Public-Private Partnerships: A Critical Solution for New York’s Infrastructure and Housing Crisis

New York's dual crises of aging infrastructure and housing affordability are threatening the region’s economic vitality and quality of life. With the state facing a shortage of hundreds of thousands of housing units and billions needed for vital metro area infrastructure improvements – along with new uncertainties surrounding congestion pricing – the current approach is unsustainable.

A more effective model leveraging public private partnerships (PPPs) is essential. PPPs are not just an option; they are necessary for accelerating development, modernizing infrastructure, and confirming resilience.

The Private Sector’s Role in Housing and Development Innovation

Private developers have long played a key role in expanding New York’s housing supply, financing and constructing residential projects at a scale that public agencies alone cannot match. Their investments, particularly in transit-oriented development (TOD), have transformed key areas of the city while generating significant public benefits.

Projects like Atlantic Yards, One Bryant Park, Columbia University’s expansion and One Vanderbilt illustrate how strategic partnerships between the public and private sectors can drive development while improving transit access, public spaces and sustainability.

However, today’s challenges require more than just increasing supply. High construction costs, market uncertainty and shifting office demand make private investment more difficult. To foster sustainable growth, government policies must provide clearer incentives, streamlined approvals and stronger alignment between infrastructure investment and development priorities.

Unlocking the Full Potential of PPPs: The Role of Government

While private developers are eager to invest, they need stronger public sector support and increased flexibility to align private development with infrastructure priorities.

Federal programs like the Infrastructure Investment and Jobs Act (IIJA), Low-Income Housing Tax Credits (LIHTC) and Railroad Rehabilitation & Improvement Financing (RRIF) facilitate private investment in TOD, housing and infrastructure, but gaps remain.

New York City and State can take the lead in driving critical improvements by strengthening policies and accelerating implementation.

State Level:

New York has taken steps to promote TOD and streamline approvals, including a $500 million commitment to unlock affordable housing on state-owned land. This investment is a step in the right direction, but more action is needed to fully harness the potential of PPPs and TOD.

To accelerate progress, the state should:

Enable legislation and expand public commitment toward the private sector.

Offer stronger financial incentives for sustainable, infrastructure-rich projects.

Align state infrastructure investments with private development to confirm transit and utilities keep pace with housing demand.

City Level:

The City of Yes initiative is a big step forward, but additional reforms are needed. Reducing bureaucratic barriers, offering targeted tax incentives and aligning zoning with infrastructure capacity will enable developers to build more housing while delivering community benefits.

Successful partnerships, particularly those supporting major transit improvements, highlight the value of PPPs in creating smarter, more efficient urban development. Expanding these models will help infrastructure investment keep pace with growth.

The Cost of Inaction: Economic Risks & Infrastructure Challenges

Without decisive action, New York risks worsening its housing crisis, increasing costs and deterring investment. In many ways, these challenges have already strained the city’s economic standing – arguably extending far beyond the impacts of the pandemic.

If infrastructure and housing investments remain disconnected:

Housing shortages will continue driving costs, pushing out middle- and low-income residents.

Developers will hesitate to invest due to uncertain infrastructure commitments.

Businesses and workers may relocate to cities with more reliable development pipelines and better quality of life.

One proven solution is supporting developers in contributing to public realm improvements as part of new building approvals. The Vanderbilt Corridor and Greater East Midtown rezoning, which facilitated One Vanderbilt’s development, showcase this approach. 270 Park and the upcoming 350 Park redevelopment demonstrate how developers can invest in transit upgrades, public spaces and infrastructure enhancements in exchange for increased development rights. This model proves strategic collaboration can drive urban growth while delivering public benefits.

Moving Forward: Policy Reforms and Collaborative Solutions

To create a predictable, investment-friendly framework, policymakers must move beyond temporary incentives and implement long-term strategies that foster both housing production and infrastructure investment. This requires:

Aligning funding streams across federal, state and local agencies.

Streamlining approval processes to eliminate bureaucratic delays.

Providing clear, consistent incentives for private investment in public realm improvements.

New York has long relied on public-private collaboration for infrastructure and housing development. But today’s challenges require a new level of partnership, innovation and urgency.

To build a more resilient, affordable, and connected city, leaders must establish a clear, reliable framework for PPPs – making certain private investment aligns with New York’s infrastructure and housing needs. The time for action is now, because the cost of inaction is too high.