Affording the American Dream: Governor Hochul Proposes New Initiatives to Make Homeownership More Affordable and Accessible

Affording the American Dream: Governor Hochul Proposes New Initiatives to Make Homeownership More Affordable and Accessible

As her fourth proposal for the 2025 State of the State, Governor Kathy Hochul today proposed significant actions that build upon her ongoing commitment to addressing the housing shortage and increase affordability by creating more homeownership opportunities, and taking actions to protect housing affordability for everyday New Yorkers. Building on Governor Hochul's historic $25 billion, five-year housing plan to create or preserve 100,000 affordable homes statewide, New York State has reached the milestone of creating 50,000 affordable homes within two years.

"The cost of living is just too damn high - especially when it comes to the sky-high rents and mortgages New Yorkers pay every month," Governor Hochul said. "Last year, we passed the most transformative plan in half a century to build more housing and lower costs for families. But shadowy private equity giants are buying up the housing supply in communities across New York, leaving everyday homebuyers with fewer and fewer affordable options. I'm proposing new laws and policy changes to put the American dream of owning a home within reach for more New Yorkers than ever before."

Buying a home is the biggest investment most families ever make and is one of the top ways for individuals and families to build generational wealth. However, buying a home has become increasingly more difficult because the housing supply is scarce, creating competition and inflating prices. These proposals build on the Governor's commitment to addressing New York's housing crisis by ensuring that even more New Yorkers can reach the financial milestone of purchasing a home.

Disincentivizing Institutional Investors from Buying up One- and Two-Family Homes

Hedge funds, private equity firms and other institutional investors, have played an increasingly significant role in the single-family and two-family housing market in recent years. These large entities can often outbid prospective homeowners with all cash offers and fast track their ownership by waiving inspections, appraisals and other common prerequisites that traditional homebuyers cannot. The rise in digital technologies have further paved the way for these entities to purchase single-family and two-family homes, allowing them to monitor real estate markets and move quickly to identify, evaluate and make offers on properties that fit their criteria.

Nationally, private equity firms own more than 500,000 homes. According to some estimates, private equity firms are expected to own up to 40 percent of the single-family rental market by 2030. When large investors hold a disproportionate share of a local housing market it removes opportunities for homeownership, exacerbating the existing scarcity and driving up prices for remaining homes on the market. These consequences are felt most intensely by first-time and low- or moderate-income homebuyers. To help level the playing field and increase the opportunities for everyday individuals and families to purchase a home, Governor Hochul is proposing legislation to disincentivize large investment entities from buying single-and two-family homes en masse, and will require a 75-day waiting period for institutional investors to make an offer on one- or two-family homes.

Additionally, the Governor will propose reducing the opportunity for institutional investors to take advantage of tax code provisions that make these investments in single- and two-family homes more lucrative by denying these entities the ability to utilize the interest deductions, depreciation deductions and other expenses associated with the ownership of these properties. If these measures are approved by the Legislature, New York State would be creating a nation leading model that disincentivizes institutional investors from buying up homes.

Provide Starter Home Innovation Funding

Oftentimes, homes being built by the market today are larger and therefore less affordable than a traditional starter home. An undersupply of homes limits mobility within the market, preventing young families from becoming homeowners and older New Yorkers from downsizing. Governor Hochul proposes $50 million in capital funding to incentivize the building of more starter homes, including innovative approaches to homebuilding such as the use of factory-built and modular development.

Support First-Time Homebuyers Down Payment Assistance

Saving enough money to make a down payment to purchase a home is a significant barrier to homeownership, especially for low- and moderate-income buyers. Governor Hochul will provide $50 million in new state funding to support New Yorkers struggling to save for down payments and help more individuals and families achieve the dream of homeownership.

Create an Affordable Homebuyer Tax Incentive

Even when homes are developed for the express purpose of being sold to low- and moderate-income homebuyers, local property tax assessments value the homes at fair market value, presenting challenges to creating homes these homebuyers can afford to purchase. The Governor is proposing an affordable homebuyer property tax incentive at local opt-in for homes built with assistance from governmental entities, nonprofits, land banks, or community land trusts, and sold to low- and moderate-income homebuyers. This will aid such homebuyers by making their dream of homeownership more attainable by bringing down costs and increasing the supply of these homes.

Strengthen Laws and Policies To Combat Home Appraisal Discrimination

For many New Yorkers, their largest investment and most valuable asset is their home. Homes provide families with a safe place to live and an opportunity to build generational wealth. For too long, pervasive appraisal bias throughout the housing industry has unjustly stripped families of this opportunity, widening racial homeownership and wealth gaps. Governor Hochul will propose a suite of actions to make discriminatory appraisal practices unlawful, enforce anti-discrimination principles in appraisals and diversify the appraiser workforce.

Today's announcement builds on Governor Hochul's landmark housing deal to deliver critically needed housing development while protecting tenants and homeowners. As part of the FY25 Enacted Budget, the Governor secured a historic agreement to increase New York's housing supply through new tax incentives for Upstate communities, new incentives and relief from certain state-imposed restrictions to create more housing in New York City, a $500 million capital fund to build up to 15,000 new homes on state-owned property, an additional $600 million in funding to support a variety of housing developments statewide and new protections for renters and homeowners.

Late last year, as New York City faces a generational housing crisis with a 1.4 percent housing vacancy rate, Governor Hochul committed $1 billion to support affordable housing to help New York City secure "City of Yes for Housing Opportunity," the most significant pro-housing rezoning in the City's history, which is expected to create more than 80,000 new homes. Additionally, Governor Hochul and First Deputy Mayor Maria Torres-Springer celebrated the creation of more than 70,000 housing units under the 421-a program by extending the construction completion deadline, which was made possible by Governor Hochul as part of the FY25 Enacted Budget.

New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas said, "Once again the Governor is putting forward a holistic approach to addressing the housing crisis with nation-leading proposals that open the door for more New Yorkers to build wealth and security through homeownership. The innovative initiatives announced today will remove barriers, increase the supply of affordable homes, create equity in the market and justice for homebuyers, and make owning a home achievable. This bold homeownership package is another example of the Governor's commitment to using every tool at our disposal to increase affordability and create the homes New Yorkers need."

New York State Division of Human Rights Acting Commissioner Denise Miranda said, "Homeownership affords New Yorkers a stable place to raise their families and the opportunity to invest in their family's future as they build equity. For far too long, these benefits have been eroded by bias and discrimination in the real estate appraisal process. Governor Hochul's proposed reforms serve to hold appraisers accountable for discriminatory practices and create an equitable and just homeownership experience for all New Yorkers. The Division of Human Rights stands in support of these reforms and will continue to vigilantly enforce New York's nation-leading anti-discrimination laws."

Habitat for Humanity New York City and Westchester County CEO Sabrina Lippman said, "As we strive to build a more equitable housing future, we applaud Governor Hochul's continued prioritization of, and investment in, creating and preserving homeownership opportunities for New York families. Increasing the supply of starter homes, curbing corporate purchasers of single-family houses, and ensuring low-income homeowners are not displaced or economically burdened due to unfair taxation, are all critical components to building a New York we can all afford."

New York Land Bank Association said, "The New York Land Bank Association enthusiastically supports Governor Hochul's ambitious response to challenges faced by homebuyers in New York State. The entry-level housing market is constrained by too few builders constructing starter homes, homeowners' reluctance to list their homes due to high interest rates, and private equity firms scooping up what little inventory is available, creating artificial scarcity. Those homes would historically have been purchased by families and have provided a path to grow household wealth. We applaud Governor Hochul for pushing back against venture capital and helping homebuyers compete on a fair playing field."

Contact the Governor's Press Office