Is Building More Enough to Tackle New York’s Affordable Housing Crisis?

To grapple with the acute affordable housing crisis, New York Governor Kathy Hochul aims to “build, build, build,” as she put it last year during her keynote remarks at the Global Economic Summit. For the 2026 fiscal year, the Executive Budget proposes $427 million to continue the state’s $25 billion, 5-year housing plan to create and preserve 100,000 affordable homes, as well as $1 billion to support the City of Yes for Housing Opportunity program.

Jolie Milstein, president & CEO of the New York State Association for Affordable Housing—the nation’s largest association of affordable housing developers—believes preserving is as important as building, so her organization is advocating for an additional $1 billion in statewide funding to go toward affordable housing preservation.

We asked Milstein to share her thoughts and highlight potential solutions to the affordable housing crisis in the state.

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What are the most pressing challenges that New York affordable housing developers face today? 

Milstein: New York’s affordable housing crisis is exacerbated by several persistent challenges that deter developers from pursuing the creation of new projects. For instance, rising construction and operational costs—including escalating insurance premiums—have created a significant financial burden on developers. This is particularly problematic for affordable housing, as it is constrained by rent limits that prevent developers from offsetting these costs through increased rents, unlike market-rate projects.  

On the regulatory side, making New York more builder-friendly is also a significant challenge. Developers are constantly facing the impacts of outdated zoning laws, stringent mandates and prolonged permitting processes that delay projects and increase costs. Encouraging local governments to plan for and prioritize affordable housing is also vital, but funding is needed to help them do so.  

Lastly, the lack of preservation funding for affordable housing is a pressing concern for developers. As existing properties face increased operational costs, the potential for losing affordable units due to physical deterioration or financial strain is growing. This makes it more urgent than ever to ensure that affordable housing preservation is prioritized alongside incentives for new construction.  

How do you assess Governor Hochul’s Executive Budget proposal in terms of addressing the affordable housing crisis, and where does it fall short in your view? 

Milstein: Governor Hochul’s Executive Budget proposal is a crucial step forward in addressing the affordable housing crisis. The $1 billion investment in the landmark City of Yes for Housing Opportunity initiative as well as increased funding for programs like the Empire State Supportive Housing Initiative and the State Low-Income Housing Tax Credit are vital components to the state’s housing agenda and demonstrate a strong commitment to the creation of new affordable housing units.  

However, while the focus on new housing is needed, the budget falls short in addressing the preservation of existing affordable housing. Preservation is equally important, as many properties are at risk of becoming financially unsustainable due to escalating costs and the lingering effects of the COVID-19 pandemic. The inclusion of a $150 million Affordable Housing Relief Fund would provide targeted support for these properties, ensuring they remain safe and affordable for residents.  

While prioritizing investment in New York City is important, the Governor should also not lose sight of affordable housing needs across the rest of the state. NYSAFAH is calling for an additional $1 billion in statewide funding for affordable housing capital, operating support and tax credits to ensure that affordable housing is not just built but also preserved across New York. 

Tell us more about the main priorities outlined in your State of Yes Housing for All proposal and how they’re meant to help affordable housing developers. 

Milstein: The State of Yes Housing for All initiative outlines a $1 billion investment and comprehensive approach to tackling the affordable housing crisis, which includes $150 million for an Affordable Housing Relief Fund. The initiative also proposes doubling the SLIHTC program to $30 million annually, with updates to enhance credit transferability, with the goal of increasing private investment flow into affordable housing.  

Additional priorities include $500,000 for a statewide insurance feasibility study, $3 million for an insurance assistance program and improvements to the Historic Tax Credit to expand the investor pool. NYSAFAH is also calling for a $25 million increase for the Homeless Housing Assistance Program, $75 million for Upstate Public Housing, a boost to the Empire State Supportive Housing Initiative rate, revising the Martin Act to facilitate affordable housing conversions and streamlining environmental reviews to accelerate development.  

How exactly would the Affordable Housing Relief Fund help developments suffering from COVID-19-related losses and rising expenses? 

Milstein: The proposed $150 million Affordable Housing Relief Fund is dedicated to projects that have operating deficits caused by escalating expenses—most notably insurance, COVID-19 rent arrears and forfeited rent increases—that have forced projects to absorb additional debt. The fund would offer subsidies for operating assistance to offset COVID-19-related financial losses and for capital improvements to correct critical issues that pose threats to residents’ health and safety.  

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What specific changes to the SLIHC program would boost private investment in affordable housing? 

Milstein: To boost private investment in affordable housing, NYSAFAH is advocating for two key changes to the SLIHC program. First, as proposed in Governor Hochul’s budget, the proposal to double the annual allocation of SLIHC funds to $30 million is a welcome step toward increasing the availability of tax credits. 

Not included in the budget—but equally as important—is allowing the transfer of these credits. Currently, the state permits only a single transfer. NYSAFAH is urging the state to expand the program to enable multiple transfers of tax credits. This change will help increase the value of the credits and, ultimately, lead to greater private investment in affordable housing projects across the state. 

Can you explain the purpose and expected impact of your NYS Captive Insurance Statewide Alternative Risk Feasibility Study for Affordable Housing? 

Milstein: A new Captive Insurance product formed by NYSAFAH members was recently welcomed by the affordable housing industry. The Milford Street Association Captive Insurance Co. provides insurance for multifamily housing in New York City that receive public financing and have a regulatory agreement that limits rent, ensuring that these properties remain financially stable. 

However, the product is currently only available to properties in New York City. To expand this model statewide, NYSAFAH proposes $500,000 in funding for a new NYS Captive Insurance Statewide Alternative Risk Feasibility Study for Affordable Housing to provide potential captive insurers and commercial insurance companies with data to evaluate captive formation or growth throughout the state. This would be crucial for increasing insurance options for developers facing skyrocketing insurance rates that limit construction across the state. 

What specific investments are being made to increase the supply of affordable housing across New York state to ensure these investments are distributed equitably across different communities? 

Milstein: Governor Hochul’s executive budget proposes several key investments to increase the supply of affordable housing, including the $1 billion City of Yes for Housing Opportunity program and funding for the Empire State Supportive Housing Initiative, the LIHTC and the NY RUSH program for repurposing state properties for housing.  

Notably, we’re also entering the fourth year of Hochul’s ambitious five-year, $25 billion housing plan to create and preserve 100,000 affordable homes statewide, making it clear that progress has been made. 

These investments are a step forward, but NYSAFAH will continue advocating for equitable distribution across urban, rural and suburban communities, ensuring that affordable housing is accessible to all New Yorkers through the State of Yes Housing For All initiative. 

Can you share details about a recent affordable housing projects in New York state that could serve as a model for future investments? 

Milstein: One notable project is the Bridge Rockaway development in Brooklyn, which integrates affordable housing with local economic development opportunities. This mixed-use project not only provides affordable housing but also includes space for light manufacturing, creating jobs and promoting community revitalization. This development serves as a model for future investments, demonstrating how affordable housing can be part of a broader effort to boost local economies and provide sustainable community development. 

Every year, NYSAFAH highlights innovative projects like this through its Awards for Excellence and Innovation in Affordable Housing Development. These projects offer a path forward for future affordable housing investments across New York, emphasizing the importance of public-private collaboration and creative solutions to overcome the challenges developers face.