NY Looked Seriously At A 'Builders' Remedy' Law To Address Affordable Housing Shortage

• Published date: 03 August 2023
• Subject Matter: Real Estate and Construction, Construction & Planning, Real Estate
• Law Firm: Carter Ledyard & Milburn
• Author: Mr Christopher Rizzo

As this column has noted before, New York state has an acute housing shortage. At the current slow pace of construction (about 40,000 units in 2022), the state will never produce the 800,000 housing units needed to meet demand over the next 10 years. The housing shortage has markedly increased housing costs throughout the state, hitting low- and moderate-income New Yorkers hard.

Land costs, expiration of the statewide affordable housing tax credit, high interest rates and other factors are contributing to the slowdown. But restrictive municipal zoning is also a contributing factor. In March 2023, Gov. Kathy Hochul tried to address the problem of exclusionary zoning head-on by proposing the "New York Housing Compact"'a series of legislative reforms to reduce zoning bottlenecks and incentivize affordable housing construction. A key element of the proposal was a "builders' remedy"'the ability of developers to bypass local zoning controls and appeal to a statewide commission for approval of an affordable housing project. She hoped the proposals would be adopted in the legislative session that ended June 10, but the legislature did not take them up. However, given the ongoing nature of the housing crisis, this failed legislation will not be the last word. This column therefore focuses on the governor's Housing Compact and the elements of it that have succeeded in other states.

Hochul's 'Housing Compact' Sought to Recoup to the State a Modest Amount of Delegated Zoning Authority

The governor's proposed Housing Compact closely followed Massachusetts' approach (discussed below) and included these key elements:

• Required municipalities to adopt amendments to their local zoning codes to provide space for a 3% growth in housing stock every three years in downstate municipalities and 1% growth in upstate municipalities.
• Required municipalities with Metro North or LIRR rail transit stops (including within NYC) to rezone areas within ' mile of the station to permit specified levels of density that would decline with distance from New York City.
• Incentivized the creation of affordable units by double counting such units towards a municipality's three-year targets.
• Provided municipalities a "safe harbor" status against challenge and override if they met housing growth targets or otherwise met progress metrics to facilitate housing growth.
• For municipalities that failed to achieve safe harbor status the compact provided developers of certified affordable housing projects...