Gov. Kathy Hochul says building more housing is the only way out of the crisis. But her housing agenda this year doesn’t take any big swings at the problem.
Hochul unveiled a number of housing policies during her State of the State address on Tuesday. Her agenda includes providing more funding to supportive housing and making another $100 million available for so-called pro-housing communities to update infrastructure to accommodate housing growth. Oh, and there’s that $1 billion the state promised to New York City to help it build 80,000 units over the next 15 years, made possible by sweeping zoning changes.
But the approach this year, especially when compared to the NIMBY-busting New York Housing Compact she pitched two years ago, appears piecemeal rather than a product of standing firm on policies that will drive substantial housing construction throughout the state. She called her 2023 approach “bold and audacious.” This year’s agenda, as part of a broader plan to tackle affordability, was framed as “bold and actionable.”
“As we’ve seen in our past battles, we can’t unleash the full potential of the housing market without a fight,” the governor said. “That’s the way it is. But that’s what New Yorkers expect of us. I cannot and I will not back down.”
But she did back down from the Housing Compact, which would have required localities to meet certain housing growth targets. The proposals laid out on Tuesday are optional. The governor may have to fight to keep new housing financing in this and future budgets, as the possibility of federal spending cuts looms large. But the policies she put forward Tuesday did not include proposals that address zoning or incentives beyond one-time investments.
The governor proposed exempting some housing projects from the state’s environmental review process to speed up construction timelines, but this would only apply to teeny projects, those that do not exceed 10,000 square feet. Sen. Rachel May has proposed a much higher threshold for projects in New York City, 1,000 units.
She also proposed a revolving loan fund for developers of mixed-income housing. It is not yet clear how much would initially be invested in such a fund, nor what kind of affordability requirements would accompany it. May has a bill that would create a fund that provides financing to projects where at least 20 percent of the apartments are rented to those earning at or below 50 percent of the area median income.
It is important to note that the State of the State just sets the stage for budget negotiations — so more proposals could emerge. But Open New York and a landlord group, the New York Apartment Association, were not super enthusiastic about the governor’s proposals.
“Missing from Governor Hochul’s State of the State address was anything about reducing the costs of housing or creating enough housing to address the state’s ongoing crisis,” Kenny Burgos, head of the New York Apartment Association, said in a statement. The governor’s agenda book also did not mention rent regulated property owners on any of its 129 pages.
Open New York’s Annemarie Gray said no housing strategy can succeed “without addressing the restrictive local zoning rules that block new homes in communities across our state.”
“While the revolving loan fund will help finance affordable housing, these desperately needed homes can only be built where local zoning allows them,” Open New York’s Annemarie Gray said in a statement. “Too often, that’s nowhere.”
On Wednesday, N.J. Gov. Phil Murphy gave his own State of the State address, and said he would call on the legislature to pass bills that would change local zoning to allow for more housing.
When she was pushing the Housing Compact, Hochul pointed to the horror that New Jersey, of all godforsaken places, was outpacing housing production in New York’s suburbs. Open New York posted on social media platform X on Wednesday about Murphy’s speech: “@GovKathyHochul please don’t make us jealous of @NJGov.”
What we’re thinking about: What housing and real estate-related policies would you like to see addressed in this year’s state budget? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: The Fair Share Act, which would require developers to pay their construction workers prevailing wages at certain projects receiving $1 million or more in city funding, now has 45 sponsors in the City Council.
Elsewhere in New York…
— The NYPD issued new rules barring officers from initiating car chases to pursue people suspected of low-level offenses, Gothamist reports. The new policy goes into effect Feb. 1, and replaces guidance that left the decision up to officers in the moment to decide if a chase would be dangerous.
— Comptroller Brad Lander received nearly $3 million in public matching funds on Wednesday, Politico reports. Lander previously did not qualify because he missed a paperwork deadline.
— A state Supreme Court judge on Wednesday dismissed the city’s lawsuit accusing Exxon Mobil, BP and Shell of falsely representing to New Yorkers that its products help address climate change, Reuters reports. Judge Anar Patel found no evidence of “greenwashing.” Patel ruled that New York could not claim that its residents were savvy about how fossil fuels contribute to climate change but were tricked by the fact these companies did not disclose how their fossil fuel products played a role in climate change. “The city cannot have it both ways,” the judge wrote.
Closing Time
Residential: The priciest residential sale Wednesday was $6.6 million for a 2,598-square-foot, sponsor-sale condominium unit at 30 Front Street in Dumbo. The unit was sold by Fortis Property Group.
Commercial: The most expensive commercial closing of the day was $88 million for a 286,212-square-foot office building at 767 Third Avenue in Turtle Bay. The Real Deal reported on the transaction from Sage Realty Corporation to Metro Loft Management.
New to the Market: The highest price for a residential property hitting the market was $39.5 million for an 18,000-square-foot townhouse at 15 East 63rd Street in Lenox Hill. Sami Hassoumi of Brown Harris Stevens has the listing.
Breaking Ground: The largest new building application filed was 184,800-square-feet for a proposed five-story school building at 45 Cleveland Place in the Arrochar neighborhood of Staten Island. Michael Bischoff of Pei Cobb Freed & Partners filed the permit on behalf of the New York City School Construction Authority. — Matthew Elo