Hochul pushes more limited plan to spur housing

NEW YORK — Gov. Kathy Hochul made addressing the housing shortage the centerpiece of her agenda in 2023 — pushing an ambitious plan to force development in towns and cities across the state.

One year later, she’s taking a much more modest approach with an eye toward avoiding fights with development-wary suburbanites whose districts are home to pivotal congressional races this fall.

In her State of the State address Tuesday, Hochul proposed a more limited set of policies to spur residential development, taking a step back from the most fraught legislative battles of last year's session.

“We still need an effective statewide approach to encourage new construction,” Hochul said in the speech. “But in the meantime, there are aggressive actions we can and must take now.”

“We saw in every other state that met the challenge of building more housing — it took decades. But I approach this crisis with a sense of urgency,” she added.

Her proposals include restricting certain discretionary funds to localities that are deemed “pro-housing,” making way for 15,000 new homes on state-owned land, and streamlining the regulatory process around new development.

She’s also reupping her push for policies to spur housing in New York City, including reviving a controversial tax break for multi-family construction known as 421-a. Mayor Eric Adams’ housing agenda depends on that incentive and other state measures, like lifting a cap on the size of newly-constructed residential buildings in the five boroughs — which Hochul also included in her speech.

Last year, Hochul proposed new mandates on localities to grow their housing stock by up to 3 percent every three years. The plan faced staunch pushback from suburban leaders and was ultimately rejected by the Legislature.

Hochul tried a different approach over the summer — incentivizing localities to add housing by giving them preference for state discretionary funding. Now, she wants to require that localities get a “pro-housing” designation from the state in order to access those funding programs.

She’s also looking to establish a $500 million fund for infrastructure and other needs related to state-owned sites she wants to convert into housing.

Tuesday’s speech prompted some disappointment among advocates calling for more dramatic action to address New York’s stark housing shortage.

“Scarsdale isn’t going to care about discretionary funding, Chappaqua isn’t going to care about discretionary funding,” said Rachel Fee, executive director of the New York Housing Conference, referring to two wealthy suburbs in Westchester County. “I do think some localities will take this really seriously and put effort in and really study the opportunity to add housing, but the ones that really don’t want to and are exclusionary are going to stay that way.”

Hochul proposed two other New York City-focused policies backed by Adams: Creating a tax incentive for office-to-residential conversions that would require affordable housing, and making way for the city to legalize basement apartments.

“This is right off the page of what we have been speaking about,” Adams told reporters after the speech. “I am confident that we're going to land the plane around housing.”

But the debate around those proposals — especially 421-a — is far from settled. Reviving the tax break will mean striking compromises with the Legislature, where some prominent members want to tie a new version of the program to a controversial tenant protection measure known as “good cause.” Lawmakers have also pushed for a new state-funded rental voucher that Hochul has opposed.

“I think you can do it with tenant protections at the same time,” Adams said Tuesday.

Hochul was cool to the notion of new restrictions or state funding as a solution to the housing crisis.

“Spending more money or insisting on new regulations will not get us out of the deep hole dug by decades of inaction, or overcome the lack of courage to do simply what is required,” Hochul said in her remarks. “Already New York has vastly more regulated housing stock than any other state, but it still hasn’t meant more homes for people.”

Cea Weaver, campaign coordinator for the Housing Justice for All Coalition, which is pushing “good cause,” criticized Hochul’s approach.

“Skyrocketing rents are driving New York’s affordability crisis — and yet the Governor continues to oppose basic tenant protections against rent hikes and evictions,” she said. “Governor Hochul’s so-called affordability agenda leaves out renters, who make up half the state.”

Real Estate Board of New York president Jim Whelan praised her address, saying: “Governor Hochul is to be commended for once again putting forth proposals to spur much-needed rental housing production.”