“The top driver of our affordability crisis is the rising cost of rent and mortgages, and New Yorkers need our help.”
Incoming HGAR President Sejdi is an Associate Broker with HomeSmart Homes & Estates in White Plains. She served as President-Elect in 2024, Secretary in 2023, and Regional Director for Westchester County in 2022.
Rates at 6% are the new normal, and from a historical perspective they’re completely fine, especially given the strength of the economy and inflation adjusted wage gains over the past few years.
“The top driver of our affordability crisis is the rising cost of rent and mortgages, and New Yorkers need our help.”
ALBANY—In her 2025 State of the State address delivered on Jan. 14, New York Gov. Kathy Hochul announced a series of funding initiatives geared at addressing the housing shortage and affordability crisis, improving Metro North rail service in the Hudson Valley region and promoting clean water and climate change efforts.
She also addressed crime prevention, specifically measures geared at improving safety in the New York City subways. Among her major initiatives include: cutting middle-class taxes for more than 8.3 million New York taxpayers to the lowest level in nearly 70 years; sending inflation refund checks of up to $500 to more than 8.6 million New York households; expanding New York’s child tax credit to provide up to $1,000 per child to 1.6 million families and fighting for the full restoration of the SALT deduction.
How the governor plans to pay for these and other key proposals and specific funding numbers for areas of concern to the construction industry will become clearer when the governor delivers her budget address next week.
In her State of the State address were a host of housing programs including investing $100 million to support critical housing infrastructure, creating the state’s first revolving loan fund to spur mixed-income rental development outside of New York City, and passing legislation to address rent-price fixing collusion by landlords. These proposals build off the Governor’s announcement last week of new steps to make homeownership more accessible and affordable to all New Yorkers.
“The top driver of our affordability crisis is the rising cost of rent and mortgages, and New Yorkers need our help,” Gov. Hochul said. “After passing a landmark housing deal last year, it’s time to continue the fight with new measures to make life more affordable for tenants and homeowners.”
Among her key housing proposals include:
Governor Hochul signed Executive Order 30 in July 2023 creating the Pro-Housing Community Program, which recognizes and rewards municipalities actively working to unlock their housing potential and encourages others to follow suit. In the State Fiscal Year 2025 Enacted Budget, Gov. Hochul made the “Pro-Housing Community” designation a requirement for accessing up to $650 million in State discretionary programs. So far, 270 localities have been certified, with more than 420 submitting letters of intent from all corners of New York State. To further support localities that are doing their part to address the housing crisis, Gov. Hochul will create a $100 million Pro-Housing Supply fund for certified Pro-Housing Communities to assist with critical infrastructure projects necessary to create new housing, such as sewer and water infrastructure upgrades.
Without resources, some communities may not have the ability to design and adopt pro-housing policies such as master plans, zoning text updates, and streamlined permitting procedures. To help ensure more localities that want to promote housing growth have the ability to do so, the governor will provide new grant funding to offer technical assistance to communities seeking to foster housing growth and associated municipal development.
New York is streamlining regulations to expedite the construction of more homes for families and individuals while implementing environmental safeguards. Gov. Hochul will advance proposed regulation to allow modestly sized home development, such as certain multi-family housing with no more than 10,000 square feet of gross floor area, to proceed as ‘Type II,’ which offers a simpler pathway towards completion. This approach not only accelerates the construction of much-needed homes but also addresses the critical shortage of affordable housing facing everyday New Yorkers.
The governor has proposed the launch of the state’s first revolving loan fund to spur mixed-income rental development outside New York City. The fund will fill construction financing gaps by providing a lower-cost and more flexible form of capital than is generally available in market financing. The funding will revolve and self-sustain over time through repayments once projects have converted to permanent financing after construction.
Modeled after the federal Low Income Housing Tax Credit Program, the New York State Low Income Housing Tax Credit Program was signed into law in 2000 and has been critical to supporting the development of housing for low-and middle-income households. Gov. Hochul will build on this success by proposing to double the amount of the tax credits available through the SLIHC program, making it the largest state low-income housing tax credit program in America. This action alone will generate upwards of $210 million in private investment in affordable housing per year, state officials said.
Currently, New York State law requires Federal and State Historic Tax credits to be coupled together to the same investor and be available only in certain census tracts. These factors depress the economic value of both tax credits and needlessly turn investment away from housing projects, a problem felt especially acutely in upstate New York communities. The governor will propose legislation that would unlock the maximum value of the tax credits and eliminate the census tract eligibility requirement.
Gov. Hochul will better equip communities to fight back against blight while creating more affordable housing opportunities, both by proposing strengthening existing municipal authority to acquire vacant and abandoned buildings and by proposing to authorize localities across the state to adopt a tax exemption to incentivize redevelopment of these properties into affordable homes.
Real estate management software services are using proprietary information from their client base to aggressively push landlords to raise rents even when an increase in supply or a softening in the market would organically lower prices. Recent data show that price-fixing algorithms cost tenants nationwide an estimated $3.8 billion more in inflated rents last year alone. The software companies make no secret that the algorithms are intended to raise rents, with some openly advertising that they can help property owners outperform the market, resulting in housing market distortion and hurting tenants during a historic housing supply and affordability crisis. Governor Hochul will take action to protect renters from these practices by proposing a statewide ban on the sale or use of rent price-fixing software.
Mitchell-Lama Program supports 105,000 units of housing that are affordable to low- and middle-income families. Currently, Mitchell-Lama developments can receive a shelter rent tax abatement to reduce their share of local property taxes. However, the current tax abatement is often insufficient to address escalating increases in insurance, utility, and taxes that endanger building quality and the financial health of this critical supply of affordable housing. To provide much needed relief, Governor Hochul will propose legislation that will reduce Mitchell-Lama shelter rent taxes by at least half in New York City and allow for the same by local opt-in in the rest of the state.
To meet the growing demand for supportive housing and maintain existing units that provide a safe place to live for many of the most housing insecure and vulnerable New Yorkers, Governor Hochul will increase funding for the Homeless Housing and Assistance Program.
To ensure that New York State's supportive housing stock and services remain viable and accessible to those who need them most, Gov. Hochul will take steps to stabilize The Empire State Supportive Housing Initiative and the New York State Supportive Housing Program.
In 2019, New York State provided market-rate tenants statewide with protections for security deposits, including requiring the return of remaining security deposits within 14 days of vacating the unit and allowing tenants to request an inspection to determine what needs to be remedied to receive a security deposit back in full. Rent-regulated tenants were erroneously left out from receiving these important protections. The Governor will propose legislation to grant rent-regulated tenants the same protections for their security deposits as all other tenants.
Insurance costs for affordable housing have skyrocketed, with many owners reporting paying higher premiums for less coverage and renters bearing an increasing share of costs. In recent years, private insurance captives, which are similar to self-insurance and allow for tailored risk management, have been created specifically for affordable housing owners. However, these insurance captives often have eligibility standards for participation, which nonprofits may struggle to meet. Governor Hochul will provide assistance to nonprofit affordable housing owners to undertake repairs and other steps needed to be eligible for such captives.
Incoming HGAR President Sejdi is an Associate Broker with HomeSmart Homes & Estates in White Plains. She served as President-Elect in 2024, Secretary in 2023, and Regional Director for Westchester County in 2022.
Rates at 6% are the new normal, and from a historical perspective they’re completely fine, especially given the strength of the economy and inflation adjusted wage gains over the past few years.
Inventory levels across many of the markets surveyed continue to contribute to a competitive landscape for buyers, driving median prices upward.
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