FY 2024 Budget Negotiations
Carrot or Stick: What Will Work to Fix Our Housing Crisis
By JOHN JORDAN – March 21, 2023
ALBANY—As negotiations slog on here to adopt a new state budget, the governor and leaders in the Legislature are in lockstep agreement that the state is facing a housing crisis—one that is growing from serious to acute. The question is, what measures will work best to address the crisis?
The Legislature is offering carrots in the form of hundreds of millions of dollars in incentives to spark new affordable housing construction, baked into the upcoming budget that begins April 1. On the other hand, the governor is threatening to wield sizeable sticks through state-imposed zoning overrides if municipalities fail to meet her mandated housing development targets.
Everyone is tuned in on this one.
Gov. Kathy Hochul, in her State-of-the-State address, 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, all municipalities statewide will face a target for building new homes. Upstate, it’s 1% every three years; downstate, it’s 3% every three years. The governor also proposed that 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. Also proposed is 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;
- $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.
The governor’s plan has received high praise from many business and construction trades organizations. Equally vociferous is the criticism it has received by scores of suburban municipal officials from the Hudson Valley and Long Island. The major problems, they charge, are the mandate levels of housing and Albany’s infringement on ‘home rule” and local zoning regulations.
On March 14, the New York State Senate and Assembly released its “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. Instead, the Legislature is offering 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.
“I think we all agree that we must build more housing,” said Senate Majority Leader Andrea Stewart-Cousins speaking on Spectrum News’ Capital Tonight program earlier this month. “We definitely need affordable housing. So, I’m sure that will be a broad conversation.”
“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.
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 Construction Industry Council of Westchester & Hudson Valley, Inc., and other general business and trade organizations.
Other supporters include Westchester County Executive George Latimer and the mayors of White Plains, New Rochelle and Peekskill.
“The Construction Industry Council is very much in support of Gov. Hochul’s Housing Compact,” said John Cooney, president of the Construction Industry Council of Westchester & Hudson Valley, Inc. “If families and the workforce—the essential lifeblood of the Hudson Valley—can’t afford to live here, our economy will die. Housing is an essential human right, and the governor’s proposal is a step in the right direction of increasing both the affordability and accessibility of our great state’s housing stock. I applaud the governor for taking the initiative in addressing the current housing crisis.”
Carlo A. Scissura, Esq. president and CEO, New York Building Congress said, “Gov. Hochul’s Housing Compact is bold, innovative, and encourages growth and sustainability. Our industry fully supports its ambitious and achievable agenda, and its policies designed to spur both housing and workforce development. The Building Congress just this week took a deeper dive into one of its proposals, with our detailed report on transit-oriented development aimed at denser, walkable neighborhoods with high job access. We look forward to working with the governor to bring the Housing Compact to life for a better, stronger New York.”
At the Rye Brook event, Peter Herero, Jr. president of New York Hospitality Group of White Plains; John Levy, CEO, of chip maker SEEQC, Inc, Elmsford; and Joe Kenner, CEO and President of non-profit Greyston of Yonkers. They discussed how the lack of affordable housing was impacting their operations. Mr. 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. “Gov. Hochul’s New York Housing Compact addresses these critical needs and will enable us to meet the growing demands of our quantum chip business.”
Mr. Kenner of Greyston 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.”
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 CONSTRUCTION NEWS 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.
Business Council of Westchester President and CEO Dr. Marsha Gordon, 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.”
She applauded 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.”
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.”