its core commitments to environmental stewardship, equity, and quality of life. From the vantage point of commercial real estate, economic development, and capital deployment, the governor’s proposals are both pragmatic and consequential.
For those of us who work daily at the intersection of land use, infrastructure, housing, and job creation, this State of the State reflects something we have been urging for years: New York cannot regulate its way into prosperity. It must build its way there.
Why the 2026 State of the State Matters to Commercial Real Estate
Gov. Hochul’s agenda directly addresses structural impediments that have made New York slower, more expensive, and less predictable than peer states when it comes to development and investment.
Key takeaways for commercial real estate, infrastructure, and housing stakeholders include:
A clear acknowledgment that New York takes too long—and costs too much—to build.
A data-driven case for reform, grounded in findings by Empire State Development.
Targeted amendments to SEQRA that preserve environmental protections while eliminating duplicative and unnecessary delays.
An understanding that housing, workforce participation, and economic growth are inseparable.
Universal Child Care: An Economic Development Policy Disguised as Social Policy
The governor’s commitment to expanding Pre-K, 3K, and child care subsidies to achieve universal, affordable care for children under five is not just a family policy—it is a workforce policy.
From a commercial real estate perspective:
Employers cannot expand without a reliable workforce.
Office, industrial, healthcare, and retail tenants all depend on labor participation.
Child care availability directly affects workforce availability, particularly for women.
By supporting universal child care, New York strengthens labor force participation, stabilizes employers, and enhances the long-term viability of commercial corridors and employment centers statewide.
Cutting Red Tape: Time Is Money—and New York Has Been Wasting Both
Perhaps the most impactful element of the governor’s State of the State is her direct confrontation with regulatory delay.
Empire State Development’s analysis is stark:
Manufacturing, housing, and energy projects take up to 56% longer in New York than in peer states to move from concept to groundbreaking.
Longer timelines mean higher carrying costs, higher financing costs, and higher end-user prices.
In housing, delay is not a neutral act—it is inflationary.
In commercial real estate terms, delay kills deals. Capital is mobile. When New York is perceived as unpredictable or interminable, investment flows elsewhere.
SEQRA Reform: Smart, Targeted, and Long Overdue
Governor Hochul’s proposed amendments to the State Environmental Quality Review Act represent a meaningful recalibration—not a rollback—of environmental review.
The facts are compelling:
Reviews of more than 1,000 housing projects over the last decade found virtually none with significant environmental impacts.
Yet these projects were delayed by an average of two years, adding hundreds of thousands of dollars in unnecessary costs.
Those costs are ultimately borne by renters, homebuyers, nonprofits, and taxpayers.
The governor’s approach is notably balanced:
Certain housing projects with no significant environmental impacts will be exempt from additional SEQRA review.
All projects will still comply with: local zoning, water and sewer regulations, air quality standards, environmental justice protections, natural resource safeguards and projects must be located outside flood-risk areas.
Criteria will vary appropriately between New York City and the rest of the state, reflecting different density and infrastructure realities.
This is not deregulation—it is regulatory precision.
Accelerating Critical Infrastructure that Communities Depend On
The State of the State also recognizes that infrastructure delays harm quality of life and economic competitiveness.
Clean water infrastructure projects with minimal environmental impact
Green infrastructure and stormwater management
Parks, trails, and recreational paths on previously disturbed land
New or renovated child care centers in developed areas
For commercial real estate and community development, these reforms matter because infrastructure readiness drives site selection, tenant demand and long-term asset value.
Protecting the Environment While Strengthening Neighborhoods
A key strength of the governor’s approach is its emphasis on previously disturbed land:
Encouraging infill development over sprawl.
Preserving open space and critical habitats.
Reducing vehicle miles traveled and greenhouse gas emissions.
Leveraging existing water, sewer, and transportation infrastructure
This is environmentally responsible growth—and it aligns squarely with modern commercial real estate best practices.
The Bottom Line
Gov. Hochul’s 2026 State of the State reflects a mature understanding of how New York competes in a national and global economy. She recognizes that:
Housing affordability is inseparable from housing supply.
Economic growth requires speed, predictability, and clarity.
Environmental protection and development are not mutually exclusive.
New York can be both progressive and practical.
For the commercial real estate community, this agenda signals that New York is serious about remaining investable, buildable and competitive.
Gov. Hochul gets it. Now it is up to the Legislature to deliver.
Editor’s Note: This article first appeared in the Rockland County Business Journal.
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