Governor Hochul Unveils Landmark Agreement to Address the Housing Crisis and Unlock New York’s Housing Potential as Part of FY 2025 Enacted Budget

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Governor Kathy Hochul today announced a historic agreement as part of the FY 2025 Enacted Budget to address New York’s housing crisis by increasing the housing supply, promoting affordability, strengthening protections for New York renters and homeowners, and combatting bias and discrimination in housing. The actions build on Governor Hochul’s commitment to tackling the housing crisis and reducing housing costs for all New Yorkers.

"I promised New Yorkers that we’d tackle the housing affordability – and in this budget, we got it done," Governor Hochul said. "As the first governor in half a century to put housing front and center, I will keep fighting to make our state more affordable and more livable and help every family achieve their New York dream.”

Governor Hochul’s Housing Agenda

The FY 2025 Budget builds on Governor Hochul’s commitment to addressing New York State’s housing crisis to make the state more affordable and more livable for all New Yorkers. The Budget establishes a groundbreaking and multifaceted plan to build new housing across New York State, including:

• A new 485-x tax incentive to create new housing in New York City, including affordable rental housing and homeownership opportunities.
• An extension of the completion deadline for projects in the now-expired 421-a incentive program through 2031.
• Authority to allow localities to adopt incentives for both mixed-income and 100 percent affordable housing outside New York City, and to support development of accessory dwelling units statewide.
• A new incentive to encourage affordability in commercial to residential conversions in New York City.
• Authority to lift outdated restrictions on residential density in New York City to deliver more housing.
• A pilot program to enable the City to legalize existing basement and cellar apartments in certain areas of New York City.
• The creation of a $500 million capital fund to build up to 15,000 units of housing on state land.
• $600 million in capital funding to support housing statewide.
• New protections for tenants and homeowners, including anti-price gouging measures for renters and stronger enforcement and preventative measures to protect homeowners from deed theft.
• Efforts to combat discrimination against Section 8 households seeking to use their vouchers to secure housing and discrimination against affordable housing providers on the insurance market.

As part of the FY 2023 Budget, the Governor announced a five-year, $25 billion Housing Plan, to create and preserve 100,000 affordable homes statewide. More than 40,000 homes have been built to date.

Increasing New York’s Housing Supply

As part of the FY 2025 Budget, Governor Hochul has secured a package of programs and initiatives to create new housing, including affordable housing, in New York City. The Budget includes the new 485-x tax incentive, a ten-year program building on the now-expired 421-a incentive program, which provides benefits for housing construction while encouraging affordability and delivering strengthened wage standards for building service and construction workers, where applicable. According to estimates, the 421-a program produced more than two-thirds of all newly constructed multifamily housing in the City in the last decade.

The Budget also extends the construction deadline for projects currently vested in the expired 421-a program through 2031, ensuring thousands of previously at-risk rental units, including affordable housing, can be built. In addition, the Budget establishes a new tax incentive for commercial conversion projects that include affordable housing, grants the authority to lift state restrictions on residential density restrictions in New York City for the first time since the 1960s while requiring affordability, and authorizes the City to create a pilot program to provide amnesty to existing basement and cellar apartments that meet health and safety standards to be set by the City in certain New York City neighborhoods.

For localities outside of New York City, the Budget includes an opt-in tax incentive program for mixed-income and 100 percent affordable new construction or conversion multifamily rental projects, and an incentive to create accessory dwelling units (ADUs). The Budget also requires the State’s Fire Prevention and Building Code Council to study ways to amend the code to facilitate alternative forms of multi-family housing.

Governor Hochul has also secured funding for a $500 million capital fund to develop up to 15,000 units of housing on state-owned sites across New York. The Governor announced the Redevelopment of Underutilized Sites for Housing initiative in her 2024 State of the State after signing an executive order last year requiring all state agencies to examine properties within their control to determine their housing potential. Sites will become available on an individual basis as the state issues requests for proposals to develop them.

In addition, Governor Hochul has reached an agreement to strengthen New York’s Pro-Housing Communities program by enabling the State to make the Pro-Housing Communities certification a requirement to receive up to $650 million in state discretionary funding. The Governor announced the Pro-Housing Communities Program last year as part of a package of Executive Actions to increase New York’s housing supply to recognize and reward municipalities actively working to unlock their housing potential and encourage others to follow suit. To date, 179 localities have launched applications to become Pro-Housing Communities and 49 communities have been certified.

The FY 2025 Budget will further take action to help bring vacant apartments back on the rental market by raising the cap on individual apartment improvements for rent stabilized units. New requirements to the system will allow owners to recoup a reasonable portion of renovation costs over a 15-year period, which will help maintain the supply of safe, modernized rent stabilized units. The Budget also provides $40 million in capital to assist bringing back online vacant apartments in need of repair outside of New York City.

Strengthening Protections for Tenants and Homeowners

Governor Hochul has also secured historic anti-price gouging and eviction protections for New York renters as part of the FY 2025 Budget. The budget makes annual rent increases above ten percent or five percent plus the Consumer Price Index (whichever is lower) presumptively unreasonable to protect tenants against price gouging and strengthens legal protections for covered renters in eviction proceedings, where applicable. These protections will be mandatory in New York City; municipalities outside of New York City will have the ability to opt-in to the program. Separately, Governor Hochul reached an agreement to reinforce existing law to make clear that squatters are not tenants, and thus are not entitled to these and other tenant protections.

In addition, the Governor has strengthened protections for homeowners against deed theft by creating a clear definition of the crime of deed theft in the larceny statute and by limiting the ability of predatory investors to acquire interests in inherited property and to pressure homeowners into selling their family homes. These protections will help enhance enforcement and keep New Yorkers in their homes. To further prevent loss, the Governor has introduced a Transfer on Death Deed, which will enable homeowners to be certain their home will be protected after their passing, without the necessity of drafting a formal will.

Combatting Bias and Discrimination in Housing

Governor Hochul also secured an agreement to combatting housing discrimination against both affordable housing providers and tenants. As part of the budget, Governor Hochul has advanced legislation to prohibit insurance carriers from inquiring about or considering tenants’ source of income, the existence of affordable dwelling units, the tenants’ or building’s receipt of governmental housing assistance, and whether the building is a Mitchell-Lama in the decision to issue, continue to provide, or increase the cost of insurance for residential real property. This new legislation will help ensure affordable housing providers have access to reasonably-priced insurance, which in turn will help avoid rent increases on tenants.

The Governor will also establish a new enforcement unit dedicated to swift resolution of complaints about housing discrimination related to Section 8 Housing Choice Vouchers, helping to place impacted individuals and families in available housing to which they had been impermissibly denied access based on their vouchers.

Additional Capital Investments

In addition to advancing major policy actions, the FY 2025 Budget also includes more than $600 million in capital funding to support housing statewide, including but not limited to:

• $150 million for New York Housing for the Future to subsidize construction of cooperative rental and cooperative homeownership 100% affordable housing.
• $140 million for capital improvements of New York City Housing Authority developments.
• $80 million for capital improvements for Mitchell-Lamas.
• $75 million for capital improvements of public housing authorities outside of New York City.
• $50 million for Land Banks to redevelop blighted or abandoned properties.
• $40 million for capital awards to upgrade vacant rental units outside of New York City.
• $40 million for Infill Housing to fund development of small homes within unused and underutilized lands with existing development patterns.
• $10 million for capital improvements of rural housing subsidized by the Federal USDA 515 program.
• $25.5 million in other one-time capital assistance projects.