How Albany Can Meet the Moment on New York Affordable Housing in 2025

We have a strong foundation on which to build.

Under the leadership of Gov. Kathy Hochul, 2024 saw record-breaking numbers of new housing construction, groundbreaking efforts to combat housing discrimination, and the adoption of new tax incentives to create affordable housing statewide.  

In New York City, Mayor Eric Adams and the City Council passed City of Yes for Housing Opportunity, a rezoning that will open the door to the creation of at least 80,000 new housing units. The result of collaboration and compromise on the part of the mayor and the council — backed by $5 billion in investments, including $1 billion from the state — this deal demonstrates how much we can accomplish when we work together.

This is all welcome progress, but much more remains to be done if we are to meet the staggering shortfall of thousands of affordable units statewide requiring levels of production not seen since the 1950s.

New York’s housing crisis is the result of a deep-rooted and complex web of issues that requires a comprehensive and targeted approach to address. With the next state legislative session poised to start in a matter of weeks, the New York State Association for Affordable Housing (NYSAFAH) has put together a list of action items for lawmakers to consider in 2025 in order to meet the housing crisis head on.

At a minimum, New York desperately needs an Affordable Housing Relief Fund of $150 million that would provide both operating and capital funding to ensure at-risk affordable housing properties remain available. The fund, as we conceive it, would allocate $75 million for operating assistance to offset COVID-related financial losses, and $75 million for capital improvements to correct critical issues that pose threats to residents’ health and safety.

With this investment, the state could properly address the viability concerns of affordable housing across New York and ensure that property owners are able to provide their tenants with well-maintained homes. The bottom line: Preserving the housing we already have is just as important as building new units. If we fail to do this, we will merely be running in place and not advancing on the goal of building our way out of the crisis.

Extending and increasing the State Low-Income Housing Tax Credit (SLIHC) will also be critical. SLIHC has been a powerful financing tool, but it is set to expire in 2026. Extending it, providing an increase of $12 million, and allowing greater flexibility in how the credits are transferred would help attract investors and leverage greater private investment in affordable housing projects.

Reforming the use of New York State Historic Tax Credits would unlock the ability of developers to create or preserve housing in our urban areas, which have remarkable historical and architectural value. Specifically, the program should be changed to permit the bifurcation of the federal and state historic rehabilitation credits – this allows the credits to be purchased separately depending on an investor’s tax liability. This change would create more demand for the credits and attract more investors.

Another important enhancement would provide projects that meet the criteria for “affordable housing” to qualify for historic tax credits regardless of census tracts. This offers flexibility in the use of historic tax credits and expands the number of projects that can be rehabilitated for affordable housing. Historic tax credits, when used correctly, have the power to unlock the adaptive reuse of existing buildings, helping revitalize neighborhoods while preserving their unique character and heritage.

One of the most intractable barriers to building affordable housing has been the skyrocketing cost of insurance. Building on recent efforts to address this escalating expense, we need a State Affordable Housing Insurance Fund. Based on the New York State Workers Compensation model, the fund would  support the coverage of insurance costs for developers and property owners, provide new tax benefits to insurers, and (a perennial ask) spur reform of the state’s unique and outdated scaffold law.

Our industry needs a State Environmental Quality Review Act (SEQRA) exemption for affordable housing to help reduce expensive delays and costs associated with environmental review processes for affordable housing projects. NIMBY (Not In My Backyard) activists seeking to block affordable housing development sometimes weaponize the SEQRA process to stall or block projects — another significant hurdle that is standing in the way of new construction.

Finally, as we soon come to the end of the state’s five-year housing plan, there are several critical programs — such as the New Construction Capital Program, the Homeless Housing Assistance Program, and the Supportive Housing Opportunity Program — that are oversubscribed. It’s critical that funding gaps are addressed so these programs can meet affordable housing production demands and continue to serve some of New York’s most vulnerable populations.    

This may seem like a long list, but it represents a holistic, point-by-point plan for removing the roadblocks slowing our state’s progress in providing its citizens with the affordable housing they need to survive and thrive. As the clock ticks toward 2025, there is no time to waste. We must start laying the foundation for progress today.

Jolie Milstein is president and CEO of the New York State Association for Affordable Housing.