NYS housing official hopes to fuel Long Island housing growth

A top New York housing official wants to "level the playing field" for Long Island homebuyers and renters.

RuthAnne Visnauskas, commissioner of New York State Homes and Community Renewal, who helps control the purse strings that pay for new affordable homes, believes there's room to add more housing of all types on Long Island. She said the state wants to help fund local communities to plan for that growth. 

"Nobody wants growth to happen haphazardly," Visnauskas said during an interview last week in Patchogue. "Where you can get more density around a train station, where your downtown can be more vibrant because there's more people walking on the streets, that adds growth and adds to the economy." 

Her agency offers lower-interest mortgages for first-time homebuyers, makes down payment grants and lends money to developers building affordable housing. 

Gov. Kathy Hochul's budget proposal would enhance funding for several of those programs. The proposal, which is subject to negotiation with the State Legislature, would provide $100 million for first-time homebuyers, including $50 million for starter home construction and $50 million for down payment assistance.

Hochul also floated a potential crackdown on private equity firms buying single-family homes and landlords using algorithms to set rents.

Visnauskas recently spoke with Newsday in Patchogue, where she recognized the village as Long Island's 16th pro-housing community. The state created that designation in 2023 to recognize cities, towns and villages that have achieved a certain level of housing growth or have committed to support new housing in the future. Ten other communities have filed letters of intent to join. 

She discussed what's driving up housing costs on Long Island, the governor's budget proposals and how the state plans to work with Long Island lawmakers.

Her comments have been edited for length and clarity.

What is driving the lack of housing affordability on Long Island?

There’s definitely a housing supply shortage. When there’s not enough of something, prices go up. People are competing to rent apartments. People are competing to buy houses, and a lot of that drives up housing costs.

It’s not obvious where it would all get built. The answer to that is oftentimes you need a little bit of housing everywhere and everybody needs to be doing their part, so in aggregate we have more housing across all of Long Island, New York City and Westchester and across the whole state.

You need a little bit of housing everywhere

How does Hochul's budget look to increase affordable access to homeownership?

We really want to get some traction on getting more factory-built, starter home-sized homes built. We’re going to put money out there to incentivize those types of projects for developers, which we see as a way to grow homeownership availability in New York State.

Then, the second is offering [$50 million in] down payment assistance, so more people can actually go buy those homes who might be shut out at times. A down payment can be the biggest barrier to someone buying a home, so if we can provide someone $10,000, $15,000, $20,000 to cover the down payment or the closing costs, that gets them over the gap.

How have you tried to incorporate feedback from Long Island officials in recent housing proposals?

The governor heard from folks that they really wanted to start with “the carrot approach” [for incentives]. It started out as an incentive, and then we shifted it into a requirement that you have to be a certified community to access $650 million in [economic development] funding.

We really want to support all these places, so I think the $650 million was a great down payment on that. We’ll grow that this year by another $100 million.

We’ve also added $10 million for localities for technical assistance that they can use to do master plans and rezonings, and those types of efforts — that will lead to more housing.

What will that additional $100 million fund?

We want to make sure, where [municipalities] have needs for water and sewer and infrastructure, that we are able to provide funding for that.

How do economic development grants improve housing affordability?

We want people to plan for growth and to plan for housing. More people want to live in Long Island than there’s space for. More kids who graduate from college and come back here and want to work, they can’t find a place to live. Older adults, who might want to downsize, can’t find somewhere to downsize, but people want to be here. That means you have to plan for growth.

That kind of gets at the sort of ultimate ethos of the problem. When there's not enough housing supply, people don't have choice and they don't have opportunity, and we want that for everyone.

Are there lessons from Patchogue that can be replicated elsewhere?

Oftentimes you find when you take someone to a building that we financed, they say, ‘Oh, this is affordable housing. This is quite nice.’ Or ‘I know somebody who lives here.’

It’s breaking down some of the myths and the barriers that people are afraid of.

Once people understand what we mean by a vibrant downtown, and you come to Patchogue and Mineola, people get more accustomed to say, ‘Oh, I would actually like that in my town or village.’ That’s really our gateway.

We really want to level the playing field for homeowners and renters

What’s the approach behind Hochul's proposal to ban landlords using algorithms to set rents?

We can’t talk about growing the housing supply without also talking about protecting people who are here today. On the rental side, it’s making sure that there isn’t collusion in rent-setting that hurts existing renters and new renters by artificially driving up rents.

As it relates to private equity, we heard many stories anecdotally about houses coming on the market and then going into contract same day, all cash. While I don’t think we have the pervasiveness of private equity [in housing] in New York State as there are in other places, that’s a clear example of algorithmic and institutional acquisition that prices people out of the market. We really want to level the playing field for homeowners and renters.

How can Long Islanders find out more about grants and housing programs?

Our website is hcr.ny.gov and there’s a section for homebuyers.

By Jonathan LaMantia

jonathan.lamantia@newsday.com@jonlamantia

Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.