Should New Plan Utilize a Carrot or Stick?
Real Estate, Government Officials Agree Housing Crisis is Real
By JOHN JORDAN – May 19, 2023
RYE, NY—In the aftermath of Gov. Kathy Hochul’s failed “New York Housing Compact” bold initiative that called for the development of 800,000 new housing units statewide to address what she termed as a housing crisis in New York State, real estate executives and government officials at a recent real estate conference agreed that the severe housing shortage in Westchester County and New York State is real.
However, that is where consensus fell apart as the participants in the Westchester County Association’s 2023 Real Estate Conference could not agree on just how to solve the crisis—through incentives or via mandates and penalties for non-compliance or a combination of both.
The conference held on May 10 at the Westchester Country Club in Rye focused on the housing market and the shortage of residential units, particularly affordable homes and apartments in the county.
William Cuddy, Executive Vice President of CBRE and chair of the WCA’s Real Estate Taskforce, provided context to the housing crisis debate by offering “five truisms” that currently exist in Westchester County:
1 – “Real estate drives Westchester’s economy.” He said real estate directly impacts how people live, where they live, where they shop, where they get healthcare, where they recreate, where they work. “It is real estate-based. That is why you are here; real estate is critically important,” he stressed.
2 – “Economic development and GDP performance are directly correlated to labor participation (jobs).”
3 – “We have dramatically unmet jobs. We need more workers.”
4 – “We lack workers because they don’t have housing.” He added that workers don’t have adequate housing or affordable housing.
5 – “The current legislative and regulatory process for delivering more housing or any new development is ineffective and inefficient.”
“That is why we are here today,” Mr, Cuddy said. “We have to fix it.”
Deputy Westchester County Executive Ken Jenkins addressed the conference attendees by noting that while Gov. Kathy Hochul’s New York Housing Compact plan was withdrawn as part of state budget negotiations, Westchester County is ready to work with state political leaders on ways to address the housing crisis.
Mr. Jenkins said the county’s efforts to implement the findings of its latest housing needs assessment that called for 11,703 new housing units was delayed due to the COVID-19 pandemic. “It (New York Housing Compact) is not done,” Mr. Jenkins said, noting that Westchester County Executive George Latimer and his administration are planning to work with the state, as well as with municipal officials, including those that have facilitated new housing development, such as in Yonkers, New Rochelle and White Plains, to address the housing needs of its workforce.
The keynote speaker at the event—Joseph Graziose, Executive Vice President, RXR Development Services, discussed the firm’s ongoing phased massive redevelopment of the former White Plains Mall property into a mixed-use development that will eventually feature 860 new residential units, retail and commercial space and public park space. RXR is also the designated developer for the redevelopment of Downtown New Rochelle and is involved in housing developments in the City of Yonkers.
Mr. Graziose praised Gov. Hochul for shining a light on the housing crisis. “I certainly commend the governor for identifying that there is a housing crisis and pushing the initiative to try and create more housing in New York State. I selfishly would like to see more housing in Westchester County. But, I really think it is going to come down to working through the local level and having private developers, such as myself, working closely with municipal leaders, community leaders to get together to figure out a way to continue responsible and sustainable development. It is not going to happen overnight.”
He concluded his remarks by saying, “The housing crisis is real. There are numerous folks that are completely boxed out of living in New York State at all different economic levels…”
The conference also included a panel discussion moderated by Tom Murphy, Senior Resident Fellow, Urban Development at the Urban Land Institute. The featured panelists were: New Rochelle Mayor Noam Bramson, Town of North Castle Supervisor Michael J. Schiliro and Executive Director of the New York Housing Conference Rachel Fee.
It was this panel discussion that clearly showed the divide on how state and local governments should address the housing shortage in New York State.
Supervisor Schiliro stressed that North Castle has met its new housing goals, but there are sections of the town where new development would be difficult.
While also praising the governor for proposing a plan, municipalities were not included in its formulation, he charged. “For people who sit in my chair, we are looking for collaboration. We are looking for a seat at the table so we can be part of the conversation,” he said.
He noted that one part of the governor’s plan was to promote Accessory Dwelling Units. The supervisor noted that ADUs have existed in North Castle since the 1980s.
He added that the town has reworked its housing ordinances and “attainable” housing goals over the years, at times to address legal or legislative actions. The town’s housing stock has increased by 30% over the last 30 years, which is in line with the governor’s plan.
Supervisor Schiliro noted that towns and cities have different challenges and issues and perhaps different guidelines and housing goals. Therefore, rather than set local town and village housing goals, the state should set individual county goals for new development.
“The SEQRA (State Environmental Quality Review Act) process does need reform,” he said. “But there are many tenets of the SEQRA process that are important that allow communities like ours to let their residents be heard, make sure we are checking off all the boxes on what the issues are and be able to move projects forward.”
New Rochelle Mayor Bramson discussed the city’s groundbreaking zoning reform that included a form-based zoning code and generic environmental review that has resulted in projects that are in conformance with the downtown zoning requirements being approved from date of submission in 90 days.
He said that 30 projects in the downtown have been approved, with approximately a dozen completed and another 12 proposals under contract. The mayor stated that approximately 3,500 new housing units have been completed in the city, with another 3,500 under construction. The amended downtown zoning would allow for approximately 10,000 new units to be built.
Mayor Bramson said that there are many local governments that are doing their part in approving new housing developments without incentives or penalties being imposed by state government. “And yet, history tells us, the evidence shows us that if you are going to leave localities to do this on their own without input from the state, it is not going to happen with the consistency and the scale that is necessary to solve this problem,” Mayor Bramson said.
He agreed with Supervisor Schiliro that localities have different issues and their housing choices have an impact beyond their borders.
Mayor Bramson said that Gov. Hocul may have made a tactical mistake in proposing penalties for non-compliance even though he believes the state was hoping and perhaps never intending to impose those penalties, including the establishment of a state organization that could circumvent an unwarranted municipal rejection of a project.
“My suspicion is that this (state) circumvention route from a developer’s viewpoint would have been regarded as very unattractive,” the mayor said. “It takes a long time, there is a lot of brain damage, there is a lot of uncertainty associated with it and no one wants to drag a project through a community kicking and screaming when the community actually doesn’t want it.
Ms. Fee was supportive of most of the governor’s compact plan, but did state that the proposed $125 million devoted to local infrastructure needs was not adequate.
She noted that the State Legislature needs to take action now to address the urgent housing need and that many facets of the governor’s plan should be debated.
“I don’t think an incentives-only approach would be effective,” Ms. Fee said. “That is basically what we have now… Communities that don’t want to act that want to say ‘No’ to housing, that want to stall projects for years and years will just keep stalling. So, I do think we need some kind of stick.”
Prior to Gov. Hochul withdrawing her “New York Housing Compact,” a group of Westchester business organizations sent a letter to the Westchester State Delegation urging them that incentives alone will not solve the housing crisis in Westchester County and therefore lawmakers should enact some key facets of Gov. Hochul’s “New York Housing Compact” plan.
The letter was signed by: John T. Cooney Jr., Executive Director, Construction Industry Council of Westchester & Hudson Valley, Inc.; Jan Fisher, Executive Director, Nonprofit Westchester; Tim Foley, CEO, Building and Realty Institute of Westchester and the Mid-Hudson Region; Jana Currier, Interim CEO and COO, Hudson Gateway Association of Realtors; and Michael N. Romita, President and CEO, Westchester County Association.
Noting the recently released one-house budget proposals by the Assembly and Senate offered incentives to foster needed housing development and an increase in infrastructure spending as compared to Gov. Hochul’s plan, the business groups noted in the letter: “We have consistently advocated for setting clear housing growth targets (including transit-oriented development) coupled with consequences for not meeting those targets. Incentives alone will not succeed.”