On January 10, Governor Kathy Hochul announced a statewide strategy to address New York’s housing crisis. This new plan, named The New York Housing Compact, aims to build 800,000 new homes over the next decade to meet the state’s historic housing shortage.
“New York faces a housing crisis that requires bold actions and an all-hands-on-deck approach. Every community in New York must do their part to encourage housing growth to move our State forward and keep our economy strong. The New York Housing Compact is a comprehensive plan to spur the changes needed to create more housing, meet rising demand, and make our state a more equitable, stable, and affordable place to live.” Governor Hochul
The current crisis: overview
- The State of New York has the second-largest homeless population in the country, which is alarming but not surprising considering the historic housing crisis that has been ongoing in the State.
- The housing market in New York has consistently suffered a supply shortage of affordable housing and the current rental market is ridiculously expensive for the average renter.
- According to Moody’s Analytics, the rent-to-income ratio in New York in 2022 was 68.5 percent.
- Statistics from the Population Reference Bureau show that more than half of New York renters pay more than 30 percent of their income and are, therefore, rent-burdened.
The New York Housing Compact: what’s the strategy?
The new plan will employ a multi-pronged strategy, with a heavy focus on local participation requirements. It aims to incentivize various stakeholders to achieve housing growth in every community, especially those communities where the demand is high and supply is low. The plan also calls for zoning amendments, requiring municipalities with MTA rail stations to locally rezone for higher-density residential development.
This new plan will make available $250 million Infrastructure Fund and $20 million Planning Fund to support new housing production statewide. Municipalities will be able to apply for and access these funds for their local development. A new Housing Planning Office will be established within New York State Homes and Community Renewal to provide municipalities with support and guidance.
Below, we have compiled the important highlights of the plan.
All cities, towns, and villages to have new home-creation targets
The plan will set new home creation targets for all cities, towns, and villages on a three-year cycle.
- New York City, along with other downstate municipalities which are connected by the MTA and where the housing shortage is most acute, will have a 3% new homes target over three years.
- Municipalities in upstate counties will have a 1% new homes target over three years.
- Localities will have complete agency to decide how best to meet their goals.
- Those that prioritize development of affordable units, will be awarded extra points when measuring the progress of localities.
- If a locality fails to meet their target, they can perform certain toward achieving their goals. This move will hopefully incentivize the development of more affordable housing.
- If targets remain consistently unmet, proposed housing developments that meet particular affordability criteria, but may not conform to existing zoning, can file an appeal to a new State Housing Approval Board or through the courts. This appeal is part of a fast-track housing approval process. If the locality cannot demonstrate a valid health or safety reason for denying the issuance of a permit, the appeal will be approved..fulfill the target.
- Transit-oriented development will be prioritized
Transit-oriented development will be prioritized, zoning obstacles eliminated
- There is a big push in the plan to encourage transit-oriented development by allowing for rezoning.
- Localities with rail stations run by the MTA will have to rezone to accommodate higher density multifamily development within half a mile of the station, unless they already meet the requirement.
- This approach towards grounding new housing development in areas with good access to public transportation will allow communities to commute to their jobs and contribute towards their mobility and prosperity.
- These zoning amendments will be made possible by removing obstacles to housing approvals and expediting the rezoning and development process. The New Homes Targets and Transit Oriented Development proposals will include specific relief from environmental review, while simultaneously maintain critical safeguards to environmental prevention.
Spotlight on New York City: what’s changing?
- The Governor plans to set in motion the reversal of an outdated state law that restricts maximum density of residential floor area. This will allow for denser residential development, at the discretion of the City officials of course.
- There has been a lot of interest and advocacy around converting commercial buildings to residential buildings. There will be a focus on expanding legislation that facilitates these conversions and that will help add a massive 120 million square feet newly eligible for conversion.
- New York City will also be authorized by the Governor to provide amnesty by local law for existing basement units that meet health and safety standards, as determined by the City.
New incentives to build and rehabilitate housing: existing housing stock will be strengthened
- New property tax exemptions will be introduced to encourage mixed income housing development near train stations. Affordable housing will be incentivized in commercial buildings that are converted to residential use in New York City.
- There will be property tax exemptions offered for homeowners that build Accessory Dwelling Units and for undertaking certain renovations in New York City.
- The Governor wants to encourage the development of mixed-income housing outside of New York City. To do so, she will direct New York State Homes and Community Renewal to make $5 million in State Low Income Housing Tax Credits available.
- Areas where incidence of childhood elevated blood lead levels are high, will be target areas for reducing lead exposure risk. Multi-family rental units, especially those built prior to 1980, will undergo a lead risk assessment every three years. If lead hazards are found, the landlord will be asked to remediate the housing unit. Grant funding will be made available to help landlords cover the costs of these assessments and improvements.
Support for Renters and Homeowners
Governor Hochul announced two new proposals, geared towards providing relief to New York renters and homeowners. Modeled on the Buffalo East Homeownership Assistance Program, a targeted initiative will be launched 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.