Albany’s New Housing Plan Would Build Only a Fraction of the Housing New York Leaders Say Is Needed

This year’s deal, which Hochul called “transformative,” will likely add only a fraction of that amount.

Housing growth projections are inherently imprecise, since development is shaped by shifting factors like interest rates, the cost of labor and land, and population trends. But the budget indicates that housing growth under the plan will largely be limited to New York City, rather than parts of the state where Hochul and numerous housing experts have said more housing is necessary to tackle New York’s affordability crisis.

Almost all of the 400,000 homes Hochul predicted her 2023 plan would unlock came from two measures that are absent from this year’s plan: a housing growth requirement for every municipality in the state and a requirement that towns allow dense housing near train stations.

Those measures were particularly aimed at New York City’s suburbs, which build less housing per capita than nearly any other major city’s suburbs nationwide — and whose politicians mounted fierce resistance to the 2023 plan, ultimately killing it.

This year’s housing deal imposes no requirements on the suburbs. Instead, it includes measures that will likely have a much smaller impact: offering state funds to localities that take steps to boost housing and creating a new statewide tax break for apartment developers who include subsidized units in their buildings.

Financial incentives for towns have historically been ineffective at spurring new housing. The Hochul administration acknowledged as much last year in a presentation, stating that “Relying solely on incentives has failed in other states.”

Another measure in the budget could be more effective: a tax break for apartment developers outside New York City. The measure will allow towns to partly exempt new apartment buildings from property taxes for 25 years after they’re completed if at least a quarter of its units are set aside for low-income families. Even though local opposition and restrictive zoning tend to be the main obstacles to apartment construction in New York City’s suburbs, a tax break could help grease the wheels.

“If we have a standardized tax credit, I do think we’ll see more interest in developing affordable housing and rental housing outside of New York City,” said Rachel Fee, executive director of the affordable housing advocacy group New York Housing Conference.

The deal also included a $500 million fund for a still-in-formation plan to promote housing development on land owned by the state, which Hochul said could lead to as many as 15,000 new units in coming years, though few details are available to explain how this will happen.

Hochul’s office did not respond to a request for comment for this story.

Andrew Fine, policy director for the group Open New York, which advocates for growing New York’s housing supply, said that this year’s housing package is “better than nothing.”

“But there is too much celebration over Albany doing the bare minimum to support housing growth in New York City,” he added.

The housing package also made significant changes to the laws governing tenants’ rights. Most importantly, it enacted a law allowing tenants to challenge rent increases over 10 percent, or 5 percent plus inflation. The law will apply automatically in New York City, and other parts of the state can opt in. Some tenant groups harshly criticized the measure for its numerous exceptions: It doesn’t apply to landlords who own a small number of units or to new buildings for 30 years, among other carveouts.

Landlord groups also won the right to introduce bigger rent hikes on rent-stabilized apartments following renovations, in a rollback to a part of New York’s landmark 2019 tenant protection law.