New Yorkers across the state can expect to see changes with housing and development after Gov. Kathy Hochul announced a $125 million investment for affordable multifamily housing and a pied-à-terre tax proposal of $5 million for luxury secondary homes.
More than $125 million will now be available to help upgrade affordable multifamily housing in upstate New York, providing support for more cost-effective measures to transition to cleaner energy and improvements in residential buildings.
“The launch of this new program marks a significant step forward in how New Yorkers deliver clean energy solutions to low- to moderate-income communities while prioritizing affordability,” Hochul said in her announcement in April.
The new program is the Affordable Multifamily Program Upstate (AMP Up), administered through the New York State Energy Research and Development Authority (NYSERDA). AMP Up will replace the Affordable Multifamily Energy Efficiency Program (AMEEP), which will now only serve downstate.
AMP Up will provide incentives for upgrades such as switching to energy-efficient appliances, window replacements and heating system upgrades. The incentives will go to building owners who apply and meet eligibility.
The goal of AMP Up is to lower multifamily buildings’ energy consumption, reduce utility bills, create better living environments and increase property value.
However, the move toward energy-efficient housing has been ongoing, with another announcement Hochul made in February of this year of a $242 million investment into 1,800 homes in every region of New York.
The total $242 million investment generates funds from New York State’s Homes and Community Renewal (HCR). The investment is divided into $66 million coming from the federal and state Low-Income Housing Tax Credits, and $176 million from subsidy loans.
In her announcement in February, Hochul said, “We have to act with urgency, that means building more housing in every region…to expand affordable homes for people of all ages and phases of life including working families, seniors, and people living with disabilities.”
These housing developments will be in every region of New York ranging from the Capital Region, to Western NY, to New York City.
The transition to incentivized sustainable homes and upgrading is being carried out in hopes of lowering the carbon footprint of New York’s housing, and decreasing the cost of living. Hochul also plans to further help reduce the cost of living in New York City through a new proposal.
For New York City, Hochul has announced the pied-à-terre tax proposal on luxury homes that are of value at $5 million or more. This tax would target homes where the owner’s primary residence is not in the city.
The pied-à-terre tax has been proposed several times since 2013. The more recent push for this tax has been supported by Mayor Zohran Mamdani’s efforts to close New York City’s budget gap, and have the ultrawealthy pay contributional taxes to support the city’s public services.
“Alongside the governor, our administration is fighting every day to make sure we address this fiscal deficit fairly, where the wealthy contribute what they owe and our budget reflects our commitment to the working New Yorkers being priced out of our city” Mamdani said in his statement about the tax.
The estimated income from the tax is targeted to be $500 million of annual revenue. Yet some New Yorkers, such as real estate workers and million-dollar homeowners, suggest that the tax will not be able to generate the estimated revenue, if owners find ways to avoid the tax. If owners of the homes start to rent out their apartments, then they could avoid this tax. Additionally, owners could claim that relatives occupy the space for a majority of the year, or even sell their homes.
Yet, Hochul remains firm on the tax saying, “If you can afford a $5 million second home that sits empty most of the year, you can afford to contribute like every other New Yorker.”
For the rest of the state, since the pied-à-terre was proposed, an expansion on the tax has been introduced by Senator Patricia Fahy.
“I strongly support Governor Hochul’s proposal to establish a pied-à-terre tax on ultra-luxury second homes in New York City, and recommend we take the next step by expanding a version of this policy statewide” Fahy said in a press release.
A statewide tax would be beneficial to “local infrastructure, public safety, and municipal services” according to Fahy who claims that smaller communities feel the imbalance more directly.
However, the statewide proposal would also come with push backs just as New York City has. While the tax could generate money for local programs, there are many differences that separate the upstate tax from the city. These distinctions include less secondary homes upstate, and a significantly lower amount that would be valued at $5 million or more.
Whether a statewide pied-à-terre tax is passed or not, lawmakers will continue to focus on housing, through new taxes and incentives that they hope will lower costs of living.
“I’m so focused on doing whatever we can to lift people up and to make New York more affordable, more family friendly, more business friendly, and part of it is how we tackle the costs that are driving up the cost of living here in this great state” Hochul said.
