New York City unveils record $26 billion housing investment in FY 2025 budget

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New York Construction Report staff writer

New York City’s $112.4 billion Fiscal Year (FY) 2025 adopted budget includes $2 billion in capital funds across FY25 and FY26 to the New York City, and commits to a record $26 billion in housing capital in the current 10-year plan.

Funding will help the city reach the “moonshot” goal of building 500,000 new homes by 2032 and its commitment to transforming NYCHA.

“Despite facing unprecedented challenges, our administration and the City Council passed a collaborative budget that addresses the issues that cost New Yorkers the most, including housing,” said  Mayor Eric Adams. “We must throw open the doors to new solutions and housing in our city to keep New York a city for everyone. With these investments, we are going to build to build a city that is more affordable, and that provides opportunity and security for all.”

“It will take every tool in the city’s toolbox to address our housing crisis,” said New York City Department of City Planning (DCP) Director Dan Garodnick. “This historic investment in the Fiscal Year 2025 Adopted Budget sets us up for success, and will work in tandem with our ‘City of Yes for Housing Opportunity’ proposal to create opportunities across the city.”

The $2 billion in capital funds across FY25 and FY26 will deliver $700 million towards NYCHA, primarily to support PACT and Public Housing Trust projects. Extensive renovation projects will result in critical upgrades and improved conditions for NYCHA homes and campuses. Recent PACT projects include updates to units, such as redone bathrooms, kitchens, and new flooring; as well as upgrades across properties, including updated heat and hot water systems, refreshed building entryways, free WiFi, and enhanced security systems.

The scope of specific updates for properties are developed through engagement processes involving NYCHA residents.

Also, $1.3 billion will support HPD programs that focus on preserving and building new affordable housing, supportive housing, and homeownership. At a time when low vacancy rates and high housing costs underscore the need for affordable housing, this investment will result in the construction of new affordable homes for lower-income households, create more supportive homes for those who can benefit from on-site supportive housing, offer the opportunity to build generational wealth through access to affordable homeownership, and fund preservation work to improve housing quality, enabling tenants to stay in their homes.

Zoning changes will increase overall housing supply across the five boroughs. DCP released the draft environmental impact statement of the proposal, which estimates it could produce as many as 108,850 new homes over the next 15 years. The proposal includes lifting arbitrary and costly parking mandates for new residential construction; the Universal Affordability Preference, a bonus allowing roughly 20 percent more housing in developments, as long as the additional homes are permanently affordable at an average of 60 percent of the area median income; transit-oriented development and Town Center zoning, which would allow three-to-five story apartment buildings to be built near transit and along commercial corridors, respectively; and allowing homeowners to add accessory homes like backyard cottages.

Additional proposal components include facilitating conversion of non-residential buildings like offices to housing; re-legalizing small and shared housing models with common facilities like kitchens; allowing development on large lots known as campuses that are today limited by outdated rules from using existing development rights; and creating new zoning districts that would allow more housing, including mandatory affordable housing, that had previously been restricted by state law. City agencies are also advancing a slate of related, non-zoning efforts to guide implementation of the proposals, such as rules for HPD’s administration of the Universal Affordability Preference, as well as technical assistance and financing tools to assist homeowners who want to add secondary homes onto their properties.

“The PACT Program plays a critical role in preserving New York City’s affordable housing portfolio,” said Matthew Rooney, principal, RDC Development and CEO, MDG Design & Construction; Susan Camerata, principal, RDC Development and chief financial officer, Wavecrest Management. “In partnership with NYCHA, it allows companies like RDC Development to provide comprehensive upgrades and enhanced social services to improve the quality of life for countless New Yorkers, while ensuring homes remain affordable.”

The City of Yes for Housing Opportunity is the third of the Adams administration’s three “City of Yes” initiatives to update New York City’s zoning for a more sustainable, prosperous, and affordable city. The first — “City of Yes for Carbon Neutrality”— was adopted by the City Council last December. The second — “City of Yes for Economic Opportunity” was adopted by the City Council in June.

“We are extremely excited that Mayor Adams and New York City Councilmembers have approved an on-time and fiscally sound budget specifically allocating 2 billion dollars of additional investment toward affordable housing for New Yorkers,” said Ericka Keller, CEO, Brisa Builders. “This sound financial commitment to quality, affordable housing will make a tremendous difference in closing the housing gap.

“This financial commitment should incentive New Yorkers to rally for the approval of the City of Yes initiative, which will allow for creative and strategic mechanisms to build housing quickly, efficiently and innovatively.”

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