Gov. Hochul Unveils Ambitious Housing Plan To Build 800,000 New Units in the Next Decade

ALBANY—In her 2023 State of the State address on Jan. 10 in Albany, New York Gov. Kathy Hochul outlined key initiatives to reduce crime and gun violence, enhance mental health services and address the affordability crisis in the state.

The governor introduced her “New York Housing Compact,” a groundbreaking strategy to catalyze housing development that has a goal of creating 800,000 new units in the next decade. She said the state will provide assistance to localities to meet the housing goal by offering “substantial new funding for infrastructure like schools, roads, and sewers needed to support growing communities.”

Every single locality across the state will have a target for building new homes, she noted. Upstate, the target is for the current housing stock to grow by 1% every three years. Downstate, 3% every three years. She added that as part of the compact, any municipality with a train station should rezone the area within a half-mile of the station, to allow for the creation of new housing within the next three years. Gov. Hochul also promised a replacement for the 421a tax exemption in New York City.

Many business and political leaders praised the governor’s housing initiative.

The Welcome Home Westchester alliance, which is advocating for more affordable housing development in Westchester County, released a statement in support of the governor’s New York Housing Compact. The group, which includes members such as The Building and Realty Institute, the Hudson Gateway Association of Realtors and the Westchester County Association, stated, “Governor Hochul put forth a bold vision for tackling our housing shortage in our region. It acknowledges a truth at the heart of our housing affordability crisis—that every community in the Greater New York City area plays a role in creating this housing shortfall, and so every community needs to do what it can to be a part of the solution.”

The group noted that the recently completed Westchester County Housing Needs Assessment found the the county needs to build 11,703 new units of housing just to see the present-day need. “A gap that large doesn’t happen by accident. Over the previous decades, the fragmented municipality by-municipality land use system we built made it too easy to create barriers to housing, create delays for approvals, pass the buck to other neighborhoods or other towns when it came to housing affordability, or fail to update local zoning codes such that we are often trying to squeeze our 21st Century needs into a tool designed for a mid-20th century lifestyle.  It has been simply too easy for too long to avoid building the housing we need.”

Welcome Home Westchester later noted that while further details and fine tuning on her plan are expected, it believes the “basic approach would make a measurable difference towards making it easier to build the housing communities we need.”

The National Association of Realtors also praised the governor’s housing compact. “We support the Governor’s New York State Housing Compact, including incentives to re-purpose commercial space and hotels for residential housing and increased state support for the creation of 800,000 new homes over the next decade, all of which builds on last year’s $25-billion investment to create and preserve 100,000 affordable homes over the next five years,” NYSAR stated. “also key to successfully moving forward is a commitment by New York State and its local governments to improve the regulatory climate that currently does not promote housing development. We encourage all lawmakers and regulators to rethink local building code and zoning rules that have been a root cause of the current housing shortage.”

However, because New York State is a “home-rule state,” opposition to imposing edicts to local municipalities will likely get some push-back from some local officials.

For example, Rockland County Executive Ed Day said, “I am concerned as well about some of the mandates included in the governor’s new NY Housing Compact that will require municipalities to change zoning in specific areas of their communities and meet mandatory home growth targets. As your County Executive, and past president of a local civic association, I believe this concept to be contradicted by the Constitution of New York State and will continue to stand firmly in opposition to any politically-based plan that undermines New York State Home Rule regulations and municipal zoning ordinances.”

He is also concerned about possible legislation that would allow, promote and possibly reward homeowners for building out Accessory Dwelling Units.

“While creating affordable housing is an admirable goal, our own Planning Department stated in their professional assessment the one-size fits’ll approach of the ADU legislation is extremely problematic and does not account for differences between rural, suburban, and urban communities and I’m concerned there is a strong likelihood that the character of our county could be changed forever,” Rockland County Day stated.

Highlights of the Governor’s ‘New York Housing Compact’

Under the compact, localities will decide how to best meet their new home construction targets. From repurposing underutilized office parks and strip malls to offering new incentives towards multifamily buildings, localities can choose how to tailor their strategies to increase housing supply. To encourage the inclusion of affordable housing as part of the new growth, affordable units will be assigned extra weight in calculating localities’ progress toward their goals.

Localities that do not meet targets can achieve Safe Harbor status for one three-year cycle by implementing certain good faith actions—or “Preferred Actions”—that create zoning capacity to achieve the growth targets. In municipalities where there is no market demand for new housing there will be no practical effect if localities fall short of their targets.

The New York Housing Compact will make available a $250-million Infrastructure Fund and a $20-million Planning Fund to support new housing production statewide. Municipalities may submit requests for planning funding to undertake either required Transit-Oriented Development rezonings or Preferred Actions to help them hit their growth targets. The plan will also create a new Housing Planning Office within New York State Homes and Community Renewal to provide municipalities with support and guidance.

The New York Housing Compact will require that localities with rail stations run by the MTA undertake a local rezoning or higher density multifamily development within half a mile of the station unless they already meet the density level. By expanding housing potential in these transit-oriented communities, more families will be able to enjoy improved access to jobs and thriving sustainable communities, state officials said.

After three years, in localities that do not meet growth targets or do not take steps to implement Preferred Actions, proposed housing developments that meet particular affordability criteria, but may not conform to existing zoning, may take advantage of a fast-track housing approval process if the locality denies the permit. The appeal can be made to a new State Housing Approval Board or through the courts. Appealed projects will be approved unless a locality can demonstrate a valid health or safety reason for denying the application.

To expedite rezoning and development of new homes, specific relief from environmental review will be included in the New Homes Targets and Transit Oriented Development proposals. The state will continue to exercise crucial safeguards that prevent environmental harm and ensure that public health remains a top priority.

Gov. Hochul unveiled a series of new proposals to incentivize new housing construction and the rehabilitation of existing housing. This includes new property tax exemptions to encourage mixed income housing development near train stations and incentivize affordable housing in commercial buildings that are converted to residential use in New York City. This also includes updated property tax exemptions offered by local option to support homeowners that build Accessory Dwelling Units and for property owners who need support undertaking certain renovations in New York City.

To support the development of mixed-income housing outside of New York City, Gov. Hochul will direct New York State Homes and Community Renewal to make $5 million in State Low Income Housing Tax Credits available.

Gov. Hochul will also make necessary changes to ensure that localities where new housing developments utilize Payment in Lieu of Taxes agreements are not penalized in tax cap calculations.

The governor will work with the State Legislature to develop a successor for the 421-a property tax exemption program that expired last year to stimulate production of new rental housing in New York City.

The governor announced additional proposals to increase the state’s supply of safe, stable, comfortable housing for all New Yorkers.

Gov. Hochul will propose legislation to create a program that builds on proven models to drastically reduce lead exposure risk in rental housing outside of New York City, targeting areas classified as “high-risk” for lead exposure based on incidence of childhood elevated blood lead levels. This will require multi-family rental units in such areas that were built prior to 1980 to undergo a lead risk assessment every three years—if lead hazards are found, the landlord will be required to remediate the housing unit. There will be grant funding for eligible landlords to help cover the cost of these assessments and the remediation of identified hazards.

The governor will also propose legislation that will update the existing law that enables local governments to take ownership of certain dangerous abandoned properties. This legislation will help localities reduce public health risks, improve property values for neighboring homeowners, increase property tax revenues and create new housing opportunities.