Recommendations for Building a More Effective and Equitable Housing System

SUMMARY

The Housing and Urban Development Committee (Farhana Choudhry and Julia Solo, Co-Chairs) issued a set of policy recommendations to the new mayoral administration to address the City’s housing affordability crisis. The memo emphasizes the urgency of addressing rising housing costs, financial distress in affordable and rent-stabilized buildings, and administrative barriers that slow housing production and access.

The Committee’s recommendations include: (1) reforming how affordability is defined by reducing reliance on HUD’s Area Median Income, which is distorted in high-cost markets like NYC, and advocating for both federal and local adjustments; (2) exploring a government-sponsored insurance option to counter skyrocketing insurance premiums threatening affordable and rent-stabilized housing; (3) creating new subsidies and tax abatements to help owners of legacy rent-stabilized buildings make necessary repairs and cover rising operating costs; (4) making major investments in staffing, resources, and technology at housing-related city agencies to eliminate delays and build long-term capacity; and (5) improving the Housing Connect platform by addressing usability problems, streamlining documentation, and reducing delays in leasing affordable units. Collectively, the memo urges bold policy action and administrative investment to preserve existing housing, accelerate affordable housing delivery, and ensure that housing programs better serve New Yorkers most in need.

REPORT

REPORT BY THE HOUSING AND URBAN DEVELOPMENT COMMITTEE

RECOMMENDATIONS FOR BUILDING A MORE EFFECTIVE
AND EQUITABLE HOUSING SYSTEM IN NEW YORK CITY

On behalf of The New York City Bar Association’s Committee on Housing and Urban Development (the “HUD Committee”), we write to congratulate Mayor Mamdani and commend him on his unwavering commitment to making New York City (the “City”) an affordable place to live.  We are excited to see the positive changes the Mayor will bring to the City, particularly with respect to affordable housing.

The HUD Committee is composed of attorneys from the public and private sectors, not-for-profit organizations, academia, and law students.  We meet regularly to discuss legal and policy issues related to the preservation and development of affordable housing in New York City. Our work includes issuing reports, making recommendations on policies and legislation, and hosting events designed to educate and facilitate discussion on crucial affordable housing issues.

We recognize that this Administration must examine a significant number of programs, priorities, and goals. As the Mayor and his appointees develop and implement his housing plan, we offer the following policy recommendations for further consideration, all of which have the potential to garner broad public support and make a lasting impact on the lives of our fellow New Yorkers. We share these recommendations based upon the collective opinions of the members of the HUD Committee, with the particular goals of encouraging the creation and preservation of affordable housing and making housing more affordable for all New Yorkers. Our policy recommendations are as follows, with a rationale and explanation for each following sequentially:

1. Make affordable housing actually affordable for New Yorkers;
2. Consider establishing a government-sponsored insurance vehicle for affordable housing developments and legacy rent-stabilized properties;
3. Establish additional programs to assist owners of legacy rent-stabilized properties in financial distress in making repairs and covering rising operating expenses;
4. Make a serious investment in resources and staffing at city agencies dealing with housing to eliminate delays and to build long-term capacity; and
5. Address Housing Connect’s functionality and user experience issues and streamline documentation requirements for housing applicants.

I. MAKE AFFORDABLE HOUSING ACTUALLY AFFORDABLE FOR NEW YORKERS

Area Median Income (“AMI”) is a benchmark published annually by the U.S. Department of Housing and Urban Development’s (“HUD”) and is intended to measure the median household income within a defined geographic area, typically a county or Metropolitan Statistical Area (“MSA”).^[1] AMI is used by federal, state, and local governments to determine eligibility for affordable housing programs and to establish maximum “affordable” rents, assuming that a household can reasonably spend no more than 30% of its income on housing. HUD calculates AMI using data from the U.S. Census Bureau’s American Community Survey, subject to a series of technical adjustments.

In the New York City MSA, however, AMI has become increasingly disconnected from actual household incomes. This is primarily attributable to one of the adjustments utilized by HUD in their methodology–the High Housing Cost Adjustment (“HHCA”), which increases AMI levels in metropolitan areas where rents are disproportionately high relative to incomes.^[2] As a result, in New York City’s high-cost housing market, AMI is adjusted upward in response to market rent conditions, rendering it a poor indicator of actual household incomes.

Put simply, “in high-rent metro areas, AMI is actually not based on incomes at all.  It instead reflects the area’s sky-high rental costs.”^[3]  In turn, artificially high AMIs are then used to set rents, and the cycle repeats itself, regardless of people’s actual incomes.  Over time, then, AMI has become increasingly disconnected from New Yorkers’ actual incomes.

The HHCA was adopted to expand the pool of households eligible for affordable housing in areas of the country where housing costs are high.^[4]  However, this distortion has serious consequences. Developments may now qualify as “affordable” even though their rents remain unaffordable to a significant share of households in the neighborhoods where the housing is built.  This framework allows rents pegged to AMI to rise faster than local incomes, gradually pushing those units out of reach for the very households they were initially meant to serve.^[5]

Concerns about HUD’s AMI methodology are not new. At the federal level, companion bills were introduced in the House of Representatives (H.R. 7972)^[6] and the Senate (S. 3914)^[7] during the 118^th Congress entitled “The Area Median Income Fairness Act of 2024” which call for HUD to formally reassess the effectiveness of its AMI methodology, including the impact of the HHCA, and require reports to Congress with potential reforms. Encouragingly, HUD’s AMI methodology is not static. For example, HUD recently made adjustments in the FY 2024–2025 cycle to how income data is trended for inflation, demonstrating that the formula is subject to evolution.^[8] These updates suggest that HUD may be receptive to further methodological refinements, particularly if the City actively engages and advocates for adjustments that better reflect the City’s unique income and housing situation.

Given the distortions in AMI, we urge the City to take an active role in working with HUD to modernize and refine its AMI framework and demonstrate how the HHCA distorts affordability thresholds. In the meantime, the City does not need to wait for federal action to ensure that its own housing policies align with the actual incomes of everyday New Yorkers. The City has discretion in how it structures its own affordability targets and can modify its own subsidy programs to target income levels that truly reflect local housing needs.  By pairing federal advocacy with local policy leadership, the City has a prime opportunity to make a meaningful and lasting impact on housing affordability for New Yorkers who need it most.

II. CONSIDER ESTABLISHING A GOVERNMENT-SPONSORED INSURANCE VEHICLE FOR AFFORDABLE HOUSING DEVELOPMENTS AND LEGACY RENT-STABILIZED PROPERTIES

Insurance premiums have skyrocketed in recent years, leaving affordable housing developments and rent-stabilized properties financially vulnerable and at risk of foreclosure and disinvestment.  A recent report by New York University’s Furman Center highlighted these two specific categories of housing as “The Subsegments of Most Concern” with respect to rising costs: government-subsidized, income-restricted buildings (aka affordable housing) and legacy 90%+ rent-stabilized buildings.^[9]

While buildings face financial pressures from a myriad of factors, including inflation and the rising cost of labor, insurance costs stand out as a uniquely serious threat to affordability in our great City. For instance, insurance premiums for affordable housing developments more than doubled from 2021 to 2024 and now consume roughly 22% of the monthly rent on a typical Low-Income Housing Tax Credit one-bedroom apartment.^[10]  The story has been the same for legacy rent-stabilized buildings.  Between 2019 and 2025, the Rent Guidelines Board tracked insurance premiums driving operating expense increases with double-digit annual rate hikes—+16.5% in 2020, +21.7% in 2024, and +18.7% in 2025.^[11]

Given these unsustainable cost increases, numerous prominent industry groups have already called for aggressive government intervention in the insurance markets on behalf of affordable housing developments,^[12] and we echo their urgent calls for relief.  New York State has taken notice of this crisis and those calls for relief, having recently passed legislation to end the practice of insurance redlining by prohibiting insurers from asking landlords about tenants’ source of income and using that information to make coverage decisions or set prices.^[13]  In addition, two State agencies have developed pilot programs to intervene in the insurance market by supporting private “captive” insurers.  The Empire State Development Corporation, for instance, issued a $2 million low-interest loan to a landlord collective that formed a “captive” insurer known as the Milford Street Captive Insurance Company, which is now insuring about 3,000 apartments.^[14]  Likewise, New York State Homes and Community Renewal recently released a Request For Proposals seeking to make joining private insurance captives more accessible across the affordable housing sector.^[15]

While we laud these efforts and encourage the City to consider similar initiatives to promote private insurance captive companies, we note that the current set of interventions are aimed only at income-restricted, deed-restricted properties, i.e., affordable housing developments, and not at rent-stabilized properties, which have experienced similarly unsustainable insurance rate hikes. Second, we take notice of industry calls not only for private captives, but for a public option as well:

• From the Association of Neighborhood and Housing Development’s recommendations — “Establish pooled-risk or state-backed insurance mechanisms—such as public captives or mutual risk pools—to counter escalating premiums and inconsistent underwriting. These reforms would allow affordable housing providers to access fair, stable coverage and reduce vulnerability to market volatility. Transparent underwriting and stronger State oversight should accompany these reforms to prevent redlining and ensure that deeply affordable housing remains insurable and financially sustainable.” (emphasis added)^[16]
• From the New York Housing Conference’s recommendations — “Create a State Excess Liability Fund: Excess liability costs have been increasing dramatically over the past five years, doubling or tripling costs for some owners, even while those owners have seen no excess liability claims. The State should create an excess liability fund for affordable housing providers.” (emphasis added)^[17]
• From the Enterprise Report — “State Action to Reduce Insurance Costs: Lawmakers must advance solutions which reduce insurance costs for affordable housing, such as funding risk mitigation upgrades which can be tied to premium relief or developing a reinsurance backstop.” (emphasis added)^[18]

The City and State of New York have a long and proud tradition of leading the way on housing issues, from Teddy Roosevelt’s New Law to Fiorello LaGuardia’s establishment of the New York City Housing Authority to the recently passed City of Yes legislation and Charter revisions.  Here again, New York City has the opportunity to lead the way and should consider establishing a transformative public insurance option for the City’s invaluable affordable and rent-stabilized housing stock.

The HUD Committee therefore recommends that the City reduce alarming insurance cost escalations by considering the feasibility of a publicly owned insurer for affordable housing developments and legacy rent-stabilized properties.

III. ESTABLISH ADDITIONAL PROGRAMS TO ASSIST OWNERS OF LEGACY RENT-STABILIZED PROPERTIES IN FINANCIAL DISTRESS IN MAKING NECESSARY REPAIRS AND COVERING RISING OPERATING EXPENSES

As noted above, housing experts are raising alarms about the significant physical and financial distress facing a large portion of the City’s rent-stabilized buildings driven by a combination of stagnant revenues and rising operating costs.[19]  Properties where 90% or more of the units are rent-stabilized are particularly susceptible to financial distress, and thus disinvestment.^[20]

Today, tens of thousands of tenants live in buildings that are long overdue for repairs and upgrades.  The creation of programs aimed at alleviating the financial burden owners face in operating rent-stabilized buildings is a prime opportunity for your Administration to help tenants of rent-stabilized units live in affordable, safe, and modern buildings.  The HUD Committee therefore recommends that your Administration take bold and decisive action to assist owners of legacy rent-stabilized properties in financial distress by providing operating subsidies and tax incentives to assist with necessary repairs and encourage renovations of legacy rent-stabilized properties. This can be done in several ways, including, but not limited to:

a. A new tax abatement credit program to address rising operating expenses in exchange for building modernizations.

The City should work to create a property tax abatement credit to offset owners’ rising costs and falling revenue in exchange for building-wide upgrades.  Such a tax abatement credit program could work akin to the current Rent Freeze Program, which includes Senior Citizen Rent Increase Exemption (“SCRIE”) and Disability Rent Increase Exemption (“DRIE”).^[21]  As you know, SCRIE and DRIE are City-administered programs that exempt certain tenants from some or all rent increases in exchange for a real property tax abatement credit equivalent to the tenant’s exempted rent increase. The creation of a similar tax abatement credit program for legacy rent-stabilized properties would reduce the burden owners face in maintaining and modernizing properties.

b. A new subsidy program to encourage Major Capital Improvements (“MCIs”) and Individual Apartment Improvements (“IAIs”).

The distress of rent-stabilized housing stock can also be addressed through the creation of supplements or a subsidy program for owners to offset lost income previously obtained through rent increases via Major Capital Improvements (“MCIs”) or Individual Apartment Improvements (“IAIs”).^[22] Instead of just raising rents on tenants, owners of rent-stabilized properties should have an option to raise revenue with MCIs or IAIs through a City subsidy. Your Administration’s investment in necessary repairs and crucial quality-of-life renovations for legacy rent-stabilized buildings revitalize rent-stabilized properties throughout the City and would improve the daily lives of tenants.

IV. MAKE A SERIOUS INVESTMENT IN RESOURCES AND STAFFING AT CITY AGENCIES DEALING WITH HOUSING TO ELIMINATE DELAYS AND TO BUILD LONG TERM CAPACITY

New York City’s affordable housing crisis is exacerbated not only by inadequate supply and rising costs, but by administrative bottlenecks that prevent affordable housing from being built and preserved at the pace and scale our City desperately needs. The agencies charged with creating, preserving, and regulating housing—the Department of Housing Preservation and Development (“HPD”), Department of Buildings (“DOB”), Department of City Planning (“DCP”), New York City Housing Authority (“NYCHA”), and Department of Social Services (“DSS”)—have experienced significant neglect. Chronic understaffing has weakened institutional knowledge and slowed agency response times, a dynamic exacerbated by burnout and the departure of experienced staff whose expertise cannot be quickly replaced through accelerated hiring alone.^[23]

These constraints are not merely bureaucratic inconveniences—they represent a fundamental barrier to meeting the City’s housing needs and, more fundamentally, to democratic control over housing policy itself.^[24] When agencies lack the staff and systems to identify risks early, properties deteriorate further, repair costs escalate, and the eventual interventions required become far more expensive—or elusive. The HUD Committee therefore recommends that this Administration prioritize substantial investments in staffing across housing-related agencies:

a. Increasing HPD’s Financial Closing and Project Management Capacity

HPD requires additional staff dedicated to financial closing, compliance monitoring, and project/asset management to move new construction and preservation pipelines forward more efficiently and to protect the City’s long-term investments in existing projects. Streamlining these processes will accelerate the delivery of affordable housing while maintaining necessary oversight and accountability.

b. Strengthening NYCHA Operations

NYCHA must receive adequate staffing for project management, maintenance operations, and tenant services to address the existing capital backlog and ensure that its properties remain habitable. Full funding of NYCHA’s operating budget is essential to reversing decades of disinvestment that have disproportionately harmed low-income communities and communities of color.

c. Expediting Land Use Review and Planning

DCP requires sufficient staff to conduct timely environmental reviews, provide technical assistance to applicants, and effectively implement recent zoning reforms. We commend your commitment to fast-track planning review for any project that commits to the administration’s affordability, stabilization, union labor, and sustainability goals.^[25] Additional planners and technical staff will allow the City to implement this expedited review process while maintaining robust community engagement and public colloquy.

d. Improving Building Code Enforcement and Permitting

DOB requires sufficient plan examiners and inspectors to process permits promptly, conduct thorough safety inspections, and enforce housing quality standards. Timely permitting is essential for both new construction and the preservation of existing housing stock. More urgently, adequate inspection staffing is foundational to preventing construction-related deaths and ensuring the safety of workers and tenants alike.

e. Enhancing Homelessness Prevention Infrastructure

HPD, NYCHA, and DSS (which includes the Human Resources Administration and the Department of Homeless Services) are all tasked with administering housing vouchers for the most vulnerable New Yorkers. These agencies need adequate case management staff and rental assistance program administrators to prevent homelessness, rapidly rehouse individuals and families, and provide supportive services. Investing in upstream prevention reduces pressure on the shelter system and helps stabilize vulnerable tenants in their existing housing.

f. Sustained Investment in Technological Infrastructure

Quality technological infrastructure, data systems, and analytical capacity will enable these agencies to identify emerging risks, monitor portfolio performance, and allocate resources strategically. HPD, NYCHA, and DOB in particular need sustained investment in analytical capacity to identify risks ex ante and intervene before properties fall into disrepair.^[26]

Supporting long-lasting agency capacity is not merely an administrative concern; it is a prerequisite for having a meaningful impact on the City’s housing landscape. If New York City is to move forward with comprehensive planning and expanded housing production, agency budgets and the public sector workforce must grow proportionally to manage these increased responsibilities. Building this human infrastructure is essential for your Administration to achieve its housing goals.

V. ADDRESS HOUSING CONNECT’S FUNCTIONALITY AND USER EXPERIENCE ISSUES AND STREAMLINE DOCUMENTATION REQUIREMENTS FOR HOUSING APPLICANTS

The lottery system for selecting affordable housing tenants, managed by HPD and accessible via the NYC Housing Connect platform (“Housing Connect”), is overwhelmed by the high volume of applications and inefficient documentation requirements.  Some housing development fund corporation (“HDFC”) co-op re-sales are listed through the City’s affordable housing lottery portal, as well.[27] In 2024, Housing Connect received six million applications for only 10,000 available units.^[28]  In 2023, the New York Citizens Housing & Planning Council  found that the average time from project completion to 95% lease-up for a project was approximately 11.4 months, with individual units remaining vacant for an average of 6.5 months.^[29]  Units set aside for the formerly homeless leased up more quickly (4.8 months) than other affordable units, but both lease-up processes took significant amounts of time,^[30] leaving New Yorkers unnecessarily struggling or homeless and undermining public support for these critical programs.

On April 29, 2025, the New York City Council’s Committee on Housing and Buildings, led by Council Member Pierina Ana Sanchez, held a hearing on the affordable housing lottery and Housing Connect.^[31]  The committee discussed various issues with the Housing Connect platform, including the lengthy selection process, accessibility concerns for vulnerable populations, burdensome documentation requirements to prove income eligibility, inefficient re-rental procedures, technical glitches, confusing application filters, and significant data security concerns. During the hearing, then Acting Commissioner Tigani testified that efforts at HPD are underway to improve Housing Connect to address its functionality and user experience issues, as well as to streamline documentation requirements for applicants.^[32]  He shared that HPD is also focused on improving customer service through the creation of a hotline for Housing Connect issues and a Housing Ambassador Program, among other outreach efforts.^[33] After the hearing, HPD and the New York City Housing Development Corporation (“HDC”) announced that in a year’s time, they would introduce new functionality to Housing Connect that would replace current procedures for re-rentals and re-sales.[34]

We urge your Administration to continue to prioritize this vital work. Furthermore, we recommend continued advocacy with Council Members on legislative efforts, such as Council Members Pierina Sanchez and Eric Dinowitz, who have sponsored bills that aim to permit alternate marketing procedures for re-rentals,^[35] enable designated community organizations to act on behalf of applicants,^[36] and establish in-person assistance programs at public locations.^[37]  We also urge your administration to work with the state and federal governments to streamline regulations and eliminate overlapping and contradictory guidance to reduce the administrative burden on both applicants and HPD.^[38]

Now more than ever, the City must reduce red tape and remove unnecessary administrative barriers in its affordable housing tenant selection process, so that it may connect vulnerable New Yorkers to affordable housing as efficiently and equitably as possible.

VI. CONCLUSION

We commend the core objective of your campaign and mayoralty: to make New York City more affordable for regular New Yorkers, and we at the HUD Committee look forward to working with the Mayor’s Administration in achieving their affordable housing objectives. We hope that the above recommendations will be considered, and we note that the list is not exhaustive. We plan to invite members of your Administration to our next CLE on May 7, 2026, and the Committee intends to submit additional policy recommendations for the Administration’s consideration from time to time. We look forward to working with the Mayor in making New York City more affordable.

Housing and Urban Development Committee
Farhana H. Choudhury, Co-Chair
Julia Solo, Co-Chair
Gerrald Ellis, Co-Secretary
Alexandra Hohauser, Co-Secretary

February 2026