Kathy Hochul has a year to build a YIMBY coalition

When Gov. Kathy Hochul announced that a key part of her agenda this session would be spurring a statewide housing boom, a lot of ears perked up.

Despite some skepticism – there were scant details on policy changes to ensure affordability, and it was unclear how the creation of 800,000 housing units in the next 10 years would slow down rapidly rising rental and ownership costs – there was optimism that those issues would be high on the agenda of state lawmakers working their way through the budget and remainder of the session.

“People want to live here, they have jobs here, but because of local decisions that limit growth, they cannot,” Hochul said during her State of the State address in January. “Local governments can and should make a difference.”

Now, with Hochul’s slate of policy changes excised from the state budget and unlikely to resurface in the remaining weeks of the legislative session, there is a renewed focus on what can be done to address what many advocates and analysts have described for decades as an affordable housing crisis. 

And that crisis is on display daily: The number of people across the state unable to afford a safe place to live keeps growing; rent has exploded in recent years; about half of all renters in New York are rent-burdened, meaning they dedicate more than 30% of their income to housing costs. Evictions are rising from pandemic-era lows; and the number of people in New York City homeless shelters is at record levels, in part due to asylum-seekers arriving in the city over the past year.

Hochul may have failed to gain approval for her plan, but there is a broad consensus on the need to change the state’s approach to housing – and a growing willingness to come to the table to do so – even from groups that often find themselves at odds on other issues, including housing advocates, real estate interests and progressive lawmakers. Hochul told The Buffalo News she’s giving herself “a year to build consensus and support around a plan.”

The consensus seemed to be positive regarding many of the key features of the Hochul plan – like building minimums for municipalities and workarounds for zoning restrictions that bar multifamily housing. But with so many complex issues to consider, it’s easy for a single issue to unravel the larger deal – this time, it was suburban legislators from Hochul’s own party who scuttled her plan by objecting to the idea of the state overriding local zoning ordinances to promote building in places that bar multifamily dwellings.

Assembly Member Linda Rosenthal, a Manhattan Democrat and the chair of the Housing Committee, took issue with some of the proposals outlined by Hochul and a similar plan to build 500,000 housing units over the next decade pitched by New York City Mayor Eric Adams. In both cases, she said, the plans were too reliant on tax incentives for developers and gave away too much tax revenue for too few affordable housing units.

Still, she recognized that the need to do something was urgent and that a multifaceted response to the crisis would be necessary.

“There are solutions that don’t help immediately, but we all have to concentrate on creating a grand plan. All the elements are there,” she said. “Everyone has to come to the table and say, ‘Yes, we have to do that.’”

Public housing options

While public housing authorities across the state have not traditionally been thought of as part of the equation in expanding the availability of public housing stock, an Obama-era program – the Rental Assistance Demonstration, commonly referred to as RAD in housing policy circles – has been consistently expanded since it was introduced in 2012. The program, which changed the rules to allow housing authorities to partner with private developers to replace or refurbish aging buildings, is often deployed in conjunction with other programs, like the Low-Income Housing Tax Credit, to add additional units as part of those projects.

In Buffalo, there are currently three projects, all using the RAD program, with a total projected price tag of around $1 billion, set to be completed in the coming years. In addition to apartments dedicated to tenants with housing vouchers, the projects will also include additional affordable units, market-rate apartments and retail space. Similar projects have been completed or are underway in Rochester, Syracuse and Albany.

Gillian Brown, the executive director of the Buffalo Municipal Housing Authority, said his agency’s primary focus continues to be on providing housing to traditional public housing tenants. But, he added, if there are opportunities to add other income levels to their complexes and generate new revenue streams, his authority will take them.

“Now if, as the price of doing that, we add market-rate housing in some parts, or we add affordable – as opposed to public – housing units in some parts, I think that’s ultimately a good thing,” he said.

The New York City Housing Authority is using its own version of RAD – the Permanent Affordability Commitment Together program – to rehab or replace existing public housing, but it has yet to expand into applying it to mixed-use projects that add affordable housing – but that that could change down the line, according to NYCHA’s executive vice president for real estate development, Jonathan Gouveia.

“I think there’s an opportunity across New York City and New York state to really look at the assets that public housing authorities have,” he said. “And No. 1, what you want to make sure you’re doing is taking care of the residents who are part of the public housing authority system. And then maybe, from there, once they’re either getting fully rehabbed or brand-new apartments, there’s an opportunity to expand the amount of housing on those sites.”

Easing the burden

Public housing still serves as the single biggest supplier of affordable housing in most municipalities, playing a vital role in the efforts of executives, legislators and advocates to expand affordable housing options across the state.

Howard Slatkin, the executive director at Citizens Housing and Planning Council, said that if NYCHA and other public housing authorities across the state are unable to address the massive backlog of rehabilitation work that needs to be done – and if they were to lose public housing units – it will offset gains made in other parts of the affordable housing equation.

“If you don’t save this quantity of housing, of affordable housing, anything else that we were to do on the affordable housing front, we’d get completely swallowed by the loss of these units,” Slatkin said. “It’s just such an enormous component of this pie that it’s not an ‘if’ –  it’s a ‘how.’ … It’s been orchestrated long-term federal disinvestment in public housing that has led to this condition.”

Rhetorically, the positions staked out by various groups pushing to expand affordable housing sound very similar.

New York City Council Member Pierina Sanchez, who chairs the Housing and Buildings Committee, is pushing for the passage of a slate of bills aimed at addressing a wide range of the housing issues identified and broadly agreed upon as key factors to fixing the problem, part of a broader movement to keep more public control of housing stock often referred to as the social housing movement.

Adams announced a plan that works to address many of the same issues, often in similar ways. Streamlining environmental review and zoning procedures, loosening restrictions on the amount of affordable units that sometimes prevent developers from including more affordable units were among the components of his plan, which he has described as a “City of Yes” approach to the housing crisis.

Sanchez said she supported many of the policies outlined in Adams’ plan and in the Hochul proposal that was dropped from the budget. But, she added, the fact that they are so concentrated on the supply side of the equation as a means to control costs was a concern.

“My initial reaction is, ‘Where’s the affordable?’” she said. “How are we defining this? How are we ensuring that we, with our interventions at the city and state level, with our interventions for the housing market, how are we ensuring that we are serving those who are feeling the pain the most and the most acutely?”

Adams’ approach sounded similar to the City Council’s social housing package. Both called for an openness to any program or strategy that will ease the burden on renters and increase housing options for New Yorkers. But Adams administration officials were skeptical of the council’s plan when they testified as part of the city budget process in March.

Cea Weaver, the campaign coordinator for the housing advocacy group Housing Justice For All, raised similar concerns, contending that the Hochul plan in particular did not do enough to help struggling families immediately, noting the absence of “good cause” eviction legislation pushed for by her group and other progressives.

Weaver and others said there was scant evidence that the policies meant to build a lot more housing proposed by Hochul – many of which were similar to recently introduced laws in states like California – were effective at controlling exploding housing costs.

A 2018 NYU Furman Center report concluded that new market-rate housing was necessary for a healthy economy in New York City, but that more government intervention was necessary to control costs.

“I think that there are merits to her proposal,” Weaver said. “But I don’t think that it’s going to address the affordability crisis the way (Hochul) is talking about it. And I think New Yorkers need help right now. More than half of the state can’t afford their rent … tenants virtually have no protections against eviction in half of the state’s rental units.”

Similar programs implemented in other states are too new to draw any conclusions on their effect on affordability.

However, there are other examples that show how drastic increases in housing supply can help temper exploding costs, according to RuthAnne Visnauskas, the commissioner of the state Division of Homes and Community Renewal.

She pointed to New Rochelle, where more permissive zoning rules led to a housing boom and rent hikes far lower than the national average.

Recent research by The Pew Charitable Trusts found that while rents went up 31% across America from 2017 to 2023, in New Rochelle, where housing permits exploded after the rule change, rents only rose 7% during that time – and actually fell 5% from January 2020 to February 2023.

“I don’t think we can presume that we’re going to stop growth or reduce rent growth,” Visnauskas said. “But the increases that we’ve seen in New York state – especially in downstate – in housing (and) rent growth is off the charts relative to what it was in the decades before. So we need to stem that, and this zoning policy is one of the ways that we can do that.”

Jessica Katz, New York City’s chief housing officer, said adding stock will help to alleviate the affordability crisis.

“With any other type of good, there is no debate as to this issue,” Katz said. “If there’s fewer eggs, eggs get more expensive. If there’s fewer bananas, bananas get more expensive. If there are fewer cars, then cars get more expensive.”

But, even if the city sees a drastic increase in housing stock, there will still be the need for a robust approach to making sure housing is affordable for those in the middle- and lower-income brackets. That’s why helping NYCHA and expanding rental assistance will remain points of focus for the Adams administration, Katz said.

“There’s no debate about the fundamental nature of supply and demand and the way in which increased supply tempers price increase,” Katz said. “That said, that’s not to say that adding new housing supply across market levels helps the poorest people in New York City immediately see rent reduction. It does not.”

Adjusting incentives

Another potential area of concord: the tax abatement programs and other subsidies available to private developers at the local, state and federal levels. Stakeholders from across the housing landscape agreed that incentives can be a useful tool and are vital to expanding housing stock – affordable or otherwise. But, like in so many housing policy discussions, disagreements arise over just how generous those incentives should be and what type of guarantees should be required of developers receiving subsidies.

The state’s recently expired 421-a program, a tax abatement for private developers in New York City that required a percentage of the building be set aside for affordable units, had been at the center of these fights. Both Rosenthal and state Sen. Brian Kavanagh, who chairs the Housing Committee in his chamber, have cast doubts on the need to extend or replace 421-a.

Kavanagh said 421-a’s fate has been given an outsized place in the public conversation around subsidies. And, he said, that program and other trades of public resources for affordable housing can be a good thing. “There is a role to play in using reductions in property taxes in promoting affordable housing,” he said.

Rosenthal said the state should be seeking more concessions and more guarantees of long-term affordability in exchange for those tax breaks.

“If anybody wants a new 421-a-type program, we have to ensure that there’s more affordability,” Rosenthal said. “It’s not just about profits. From a policy point of view, the government has to encourage and help build apartments that are affordable to its residents and future residents, because this also will affect future residents who will say, ‘I can’t afford to live in New York.’”

Visnauskas did not see these disagreements as an insurmountable problem. As long as everyone has the same end goals in mind and is willing to come to the table, a solution is in their grasp, she said.

“We can’t do it alone,” Visnauskas said. “We need the private sector to create housing – but also to be incentivized to include affordability in that housing. And if we don’t have that, we’re never going to get enough housing. And we’re never going to get enough affordable housing if we don’t have this sort of public-private structure.”