FINANCE

NEW YORK STATE HOUSING BUDGET HEARING FOCUSES ON HOUSING COMPACT PROPOSAL Albany — The New York State Legislature's joint Finance and Housing committees heard testimony March 1 on Governor Hochul's 2023-2024 housing budget proposal, which centers on an ambitious Housing Compact designed to create 800,000 new homes over the next decade through statewide growth targets and regulatory changes. Housing and Community Renewal Commissioner RuthAnne Visnauskas announced that the state has completed its first five-year Housing Plan, which created and preserved 100,000 affordable homes and 6,000 apartments with supportive services. She outlined a new $25 billion five-year investment to create an additional 100,000 affordable homes, with nearly 15,000 homes financed to date. The Housing Compact proposes setting statewide housing growth targets of 3 percent for downstate communities served by the MTA and 1 percent for upstate communities. The proposal includes a $250 million Climate Friendly Homes Fund to electrify 10,000 homes at an average cost of $25,000 per unit, a $20 million planning fund for local governments, and a new lead abatement program developed with the Department of Health. Assemblywoman Linda Rosenthal, chair of the Assembly Housing Committee, raised concerns about the lack of "affordable" language in the 800,000-unit target and questioned the adequacy of immediate relief measures for the current eviction and rent crisis. She noted that more than half of New York renters pay more than 30 percent of income toward rent—the second-highest rate in the nation—and cited a 30 percent rent increase in the NYC metro area since 2015. Rosenthal also pressed the commissioner on the lack of budget funding for the Homeowner Protection Program (HOPP), which had received $20 million from the Governor and $15 million from the Legislature last year but received no funding in the current proposal. She expressed alarm that 89 nonprofits had written to the Governor about the omission, and noted that projections estimate a $40 million need for the program. Sen. Brian Kavanagh, chair of the Senate Housing Committee, asked detailed questions about new funding mechanisms and expressed enthusiasm for lead abatement and climate initiatives. However, he signaled that the Legislature would likely need to add funding for HOPP and other immediate-need programs like good-cause eviction and Housing Access Vouchers. Assemblyman Michael Fitzpatrick raised concerns about declining Major Capital Improvement (MCI) applications in rent-stabilized buildings, noting that applications dropped from 1,342 in 2018 to 285 in 2021, suggesting that recent rent regulation changes have disincentivized investment in aging housing stock. He also questioned the Housing Compact's implementation in areas like Suffolk County, where infrastructure limitations and aquifer protection requirements may prevent municipalities from meeting growth targets. The commissioner acknowledged infrastructure challenges and noted that the $250 million infrastructure fund is intended as "a down payment" on sewer and water investments needed to support housing development. The hearing was the 12th and 13th in a series of joint fiscal committee hearings on the Governor's proposed budget. A second hearing on workforce issues was scheduled for later that afternoon. NEW YORK STATE HOUSING COMMISSIONER DEFENDS AMBITIOUS HOUSING COMPACT AMID FIERCE LEGISLATIVE SKEPTICISM Albany — Housing and Community Renewal Commissioner RuthAnne Visnauskas faced intense questioning from state legislators on March 1 over the Governor's proposed Housing Compact, a sweeping statewide policy requiring municipalities to increase housing production by 1-3 percent annually to reach 800,000 new units over the next decade. The hearing before the Joint Legislative Committee on Finance revealed deep divisions over the plan's approach, with suburban and upstate lawmakers expressing alarm that the proposal prioritizes density over affordability and fails to account for infrastructure costs and property tax impacts. Sen. Jack Martins of Nassau County delivered the most pointed critique, performing mathematical calculations on the record to demonstrate the proposal's scale. He noted that the Housing Compact's requirement of 50 units per acre within a half-mile radius of train stations would translate to 25,000 units per station. With Nassau County containing over 50 train stations, Martins calculated the proposal could require over 1 million new housing units—more than double the county's current 476,000-unit housing stock. "My concern is, Commissioner, there are 476,000 housing units in Nassau County right now. It is the most densely populated county outside of the five boroughs, at approximately 4,750 units per mile," Martins said. "If you consider the sheer scope and impact on our communities in Nassau County by a proposal that in a single step has the potential of tripling the number of housing units in our county, changing the very fabric of our communities — I hope you understand why people in our communities are that upset." Visnauskas countered that many lands would be exempt from the requirements due to waterways, roadways, cemeteries, and other non-buildable areas, and that the state would work with communities on implementation. Other legislators raised concerns about affordability. Sen. John Liu questioned whether the plan adequately incentivizes affordable housing, noting that the 2-for-1 counting mechanism—where one affordable unit counts as two market-rate units toward targets—may not be sufficient. Sen. Cordell Cleare cited a New York Times report on Black exodus from New York, noting the median income disparity between Black ($53,000) and white ($98,000) residents, and argued the plan should prioritize deeper affordability. Sen. Pam Helming raised concerns that the proposal could increase property taxes through developer exemptions and private causes of action, and questioned whether local government associations were adequately consulted. She also noted that while land banks received $50 million in the previous budget, only $20 million had been committed, with no new allocation proposed for 2024. Assemblyman Keith Brown of Long Island noted that while the state allocated $250 million for planning and infrastructure, Suffolk County alone would need approximately $5 billion to sewer the entire county. He also pointed out that Long Island requested $110 million for affordable housing last year but received only $3 million—less than 3 percent. Visnauskas defended the $250 million as a "down payment" and noted that infrastructure funding comes from multiple state sources, including the Environmental Facilities Corporation and a bond act passed last year. He emphasized that the plan includes incentives for affordable housing and that the state has been actively consulting with local government organizations since the proposal's announcement in January. On other housing issues, Assemblyman Epstein raised concerns about public housing residents facing evictions due to Emergency Rental Assistance Program (ERAP) funding shortfalls, citing $10 million in arrears in his district alone. Visnauskas acknowledged the issue and said the state continues to advocate for additional federal ERAP funds. The hearing also touched on basement and cellar apartment legalization, with Epstein noting that the proposal includes basements but excludes cellars despite their similarity. Visnauskas said the state wanted to start with basements as a first effort but expressed willingness to work with the Legislature on including cellars. Sen. Rachel May, chair of the Cities Committee, expressed concern that uniform municipal targets could exacerbate sprawl and fail to address concentrated poverty and racial segregation in upstate cities, suggesting a regional development approach might be more effective. The hearing underscored the political challenge facing the Governor's housing agenda: while housing advocates support increased production, suburban and upstate lawmakers worry about unintended consequences for their communities, and affordable housing advocates question whether the plan does enough to ensure new units remain accessible to low-income New Yorkers. NEW YORK STATE HOUSING COMMISSIONER FACES SKEPTICAL LEGISLATURE ON 800,000-UNIT HOUSING COMPACT Albany — Housing and Community Renewal Commissioner Vishnauskas defended the Governor's ambitious Housing Compact during a joint legislative hearing Wednesday, fielding pointed questions from state senators and assembly members skeptical of the plan's reliance on local zoning changes and its actual affordability outcomes. The hearing, held before the joint Finance Committee, focused on the executive budget's housing proposals, including a plan to create 800,000 housing units over 10 years through a combination of state incentives and local zoning reforms. The commissioner acknowledged that new construction projects typically take 24 months to build plus six months for occupancy, meaning units approved in the final year of the five-year plan would not be occupied until 2029. Sen. Borrello, a former local government official, engaged in a sharp exchange with the commissioner over state authority to override local zoning decisions. "If you're letting them decide, why would you need to override their local zoning?" he asked, raising concerns about infrastructure capacity for water, sewer, roads, police, fire, and electrical grid needs. The commissioner responded that the state is providing tools and incentives rather than dictating housing types, but acknowledged the state would assert authority when localities issue building moratoriums. Assemblyman Dinowitz raised urgent concerns about Amalgamated Houses, the nation's oldest limited-equity housing cooperative with 1,500 affordable units, saying 800 apartments face gas shutoff due to financial problems. He blamed agency delays in approving loans and carrying charge changes, costing the development millions in increased interest rates. The commissioner acknowledged familiarity with the project and said HCR had provided a $7 million loan five years ago and was working on a new scope of work. Sen. Salazar expressed support for the housing compact's goals but emphasized concerns about ongoing affordable housing loss and the absence of good-cause eviction protections in the budget proposal. She questioned how the revised J51 tax abatement program—which now requires 50 percent of units to be at 80 percent of area median income or below—would actually benefit low-income renters. Sen. Krueger, the final senator to question, challenged the 421-a tax exemption extension, arguing the program does not produce genuine affordable housing and that the city should retain four years of property tax revenue for actual affordable housing investment. She also questioned whether a $579,000 increase to the Tenant Protection Unit—which currently has 28 staff—represents efficient spending if most funds go to opening six new regional offices rather than hiring additional staff. The hearing revealed significant legislative divisions over the housing compact's approach, with some lawmakers questioning whether state-mandated zoning changes can succeed without addressing infrastructure needs, labor standards, and genuine affordability protections. NEW YORK — A joint legislative committee hearing on the 2023-2024 executive budget for housing revealed sharp divisions over the administration's proposed Housing Compact and deep concerns about funding cuts to existing programs, particularly the Homeowner Protection Program. Commissioner Visnauskus of Homes and Community Renewal defended the administration's housing strategy, which emphasizes a five-year plan to create and preserve 100,000 units and proposes mandatory transit-oriented development around train stations. The state has created 1.4 million jobs but only 400,000 housing units, she noted, and the plan aims to address this imbalance. However, multiple legislators challenged key aspects of the proposal. Assemblyman Ra (Nassau County) objected strenuously to what he characterized as a mandate—not an incentive—for municipalities to rezone around transit stations, arguing that the proposed 50-unit-per-acre density is incompatible with Nassau County's infrastructure and existing single-family neighborhoods. "This mandates housing, it doesn't mandate affordable housing," he said. "I don't think it's going to create affordable housing." Assemblywoman Kelles raised concerns that the compact focuses too heavily on long-term housing supply while ignoring immediate affordability crises, citing rent increases of 20 to 40 percent in Tompkins County. Assemblyman Kim criticized the administration's reliance on private capital, arguing the state should establish public benefit corporations and consider a public banking system to compete with private markets. The most contentious issue was the exclusion of funding for the Homeowner Protection Program (HOPP) from the budget. Assemblywoman Hyndman called the $32 million cut "really disturbing," noting that Black homeownership is declining as residents leave New York due to high property taxes. Jacob Inwald of Legal Services NYC provided specific financial data showing that $34,340,164.56 of the $35 million allocated last year was spent, contradicting any suggestion of unspent funds. He characterized HOPP as "the state's only tool to combat deed theft" and warned that defunding it would disproportionately harm communities of color. Other concerns raised included a $2 billion funding gap for NYCHA and public housing authorities due to ERAP shortfalls, inadequate staffing (13 inspectors) for rent overcharge investigations, and a three-year backlog in the petition for administrative review process. Sen. Kavanagh pressed the commissioner on details of the new $50 million Homeowners Stabilization Fund for home repairs in communities of color and sought clarification on unpaid rent arrears in the affordable housing provider portfolio, noting that the ERAP portal has closed. The hearing, held March 1, underscored tensions between the administration's long-term housing production goals and legislators' concerns about immediate affordability, tenant protections, and the adequacy of support for vulnerable homeowners and renters. NEW YORK — Housing advocates and tenant representatives testified before a joint legislative committee on March 1 that the Governor's 2023-2024 housing budget proposal prioritizes development incentives at the expense of tenant protections and affordability safeguards, warning that without concurrent protections, new housing investment will accelerate displacement in communities of color. The hearing before the Senate and Assembly Finance Committees featured testimony from legal services providers, housing nonprofits, and tenant organizers who largely supported continued funding for eviction prevention programs while criticizing the Governor's housing compact for emphasizing supply-side solutions without adequate affordability requirements or tenant protections. Rachel Halperin of the Legal Services Access Alliance urged continued $35 million in state funding for legal representation and eviction services outside New York City, noting the alliance has served over 10,000 tenants statewide and helped thousands avoid homelessness. However, Assemblywoman Linda Rosenthal raised concerns that the Governor's Executive Budget omitted this funding despite all money from last year's allocation being spent. Rebecca Garrard of Citizen Action of New York presented demographic data showing that in Brooklyn Community District 2, Black residents declined from 41.8% of the population in 2000 to 20.3% between 2015-2019, while white residents increased from 31.1% to 52.1%. She argued this pattern demonstrates the need for good-cause eviction protections to prevent displacement when development resources flow into historically disinvested communities. Claudia Waterton, president of a South Bronx tenants association, testified about her five-year organizing campaign that culminated in tenants purchasing their building for $2.6 million in February 2022. She advocated for $250 million in state funding for the Tenant Opportunity to Purchase Act (TOPA), which would allow tenants to make first offers when buildings are sold. Baraba Halm of Enterprise Community Partners requested $250 million for the Housing Access Voucher Program, stating it would serve over 50,000 New Yorkers statewide and function as both a homelessness prevention and anti-eviction tool. She also requested an additional $5 million for fair housing enforcement, noting that source of income discrimination—banned in 2019—remains prevalent despite legal protections. Senators Kavanagh, Myrie, and Salazar engaged extensively with panelists on good-cause eviction protections, fair housing enforcement, and tenant ownership opportunities. Sen. Kavanagh questioned whether $7 million total in fair housing funding could support at least one organization in every part of the state, while Sen. Myrie asked panelists to clarify misconceptions about good-cause eviction, emphasizing it does not prevent evictions for non-payment or property damage. Ed Yaker of Amalgamated Housing Corporation, the nation's oldest limited equity co-op at 95 years old, delivered pointed criticism of state oversight, testifying that HCR supervision has left the organization $1.5 million behind in vendor payments with no capital reserves. He warned that 800 of 1,500 families face building shutdowns due to Local Law 152 gas requirements without state funding to comply. NEW YORK — Housing advocates and industry representatives testified before a joint legislative committee on March 1 in support of Governor Hochul's housing compact, which aims to address New York's severe housing shortage through state-mandated growth targets and transit-oriented development requirements. However, a suburban senator mounted a pointed challenge to the proposal, arguing it would strip local communities of zoning control. Testifiers from the New York City Housing Partnership, Building Congress, Housing Conference, and affordable housing industry emphasized that New York has created 1.2 million jobs while adding only 400,000 homes, creating a historic affordability crisis. Jamie Smarr of the Housing Partnership noted that New Yorkers now face a "close to zero percent chance" of finding low- or moderate-rent housing. Rachel Fee of the Housing Conference cited data showing home prices increased 46 percent from 2018 to 2022, with half of renters cost-burdened. The hearing also surfaced a crisis in affordable housing preservation. Jolie Milstein of NYSAFAH testified that rent arrears in affordable housing portfolios have increased five-fold since the pandemic, with 8-13 percent of units experiencing missing rent. She called for a $2 billion Tenant Fund for Affordable Housing to prevent evictions and building closures. Ed Yaker of Amalgamated Housing Cooperative warned that delays by the state's Housing and Community Renewal agency in processing loans could cost his organization more than $2 million annually, potentially forcing 1,500 units out of affordability. Sen. Robert Martins of Nassau County delivered a skeptical challenge to the housing compact's transit-oriented development component, which would require 50 dwelling units per acre around train stations. He argued the state mandate would eliminate local decision-making and destroy suburban character, potentially requiring 1.2 million additional units in his already-dense county. "How is this any different" from exclusionary zoning, he asked, drawing parallels to gentrification concerns. The hearing revealed tensions between housing advocates pushing for state-mandated density requirements and suburban legislators defending local zoning authority. Labor representative Deandra Khan of 32BJ SEIU supported housing expansion but insisted that new development include prevailing wage standards for building service workers, noting concerns about job quality in communities of color. The committee heard testimony on extending the 421-a tax incentive deadline to protect 33,000 units and converting commercial office space to residential use, particularly in Manhattan. However, Assemblywoman Davila noted that last year's proposal for 25,000 units lacked information on where they would be built, raising accountability questions about the current 32,000-unit extension proposal. New York State legislators heard competing visions for addressing the state's housing crisis during a joint Senate-Assembly hearing on the 2023-2024 executive budget, with sharp disagreement emerging over whether proposed tax incentive programs deliver sufficient affordable housing for their cost. Chairwoman Loni Krueger of the Senate Finance Committee expressed deep skepticism about the Governor's proposed extension of the 421-a tax abatement program, calculating that four years of the program would cost approximately $6 billion in lost tax revenue while producing only minimal affordability. "I don't believe that's the right thing, because I think we have to fight for actual affordability," Krueger said, questioning whether the proposed conversion program—offering a 50 percent incentive for just 20 percent of units with only 19 years of affordability—goes deep enough. Testifiers from housing advocacy organizations largely supported the Governor's broader housing compact, which aims to create 800,000 new housing units over 10 years, but many echoed concerns about affordability requirements. Rafael Cestero, CEO of the Community Preservation Corporation, which has invested over $14 billion to create and preserve more than 225,000 housing units statewide, advocated for a "yes and" approach combining the housing compact with continued robust state investment in affordable housing and tax incentives. Ms. Fee of the New York Housing Conference testified that affordable housing is currently being built only in low-income neighborhoods when paired with mandatory inclusionary housing and tax abatements, and she recommended adding mandatory inclusionary housing as a preferred action in the housing compact. Separately, representatives of community-based housing organizations—including the Neighborhood Preservation Coalition, Rural Preservation Companies, and land banks—requested increased or restored funding for their programs. Mark Streb of the Neighborhood Preservation Coalition noted that despite 30 percent inflation from 2015 to 2023, the Neighborhood Preservation Program has received flat funding, and requested $17.75 million for the program. Bruce Misarski of the Rural Housing Coalition reported that RPC funding has been stagnant since 2017 and requested increases from $89,000 to $125,000 per organization. Assemblyman Burdick pressed multiple testifiers on whether the housing compact should include a specific subgoal for affordable units within the 800,000-unit target, noting that the current proposal lacks such a goal. Most panelists agreed that affordable housing should be a priority, though some noted that in rural markets, much new housing would naturally fall into the affordable category. The hearing, held March 1, 2023, revealed broad agreement on the need for more housing supply but significant disagreement over whether proposed tax incentive programs adequately balance development incentives with affordability requirements. NEW YORK STATE SENATE FINANCE COMMITTEE HEARS HOUSING BUDGET TESTIMONY — RURAL ADVOCATES WARN OF FUNDING CUTS, URBAN GROUPS PUSH TENANT PROTECTIONS Albany — A joint Senate-Assembly hearing on the 2023-2024 Executive Budget housing proposals revealed sharp divisions Wednesday between rural advocates warning of program cuts and urban housing groups pushing for stronger tenant protections, even as lawmakers debated the Governor's controversial housing compact. Rural housing advocates testified that critical programs have been eliminated or underfunded in the Executive Budget. The Small Rental Development Initiative, which funds 4-8 unit projects appropriate for small communities, received no funding this year despite being requested at $20-30 million last year and receiving only $7 million. The RESTORE program, which received $6 million in valid applications last year but was funded at only $3.4 million, faces similar shortfalls. Advocates emphasized that large LIHTC projects do not serve small rural communities effectively. "We need small rental projects in small communities, in every community," testified Mr. Misarski. "That's what every community needs." Sen. Hinchey (D) expressed frustration that rural housing gains secured last year have "disappeared from the Executive Budget," while Sen. Helming (R) noted that zero funding is currently budgeted for land banks despite their effectiveness in moving people from hotels into refurbished homes. Urban housing advocates, meanwhile, pushed for good-cause eviction protections and criticized the housing compact's focus on market-rate development. Brahvan Ranga of For the Many testified that 57 percent of Hudson Valley renters are rent-burdened and one in eight households in Poughkeepsie face eviction filings. He called for passage of good-cause eviction, noting that local laws in Newburgh, Poughkeepsie, Beacon, and Kingston are under legal challenge. Barika Williams of the Association for Neighborhood and Housing Development warned that the housing compact "deprioritizes the current urgency of homelessness, evictions, and crippling rent burdens" and relies on luxury tax breaks. She cited data showing over 500,000 New York households remain behind on rent, with 80 percent people of color and 77 percent low-income. ANHD requested $200,000 to continue its Displacement Alert Project portal. Annemarie Gray of Open New York supported the housing compact's zoning reforms but called for stronger enforcement provisions, citing delays in Massachusetts and California. She urged the Legislature to allow nonprofits to sue non-cooperative localities. Sen. Martins (R-Nassau) delivered a pointed critique, calling the housing compact a "sledgehammer" that would require 25,000 units around every train station in Nassau County. "This compact is a blunt instrument," he said, expressing concerns about impacts on aquifer protection and community character. Sen. Burdick asked multiple testifiers whether the 800,000-unit housing target should include a specific affordable housing subcategory, but received no consensus on specific numbers. The hearing underscored tensions between supply-side housing advocates and those prioritizing affordability and tenant protections. NEW YORK — Advocates and nonprofit housing providers sharply criticized the Governor's 2023-2024 housing budget proposal during a joint legislative hearing on March 1, arguing that the incentive-based framework fails to guarantee genuine affordability and relies too heavily on developer incentives without sufficient tenant protections. Barika Williams, representing nonprofit affordable housing organizations managing 100% affordable buildings across New York City's five boroughs, testified that the Governor's double-credit system for affordable units is inadequate because it treats deeply affordable units at 40% of area median income the same as units at 120% AMI. She also detailed how rent arrears from tenants ineligible for Emergency Rental Assistance Program (ERAP) funding have crippled member organizations' ability to pay vendors, access loans, and negotiate with tenants. "421-a is a disaster because it was never an affordable housing program to begin with," Williams said, calling for a new program specifically designed for affordability rather than market-rate development. Brahvan Ranga of For the Many, a grassroots organization in the mid-Hudson Valley, argued that the proposal mirrors previous failed approaches and must be paired with tenant protections including good-cause eviction protections and the Tenant Opportunity to Purchase Act. He noted that 57% of renters in the mid-Hudson Valley are rent-burdened, dispelling assumptions that housing costs are only a downstate problem. Sen. Liz Krueger (D-Manhattan) expressed deep skepticism about the proposal, noting that her district has experienced constant 421-a development that has actually reduced affordable housing stock by displacing smaller rent-regulated units. "If we aim for 800,000 units in 10 years but none of it's actually affordable for real people, I don't think we look back 10 years from now and go, what a great experience we had," she said. She called for specific models tailored to different communities rather than statewide approaches. Ms. Gray, representing a housing advocacy organization with chapters across the five boroughs and Westchester and Long Island, offered qualified support for the Governor's framework while proposing amendments including layered affordability requirements (20% in NYC, 10% elsewhere) and fast-track processes for affordable projects. She emphasized the importance of legalizing smaller housing types and expanding sites available for 100% affordable development. Sen. Brian Kavanagh, the Senate Housing Chair, asked whether testifiers believed the Governor's double-credit incentive sufficiently promoted affordability, and requested written feedback on potential amendments to the proposal. The hearing underscored tensions between supply-side and affordability-focused approaches to housing policy.