Chief among the reform measures included in the budget was disincentivizing institutional investors from buying up one- and two-family homes.
This draft language preserves or strengthens a raft of provisions vital to housing affordability.
In a third transaction, an existing 76-unit development completed about six years ago has a new owner.
Chief among the reform measures included in the budget was disincentivizing institutional investors from buying up one- and two-family homes.
ALBANY—On May 9, New York Gov. Kathy Hochul signed new legislation as part of the FY26 Enacted Budget that will make owning and renting a home more affordable by providing more than $1.5 billion in new state funding for housing statewide.
The funding includes investing $100 million for pro-housing communities to fund critical infrastructure projects to support housing development, $100 million to promote mixed-income housing development, $50 million for the first year of the Housing Access Voucher Program to address households that are homelessness or at risk of imminent homelessness, and $50 million for building more affordable starter homes, among other housing initiatives.
“New Yorkers deserve a fair chance at achieving the American dream, whether it is buying their first home or renting their first apartment, and this bold plan does just that,” Gov. Hochul said. “As part of my FY 2026 Enacted Budget, I secured over $500 million in capital for housing to uplift local economies and level the playing field so families can have more access to safe and affordable homes.”
Chief among the reform measures included in the budget was disincentivizing institutional investors from buying up one- and two-family homes. Nationally, private equity firms own more than 500,000 homes. According to some estimates, private equity firms are expected to own up to 40% of the single-family rental market by 2030. To help level the playing field and increase the opportunities for everyday individuals and families to purchase a home, Gov. Hochul signed legislation to disincentivize large investment entities who own 10+ single- and two-family homes and act as a fiduciary for at least $30 million in assets under management from buying single- and two-family homes en masse, and will require a 90-day waiting period for institutional investors to make an offer on one- or two-family homes.
The prohibition would also apply to an entity that receives funding from a covered institutional investor, other than in the form of a standard mortgage. Nonprofits, land banks, community land trusts, and foreclosure sales would be exempted. With the New York State Attorney General’s enforcement, covered entities that violate the waiting period would be subject to $250,000 penalties, and to $10,000 penalties for failing to provide required notices.
Additionally, Gov. Hochul signed legislation to prohibit institutional investors from claiming depreciation tax deductions for single- and two-family homes, or claiming interest deductions with respect to such homes, to disincentivize their accumulation of single- and two-family homes. The legislation also requires the New York Department of State (DOS) to provide notice when establishing a “cease and desist zone” in which homeowners who opt into coverage are prohibited from being solicited to sell their homes. The notice requirements will require information about the zone to be posted on the DOS’ website when a zone is established and annually included in a local newspaper within the area of the zone.
For many New Yorkers, their largest investment and most valuable asset is their home. Homes provide families with a safe place to live and an opportunity to build generational wealth. For too long, pervasive appraisal bias throughout the housing industry has unjustly stripped families of color of this opportunity, widening racial homeownership and wealth gaps. Gov. Hochul secured agreement on legislation that will make it a violation of the State's Human Rights Law to discriminate when providing real estate appraisals or in making such services available. The law will further enable DOS to fine appraisers for violations, in addition to other existing remedies, with half of those fines going to a fund to support fair housing enforcement. Additionally, the budget includes $4 million in new state support for fair housing testing.
Governor Hochul’s budget includes $50 million in capital funding to incentivize the building of more starter homes, including innovative approaches to homebuilding such as the use of factory-built and modular development.
The Homeowner Protection Program is a state-wide network of housing counseling and legal services organizations serving every county in New York. The network provides critical services to at-risk homeowners struggling to maintain their housing and avoid foreclosure. HOPP is also a front-line defense in gentrifying neighborhoods helping to prevent fraud and deed theft for vulnerable homeowners. This $40 million in funding will ensure that this network can continue to serve thousands of homeowners, preserving millions of dollars in equity and stabilizing communities.
Severe weather events are leaving New York homeowners in need of urgent repairs and long-term resilience measures. The budget includes $50 million in new funding for the Rapid Response Home Repair Program and Resilient Retrofits Program, which have provided vital assistance, helping over 1,300 homeowners to date recover and prepare for future disasters.
Even when homes are developed for the express purpose of being sold to low- and moderate-income homebuyers, local property tax assessments value the homes at fair market value, presenting challenges to creating homes these homebuyers can afford to purchase. The Governor has secured agreement for an affordable homebuyer property tax incentive at local opt-in for homes built with assistance from governmental entities, nonprofits, land banks, or community land trusts, and sold to low- and moderate-income homebuyers. This will aid such homebuyers by making their dream of homeownership more attainable by bringing down costs and increasing the supply of these homes.
Gov. Hochul signed Executive Order 30 in July 2023 creating the Pro-Housing Communities 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, Governor Hochul made the “Pro-Housing Community” designation a requirement for accessing up to $650 million in State discretionary programs. So far, 300 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, Governor Hochul is creating 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.
To help ensure more localities that want to promote housing growth have the ability to do so, the budget will provide $5.25 million in new grant funding to offer technical assistance to communities seeking to foster housing growth and associated municipal development.
As New York City confronts a generational housing crisis with a 1.4% rental vacancy rate, the citywide rezoning will enable the creation of 80,000 new homes over the next 15 years and invest $5 billion. As part of the FY26 Enacted Budget, the state is investing $1 billion towards the development and preservation of affordable housing throughout New York City.
With major forthcoming economic investments in Upstate New York, such as Micron’s $100 billion investment in Clay, the state continues to need an all-of-the-above approach to the housing supply to address acute housing needs and accommodate job growth. Too often, however, communities do not have the tools to create mixed-income rental housing, leaving many developments permit-ready but unable to secure financing. To bridge this gap and unlock more housing, the budget includes the state’s first revolving loan fund to spur mixed-income rental development. With a $100 million state investment for upstate and 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 (SLIHC) was signed into law in 2000 and has been critical to supporting the development of housing for low- and middle-income households. The budget 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.
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 budget agreement will unlock the maximum value of the tax credits and eliminate the census tract eligibility requirement.
Many municipalities struggle to acquire and redevelop vacant and abandoned buildings. Many of these properties are in a significant state of disrepair due to years of neglect and are located in neighborhoods that lack the local economic conditions necessary to incentivize redevelopment by the private sector. Consequently, the investment required to redevelop these properties can exceed their value and the resulting funding gap prevents the property from being rehabilitated. Gov. Hochul will better equip communities to fight back against blight while creating more affordable housing opportunities, by securing agreement to authorize localities across the state to adopt a tax exemption to incentivize redevelopment of these properties into affordable homes. The budget also includes $50 million in total funding for Land Banks and $30 million for infill development.
As part of the FY26 Enacted Budget, the state is investing $50 million for the first year of a four-year pilot program for state-funded vouchers for homeless families or families at imminent risk of losing their housing. Vouchers would be available to households making 50% of area median income. HCR will administer the program through local partners outside of New York City, with the NYC Housing Preservation and Development (HPD) and/or the New York City Housing Authority (NYCHA) administering the program within New York City. The vouchers will be a critical new tool to help New Yorkers escape or evade homelessness and housing insecurity.
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, the budget agreement includes 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.
As part of the budget, the budget includes $225 million to fund capital improvements for the New York City Housing Authority (NYCHA), including $25 million for vacant NYCHA units, and $75 million for public housing authorities outside New York City, providing vital support to this essential housing stock and critical quality of life improvements for the residents who call it home.
The Homeless Housing and Assistance Program (HHAP) was among the first programs in the country more than four decades ago to dedicate significant capital resources to creating housing, including permanent affordable and supportive housing, specifically for homeless individuals. Tens of thousands of units have been built since its inception, and today, requests for funding exceed what is available. 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, the budget has secured an increase in funding for HHAP.
The budget also includes increased funding for supportive housing, extends security deposit protections for rent-regulated tenants and
would allow for certain large 100+ unit rental buildings in New York City that currently include affordable units to partially convert to condominiums in order to preserve its expiring affordable units as permanently affordable or increase the amount of existing permanently affordable units in a building. The conversions would be subject to approval by HCR or NYC HPD and have ongoing regulatory oversight over the affordable units, which would be owned by separate nonprofits. The New York State Attorney General's office would further have an oversight role in approving the conversions. The affordable units could subsequently convert to affordable homeownership units, as well.
The enacted budget will also provide assistance to nonprofit affordable housing owners to undertake repairs and other steps needed to be eligible for such captives.
In addition to advancing these critical policy actions, the FY 2026 Budget includes more than $1.525 billion in new capital funding to support housing statewide, including but not limited to:
This draft language preserves or strengthens a raft of provisions vital to housing affordability.
In a third transaction, an existing 76-unit development completed about six years ago has a new owner.
In the first quarter, the Northeast performed best in both sales and price gains by percentage.
The Federal Reserve Board stressed that it will continue to press forward on its goal of bringing the inflation rate back to 2%.
Receive original business news about real estate and the REALTORS® who serve the lower Hudson Valley, delivered straight to your inbox. No credit card required.
