Governor, Legislature Debate How to Fix State’s Housing Crisis
John Jordan | March 20, 2023
ALBANY—As negotiations continue at the State Capital on the 2023-2024 New York State Budget, Gov. Kathy Hochul and state legislative leaders agree that the state is facing a housing crisis. The issue seems to be how to go about solving it, through offering carrots in the form of incentives to spark new affordable housing construction or imposing the threat of a stick if municipalities fail to meet mandated housing development targets.
Just how the state intends to deal with a housing shortage and the high cost of housing will become clearer in the coming days as the governor and legislative leaders look to finalize a budget by the April 1 deadline.
Gov. Hochul in her State of the State address in January unveiled her ambitious, yet controversial “New York Housing Compact,” which looks to catalyze housing development and has a goal of creating 800,000 new units in the next decade. The governor said the state would provide assistance to localities to meet the housing goal by offering $250 million in funding for infrastructure like schools, roads, and sewers needed to support growing communities.”
Under the compact, every single locality across the state will have a target for building new homes, Upstate, the target is for the current housing stock to grow by 1% every three years. Downstate, 3% every three years. She added that as part of the compact, any municipality with a train station should rezone the area within a half-mile of the station to allow for the creation of new housing within the next three years. Gov. Hochul also proposed an extension of the 421a tax exemption in New York City through 2030.
Other key facets of the governor’s New York Housing Compact are: $20 million for planning and technical assistance to support local rezoning efforts and other solutions to drive growth; $15 million for a new statewide data collection effort; $4 million to create a new Housing Planning Office within Homes and Community Renewal to support localities in meeting their housing goals and coordinate planning efforts across the state; $39.8 million to reduce the risk of lead exposure in rental properties outside of New York City, including $20 million in assistance to property owners for building remediation, and $50 million for the creation of a statewide Homeowner Stabilization Fund to provide critical home repairs in 10 key communities with a high concentration of low-income homeowners of color.
Since its introduction, her plan has been praised by many business and construction trades organizations, but has been criticized by a host of suburban municipal officials from the Hudson Valley and Long Island over state government’s infringement on ‘home rule” and local zoning regulations.
On March 14, the New York State Senate and Assembly released their respective “One House” budgets in response to the governor’s proposed budget. Both the Senate and Assembly rejected key provisions of the New York Housing Compact, particularly the mandates and development targets and instead offered proposals to provide incentives for housing development, without penalties. The proposals by the Assembly and the Senate would allocate $500 million to help municipalities create a housing plan and help pay for its implementation. However, the Assembly and Senate rejected the idea of extending the 421a deadline.
“I think we all agree that we must build more housing. We definitely need affordable housing. So, I’m sure that will be a broad conversation,” Senate Majority Leader Andrea Stewart-Cousins said on Spectrum News’ “Capital Tonight” broadcast earlier this month.
“I’m hoping that we can figure out a way to move the housing situation, that obviously has to be addressed, forward in the budget, but if it can’t be moved in the budget, then it will be moved outside of the budget,” Sen. Stewart-Cousins added. “This is a very, very big conversation to have in a compacted amount of time.”
Gov. Hochul visited the headquarters of The Business Council of Westchester in Rye Brook on March 15 to continue her push for her New York Housing Compact and its key provisions.
At the event, Peter Herero, Jr. president of New York Hospitality Group of White Plains; John Levy, CEO, of chip maker SEEQC, Inc. of Elmsford; and Joe Kenner, CEO and President of non-profit Greyston of Yonkers, discussed how the lack of affordable housing was impacting their operations. Herero said that the biggest obstacle for growth for many businesses is finding suitable housing for its workforce.
“As a fast-growing chip manufacturing company, we know that housing that is affordable, convenient to our foundry and nearby to public transportation is critical to our ability to recruit and retain our employees over the long term,” Levy said. “Governor Hochul’s New York Housing Compact addresses these critical needs and will enable us to meet the growing demands of our quantum chip business.”
Greyston’s Kenner added, “I applaud Gov. Kathy Hochul’s efforts to tackle the state’s housing challenges. Housing is a fundamental need that impacts an individual’s ability to get to the next level, like finding employment and keeping that job. Many of our Open Hire staff indicated housing as a significant obstacle to securing and maintaining a stable job. By making housing more accessible and affordable, this initiative can help our team members meet their basic needs, focus on their work, and contribute to the growth of our state’s economy.”
More than 100 business and non-profit organizations throughout New York State have come out in support of Gov. Hochul’s New York Housing Compact, including both The Business Council of Westchester, The County Association and others.
HGAR President Tony D’Anzica agrees that the state is facing a housing crisis involving both supply and cost. “New York State has an affordable housing crisis and that crisis will not be solved with this budget. The governor, the legislature, local municipalities, and all interested parties, including the real estate industry, must come together to study and understand the root causes of our housing crisis and to collaborate in finding long term solutions,” he said. “New Yorkers across the state are entitled to a thoughtful and deliberative process that engages all communities and all affected parties in helping to find long term solutions. Until such time, our elected officials should work together to adopt common sense measures that we all can agree upon.”
Leah Caro, co-chair of HGAR’s Legislative Committee, attended the governor’s event in Rye Brook and believes that negotiation between the governor and legislative leaders can produce a plan that will address the housing crisis.
Caro, who is President and Principal Broker of Park Sterling Realty of Bronxville, said, “The Governor and the guest speakers offered compelling stories regarding the lack of available and affordable housing in New York, particularly in regard to hiring talent for our county’s growing industries; business leaders looking to increase their workforce, from executives and scientists to restaurant workers, find that many viable candidates just can’t find somewhere nearby to live. While we applaud the concept of increasing our housing stock, what the final product looks like remains to be seen. Clearly, a co-operative effort between local municipalities, the State Legislature and the governor’s office will need to be mapped out, and we look forward to supporting those efforts.”
Gov. Hochul said that she is hopeful that state legislative leaders will have “open minds” in trying to hammer out a housing plan. The governor told reporters after the Business Council program ended, “Change is necessary. We cannot continue the way we have. We are losing people to Connecticut and New Jersey… and the reason is the lack of affordable housing or housing at any (income) level and we have to stop that right now.”
When asked by Real Estate In-Depth what she would say to those government officials that say her plan flies in the face of home rule and takes away local planning control, Gov. Hochul responded, “That is not the case at all. We are simply saying that sometimes it is hard to grow. You get some people in parts of your community who don’t want to see your community prosper and this gives you a tool to be able to say ‘This is what we are going to do because we are part of a statewide solution.’”
She added that for 80% of the municipalities in New York State, the compact target would involve the addition of only 100 units or less and if affordable, the target number would drop to 50.
A host of local business leaders expressed support for the governor’s plan, including Business Council of Westchester President and CEO Dr. Marsha Gordon, who said, “Westchester County and New York State residents suffer from a chronic and growing shortage of workforce housing. Employers cannot compete to attract and retain talent for their workforce without attractive housing opportunities available to its prospective employees. This housing crisis threatens our economic future. The Business Council of Westchester commends Governor Hochul for her strong leadership in addressing this critical issue. The New York Housing Compact directly confronts this crisis unlike any of the past plans of her predecessors. The BCW recognizes that fundamental change can be difficult to implement. We commend the governor for reaching out to business, labor, not-for-profit, and faith-based organizations in her effort to create desperately needed housing in our communities.”
Michael Romita, President and CEO of the Westchester County Association said, “New York’s housing crisis continues to be a serious impediment to economic growth and community vitality. It is harming our residents, workers, and businesses. The major culprit is an antiquated patchwork of local land use and zoning restrictions. This has placed New York at a competitive disadvantage to our neighboring states who have taken steps to modernize their laws. The governor’s Housing Compact is a bold step and has the support of businesses, nonprofits, and housing advocacy groups from across the state. We at the Westchester County Association call on the legislature to work with the governor to pass housing reform by addressing the issue head-on.”
Tim Foley, CEO of The Building and Realty Institute of Westchester said, “It has simply been too easy for too long to avoid building the housing we need. In Westchester, our housing shortage comes with real costs, and those costs are borne by seniors, millennials, people of color, middle-class families, and others who struggle with rising rents and dwindling affordable home ownership options. The governor’s New York Compact plan is a bold solution that at its essence makes it clear that this is a shared problem and requires a shared response. Every community does not need to do the same things to address our housing shortage, but no community should be allowed to do nothing.”
Westchester County Executive George Latimer said, “We agree with the governor that we need to provide more housing units in Westchester as part of the overall statewide need. Our task is to work closely with our local governments, using the tools available, to achieve these goals.”
PHOTOS BY JOHN VECCHIOLLA