Will Affordable Housing Turn Things Around for New York?

Will Affordable Housing Turn Things Around for New York?

Early this year, Governor Hochul introduced the New York Housing Compact, a strategy to build 800,000 new homes in the next decade to address the state’s affordable housing shortage. While it will take some time to see where everything lands, a big question remains: Will the Housing Compact address the myriad of challenges New York is facing?

Governor Hochul’s strategy involves setting targets for housing growth in every community; removing obstacles and incentivizing construction; and increasing the housing supply and support for renters and homeowners. Municipalities near MTA rail stations will be required to meet certain density targets for multifamily housing within a half-mile of stations. Localities will decide how to meet targets. A $250 million Infrastructure Fund and $20 million Planning Fund will be available. The new State Housing Approval Board or courts will be involved when proposed housing meet affordability criteria but not zoning.

According to the National Low Income Housing Coalition, “Across New York, there is a shortage of rental homes affordable and available to extremely low income households (ELI), whose incomes are at or below the poverty guideline or 30% of their area median income (AMI). Many of these households are severely cost burdened, spending more than half of their income on housing. Severely cost burdened poor households are more likely than other renters to sacrifice other necessities like healthy food and healthcare to pay the rent, and to experience unstable housing situations like evictions.”

The affordable housing shortage has been linked to New York’s labor situation. As reported in Patch.com, the governor said, “ While over the last decade, New York has created 1.2 million jobs, only 400,000 new homes have been built. Land-use policies statewide are some of the most restrictive in the nation.”

Governing.com reports that the “plan would give the state power to bypass local zoning laws, but local officials want to maintain control of what is built in their communities.” (Weinter, Mark. “New York’s Affordable Housing Plan Bypasses Local Zoning.” February 2, 2023. Syracuse.com.)

Aside from housing, New York faces a population decrease, which is triggering issues in other areas like public school enrollment, funding, and more. As RBT CPAs reported in “What’s Happening with Enrollment in New York Public Schools?”, 2020-2021 showed historically low population growth in the U.S. that started to change in 2022 with a .4% increase attributable largely to more people moving to the U.S. from international locations than leaving and more births than deaths.

However, the Northeast population declined with more people moving out of the region than into it and New York State showing the biggest decline in the country. While New York had more births than deaths, it wasn’t enough to offset losses due to net domestic migration – 300,000 more people moved out of the state than into it, and it’s not just the economically disadvantaged who are leaving.

CNBC reported, “A survey conducted by SmartAsset tracked the movement of people under 35 earning an adjusted gross income of at least $100,000…It seems young professionals are most eager to leave New York. With a net outflow of 15,788, this state had the highest number of individuals leaving by a significant margin.”

As reported by SpectrumLocalNews.com, “Senate Minority Leader Robert Ortt says the cost of living is driving people out of the state. ‘The single biggest threat to the state of New York is the outmigration of our human capital. It’s the loss of future generations of workers, of investors, of employers, taxpayers.’  While housing, no doubt contributes to that, there are a lot of other factors at play, too, like payroll taxes, Medicaid costs, proposed tuition hikes at state public schools, and more. (Reisman, Nick. “Affordability Becomes Watch Word in New York State Budget.” February 17, 2023. Spectrumlocalnews.com.)

Only time will tell whether affordable housing is the key to solving so many of New York’s challenges. To free you up to focus on the many strategies needed to build and maintain economically sound municipalities, RBT CPAs is here to help with your taxes, audits, accounting, advisory services, and more. We’re one of the leading accounting firms in the Hudson Valley, dedicated to helping our clients succeed. Learn more – give us a call.

How Will the End of the Public Health Emergency Impact Your Organization and Finances?

How Will the End of the Public Health Emergency Impact Your Organization and Finances?

Is your organization ready to “unwind” from the Public Health Emergency (PHE) and address the potential impact, financial or otherwise?

Just about three years ago, the U.S. Government issued a nationwide emergency declaration due to COVID. At the end of the day, May 11, 2023, the U.S. PHE expires, along with many temporary changes to health insurance, coverage, and care. This will impact health care providers, insurers, pharmaceutical companies, pharmacies and certain retailers, employers that provide health care coverage, and individuals.

Along with the end of the PHE comes the end of Medicare coverage for free COVID tests and testing, as well as the extra 20% payment for COVID care in the hospital; Medicaid and CHP free testing and COVID treatment services with no cost-share (the latter starts the first calendar quarter one year following the end of the PHE); continuous enrollment in Medicaid (as of March 31); private health insurance free tests and testing services, as well as mandatory out-of-network coverage for both; enhanced federal funding to states (effective December 31); and more.  (For more details, see “Key Flexibilities Triggered by Major Covid-19 Federal Emergency Declarations” at KFF.org.)

In February, the American Hospital Association sent a letter to U.S. Secretary of Health and Human Services Xavier Becerra asking the administration to consider PHE implications on our health care system’s stability. It noted, “The recent decision to sunset the COVID-19 public health emergency (PHE) is a testament to the progress we have made; however, as we prepare for that transition, we should not revert to care delivery as it was prior to the pandemic. Instead let us build on the lessons we have learned and the advancements in care delivery and access we have made. Let us use this crisis to create a more effective, equitable, patient-focused and stable health care system.”

During the PHE, health plans benefited from government coverage of COVID-related expenses, and relaxed HIPPAA and COBRA rules. Before the end of the PHE, they’ll have to negotiate with plan sponsors regarding how these expenses will be covered going forward, even as some prices are still being worked out (i.e., how much pharmaceutical companies will charge for vaccines and treatments). Finally, while significant premium increases didn’t materialize in 2023, there’s concern about the impact cost-shifting to insured patients may have in 2024.

GoodRx reports: “One of the most profound effects of the PHE ending is the potential number of people who will lose Medicaid coverage (5 million to 14 million according to some researchers and nearly 18 million according to the highest estimates).” (George, Cindy. “The End of the COVID-19 Public Health Emergency: What You Need to Know.” March 10, 2023. GoodRx.com.)

The U.S. Department of Health and Human Services (HHS) issued a roadmap for transition, highlighting what will change and what won’t with the PHE’s end. Among the changes is how lab results and immunization data will be reported. Once the PHE ends, the HHS won’t have the authority to require this reporting. The Center for Disease Control is encouraging states to continue sharing vaccine data. Also, hospital reporting will continue but likely at a lesser frequency.

The unwinding is occurring as the health industry faces an uncertain economic environment, supply chain issues, and the labor shortage, leaving questions about how all of this will impact demand for care; debt, liquidity and bond ratings; provider costs, cash, and funding; and more.

No doubt, all healthcare providers, health plans, employers offering coverage, and others will be on the receiving end of patient questions – and possible hostility – about coverage and cost changes. As noted on GoodHousekeeping.com, “It’s unclear just how expensive treating or preventing COVID-19 will be for most Americans currently — but a majority can expect to face new forms of co-pay for tests, treatment and medications starting in May.” (Krstic, Zee. “What Does the End of Covid Emergency Declarations Really Mean?” February 12, 2023. GoodHousekeeping.com.)

To prepare your organization for the unwinding, there are numerous resources available:

Many variables will impact/determine the financial implications of the PHE ending on your organization. As with any legal matter, it’s always best to consult your legal counsel for advice and direction. At the same time and as part of your unwinding activities, you may want to evaluate data on hand to determine the potential financial impact. RBT is here to help guide you through the accounting and tax implications you may want to consider as part of your strategy. Give us a call today.