New York Construction Report staff writer
Governor Kathy Hochul has unveiled a capital spending plan in the Fiscal Year (FY) 2026 Executive Budget, which includes significant investments aimed at addressing New York’s housing crisis and driving growth in the construction sector. The governor’s proposal features a robust $1 billion commitment to housing development, with key funding initiatives designed to stimulate construction across the state.
A cornerstone of the budget is the City of Yes initiative, a $1 billion program spread over five years to promote housing construction in New York City. This initiative, aimed at overcoming local zoning barriers and streamlining approvals, is expected to provide a substantial boost to the city’s construction industry.
Additionally, Governor Hochul is allocating $760.5 million in discretionary funding for Pro-Housing Communities, a program designed to incentivize municipalities to adopt housing-friendly policies. A $100 million infrastructure fund will be specifically available for the 266 certified Pro-Housing Communities, further encouraging local governments to prioritize housing development.
To further support housing projects, the budget includes $250 million to revitalize state-owned land for residential development through the Redevelopment of Underutilized Sites for Housing (NY RUSH) initiative.
Also, the proposal includes $50 million in capital for starter homes.
Other measures include a $50 million Mixed-Income Revolving Loan Fund, aimed at fostering the development of mixed-income rental housing outside New York City, and $30 million for affordable housing through enhanced tax credits under the New York State Low-Income Housing Tax Credit Program (SLIHC). This tax incentive is expected to generate an additional $210 million in private investment, further driving housing construction.
Notable transportation capital projects include:
- $6.9 billion for the New York State Department of Transportation’s (NYSDOT) capital plan.
- $1.3 billion of the capital plan allocated to repair local roads and bridges through programs such as the Consolidated Highway Improvement Program (CHIPs) and the Pave Our Potholes (POP) initiative.
- $3 billion in state funding to support the MTA’s proposed $68.4 billion 2025-2029 Capital Program, which will fund upgrades to transit infrastructure, including rail, bus, and subway systems.
- $344 million for Upstate transit systems and $588 million for non-MTA Downstate transit systems.
- $25 million to plan and design improvements to Hudson Valley rail service, aiming to reduce commute times by up to 15 minutes for certain trips.