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.