New York State Budget Housing

Lawmakers Aren’t Sure Their Own Plan to Build More Housing Will Work

The legislature signed on to Hochul’s goal of 800,000 new homes. But they aren’t confident their plan can get there.

Sam Mellins · March 20, 2023

New York leaders agree the state needs to dramatically increase its housing stock. They don't agree on how to do it. | Illustration: Maia Hibbett for New York Focus

Staying Focused

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THE POWER PLAYERS in New York politics agree: There’s a severe housing shortage in New York state. Governor Kathy Hochul spoke extensively about the issue in her State of the State address in January, and both the Senate and Assembly leaders addressed it when they kicked off the legislative session. “We need a transformative statewide housing policy that can address this issue,” said Senate Majority Leader Andrea Stewart-Cousins.

But they sharply disagree on what that should look like.

Hochul’s plan aims to boost New York’s housing supply primarily by peeling back towns’ and cities’ most restrictive zoning regulations. The legislature is seeking to block this approach, preferring one that relies on offering towns cash incentives to motivate new construction.

While local politicians like the strategy, such incentives have failed to add significant amounts of new housing in other states. And there’s no evidence that they would work better in New York.

Even key lawmakers who support the incentive-based plan acknowledge that it isn’t enough.

“It’s fairly clear in my mind that this is not a comprehensive housing solution,” Senate Housing Committee Chair Brian Kavanagh, who backs the legislature’s approach, told New York Focus. “I personally would support some provisions that would force the issue of where and how housing is going to get built.”

“I think it will work in some areas,” Linda Rosenthal, who chairs the Assembly’s housing committee, told New York Focus. “We can’t know who would want to opt in.”

Under the legislature’s plan, the state would create a $500 million cash pot, and towns that hit the housing growth targets could apply for grants to update their infrastructure. It would leave local zoning untouched.

Hochul’s agenda would include a grants program to aid development too, funded at $250 million. But more crucially, it would require towns and cities to permit a minimum level of new development and, if they refuse, let developers get approval for certain new buildings directly from the state — bypassing restrictive local zoning codes that often stifle development or ban it entirely. (Developers who want to bypass local zoning would have to include below-market rate apartments in their buildings.)

This plan has spooked legislators. “There was overwhelming agreement that incentives are far better than mandates,” said Senator John Liu, who represents a part of northeastern Queens.

Governor Kathy Hochul discusses the New York Housing Compact in Patchogue, New York, on March 2, 2023. | Darren McGee / Office of Governor Kathy Hochul

Shortly after Hochul introduced her proposals in January, Kavanagh called them“critical and long overdue.” But he’s now singing a different tune.

“We’re not supportive of zoning overrides,” he told New York Focus. “There are definitely incentives that do increase housing stock.”

In the past two decades, several other states have attempted to get local governments to build more housing by using incentives, rather than lifting restrictions. California, Connecticut, and Massachusetts all tried paying towns to permit development, but in recent years, those states have enacted policies requiring local governments to allow new housing.

“Every single one of those states has moved on,” noted Noah Kazis, a professor at the University of Michigan Law School and author of a paper on exclusionary zoning in New York.

Connecticut’s incentive program only got two towns to build a few dozen housing units between 2007 and 2022. A similar structure in Massachusetts fared better, generating over 15,000 units in multiple towns between 2004 and 2018.

In New York, there’s an estimated need for hundreds of thousands of units — and both Hochul and the legislature agree that the state should set its current target at 800,000 over the next decade. But the legislature’s plan lacks enforcement to get there.

“The legislature’s proposal is adopting a strategy that has failed everywhere it’s been tried,” Kazis said.

‘I Cannot Guarantee That Incentives Will Work’

A problem with paying towns to allow more housing is that wealthy localities often choose not to opt in.

“A place that has built nothing, is super rich, and where a lot of people want to live doesn’t need that money from the state,” said Samuel Stein, a housing policy analyst at the nonprofit Community Service Society. “So they’re not incentivized to build more housing.”

When Massachusetts pursued its incentive program, almost none of the housing it created was in the Boston area, where jobs and economic opportunity are richest.

Even among suburban New York legislators who support the legislature’s plan, there’s doubt that an incentives-only approach will work on a large scale.

“I doubt that it can, but that doesn’t mean we shouldn’t try it,” said Assemblymember Dana Levenberg, who represents parts of Westchester and Putnam Counties. “We may come to a compromise somewhere in between where there’s both carrots and a little bit of stick.”

“I cannot guarantee that incentives will work, to be entirely frank with you,” said Assemblymember Charles Lavine, who represents part of Nassau County, one of the least friendly in the state for new housing. “I am certain that some communities will resist emphatically.”

Lawmakers also highlighted affordable housing as a concern.

“We’ve got to make sure that we are making housing that the people who are having the hardest time finding housing can afford,” said Assemblymember MaryJane Shimsky, who represents part of Westchester. “The bulk of our supply problem is with the range for people with low incomes and moderate incomes. It’s not for people who can afford market rate.”

Hochul’s plan relies mostly on two mandates.

First: ordering every community district in New York City and every town in its suburbs to grow their housing stock by three percent every three years, and upstate towns to grow by one percent every three years. Each new affordable unit would count double toward the target. Hochul’s office projects this plank of the plan would yield roughly 150,000 new homes.

And second: requiring areas around subway or commuter train stations to allow dense housing, if they don’t already. This would yield 190,000 new homes, Hochul’s office projects. If towns refuse to follow these policies, then developers could go directly to the state to get approval for new developments.

Tenant Protections

While the legislature’s housing proposals were more lax on new housing, they went further than Hochul’s on tenant protections. Most notably, the Senate indicated support for the “core principles” of “good cause eviction,” a law that would limit annual rent increases and give tenants the right to renew most leases statewide. The Assembly’s proposal said that the chamber will seek to “protect tenants from arbitrary and capricious rent increases and unreasonable evictions,” but didn’t mention good cause eviction specifically. Both chambers also included nearly $390 million in emergency rental relief funds.

Kavanagh and Rosenthal also touted the legislature’s proposal to dedicate $250 million to vouchers for homeless or precariously housed New Yorkers to rent apartments. The Housing Access Voucher Program, as it’s known, is a top priority for left-leaning housing activists, who cite research showing that vouchers are a highly effective toolto fight homelessness. Hochul opposed the program last year on the basis of an inflated cost estimate, and didn’t include it in her budget proposal this year, either.

But without adding a lot of housing to the state’s supply, those vouchers could be difficult to use in New York’s tight rental market, noted Kazis, the law professor.

“The more new housing you build, and especially the more multifamily rental housing you build, the more effective vouchers are as a tool for the people who need them,” he said.

Levenberg, the Westchester assemblymember, said that while she’s willing to try the incentives approach, she wants to see results above all.

“We’re going to need to be stronger as a state about how we reach our housing goals,” she said. “We don’t really have that much time since we’re already falling behind.”