Gov. Hochul's Bold Plan for 800,000 New Homes in New York

Dan Clark: New York is in a housing crisis. There's a shortage of more than 600,000 rental units that low-income renters could actually afford, according to the National Low Income Housing Coalition.

While New York's population has dropped over the last few years, the demand for housing has not. Governor Kathy Hochul has proposed a plan this year that she says could help fill that gap. It's called the New York Housing Compact. It would set a goal of 800,000 new homes in New York over the next decade, and each locality would have specific housing targets to meet.

Not everyone is happy about that. Some local leaders, especially on Long Island, say they want to create housing on their own terms, not the states. I asked Governor Hochul about those concerns this week while she was in Albany to tout her housing plan.

Kathy Hochul: You know, I'm not saying everybody agrees with me on everything, but when they understand the purpose behind this, to broaden the tax base, a big issue on Long Island as well, take care of the employers who've been telling me for ten years now that their biggest challenge is finding workers, and workers are telling me they can't afford to live there.

So, this is how we meet the needs of the employers as well.

DC: Hochul has pitched the plan as part of the state budget, which again is due in just four weeks.

There are still a lot of questions about how it would work, and to learn more about the housing compact and to ask about those local concerns, we spoke with State Housing Commissioner RuthAnne Visnauskas.

Commissioner Visnauskas thank you so much for being here. I appreciate it

RuthAnne Visnauskas: Thanks.

DC: We're talking about the New York Housing Compact. It's a proposal from Governor Kathy Hochul for this year's state budget. Just a quick rundown, it would have a goal of creating 800,000 new homes over the next decade across the state. Each locality would have its own housing goal. I want to start with that number, 800,000, because it is a big number.

How did we get to that number for the goal for this plan over ten years?

RV: Absolutely. And really, thank you for the opportunity to unpack a little bit of what is a complicated strategy that we propose, but really a necessary one in order to relieve the crisis in housing that we have right now.

When we looked back over the last ten years, we saw that in New York State, we produced about 400,000 units of housing. We looked at a lot of data to figure out what do we actually need to be producing in order to accommodate our growing workforce in our growing state and we think that number is about 800,000. So, then we developed a series of policy strategies that we think will get us over the next decade, continuing with the 400,000 we would assume would happen organically, and then adding an additional 400,000.

Those are the things you read about in the compact around growth targets and transit oriented development and some other regulatory relief.

DC: Okay so the 800,000 isn't necessarily the gap that we have now. It's kind of the gap we're expecting in ten years. Is that what I'm understanding correctly?

RV: It's a target. It's really what we think in New York State needs to get created over the next decade in order to make up for the under production of the last ten years and accommodate our growth. I think as you've probably heard the governor talk about, we have done a really good job creating jobs in this state, and we've created 1.2 million jobs over the last decade, but only 400,000 units of housing. That is obviously a gap, but reason why it's important is it's also different than what other states are doing.

In other states, in many cases, and our surrounding states are producing more housing than they are jobs. That's why people are moving to northern New Jersey and moving to Connecticut, because there's actually housing available there and housing available there that's more affordable.

So we really need to make up for that lack of production over the last decade by really changing what we do, as we look forward over the next ten years.

DC: Over those 800,000 units, are there any requirements on what kind of units they have to be? Is the requirement that a certain number or share of them have to be affordable housing versus just, you know, any kind of housing.

RV: We want localities to really be able to control what kind of growth they have. So while we have this sort of framework set up within, it is also a lot of flexibility. So, if localities would like to build single family homes, townhouses, multifamily buildings, homeownership, rental, they really control their growth in that way. What we're really saying is we need you to grow. We need you to keep permitting housing so that people have places to live, whether that's, you know, kids who want to come back and live where they grew up or seniors who want to downsize into a different type of house. We really want to have different types of housing across the spectrum.

So, we give localities really a lot of flexibility to create the type of housing that they that makes sense for them.

Although I would say within that, too, we've tried to build in a lot of incentives for affordability because certainly as I go across the state, everywhere I go, local leaders are saying to me they need workforce housing, they need affordable housing. So, we've put a series of incentives sort of built into the system for localities to include affordable housing in their production.

DC: Let's talk about that. What do those incentives look like? Are we talking about things like tax breaks or direct funding from the state? How would that work?

RV: I mean, really, it's all of the above. We have a very robust housing plan that got passed by the governor, the legislature, last year. We have a $25 billion five-year plan to create 100,000 affordable units. It's the biggest commitment of any state in the country towards affordable housing. So, we have that ready and available for localities that want to do that, but we've also built into the overall housing compact a counting system that allows localities to count affordable, regulated housing at double what they would market rate housing.

So again, we're saying we really want you to grow if you're a town of 10,000 and you have a three year target of 100 units, you could permit 100 market rate units or you could permit 50 affordable units, and that would count towards your target.

We think that's a really good incentive for localities to want to build affordable housing.

DC: I think you mentioned it a bit, but what would each localities housing goal be based on? Is it just strictly population? We see a bigger housing growth in New York City versus maybe a rural town upstate.

RV: We are really tailoring it to where localities are today. So we are going to look how these would be baseline off the 2020 census of how many housing units they have. So, again, in 2020, you're a town that had 10,000 housing units. We would say your three-year target is 100 units and you have three years to make that target and to permit, to your question, whether it's a starter home, a senior apartment, or a multifamily building, to meet that target in that time frame.

DC: Now, are there any localities across the state that you see that maybe it's a very small rural town that maybe just doesn't have a demand in housing that we see there clearly. Would they still have a housing goal as well, or would there be a system that says, you know, it looks like you don't need it, you don't have to do it?

RV: If there's no demand in a locality for housing, then this really does not have an impact. So, we aren't requiring housing get built anywhere. We just simply have the sort of framework in place to encourage growth where people are looking to build.

DC: Now there are higher housing goals, I believe, and I'm sorry that I'm not remembering the correct details of housing goals in New York City versus other parts of the state, I think it's 3% over a certain number of years, but I'll let you say it because you will know it.

RV: You're exactly right. It's 3% downstate, and by downstate we are talking about areas that are served by the MTA, and then it's 1% upstate and that's over the three-year timeline.

DC: And how would you see each locality meeting these goals? We talked about it a little bit in terms of incentives and things like that, but at the start of this process, assuming that it passes in the state budget, at the start of this process, each locality will have a goal over a certain number of years.

Does the state just kind of say, here’s what we want out of you, can you do that? If not, here's help.

RV: So, I would say to your sort of first point about should this pass in the state budget, we are really looking forward to working with the legislature to get something passed. I think we feel that we can't keep going business as usual as we have for the past decade into the next because the housing crisis is too severe. Rents and home prices have grown far too much as a result of a lack of supply. So, I think everybody understands that premise and that we have to find a solution for it.

We think this is the right one and a good one, but we also are open to working with the legislature to make sure we can make this something that does work because we just think doing nothing is not an option and it's not going to be good for the state.

Assuming we do get past that, I think we are really looking forward to seeing a lot of communities take up a planning process and to say, how can we grow and how do we be successful in that way? There are so many places that I've gone around the state where people have done mixed income, mixed use buildings in their downtowns, around their train stations, their vibrant downtowns, where people are walking to dinner, are walking to coffee, businesses are opening up, and so we think this is really sort of

key to New York's long term success, that people are thinking about growth and thinking about affordability really as part of their economics. We want New York to be a place where people want to stay here and live here, and they aren't moving to New Jersey and aren't moving to Connecticut because they're priced out of the market here.

DC: Yeah, I think we all would like that for sure.

Could localities also offer incentives for new housing? I could see situations where maybe, you know, a locality helps out a local developer that happens all the time across the state on other projects. Is that also expected from these localities?

RV: Yeah. I think right now people feel that both the sort of land use process in a lot of places is a very, very long, lengthy process, and so I think by encouraging localities to undertake rezonings, right, this is going to allow more what people would call as-of-right development. So, every project doesn't have to go through what can sometimes be a 12-month, two-year, three-year, four-year process to go through a series of approvals.

We aren't going to build our way out of this if it takes every project four years just to get approved, much less right, get built and then get occupied. So, we think that by working with localities, you really have to look at your zoning and really do a planning process so that then more developments can happen on an expedited basis so you get the kind of growth that we really need.

DC: Ray, as you mentioned, the state's plan, Governor Hochul is plan, I should say, would allow localities, if they're having trouble meeting their housing goals, some other way to override local zoning laws so they could kind of streamline the process.

Some local leaders, especially on Long Island, have said that they really don't like that. They don't like the state telling them that they should rezone certain parts of their locality that they don't want to, in order to meet these housing goals.

What would you say to them?

RV: So, we've built in a lot of flexibility to the plan. The first course is if you grow and you meet your housing target in three years, great. If you can't because you don't have enough zoned capacity in your town to have that kind of growth, then what we've laid out in the compact is to say, then undertake a series of zoning actions that could be, you know, rezoning an office park, rezoning an old mall to allow residential development and a series of other actions, and if a locality does those, then they actually have six years to make their growth target.

So, we feel like we're really giving a lot of flexibility to say we want you to grow, but if you can’t, then we'll give you an extra cycle to undertake some zoning and then grow so that by year six you will have met your target.

Then we obviously have a mechanism in there to have some projects approved. That's really for localities that don't grow and permit housing and or don't take any zoning action. And in that case, we're saying that it is too important for this state to allow some localities to just not grow it all. We really need everyone to be doing their part.

That's really the only case where this other approval process comes into play, and it's not how we are hoping a lot of housing gets built in the state. We really want localities to be undertaking all these planning and zoning actions.

DC: Will there be consequences for localities if this passes and they get their number and the local leaders are so against that they just say, I'm not doing it. I don't want to do it. What happens then?

RV: So we put in what's called sort of an appeals process or a approvals process, where if the locality is not doing any of those things, as I mentioned, and a developer then goes that locality and applies for a for a plan approval or a building permit and they get denied, we're going to give them a place to appeal and they can either come to a newly created board at the state level or they could go to the court system. We have allowed them to do either one and they can have that case reviewed.

If in fact the court or the board finds that the town has not met any of its obligations, has not made any attempts, to do rezoning, they would then override that denial for that project and allow it to proceed

Again, you know, the unfortunate mechanism is there to make sure that everyone does their part, but our hope is really that people actually, proactively do all the planning and the zoning that's needed to make them grow in a way that makes sense for them.

DC: All right, we will see how it shakes out in state budget talks. State Housing Commissioner RuthAnne Visnauskas, thank you so much.