Gov. Hochul Backs Down on Linchpin of Housing Plan for New York

Mandatory growth targets were at the heart Hochul’s housing plan, but state lawmakers fought back hard.

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Gov. Kathy Hochul is reportedly walking away from a key component of her housing agenda, mandatory growth targets to increase the housing stock in every town and city in New York.

The targets are a vital linchpin of Hochul’s housing compact, which aims to build 800,000 new homes statewide over the next 10 years, but Hochul backed down after facing fierce pushback from state lawmakers, City & State reported, citing sources close to the governor. 

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Hochul’s press secretary Avi Small declined to answer Commercial Observer’s questions about the governor’s position on mandatory housing targets, but said in an email that 72 percent of New Yorkers agree with the governor that “housing affordability is a major problem.”

Small described Hochul’s housing compact as “the boldest plan in a generation.” 

The governor unveiled the mandatory housing plan last January, calling it “a groundbreaking strategy to catalyze the housing development we need for our communities to thrive” in her State of the State address.

The proposal included setting specific growth targets to build new housing, 3 percent growth for areas downstate and 1 percent growth for counties upstate. If communities fail to meet the targets, the state would step in and override prohibitive local zoning laws to usher new development through to approval. 

Lawmakers in Albany have not shared the governor’s enthusiasm for the plan. The prospect of mandatory housing targets proved particularly unpopular in suburban Westchester County and Long Island, where communities served by Metro-North lines and the Long Island Rail Road would face higher growth targets over three years.

New York Democrats have their eye on those same communities ahead of the 2024 general election. The outcome of races for several downstate congressional seats will be key in determining which party controls the U.S. House of Representatives, leaving the governor in a quandary over housing measures she said are “front and center of my agenda” yet might risk further antagonizing swing districts.

City & State reported that other parts of Hochul’s housing plan — including a replacement for the 421a tax abatement — remain intact.

This isn’t the first housing loss Hochul has suffered this year.

Negotiations for a deal to pass other housing measures — including rent subsidies, a “good cause” eviction bill, and a replacement for 421a — fell apart in June at the last minute.

Hochul tried to circumvent the state legislature this summer in taking executive action to extend the 421a tax abatement to a limited number of mixed-income developments that would not otherwise meet the law’s June 2026 deadline. The governor leaned on advice from industry groups, the Real Estate Board of New York (REBNY) and the Building and Construction Trades Council to iron out the details before issuing the orders, New York Focus reported.

State lawmakers were surprised by the move, and Hochul eventually passed a much more subdued plan to include a replacement for 421a for certain projects in Gowanus, Brooklyn, and a substitute tax benefit to let partially built projects move forward.

“After the legislature flatly rejected it and failed to introduce a viable alternative, Gov. Hochul refocused her efforts on sweeping executive action that took effect in July,” Small said in a statement Thursday. “Until the legislature is ready to come back to the table with a serious approach to build more housing in New York, the governor is focusing on using her executive powers to address the housing crisis.”

A spokesperson for REBNY declined to comment on the status of mandatory growth targets in the governor’s latest plans but said in an email, “It’s clear that New York City’s housing supply crisis is worsening, making it more expensive to rent an apartment and less attractive to live here or grow a business in our state.” 

The spokesperson said that lawmakers will play an important role in tackling housing policy in 2024, and that REBNY is waiting to see what “practical policies and initiatives that the state legislature is willing to support to address the issue.”

Abigail Nehring can be reached at anehring@commercialobserver.com.