Hochul proposes requiring NYS municipalities to allow housing to get more state funds

ALBANY — Gov. Kathy Hochul this year wants to require local governments to allow more affordable housing to be built in suburbs, including on Long Island, if municipalities want to tap into millions of dollars in state funding.

This new proposal to the State Legislature is aimed at combating an affordable housing crisis statewide, which is keenly felt on Long Island, in Westchester and in New York City. The proposal was part of her State of the State address in which she mapped her legislative agenda for 2024.

The effort comes after her more aggressive “housing compact” was blocked last year by the legislature and suburban leaders led by officials on Long Island. Last year’s compact would have set goals for municipalities to add 800,000 units over the next decade and create a state panel that could override local zoning to allow housing projects to progress. Those provisions are not part of her new proposal.

Hochul said her new proposal is based on incentives. Under her plan, local governments would have to qualify as a “pro-housing community” if they wanted to gain priority to hundreds of millions of dollars in state funding. To be designated a pro-housing community, a local government would have to make efforts to entice and allow more housing development.

Hochul emphasized she is calling for a “requirement” that local governments obtain the pro-housing designation to gain priority access to state funds she controls. Those funds include the Long Island Investment Fund, the Downtown Revitalization Initiative and the New York Main Street Program, which have helped communities improve infrastructure through state funds, avoiding the cost to be borne fully by local property taxes.

Hochul didn’t elaborate on the amount of funding that would be tied to her proposal. But her proposal is an expansion of her existing executive order, which allows communities designated “pro-housing” to gain priority access to $650 million in the state funds.

Senate Republican leader Rob Ortt said the state should instead  incentivize builders to cut the through high cost and regulations needed to build more housing.

Hochul has made increasing affordable housing at all levels a key priority for her tenure. She said the high cost of housing is driving away young New Yorkers and seniors to less expensive states as part of an exodus from New York, and forcing others to choose between rent or mortgage payments and paying for medicine.

“Our policies must lift more people into the middle class and give them the same opportunities my immigrant grandparents had,” Hochul said in a forward to her speech. “We don’t want a New York with a gulf between the rich and poor. We want to build a bridge to the middle class and beyond.”

Legislative leaders who shot down Hochul’s housing plan last year said they are open to talks about a new proposal.

“I do think housing has to be a priority,” Assembly Speaker Carl Heastie said Monday.

“We are focused on doing housing,” said Senate Majority Leader Andrea Stewart-Cousins, also in a news conference Monday. “I think we all want to get to a good place … to see a path forward.”

Other elements of Hochul's housing proposal include:

• Reviving the tax abatement program known as 421-a to help more rental properties get developed in New York City. The subsidy requires housing affordable to moderate-income New Yorkers to be included. Some legislators have criticized the program as a subsidy for rich developers who are major campaign contributors, but Hochul said that without the program, rental housing construction in New York City would “slow to a crawl.”
• Seeking to build 15,000 new housing units on vacant state property, including lots at commuter rail stations, former prison property and unused public college parcels.
• Creating a $500 million fund to help pay for infrastructure needed to convert public land to private-sector housing.
• Providing an incentive to convert empty commercial buildings in New York City to housing at below-market costs.
• Strengthening tenants rights. This is a key goal of the legislative leaders and could be fodder for an overall deal on housing.

Last year, legislative leaders sunk Hochul’s housing compact and called for incentives instead of a potential for a state panel to override local government officials. Hochul on Tuesday said her new proposal is based on incentives, but could lead to a return to more strict mandates. 

She said the incentive proposal will “truly test the question of whether an incentives-based approach can drive the change we need to increase housing supply or if stronger mechanisms are needed.”

Editor's note -- A previous version of this story incorrectly reported that Hochul's proposal also required "good cause" for evictions.

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.