Today at the State of the State, Governor Kathy Hochul announced the New York Housing Compact, a bold new statewide strategy to increase housing supply and combat exclusionary zoning, with the goal of producing 800,000 new homes over the next decade.

The Housing Compact has the potential to be truly transformative for New York. It goes far beyond the usual band-aid solutions typically offered by elected officials and instead addresses the heart of our current crisis by requiring every community across the state to play a meaningful role in making New York affordable.

The New York Housing Conference commends the Hochul administration for taking seriously the immense housing crisis that threatens New York’s long-term growth and economic health. We look forward to working with the Legislature and Gov. Hochul to enact these proposals and get to work making our state as affordable as possible.

Gov. Hochul’s Housing Compact proposes:

Statewide Housing Targets

To ensure every community in the state is doing its fair share, the New York Housing Compact will require all cities, towns, and villages to reach production targets on a three-year cycle. Downstate municipalities served by the Metropolitan Transportation Authority (MTA) including New York City, will have a three percent target over three years. Upstate, the new homes target will be one percent over three years. While municipalities will determine how to best meet their production targets, affordable housing will receive extra weight when progress is being calculated.

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.

Facilitate Housing Approval When Targets Are Unmet

After 3 years, 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.

Municipalities that fall short of their targets can still take good faith Preferred Actions to spur development for another 3-year cycle in which the fast-track approval process will not apply. In municipalities where there is no market demand for new housing there will be no practical effect if localities fall short of their targets.

Transit-Oriented Development

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.

Remove Obstacles to Housing Approvals

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.

Infrastructure and Planning Funds

The New York Housing Compact will make available a $250 million Infrastructure Fund and $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

Provide New York City with Vital Tools to Increase Housing

The Governor announced she will propose New York City specific legislation to:

  • reverse an antiquated state law that restricts maximum density of residential floor area to 12 FAR. This measure will allow New York City the ability to allow for denser residential development where City officials deem appropriate.
  • expand the number of commercial buildings eligible for conversion to residential use and provide necessary regulatory relief, making an estimated additional 120 million square feet newly eligible for conversion.
  • grant the City of New York the authority to provide amnesty by local law for existing basement units that meet health and safety standards to be determined by the City.

Critical Incentives to Build and Rehabilitate Housing

The Compact proposes a series of new tax incentives to encourage 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, Governor Hochul will direct New York State Homes and Community Renewal to make $5 million in State Low Income Housing Tax Credits available.

Governor 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.

Strengthening New York’s Existing Housing Supply

The Governor announced she 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.
  • 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.

Support for Renters and Homeowners

Governor Hochul announced she will propose an initiative, modeled on the Buffalo East Homeownership Assistance Program, to finance home repairs in communities statewide that have been identified as having high levels of low-income homeowners of color and homeowner distress.

The Governor will also propose increased funding for the State’s Tenant Protection Unit, enabling them to open an additional satellite office. The increased capabilities of the Unit will be of particular benefit to manufactured home park residents and will improve access to grants and loans available to municipalities for farmworker housing.

The Compact supplements the State’s $25 billion 5-year Housing Plan, to create or preserve 100,000 affordable homes across New York including 10,000 supportive units. We thank Governor Hochul for making sure the State plays its part in addressing our affordable housing crisis and for taking a strong stance against the land use barriers that prevent us from increasing housing supply at scale. Detailed summaries of all proposals can be viewed in the full State of the State Book here. NYHC will provide analysis of supporting legislation which we anticipate to be released later this month in the executive budget proposal.