Gov. Kathy Hochul, who withdrew an ambitious plan to expand housing in New York last year after upstate legislators mounted stiff opposition, used her annual State of the State address this week to make restoring the 421a tax break for affordable housing a top priority of her 2024 agenda.

Hochul said any restoration of the tax abatement, which expired in June 2022, will need to include new requirements for below-market housing and wage standards for building service and construction workers. She suggested that the legislature enable NYC to offer its own abatement for rental housing construction.

Hochul also renewed her support for a four-year extension of the deadline that requires 421a projects to be completed by June 2026 in order to be eligible for the tax breaks, which offered a decades-long abatement on property taxes in exchange for setting aside a percentage of housing for lower- or middle-income tenants.