Hochul Moves to Slash Housing Red Tape, Citing $82,000 Cost Per NYC Unit

An ambitious effort to untangle New York’s daunting housing knots could portend a remarkable shift for the city’s future affordability.

The figure is as galling as it is familiar: constructing a new apartment in New York City now costs, on average, $82,000 more per unit than in many rival American cities. That paltry distinction is not down to costlier concrete, nor is it a labor premium. Instead, much of the bill comes courtesy of a clutch of swelling bureaucratic paper mountains—chief among them, the ponderous State Environmental Quality Review Act (SEQRA).

This week, Governor Kathy Hochul unveiled a plan to do what few in Albany have dared: prune New York’s tangle of environmental reviews, zoning deliberations and redundant paperwork that can stall essential housing projects for years. Flanked by a raft of city and upstate mayors, including New York City’s own Zohran Mamdani, Hochul presented “Let Them Build”—a suite of executive tweaks and legislative reforms meant to streamline the path for new housing, infrastructure, and, by extension, the city’s very future.

Few disagree that New York faces a housing crisis. Vacancy rates for affordable rental units hover below a tepid 2%, and office-to-apartment conversions—much hyped—have fallen well short of expectations. Developers complain, not without reason, that lengthy environmental reviews, added community hearings and byzantine permitting rules slow their projects by up to 56% compared to the most nimble U.S. states. The cost of red tape, reckons the Citizens Budget Commission, is hardly trivial. It adds years to the timeline and up to five figures per apartment, stymieing the ambitions of would-be residents and developers alike.

Unclogging the pipes

Hochul’s proposal accomplishes three main things. First, it would reform SEQRA, the decades-old law notorious for letting small groups hold up needed developments on the slenderest pretexts. Second, it promises a digital overhaul of permitting so agencies can share data, sidestepping repetitive paperwork. Third, it would streamline approvals for public works—especially water infrastructure and parks—both of which often fall prey to the same procedural morass as new housing.

This all sounds technical, but the effect would be tangible for ordinary New Yorkers. If, as Hochul hopes, housing projects accelerate, one might at last see a reversal in the stubborn rise of rents. Social services would benefit too; child-care centres and community spaces are currently subject to the same lags and cost overruns as luxury towers. And more efficient infrastructure spending means more bang for each tax dollar—sorely needed, given strained municipal budgets.

Still, not all are cheering. Environmental groups fret that loosening SEQRA could imperil protections that prevent reckless development. Others argue that reining in the regulatory process risks empowering developers at the expense of local communities. The Hochul administration, for its part, contends that New York’s rules are simply outmoded; other states, such as California and Massachusetts, have managed to safeguard the environment without choking off new homes.

For the city’s broader fortunes, however, the logic is unassailable. New York’s population has scarcely budged over the last three years—an anemic trend for a putative global city. Persistent scarcity has sent median rents in Manhattan toward $4,000 per month, with boroughs like Brooklyn and Queens not far behind. Economic dynamism—once buoyant—is at risk as middle-class and younger workers decamp for less inhospitable cities.

The gridlock extends well beyond housing. Infrastructure projects, from new green space to modernisation of drinking water systems, face the same inertia. School enrolments in parts of Brooklyn and Manhattan have tumbled, not because the city lacks children, but because families cannot afford to stay. In an age when high-skilled workers (and businesses) can increasingly live anywhere, New York’s stolid approach risks ceding ground to nimbler locales.

A national glance at a local knot

Other fast-growing American cities, such as Austin and Atlanta, have paired loosened development rules with robust economic growth. New York’s rivals abroad—London, Toronto, even Paris—have sought their own housing reforms, to mixed effect. The lesson is not that slashing rules guarantees affordable homes, but that regulatory sclerosis certainly blocks progress.

Gov. Hochul’s effort is notable for transcending the usual city-versus-state squabbles. Partnership between Albany, City Hall, and the Association of Counties suggests a rare consensus that something must change. Whether these reforms make it into the final state budget, and how they weather expected legal and political challenges, remains to be seen.

We reckon that a nimbler bureaucracy is a necessary, if not sufficient, condition for a more affordable New York. Skepticism regarding environmental backsliding is neither misguided nor new—but today’s regulatory labyrinth benefits neither nature nor New Yorkers who seek a foothold. Boldness, not inertia, made New York a magnet for ambition. Unless the city and state rediscover their appetite for timely, well-managed construction, many will continue to vote—with their feet—for other cities.

If New York is to remain a city that builds, it must first become one that lets itself build. Hochul’s plan is a welcome, if belated, bid to unjam the works. The city’s panache and potential cannot be sustained by nostalgia for mid-century process. It is time for leadership—and action—on the most elemental need: a place to live. ■