New York State Decides to Speed Up A Lot of Environmental Reviews

Gov. Kathy Hochul was going to tackle New York’s housing crisis even if it meant delaying the state budget nearly two months to get what she wanted.

On May 27, Hochul signed two bills in the state’s $268 billion budget that provided an exemption from monthslong reviews, known as the State Environmental Quality Review Act (SEQRA), for new infill housing developments and several types of public infrastructure projects.

“Red tape and duplicative reviews have stopped New York from doing the very building that made us the envy of the world, making our housing more expensive and our infrastructure outdated — that ends today,” she said in a statement last week.

Changing the state’s half-century-old environmental assessment process was one of the governor’s top legislative priorities. 

She introduced the proposal in her annual budget address in January to address New York’s climbing housing costs and shrinking apartment vacancies, then made several public appearances across the state to promote it.

Real estate leaders and housing advocates were largely on board with the move. James Whelan, president of the Real Estate Board of New York, called the SEQRA revisions an “important step” toward boosting housing production while Partnership for New York City President and CEO Steven Fulop said the final budget agreement was proof the governor and legislators were willing to work together to tackle the state’s affordability crisis.

“New Yorkers are facing some of the highest housing costs in the nation because construction is too expensive, too slow, and too bureaucratic,” Fulop said in a statement to Commercial Observer. “This legislation removes unnecessary obstacles to building housing, gives the mayor the boost he needs to make his housing growth agenda a reality, and lays out a path to faster, more affordable homes in New York.”

There was no guarantee that changing the state’s cumbersome review process would succeed during an election year. 

The Hochul administration still had scars from the governor’s attempt to boost the state’s housing supply three years ago when she proposed requirements for downstate municipalities to increase their housing stock by 3 percent every three years. But suburban mayors and lawmakers revolted at the zoning overrides, forcing Hochul to abandon her housing plan weeks before announcing a slimmed-down budget.

Some municipal leaders and environmental groups, including Riverkeeper, opposed the changes to SEQRA. But Hochul found a more receptive audience among state lawmakers and business leaders for cutting red tape in order to lower housing costs over imposing a mandate.

“This didn’t feel like a very controversial thing to do,” Joshua Berman, campaigns manager at the Regional Plan Association, said. “That’s a big step forward compared with what the housing conversation was like even a few years ago. There’s been more recognition with housing prices going up that the state needs to do something about this.”

Speeding up environmental reviews could end up being Hochul’s most consequential attempt to reverse the housing crisis. In New York City, the existing review process has increased development costs for a 500-unit project by 11 percent, or $82,000 per unit, due to the cost of consultants, attorneys and inflation incurred during the review, a 2022 Citizens Budget Commission report found.

But there are still questions over where development will ultimately occur as costs continue to rise and some localities will resist new housing despite high demand.

“Anybody who is looking to build needs be confident that rents in the area will support that development,” Ken Fisher, a member of Cozen O'Connor’s business law department, said. “Given the demand, that’s more places than it used to be, but it’s still not everywhere.”

The effects of SEQRA reform could be felt most dramatically in the city’s outer boroughs.

Developers will now be able to bypass the SEQRA process for projects up to 500 units in medium and high-density residential areas and up to 250 units in low-density tracts that often contain properties merely one or two stories tall. 

These sites cannot be located in an industrial zone or places with extensive coastal flooding. But the exemption would permit mixed-use projects if the commercial or community space does not exceed 50,000 square feet. And it will apply to essential community infrastructure projects, such as schools, sewers and water treatment facilities that would accompany the additional bump in population in any given area.

That still leaves plenty of room for modest-sized rezonings to occur in swaths of southern Brooklyn and western Queens, as well as pockets of Staten Island and the Bronx containing vacant lots and single-story commercial properties near subway stations and bus lines.

Mayor Zohran Mamdani has already begun to prioritize new development in community districts that have low housing production or have repeatedly blocked new projects. In May, the Mamdani administration released its plans to study potential rezonings for McDonald and Coney Island avenues below Prospect Park in southern Brooklyn and White Plains Road in the Bronx.

Now the newly revised SEQRA, combined with city charter reforms and the City of Yes Housing Opportunity zoning overhaul completed under Mayor Eric Adams, will give the Mamdani administration more tools to upzone areas and bypass local opposition to new housing construction.

“In southern Brooklyn, these projects may get kicked into one of the new review procedures under the charter so they wind up going, through an expedited basis, to City Planning and they don’t have to go through environmental review,” Fisher said. 

The revisions could also bring new demand to parts of the city where single-family zoning predominates, particularly in Woodside and Bayside, Queens, along the Long Island Rail Road and the East Bronx along the Metro-North, which offer direct access to Midtown Manhattan (construction on four new train stations in the Bronx could be complete by 2029).

And the construction of the Interborough Express (IBX), a 14-mile light rail line with 19 new stations between Sunset Park, Brooklyn, and Jackson Heights, Queens, could create 70,000 to 100,000 new homes within a half-mile of the line over the next decade, according to a New York Building Congress 2025 analysis.

The land-use and transportation connections make it easier to maximize the benefits whenever the IBX opens up,” Berman said. “It will allow for faster and cheaper development to happen around the station areas, which is a benefit that pairs nicely with the transit improvements.”

Most importantly, the newly adopted SEQRA revisions will allow more affordable units to come onto the market more quickly.

Whenever developers apply to rezone a site for residential use, they trigger the city’s mandatory inclusionary housing program, which means owners must set aside a portion of the units to become permanently affordable. Now the exemptions could mean significantly shorter timelines for these projects.

In some cases, affordable housing developers experienced two to three years of delays while completing their SEQRA reviews, according to the New York State Association for Affordable Housing (NYSAFAH). In the Bronx, courts eventually upheld a negative declaration and two projects on Bathgate Avenue and Broadway moved forward despite neighborhood opposition.

“We couldn’t have a situation where affordable housing developers were facing years of procedural and legal hurdles before even breaking ground,” Carlina Rivera, president and CEO of the NYSAFAH, said. “It took a lot of political capital on behalf of the governor and we appreciate that she stepped out on this.”