This week, Governor Kathy Hochul released a $216.3 billion Executive Budget that proposes a new five-year housing plan, continues investment in existing housing programs and introduces policy changes to spur the creation of affordable housing across the state. NYHC is encouraged by the Executive Budget proposal, which includes a very significant increase in capital over the last 5 year plan and new zoning proposals to unlock housing opportunity across the state. The budget aligns with many of the recommendations we issued in a December report in coalition with 15 partners.
We commend Governor Hochul for releasing a strong vision to expand affordable housing production. We hope the Legislature will work with the Governor to expand on this framework for affordable housing investment and important legislative proposals to help boost supply. Where the Governor has fallen short is in addressing the eviction crisis and NYCHA. With $2B in a pandemic relief reserve, aid to renters and landlords at-risk should be prioritized. In the absence of federal funding, Governor Hochul should commit to developing a long-term funding strategy for NYCHA with Mayor Adams.
Hochul’s Housing Plan Hochul’s $25 billion housing plan will create and preserve 100,000 affordable homes, including 10,000 homes with support services for vulnerable populations, and electrifies an additional 50,000 homes. NY State’s capital budget for the plan is $5.7 billion, which includes $4.5 billion in housing plan funds broken down programmatically below to be spent over the next 5 years. The $1.2 billion balance of capital funding is based on 5-years of projected funding of existing programs like Homeless Housing and Assistance Program, Low Income Housing Trust Fund, Affordable Housing Corporation and others which total $230.2 million in FY2023. These programs will have to be appropriated at these levels through FY2027 to reach a total of $5.7 billion.
Supportive housing, which was a major priority for the coalition, includes a commitment of 7,000 new construction and 3,000 preservation units in the Executive Budget. It also expands affordable housing new construction with $1 billion in funding. Dedicated senior housing funds are also increased to $300 million but service coordinator funding is not included.
The Executive Budget also funds crucial preservation efforts in both urban and rural communities. The $450 million for the Multifamily Preservation and $20 million for the Mobile and Manufactured Home Replacement Programs will help keep low-income residents in their homes. Though more funding is needed in the Small Homes Program, if we want to see rural and upstate towns revitalized. We also would like to see the vital work of the Community Restoration Fund continued and money geared toward a rural-specific housing counseling services program. Public housing preservation outside of NYC is also prioritized in this budget but at a lower level than we recommend.
The Executive Budget takes bold steps—mirroring the coalition’s calls—in expanding affordable homeownership, with $20 million for the Homeowner Protection Program (HOPP), $26 million for the Affordable Housing Corporation (AHC), and $400 million in affordable homeowner capital, including an exciting new shared equity pilot.
The Budget also takes seriously the role housing can play in the urgent need to lower emissions. $250 million is geared towards the weatherization and electrification of New York’s affordable housing stock, including through all-electric, high-performance equipment for heating and air-conditioning, alternative energy sources, and other energy-efficient best practices. There is also $77 million for capital and $32 million for operations for the Governor’s Office of Storm Recovery.
In terms of fair housing and anti-discrimination efforts, the Executive Budget allocates $2 million for fair housing testing and $215,000 for new housing credit check reforms. While it is great to see this new funding to fight discrimination in the state along with policy changes (described later), it falls $1 million short of what is needed for organizations working through Eliminating Barriers to Accessing Housing in New York Program needed to do this important work. We hope that the Enacted Budget reflects this need along with the programmatic structure—mirroring EBHNY—that made the initiative successful.
Other housing programs proposed in the Executive budget but not included in the capital funding chart are:
- $85 million Accessory Dwelling Units
- $35 million proposal to expand legal representation for evictions
- 21.6 million for the Rural Rental Assistance Program; and
- $12.8 million for the Neighborhood Preservation Program
- $5.4 million for the Rural Preservation Program
- $1 million for community Controlled Affordable Housing
The Executive Budget includes policy language that is closely aligned with our recommendations to legalize accessory dwelling units (ADUs), provide regulatory relief for hotel and commercial conversions and encourage transit-oriented development. It also proposes greening building codes, replacing 421-A, and expanding fair housing. New York State must step up and use all tools at the State’s disposal to address our affordable housing crisis. Governor Hohul’s legislative proposals, which still must be passed by the Legislature, are an encouraging step in this direction.
Accessory Dwelling Unit (ADU) Legalization: Requires local governments to establish laws allowing for the creation of ADUs. It prevents localities from establishing building standards that unreasonably restrict the creation of ADUs, including unreasonable square footage, ceiling height and setback requirements. Parking requirements are prohibited except in limited circumstances. It also requires NYC to create a program to address ADUs that existed prior to the passage of the bill. It allows NYC to waive relevant regulations as necessary without amending local land use or zoning law and provide amnesty for these owners. This could have a significant impact on the tens of thousands of New Yorkers currently living in illegal basement apartments by bringing many of them up to appropriate safety standards.
At minimum, local laws must:
- Allow the creation of at least one ADU per lot, in all lots with existing residential uses, including single-family zoned areas
- Require ADUs to comply with the following:
- Cannot be sold or otherwise conveyed separate from the primary residence
- Located on a lot that includes a proposed or existing residential dwelling
- Shall not be rented for a term less than 30 days
- Total floor area shall not exceed 50% of the primary residence, except when this limit would prevent the creation of an ADU no more than 600 square feet
The bill also directs NYS Department of Homes and Community Renewal (HCR) to establish a lending program for low-moderate income homeowners to construct ADUs within 180 days of the effective date. The criteria will be established by HCR to assist eligible homeowners with the creation of ADUs including, financing for design and construction, flood prevention, permitting, and septic enhancement. HCR will be required to issue an annual report that includes a list of projects financed through the program and their counties. HCR or affiliated authorities will also establish a program to provide technical assistance to low- and moderate-income homeowners seeking to create ADUs.
Transit Oriented Development Act of 2022: The Transit Oriented Development Act would require cities, towns, and villages to allow housing with a density of at least 25 units per acre on any land, where residential construction and occupation is already permitted if it is already within a half mile of any covered transportation facility. It prohibits cities from using excessive restrictions on height, setbacks, floor-area ratio, and other requirements to prevent construction of this housing. The bill also requires comprehensive plans, zoning regulations and other land use tools enacted by such cities, towns, and villages to conform to these requirements. It would take effect two years after being signed into law.
The bill defines a “covered transportation center” as being located between one half and 60 miles from NYC and:
- New Jersey Transit, Port Authority, Metro-North and LIRR rail stations
- bus stops and stations with designated parking for riders
If an application is not acted on or denied in violation of the requirements of this bill, any aggrieved party can file an Article 78 proceeding with the Supreme Court to compel compliance.
This act establishes a more significant role for the State to influence local zoning, which has prevented growth and led to exclusion in many communities . We hope that more incentives and policies with strong enforcement like Senator May’s recently introduced Housing Appeals Board legislation (S.7635) will advance in NY.
Creating Housing Opportunities through Building Conversion Act: This bill would allow Class B hotels in or near a residentially-zoned district in New York City to convert their units into permanent residences without the need to change their certificates of occupancy and authorize certain commercial office buildings in New York City to be converted into Class A multiple dwellings. The converted units would need to be under a regulatory agreement with the Department of Housing and Community Renewal (DHCR) or another agency, and the residential units in hotels would be subject to Rent Stabilization.
Owners of properties where hotel workers are represented by a collective bargaining agreement (CBA) would be required to notify the CBA representative in writing of the proposed conversion and would be required to certify to the agency administering the regulatory agreement that the CBA representative had mutually agreed to the conversion. This legislation is needed to make conversions more cost-effective.
Expanding NYC Density Limit: This bill would return authority to NYC to exceed the maximum density of 12.0 residential floor area ratio (FAR), which is limited by existing state law. Returning this land use authority to the City will allow for denser residential development where appropriate.
Housing Non-Discrimination for Justice-Involved Individuals Act of 2022: This bill modifies the New York Human Rights Law to prohibit housing providers from automatically rejecting individuals with one or more prior criminal convictions. Housing providers will only be permitted to consider convictions resulting from offenses that involved a threat to the health or safety of persons or property.
Fair Chance: Reforming the “Use of Credit Checks in Tenant Screening Act”: The Fair Chance bill prohibits housing providers from automatically rejecting applicants based on negative credit history or poor credit in certain situations. It would require housing providers to notify potential tenants if they intend to deny the application based on credit history or score and provide them with an opportunity to prove that they have paid their rent on time, that they receive rental subsidies, that the applicant’s negative credit history or poor credit score is solely the result of outstanding student loans or medical debt, or that it is a direct result of domestic, dating violence, sexual assault or stalking.It will take effect on the 60th day after becoming law.
Advanced building codes, appliance and equipment efficiency standard and the Building Benchmarking Act of 2022: This bill will help the State meet its energy efficiency and climate change mitigation goals required by the Climate Leadership and Community Protection Act (CLCPA). It will provide authority and mechanisms with respect to benchmarking building energy and water data, allowing property owners and other stakeholders to make more informed decisions. It updates building energy codes and requires no on-site emissions of greenhouse gases for new construction by 2027. It also proposes performance and efficiency standards for equipment and appliances.
Affordable Neighborhoods for New Yorkers Tax Incentive : This replaces the Affordable New York property tax program [421-A] set to expire in June 2022. by establishing the Affordable Neighborhoods for New Yorkers Tax Incentive program (ANNY).
- Affordability Options: Rental buildings with 30 units or more would be required to have at least 10 percent of units to be affordable to households with incomes at 40 percent of AMI, 10 percent affordable at 60 percent of AMI, and 5 percent at 80 percent of AMI. Rental buildings with less than 30 units would be required to have at least 20 percent of units affordable to those with household incomes at 90 percent of AMI. Homeownership buildings (i.e., co-ops and condos) would require 100 percent of units to be affordable at 130 percent AMI.
- Affordable units in an eligible building must also have a unit mix either proportional to the market units or at least 50 percent of affordable units must have two or more bedrooms with no more than 25 percent having less than one bedroom.
- Affordability Period: ANNY would set restricted periods based on the size and type of the project. Rental projects with 30 units or more would be required to maintain affordability restrictions permanently. Small rental projects with less than 30 units would be required to maintain affordability restrictions for 35 years after construction completion. Additionally, all affordable rental units would remain subject to Rent Stabilization, permanently. Homeownership projects would maintain affordability for 40 years after construction completion, subject to regulatory agreements.
- Tax Benefit: All rental projects under the program would be provided a full tax exemption for up to three years during construction and for 25 years after construction is complete, followed by a partial tax exemption for 10 years thereafter set at a rate matching the percentage of affordable units. ANNY would provide co-ops and condominiums a full tax exemption for up to three years during construction and for 40 years after construction is complete.
- Geography: The new program renames the three Enhanced Affordability Areas (EEAs) in Manhattan, Brooklyn, and Queens to Prime Development Areas (PDAs). The geographic coverage of these areas is maintained. Buildings in the PDAs are required to pay established rates for construction workers and building service workers.
- Labor Requirements: Construction wages for projects with 300 units or more in the PDAs would be set at a minimum of $63 per hour in Manhattan and $47.25 per hour in Brooklyn/Queens, increasing 5 percent after one year and every three years thereafter. These wages would remain in place until the Department of Labor establishes an alternative construction wage standard.
- Under the new program, construction wage requirements would not be applicable to co-ops/condominiums, projects where 50 percent of the units are affordable up to 80 percent of AMI, and those with a PLA. Building service employee wage requirements would not be required for buildings with less than 300 units or where at least 50 percent of units are affordable up to 90 percent of AMI.
- Reporting: On or before June 30 every year, the commissioner of the NYC Department of Housing Preservation and Development (HPD) will issue a report to the governor, the temporary president of the senate and the speaker of the assembly with the total number of projects and units created, the level of affordability, community board, cost of the program and any other factors the commissioner considers necessary.
- Expiration: ANNY would be set for five years after the expiration of 421-a