As part of her State of the State address, Governor Kathy Hochul is proposing new initiatives to address the state’s housing affordability crisis.
The plan includes the first statewide legislation in the nation to combat rent price fixing through algorithms, a $100 million investment in the Pro-Housing Communities Fund to support housing infrastructure and the state’s first revolving loan fund for mixed-income rental development outside New York City. The governor also announced last week that her $25 billion five-year plan to build or preserve 100,000 affordable housing units is 50 percent complete and ahead of schedule.
“The top driver of our affordability crisis is the rising cost of rent and mortgages, and New Yorkers need our help,” Hochul said. “After passing a landmark housing deal last year, it’s time to continue the fight with new measures to make life more affordable for tenants and homeowners.”
A $100 million New York State Pro-Housing Supply Fund is planned in the governor’s state budget proposal, available to certified Pro-Housing Communities to assist with infrastructure projects necessary to create new housing, such as sewer and water infrastructure upgrades.
The governor’s plan would also allow certain multifamily housing proposals to proceed with streamlined environmental review. For example, multifamily housing with no more than 10,000 square feet of gross floor area could proceed as “Type II” under the State Environmental Quality Review Act, offering a simpler pathway toward local approval.
The mixed-income revolving loan fund is intended to fill construction financing gaps by providing a lower-cost and more flexible form of capital than is generally available in market financing, according to the governor’s office. The funding will be replenished when borrowers make repayments once projects have converted to permanent financing after construction.
Hochul also plans to double low-income housing credits, a program that was signed into law in 2000. Doubling the amount of credits available will make it the largest state low-income housing tax credit program in the country. According to the governor’s office, it will generate upward of $210 million in private investment in affordable housing per year.
To address blight while also creating affordable housing opportunities, Hochul intends to strengthen municipal authority to acquire vacant and abandoned buildings and authorize localities to adopt a tax exemption to incentivize redevelopment of these properties into affordable homes.
Regarding algorithm-enabled rent price fixing, the governor’s office referred to the practice as collusion.
“Real estate management software services are using proprietary information from their client base to aggressively push landlords to raise rents even when an increase in supply or a softening in the market would organically lower prices,” the governor’s office stated. “Recent data show that price fixing algorithms cost tenants nationwide an estimated $3.8 billion more in inflated rents last year alone. The software companies make no secret that the algorithms are intended to raise rents, with some openly advertising that they can help property owners outperform the market, resulting in housing market distortion and hurting tenants during a historic housing supply and affordability crisis.”
Hochul is proposing a statewide ban on the sale or use of rent price-fixing software.
The governor also plans to seek more money for supportive housing and to maintain existing units for people who otherwise would be homeless due to, for example, serious mental illness and substance use disorders.
Staff Writer on Jan 21, 2025