NYC Suburbs Fight Hochul's Plan to Expand Housing

The clock is ticking on whether Gov. Kathy Hochul will be able to persuade the New York State Legislature to adopt the key proposals of her ambitious housing agenda—or any of her housing plans—in the face of fierce opposition from NYC’s suburbs.

The battle royale in Albany over the state budget has already rolled through the April 1 deadline to finalize the Empire State’s fiscal blueprint, but key state legislators are signaling they may not agree to extend the negotiations through Monday, as Hochul as requested.

What Hochul is calling the New York Housing Compact aims to add 800,000 units to NY’s residential inventory over the next decade by requiring NYC and its suburbs—as well as upstate cities including Buffalo and Rochester—to increase housing by 3% over three years.

Hochul’s proposed $227B budget takes a page—actually several pages—from affordable housing initiatives in California, including rezoning neighborhoods adjacent to train lines and train stations for higher density residential development and the imposition of builder’s remedy, which would allow the state to overrule local zoning officials to clear the way for affordable housing projects, Bloomberg report.

These proposals have been denounced by legislators representing NYC’s northern suburbs and Long Island as a “radical power grab” that will “destroy a way of life” and force Long Island “to become the sixth borough of New York City,” the report said.

The village of Bronxville, which sits between the Bronx and Yonkers, would be required to add 7,000 new housing units under Hochul’s plan, which effectively would triple the population of the village and allow densities as high as 50 dwelling units per acre. Median home prices in Bronxville are $1.2M.

Also unresolved in the debate in Albany is the fate of the 421a construction deadline, which requires NYC developers who rushed to start projects last June—before the 421a tax credits expired—to complete their projects by 2026.

In February, Hochul proposed to extend for four years the June 2026 deadline. Scores of developers raced last June to pour foundations before the June 15 deadline to qualify for the tax breaks, which expired at the end of June 2022.

Multifamily developers have been lobbying for an urgent extension of the 2026 deadline. If they fail to meet the deadline, their 421a projects are no longer eligible for the tax breaks.

NYC developers are warning that most of these projects will be canceled or postponed if the June 2026 deadline remains in place because in the current environment they’re not feasible—and, if they miss the deadline, whatever financing they were anticipating will evaporate when lenders pencil out the tax breaks.

According to a survey conducted by the Real Estate Board of New York (REBNY), more than 32,000 housing units may not get built if the June 2026 deadline stays in place.

Also up in the air is Hochul’s proposal make a key revision in the laws governing NYC zoning to enable more office conversions to apartments, a central element of Mayor Eric Adams’ “Moonshot” plan to build 500K new homes in NYC by the end of the decade.