Hochul releases strategy to build 800,000 new homes to meet rising demand

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New York Construction Report staff writer

A strategy was released this week to address New York’s housing crisis and build 800,000 new homes over the next decade, as part of the 2023 State of the State. The New York Housing Compact, a comprehensive, multi-pronged strategy introduced by Governor Kathy Hochul, includes local participation requirements and incentives to achieve housing growth in every community. The plan will also require municipalities with MTA rail stations to locally rezone for higher density residential development.

“New York faces a housing crisis that requires bold actions and an all-hands-on-deck approach,” Hochul said. “Every community in New York must do their part to encourage housing growth to move our State forward and keep our economy strong.

“The New York Housing Compact is a comprehensive plan to spur the changes needed to create more housing, meet rising demand, and make our state a more equitable, stable, and affordable place to live.”

According to the Population Reference Bureau more than half of New York renters currently pay more than 30 percent of their income on rent – the second-highest rate in the nation. In the New York City metro area, rents have risen 30 percent since 2015 and home prices have risen 50 percent over the same period. Outside of New York City, rents have risen 40 to 60 percent since 2015 while home prices have risen 50 to 80 percent.

The New York Housing Compact will require all cities, towns, and villages to achieve new home creation targets on a three-year cycle. Downstate municipalities served by the Metropolitan Transportation Authority where the housing need is most acute, including New York City, will have a three percent new homes target over three years. For municipalities in upstate counties, the new homes target will be one percent over three years.

Localities will decide how to best meet their new home construction targets. From repurposing underutilized office parks and strip malls to offering new incentives towards multifamily buildings, localities can choose how to tailor their strategies to increase housing supply. To encourage the inclusion of affordable housing as part of the new growth, affordable units will be assigned extra weight in calculating localities’ progress toward their goals.

A $250 million infrastructure fund and $20 million planning fund will support new housing projects statewide. Municipalities may submit requests for planning funding to undertake either required transit-oriented development rezonings or preferred actions to hit growth targets.

All localities with rail stations run by the MTA undertake a local rezoning or higher density multifamily development within half a mile of the station unless they already meet the density level.

To expedite rezoning and development of new homes, specific relief from environmental review will be included in the New Homes Targets and Transit Oriented Development proposals. The State will continue to exercise crucial safeguards that prevent environmental harm and ensure that public health remains a top priority.

To support the development of mixed-income housing outside of New York City, Governor Hochul will direct New York State Homes and Community Renewal to make $5 million in State Low Income Housing Tax Credits available.

The governor will also propose legislation that will update the existing law that enables local governments to take ownership of certain dangerous abandoned properties. This legislation will help localities reduce public health risks, improve property values for neighboring homeowners, increase property tax revenues, and create new housing opportunities.

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