NY Pitches Exempting Housing from Environmental Review

Gov. Kathy Hochul wants to make it easier to build in New York, while also cracking down on bad landlords and cutting down on property owner costs.

In her fifth State of the State address, Hochul unveiled her “Let Them Build” agenda, which includes speeding up housing and infrastructure projects. She also backed efforts to create new criminal charges for landlords that repeatedly harass tenants across their portfolios.

Hochul’s agenda echoes the early approach of Mayor Zohran Mamdani, who has simultaneously taken steps aimed at easing housing construction while also ramping up enforcement actions against landlords. However, her policy priorities, as laid out Tuesday, do not include increasing taxes on corporations or the state’s wealthiest individuals — proposals key to paying for some of the mayor’s top campaign promises.

Speeding up the building process

As part of “Let Them Build,” the governor pitches exempting certain housing projects from the State Environmental Quality Review Act, or SEQRA, according to the State of the State book, which lays out the governor’s policy priorities for the year.

The governor calls for allowing housing projects that have no significant impact on the environment and are compliant with local zoning to avoid environmental review. Projects must be outside flood risk areas to qualify and still need to abide by state rules related to water use, air quality, environmental justice and protection of natural resources.

The book doesn’t get into specifics, but notes that the state will establish different density caps for projects eligible in New York City, based on neighborhood density. Elsewhere in the state, projects can only qualify if located on “previously disturbed” land and connected to existing water and sewer systems.

Under Hochul’s proposal, certain green and other infrastructure projects, including nature-based storm water management, public parks and recreational bike/pedestrian paths, could avoid review.

“When communities say yes to housing, infrastructure or clean energy, we’re going to let them build,” Hochul said during her State of the State address. “When a town or city decides to move forward they shouldn’t get stuck in regulatory hell.”

The governor also wants to cap the review process at two years and to clarify the timeline for waging a legal challenge to these reviews. She additionally is calling on state agencies that review and approve permits to assess their processes and find ways to speed up approvals. Agencies must issue recommendations by Sept. 1.

Hochul similarly proposed carveouts for small housing projects, those spanning no more than 10,000 square feet, as part of her State of the State last year.

This year’s more ambitious proposal comes after California successfully exempted infill housing from its state environmental review process.

Environmental review can add years to a project’s timeline. New York City has tinkered with the city version of environmental review, allowing some housing projects to either skip review or undergo a shortened one. The state rules, however, set minimum requirements for localities to follow, meaning that significant change requires action by state.

Sen. Rachel May previously proposed legislation that would exempt much larger affordable housing projects, those consisting of up to 1,000 units, from environmental review. The measure passed in the Senate last year but died in committee in the Assembly.

The policy book notes that an analysis by the city and state of 1,000 projects found that “virtually none of such projects ultimately were found to have significant environmental impacts.”

Other multifamily moves

Hochul also supports legislation that would upgrade felony charges against landlords who systematically harass rent-regulated tenants across multiple buildings or are “repeat serious offenders.” At the urging of Manhattan District Attorney Alvin Bragg, Sen. Brian Kavanaugh and Assembly member Micah Lasher introduced similar legislation last year.

The governor’s policy priorities include some initiatives aimed at decreasing costs of multifamily property owners, but do not include changes that would allow for increasing rents on vacant stabilized apartments, as landlord groups have sought.

Hochul proposes reforming the property tax break J-51, which expires in June. The City Council revived the incentive in 2024, more than a year after the state approved a new version of the tax break that limited the pool of eligible buildings. The abatement is provided to owners who renovate their stabilized apartment buildings, which must be at least 50 percent affordable, part of the state’s Mitchell-Lama program or otherwise receiving “substantial government assistance.”

Owners have previously blamed outdated price schedules — which are used to determine the value of the break — for making the program unappealing. The most recent iteration of the abatement creates too narrow a universe of eligible buildings, according to landlord groups.

The State of the State book cites “administrative challenges” as a reason that owners haven’t sought the incentive, but doesn’t provide details on a new program.

The governor doesn’t mention property tax reform, nor alternative property insurance models, which are frequently floated as possible cost-cutting initiatives for owners. The State of the State book, however, proposes expanding insurance discounts for homeowners and multifamily owners, and also ramping up reporting requirements for insurance providers.

The governor is also seeking to increase income eligibility for Senior Citizen Rent Increase Exemption (SCRIE) and Disability Rent Increase Exemption (DRIE), programs that provide tax credits to landlords in exchange for freezing rents for certain senior and disabled tenants.

New York Apartment Association President Kenny Burgos said he supports the governor’s expansion of SCRIE and DRIE, but reforming J-51 isn’t enough to address the scale of distress among rent stabilized properties.

“No building can take out a loan on the promise of a tax break, so this will do nothing to help more than 300,000 apartments in buildings that are already functionally bankrupt,” he said in statement.

Hochul wants to allocate $250 million to “accelerate affordable housing” this year, adding to her $25 billion, five-year housing plan announced in 2022. The State of the State book doesn’t mention funding for the state-based housing voucher program approved last year.

Tuesday’s address comes as Hochul faces a challenge on the left from Lt. Gov. Antonio Delgado and Nassau County Executive Bruce Blakeman on the right in her re-election campaign. Some socialist lawmakers, including state Sen. Jabari Brisport and Assembly Member Emily Gallagher, have endorsed Delgado.

The election already seems to be shaping the governor’s policy agenda this year. In an answer to Mamdani’s pledge for free childcare, Hochul announced a $4.5 million plan this month to expand free and low-cost childcare across the state. She also proposed eliminating state income taxes on up to $25,000 of tipped income, following a federal rule promoted by President Donald Trump.

She also repeatedly framed her agenda as a fight against the Trump administration during her speech, pointing to the president’s recent criticism of New York’s congestion pricing program.

“We will not bow to a wannabe king,” she said.