Thank you Chairs Krueger, Weinstein, Kavanagh, Rosenthal, and all the members of the joint legislative budget committee for holding today’s critical hearing on the FY2024-25 Executive Budget housing proposals.
Regional Plan Association (RPA) is a non-profit civic organization that conducts research, planning, and advocacy to improve economic opportunity, housing affordability, mobility, environmental sustainability, and prosperity for those who live and work in the New York metropolitan region. For over a century we have worked alongside government, civic and private-sector partners to promote policies and projects that will improve the quality of life for those who call the New York region home.
A little over a year ago, we detailed how New York State must build over 800,000 units of new housing to meet existing demand and address future projections. We were strong supporters of Governor Hochul’s Housing Compact, because we saw it as an ambitious framework to fundamentally change how we approach housing to address this enormous challenge. We are grateful for your attention to this issue and eager to collaborate on potential solutions that create a statewide framework to address housing supply. Our testimony will provide an overview of the problem along with several ideas we hope you will consider.
Our Housing Supply Problem
The recently released 2023 New York City Housing & Vacancy Survey shows that the vacancy rate fell to its lowest level in half a century to 1.4%. But our supply issues are not limited to the City. New York State needs to increase its housing stock by nearly 10% over the next decade in order to meet current needs and address future population projections. As seen in the chart below, this supply is critical to address some of our largest housing challenges, including homelessness, overcrowding, and poor quality housing.
Unfortunately, we have failed to build enough housing over the past few decades to help us make meaningful progress towards this goal. Between 2010 and 2020, Suffolk and Nassau counties in Long Island only permitted seven residential units for every 1,000 residents. Putnam, Rockland, and Westchester in the Hudson Valley only permitted eight, 12, and 13 permits, respectively. That same metric in Manhattan and Brooklyn is 31 units, which is low compared to peer cities but almost five times over when compared to Long Island and three times over Hudson Valley counties.
Housing development within the New York metropolitan region has been insufficient to meet the needs of its residents. As housing supply has become constrained, available homes for workers, young people, and low and moderate-income households have declined. Seniors are also likely to feel the effects since owning a single-family home is neither financially nor physically viable for many of them to successfully age in place. The region’s failure to build enough housing has resulted in overcrowded apartments, increasing homelessness, and rents and home prices that have been rising faster than income and inflation. This lack of housing has hampered economic growth, accelerated environmental degradation, and worsened health outcomes.
Prior to the pandemic, more than 1 million owner-occupied households (28% of all owners) across the state were cost-burdened by paying more than a third of their monthly income towards mortgages and/or maintenance costs. Renters were in worse condition, with approximately 1.6 million renter households (52% of all renters) cost-burdened. Since 1990, median home values in the region have increased by approximately 21% and median gross rents by 22%. Consequently – and paired with rising income inequality – the share of homeowners and tenants that are cost burdened by mortgages and rents has increased by approximately 68% and 29%, respectively. Public opinion polls reflect this reality, where the high cost of living and the inability to find affordable housing have been consistently identified as the biggest threats to the region, and the reason that working and middle-class households are leaving New York at higher rates than wealthier households. The pandemic has only exacerbated these trends making our housing crisis even more urgent.
Last year, the New York Metropolitan Statistical Area (MSA) permitted 7.3 housing units for every 1,000 existing homes, a low rate that led the region to trail behind most other metros in the country. The New York MSA ranked 36 among the 51 most populated metros in the country. Unfortunately, the trend in the region has not been limited to 2022, as this slow pace in residential development has largely defined the years following the great economic recession. Despite a net increase of over 2 million people in the region between 2000 and 2020 (1.3 million of which were added in the last decade), we permitted 13% fewer housing units per capita post-recession compared to the 1997-2009 pre-recession period. This change was most acutely felt on Long Island and in the Mid-Hudson Valley, where the percentage reduction in housing units per 1,000 residents was 57% and 43%, respectively.
The region has also seen a shift in the type of housing units being developed between the pre and post recession periods. Notably, the post recession period has seen a greater production of multi-family housing (68% increase), in comparison to the significant reduction in single family housing (51% decrease) and a steep decline in the middle density housing (69% decrease). Mid-sized buildings with 2-4 housing units, generally described as missing middle housing, were in short supply pre-recession (1997-2009), but have become incredibly scarce in the post-recession era. Permits for middle density buildings were reduced by almost 70% in the post-recession period, where the region permitted only 34,700, representing just 5% of the total number of housing units.
Anti-development sentiment, and concerns around the impact of even gentle density on suburban communities, has made it even more difficult to move projects forward that would fill in the housing gap. Our land-use policies and limits on multi-family development have not only hurt our economic advantage, but have led to environmental degradation. As seen in the chart below, the state lost over 68,000 acres of forest land from 2001-2019, most (94%) of which is attributable to suburban sprawl, with the mid-Hudson area being most affected.
The pace, type, and disparities of more recent housing development in the region have largely been influenced by more constrained loan volumes for real estate development, and by the legal frameworks governing land use.
Our regional neighbors, Connecticut and New Jersey, each have some form of a system requiring localities to calculate and meet affordable housing obligations. While not perfect, New Jersey is considered to have the most robust system. New Jersey’s fair share housing framework, known as the Mount Laurel doctrine, helped facilitate the state’s greater housing production, and affordable housing in particular. A recent analysis revealed that the last round of Mount Laurel is associated with adding 69,000 multifamily units between 2015-2022 across 349 municipalities (i.e., 12.4 units per 1,000 residents). In comparison, multifamily housing production during the same period on Long Island was only 4,800 units or 1.6 units per 1,000 residents, which represents 13% of what municipalities participating under Mount Laurel in New Jersey produced. And Connecticut has legalized accessory dwelling units (ADUs) statewide and established a framework known as the 8-30g statute, which has been a critically important tool in helping expand the stock of affordable housing in the state.
New York State does not have a comparable statewide framework, which has allowed locally-controlled restrictive zoning to remain unchecked. New York stands alone among its peer states–coastal states with high housing costs and healthy regional economies–in giving its local governments such broad authority over land use and housing production. An analysis from the Eviction Lab at Princeton University quantified how difficult it is to build under the zoning codes of different cities and towns, and concluded that New York ranks second among the most restrictive metropolitan areas in the country, only behind the Washington D.C. metro area. A more recent compilation of zoning regulations on Long Island – which RPA supported – shows that apartment buildings are prohibited on more than 96% of the zoned land in Nassau and Suffolk Counties, while single-family housing can be built on 89% of the land on an as-of-right basis. The lack of housing production and the enormous disparities between the city and its suburbs are a result of New York having the most exclusionary zoning in the region.
Potential Solutions
These conditions, and the ways in which our housing market has evolved, have largely been shaped by policy choices made almost a century ago. With your leadership and action, we can begin to make up for lost time and deliver a framework that helps address our housing supply crisis at scale. Compelling recent evidence indicates that new construction in diverse environments has the effect of reducing or impeding rent increases, not only across the entire city but typically for apartments in close proximity to the newly constructed developments. Ultimately, we must work to implement programs and policies that promote a fair share system so that all localities are doing their part to address our housing crisis and connect more New Yorkers to opportunity.
We believe there are several options that, taken together, would create a pro-homes environment, and reduce or impede increasing housing costs across the region. The supply-focused proposals in Governor Hochul’s State of the State provide good ideas to start:
1. Make HCR’s Pro-Housing Community certification and requirement for state funding programs:
While incentives have proved to be limited in their impacts on addressing housing supply needs, they can offer support for communities that have demand and want to build but lack the resources to do so. We continue to advocate for a system that includes a set of “sticks” to ensure communities with exclusionary policies do their fair share since incentives alone do not incentivize wealthy, high-opportunity communities to “adopt a new vision for local growth.” However, we believe that by making this certification program a requirement for certain pots of discretionary funding, we can incentivize more communities to engage and give more “teeth” to the program.
2. Fund critical infrastructure to help utilize state-owned sites to facilitate new housing:
Wherever possible, the state should utilize its properties to address our most pressing issues. We regularly dispose of state-owned land for purposes of open space and environmental stewardship, and we should take the same lens to utilizing properties to address our housing crisis. Many sites are already primed for new housing, and those that aren’t will benefit from $500 million in funding to support necessary infrastructure to facilitate development. To the extent possible, the funding should be targeted to take advantage of other investments that create more opportunities for residents. For example, RPA has been researching commuter rail stations needs in order to implement successful transit-oriented development. To the extent possible, we should leverage various investments to build successful and sustainable communities on state-owned property.
3. Eliminate the 12.0 FAR cap imposed on New York City to create more affordable housing:
We are in favor of allowing more mixed-income housing to be built within the urban core by enabling New York City to lift the 12 Floor Area Ratio (FAR) cap. We should ensure the cap is lifted when there is action to rezone an area for more residential density. This would both ensure that any new housing is mixed-income housing, as New York City must apply a Mandatory Inclusionary Zoning (MIH) component with any residential upzoning, and also let New York City be intentional about the form of any new buildings. RPA analysis finds that if the 12 FAR cap is removed, and high rise neighborhoods are zoned with MIH, New York City would produce as many as 135,000 total housing units, 33,000 of which would be income-restricted.
The buildings that are most often cited as concerns when it comes to this proposal - super tall luxury towers without any affordable housing - have all been built as-of-right, under current rules. Lifting the 12 FAR cap and rezoning for added density would let New York City eliminate the ability to build these types of buildings and require the mixed-income housing we desperately need in these high-market areas, and in more contextual buildings as well.
4. Streamline environmental review to increase housing production
Our environmental review process was created to protect the safety and quality of life of residents and to ensure we protect our environment and the resources we rely on. However, the review process has been twisted to push back against anything a community does not like, such as affordable housing or more density, with an often explicit aim of killing a project. Components of the review, like “community character,” have overtaken the well-intentioned purpose of environmental review. We believe reforms are necessary to get us back to the underlying purpose of environmental review and eliminate its use as a project-delay tactic. Efforts by NYSDEC to streamline the process can help reduce timelines and costs for projects meeting certain criteria. For example, projects with a certain level of affordability, those that are meeting sustainability goals such as infill or TOD development, and others that simultaneously address our climate and housing goals.
New York City’s Green Fast Track proposal aims to do this locally. The City analyzed a decade of environmental reviews to develop the threshold criteria used for the program and will ensure that green buildings of modest density can be fast tracked in the review process.
Some pending legislation also begins to address this at the state level:
A.4933A (Kelles) / S.925A (May) would limit or exempt certain housing and infill projects from SEQRA provided applicants have been certified that they do not violate state environmental laws, meet affordability requirements, and commit to sustainable development.
- A.3111 (Kelles) / S.0668 (May) creates a 40-day timeline for affordable housing projects and criteria that justifies a no vote to streamline expectations for review.
5. Enable New York City to identify a path to legalize basement apartments
We cannot require people to effectively choose between living in unsafe living conditions and homelessness. Ensuring that people living in illegal accessory dwelling units (ADUs) have safe conditions and bringing their dwellings up to code is another approach we must take. Health, safety and sanitation are paramount in all housing, and local governments should retain the ability to properly set these standards when it comes to ADUs. To make building more ADUs practical, ADUs in New York City also need to be allowed waivers from Multiple Dwelling Law rules - as single and two-family homes already are able to do - in order not to burden the creation of ADUs with regulations meant for large multifamily buildings.
We think efforts should expand to facilitate adoption of ADUs in other parts of the state as well. ADU’s can have huge benefits for individual homeowners, allowing them more flexibility with their home, a potential extra income to assist with property taxes and expenses, and seniors to have live-in caretakers and age in place. And they will also provide much needed new housing options for people who currently can’t afford to live near jobs or family in exclusionary neighborhoods without affordable housing. To the extent additional specific safety standards may need to be spelled out, we encourage the legislature to engage with the architecture and building engineering industry to understand needs and set proper guidelines.
6. Support Office-Residential Conversion
We are also supportive of allowing the conversion of underutilized commercial buildings and hotels to affordable housing, which will also help to address housing needs in core Manhattan. Efforts by the state to help facilitate conversions will help revitalize our traditional commercial corridors, create more 24/7 communities, and get more housing created in places with access to opportunities.
There are also other proposals we are focused on that would help further address our housing supply challenges at scale:
Faith-Based Affordable Housing Act (FBAHA) (S7791/A8386)
The Faith-Based Affordable Housing Act presents an opportunity to address our housing supply issues through a statewide framework. It would help faith-based organizations, who already serve as critical social safety net providers, to further their own mission by allowing them to develop mixed-income and 100% affordable housing on their land. The legislation would foster community-driven projects to address our statewide housing crisis while simultaneously helping these institutions get on better financial footing to address their capital and operational needs in order to remain in their communities.
Develop an Enforcement Mechanism to Override Exclusionary Zoning
Adopting ambitious land use reforms, as well as enforcing and improving existing housing obligations, will be key to addressing insecurity and constraints in housing supply. New York City is leading by example through ambitious proposals as part of the “City of Yes” and Green Fast Track initiatives. Many New York suburbs are trying to find opportunities to do their part in addressing the housing crisis and plan better for their community. For example, New Rochelle went through a robust planning process to engage the community and come up with a plan to revitalize their downtown and bring new affordable housing to the community. In Kingston, NY, a new citywide rezoning was passed unanimously over the summer that helps address affordable housing by eliminating parking minimums, legalizing ADUs and middle density housing, and streamlining the development approvals process, among other changes.
However, without a statewide framework, the costs and time associated with making major land-use reforms locally will continue to hamper our ability to address our housing crisis at scale. Too often, localities use local control to prevent affordable housing projects from moving forward. One of the most glaring examples of this is Matinecock Court in Huntington - a modest project of 146 affordable units that took 45 years to get approvals to move forward. And because each jurisdiction is able to decide for themselves, we are faced with unpredictable project timelines, which drive up project costs and limit supply. We must make it harder for localities to arbitrarily oppose new types of housing, especially affordable housing projects - and an enforcement mechanism has been a proven strategy to institute a more fair share approach.
Some pending legislation begins to get at this:
A.3111 (Kelles) / S.0668 (May) would create a state zoning board of appeals to consider applications for low or moderate-income housing development.
- A.2017 (Thiele) would require localities to prepare and adopt an affordable housing plan.
Permit Middle Density Housing
Expanding the production of middle density housing should be an important policy goal for several reasons. This type of stock provides additional housing in a manner that fits existing communities’ structure, also known as “gentle density,” while assisting in providing units for a wide variety of price points and needs. In addition, the feasibility of these mid-sized buildings also enables smaller developers - often M/WBE firms or nonprofit housing providers - to access more opportunities and could help address the lack of diversity within the real estate industry.
Prioritize Sustainable Development
TOD provides a range of benefits, including increased transit ridership, reduced regional congestion and pollution, and healthier, more walkable neighborhoods. Neighborhoods with a mix of both affordable and market-rate housing can also provide many benefits, such as reducing income and racial segregation. We have invested billions of dollars into our transit system, and will continue to do so in order to create reliable and sustainable modes of transportation to help more people access jobs, cultural institutions and connect with friends and families.
These investments must go hand-in-hand with better land-use policies and sound planning to reduce stresses on our environment, improve health outcomes and create infrastructure efficiencies. Moreover, TOD can introduce a variety of housing types that would allow for more affordable options and help reduce housing cost burdens. As seen in the chart below, the New York Housing Conference found that households in downstate New York suburbs could realize up to $1,400 in reduced costs through attached single-family homes, and multi-family buildings, including condos and co-ops. Our own analysis finds that local zoning continues to be a major impediment. Less than half of commuter rail stations outside of New York City with the infrastructure to support TOD have land use regulations needed to facilitate it.
We can learn from other states that have implemented statewide measures to promote TOD, including New Jersey’s Transit Village program. However, we must ensure that localities that are receiving the benefits of transit investments and better connectivity are utilizing these investments as effectively as possible, and not purposely enacting exclusionary policies to prevent sustainable development.
Adding much needed housing in the region’s core, its smaller downtowns, and its single-family suburbs are all needed. These proposals together make clear that it isn’t just one area or neighborhood type that needs to help with our housing crisis, but that it is all of our responsibilities, with support from the state. We have organized the New York Neighbors coalition to help educate and advise on strategies that will meaningfully increase sustainable housing production in order to reduce housing cost burden and prevent displacement. We are ready to serve as a resource in your efforts to better address our housing crisis and look forward to working together to make sure all New Yorkers have a safe and affordable place to live.
Thank you for your time and consideration of this testimony.
