Comprehensive housing and zoning regulations set to sweep across New York | Environmental Law

In January, Gov. Kathy Hochul proposed the New York Housing Compact, which includes a series of proposals to address the purportedly low housing selection across New York. The New York Housing Compact aims to complement the Governor’s Housing Plan announced last year to create or preserve 100,000 affordable homes throughout New York. Additionally, several bills sit in the New York State Senate to address housing shortages across the state.

The New York Housing Compact proposals are broad and include subsidies for localities to fund infrastructure, mandate minimum housing growth targets for municipalities, rezoning areas near train stations, facilitating housing approval at the state level when localities are unable to meet targets, removing obstacles to housing approvals, and expanding tax incentives and assistance to renters.

Subsidies to Fund Infrastructure

The New York Housing Compact will create an Infrastructure Fund of $250 million and a Planning Fund of $20 million to encourage new housing throughout the state. Localities may submit requests for subsidies to further Transit-Oriented Development or Preferred Actions, or good-faith measures to increase housing availability.

Housing Growth Targets

The New York Housing Compact will also require all cities, towns, and villages to create new homes on a three-year basis. New York City is required to meet a 3% growth rate over three years, while upstate municipalities must achieve 1% growth in new homes every three years. The creation of new housing counts toward the target, with extra weight assigned to the creation of affordable units.

Municipalities are vested with the power to decide how to meet the targets, but those that do not meet targets may still achieve a Safe Harbor status for one three-year cycle by employing good-faith Preferred Actions, which create capacity to achieve the housing growth targets. Preferred actions may include new housing, particularly below-market rate, income-restricted affordable housing.

Transit-Oriented Development and Rezoning Near Train Stations

According to the fact sheet from the governor’s office, the New York Housing Compact will also require localities that have rail stations operated by the MTA “to undertake a local rezoning or higher density multifamily development within half a mile of the station unless they already meet the density level.” The aim is to improve access to jobs through transit.

State Override of Local Zoning Laws

Gov. Hochul derided local governments for their zoning restrictions at her State of the State address in January. To combat this, the New York Housing Compact provides that if a municipality does not remove zoning restrictions which impede new development, and the locality fails to meet its growth target or does not implement Preferred Actions, developers may circumvent the municipality and seek approval via the courts or the newly conceived State Housing Approval Board. Based on the press release from the governor’s office, projects will be approved by the board “unless a locality can demonstrate a valid health or safety reason for denying the application.” Many municipalities have interpreted this to mean that developments will be permitted absent any exigent circumstances. Practically speaking, localities will be forced to allow developments that do not conform with current local zoning laws, which could create developments that do not match with the character of existing neighborhoods and may run contrary to a comprehensive plan, may pose issues for code enforcement, and could set precedent the locality sought to avoid.

Relief from Environmental Review

Relief from environmental review is included in the housing growth and transit-oriented development proposals in the New York Housing Compact, although the state has indicated that it remains committed to exercising safeguards to prevent harm to the environment and public health.

Tax Incentives for Developers

The governor intends to allocate $5 million in State Low Income Housing Tax credits to foster development of affordable housing. The New York Housing Compact includes several tax incentives to encourage housing development throughout the state, such as new property tax exemptions for mixed income housing development near train stations and affordable housing in commercial buildings that are converted to residential use in New York City.

Further, the governor plans to unveil a new 421-a property tax exemption program that would provide an exemption to real-estate developers for building new multifamily residential housing buildings in New York City.

Support for Homeowners

The New York Housing Compact includes plans to update property tax exemptions for homeowners that build accessory dwelling units and includes proposed changes to prevent penalizing municipalities who use Payment-in-Lieu-of-Taxes (PILOT) agreements with tax cap calculation.

Gov. Hochul has also disclosed two new proposals to assist renters and homeowners. The first is a fund modeled after the Buffalo East Homeownership Assistance Program to aid homeowners with repairs in targeted areas that have been identified as having high levels of homeowner distress or low-income homeowners of color.

Next, the governor has proposed increasing funding and presence for the State’s Tenant Protection Unit (TPU). The TPU acts as a proactive law enforcement office within New York State Homes and Community Renewal. Its purpose is twofold: preserving affordable housing by discouraging patterns and practices of landlord fraud and harassment; and encouraging compliance by keeping tenants informed of their rights and responsibilities under the rent regulation laws. The expansion of the TPU is aimed to benefit mobile home residents, as well as those living in farmworker housing.

Additional Housing and Zoning Proposals Before the Legislature

Three bills currently sit before committee in the New York State Senate. Senate Bill S7574 would amend General City and Village Laws by preventing cities from establishing various zoning requirements, including a minimum lot size of more than 1,200 square feet, requiring off-street parking as a condition for construction of a building (except for the loading of deliveries), and prohibiting construction and occupation of a building for four or fewer families in a single lot, imposing height or setback restrictions, or prohibiting the construction and occupation of a dwelling for six or fewer families on a single lot for those dwelling near a rail or subway station operated by the MTA. Bill S7574 would also amend Town Law to prevent towns from establishing a minimum lot size of more than 5,000 square feet if a lot has access to sewer and water or a minimum lot size of more than 20,000 square feet in any area.

Senate Bill S4547A amends the Real Property Law to legalize accessory dwelling units (ADUs) throughout the state, including existing basement apartments, in-law suites, and backyard cottages. The bill also includes a mechanism for a party who has been denied a permit for an ADU to appeal the denial in a court of competent jurisdiction.

Senate Bill S7635A amends the Public Housing Law by streamlining the permit application process for low- or moderate-income housing developments. It also requires municipal Zoning Boards of Appeals to approve applications for low- or moderate-income housing unless written findings show that the proposed development would have a specific, adverse impact on public health or safety, and there is no feasible manner to mitigate or avoid such adverse impact. If applications are still denied or are granted with conditions by a local Zoning Board of Appeals, applicants may appeal to the State Board.

Change is certainly afoot throughout the state to address housing shortages. However, what remains to be seen is the long-term effect it will have on municipalities and their communities at large.

Ericka B. Elliott is an Associate in Underberg & Kessler LLP’s Litigation and Municipal Law Practice Groups. She focuses her practice on commercial litigation, land-use, and municipal law matters. She is also a member of a local community planning board. Ericka can be reached at [email protected].