Gov. Kathy Hochul’s New York Housing Compact

In presenting her State of the State speech this week — her first as a full-term governor following her triumph in last year’s election — Gov. Kathy Hochul outlined agenda items including bail reform, mental health funding, and initiatives to combat climate change, among other things. One of the biggest and most elemental was her proposal of something called the New York Housing Compact, an ambitious plan to develop 800,000 new homes across the state over the next decade.

The plan has a lot of technical details, facets, and specifications that we’ll get into in a second, but boiled down to its basic elements, it’s a recognition of a few crucial facts and assumptions:

1. New York State as a whole, and downstate in particular, doesn’t have and has not had nearly enough housing construction across the board in proportion to job creation and demand.
2. The current system of approvals, regulations, and zoning, working as it has been at every level of government, simply cannot produce this necessary supply.
3. This won’t change without active intervention, and the actor best equipped and incentivized to take action is the state government, which has a compelling interest in remedying the problem across the board and is both less subject to the whims of organized local opposition and NIMBYism and able to take a more overarching approach.
4. This approach must lean on a variety of tools of different types, all working in conjunction to increase housing production of all types, giving localities latitude on methodology but not targets, which are clear and mandatory. Localities control their own approach, but the carrot will give way to the stick if progress is not made.

This, it must be said, is a very notable departure from the longtime way of thinking. For decades, the thinking in New York and pretty much everywhere else has been that housing construction is mainly incentivized and regulated at the local level, with local leaders knowing more or less what their individual communities need and having the ability to determine whether, where, what type of, and how housing is constructed.

The announcement doesn’t alter parts of that calculus, in the sense that local officials aren’t being cut out of the process wholesale, but it recognizes that these officials are often narrowly focused on pleasing bands of homeowners and renters with not-in-my-backyard attitudes; that zoning and regulatory approval of housing writ large has over decades grown into a monster that kills housing development in the crib; and that localities will to some extent be forced to comply. It’s a turn toward a more top-down vision of urban planning at a macro level, with a vision of what a healthy statewide housing approach entails and an acknowledgement of what needs to happen to get there, with Hochul saying in her speech that “to do nothing is an abdication of our responsibility to act in times of crisis.”

In practice, this will take the form of requiring that downstate jurisdictions including the five boroughs and Long Island increase their total housing availability by three percent over three years, while upstate localities have the more modest goal of a one-percent increase. That’s not particularly radical, and in fact several counties are basically there already, but to hear some local officials tell it, Hochul has all but declared martial law and lit freedom aflame. GOP State Assemblymember-elect Edward Flood, who defeated longtime incumbent Steve Englebright in a race last year for Suffolk County’s district 4, tweeted the eyebrow-raising sentiment that the governor’s goal was “to turn Brookhaven into the Bronx by removing local control of zoning laws.”

It’s worth noting that this is not strictly an affordable housing proposal, with Hochul’s advisors pointing to research that shows that the development of housing of all types eases pressure on housing at the lower bands, though the plan will incentivize affordable construction by weighing such housing more heavily in determining whether a locality has met its goals. The governor’s plan also calls for several ways of boosting this housing development, including moving ahead with proposals for conversions of commercial space to residential and the waiving of certain environmental regulations.

The most notable aspect of all this is perhaps what happens when a locality does not meet or show sufficient progress toward the housing production goals: the developer will have the ability to petition the state to essentially leapfrog local zoning altogether and get projects approved over rejections by local officials. Localities will also be required to upzone areas that are MTA rail stations of various types as part of Hochul’s longtime interest in having housing development concentrated around transit hubs. This is where the stick comes in, and it’s long overdue in the effort to keep NY housing costs down. The proposals are sweeping for the state, but they’re by no means unprecedented, and in fact the state is behind the curve nationally. States like Massachusetts and Washington have taken some similar steps to positive results so far.

Of course, all of this is fundamentally a plan, and not a final one. Hochul can tweak things through executive authority, but the major planks here will be subject to negotiations with the Legislature, which has to sign off. As represented by Assemblyman NIMBY up there, this will have its detractors, but most elected officials probably also understand that things can’t go on as they have, with constituents increasingly realizing that you can’t preserve your neighborhoods and homes by refusing to build. The extent to which they’re malleable to these proposals will depend in large part on public pressure, so if you want housing, let it be known.