Lawmakers propose creation of state authority to finance and build affordable housing

State Sen. Cordell Cleare and Assembly Member Emily Gallagher are sponsoring a bill to create the Social Housing Development Authority, which would build housing directly instead of relying on private developers.

Assembly Member Emily Gallagher speaks at a rally in support of the Permanently Affordable Social Housing for New Yorkers Act, which would create a new state Social Housing Development Authority.

Assembly Member Emily Gallagher speaks at a rally in support of the Permanently Affordable Social Housing for New Yorkers Act, which would create a new state Social Housing Development Authority. NYS Assembly

State lawmakers from New York City are introducing a bill that would create the Social Housing Development Authority, providing an alternative to the 485-x affordable housing tax incentive supported by Gov. Kathy Hochul. Assembly Member Emily Gallagher and state Sen. Cordell Cleare, the prime sponsors of the bill, announced the legislation at a press conference in the State Capitol on Tuesday. It’s the latest attempt to solve the state’s desperate need for affordable housing.

“What we've condemned people to here in New York is if you aren't a top earner, you don't get to have very much dignity or pleasure, because you are giving 60% of your income to your housing costs,” Gallagher told City & State. “That means you can barely make a nice meal for yourself, you can barely keep the lights on. That's not acceptable”

The housing crisis has produced countless arguments and few solutions in Albany. Hochul attempted to push her “New York Housing Compact” last year to build 800,000 new homes. But between pushback from localities over her zoning code overrides and outcry over the lack of tenant protections, her plan went nowhere. The governor remains committed to the idea that construction, not rent regulation, is the answer to New York’s housing woes. This year, her strategy relies on a proposed 421-a replacement, known as 485-x or Affordable Neighborhoods for New York. This would provide a 35-year-long tax break to developers who create housing that meets certain affordability levels determined by the state Legislature.

Hochul has said that a tax incentive like 485-x is necessary to ensure that affordable housing can continue to be built in the city. She has also promised that 485-x will result in more affordable housing than 421-a, which was allowed to expire in 2022 after critics argued that it failed to produce truly affordable housing.

But some on the left object to the basic concept behind 421-a and 485-x – that the best way to build affordable housing is to try to incentivize private developers to build it. Instead, they want the state to take a more active role in financing and developing “social housing,” which includes publicly-owned rentals, limited equity cooperatives and community land trusts. 

A poll conducted by Data for Progress last year revealed that many New York City residents supported the concept of social housing. Gallagher said it’s not hard to understand why.

“Our whole life is like, if my rent’s gonna go (up), how long do I live here?” said Gallagher. “Even I, as a state legislator, am asking these questions in a rapidly gentrifying district.”

Supporters of the new Social Housing Development Authority bill see it as a progressive alternative to Hochul’s plan to create new housing. 

The authority would rely on an initial $5 billion investment from the state and annual injections of $75 million to support operations and staffing. There would also be cash flow mechanisms to direct any excess profits back to the authority after the tax-exempt bonds are paid back. The authority would be governed by a 19-member board, 11 of whom would be political appointees and eight of whom would be elected by residents of Social Housing Development Authority properties.

The authority would produce publicly-owned rental units, as well as publicly-stewarded rental units (including community land trusts) and cooperatives (akin to Mitchell-Lama developments). These properties would charge residents no more than 25% of their gross monthly income and would dedicate 25% of units to households making less than 30% of the area median income. With the power to facilitate or fund housing projects, the authority could work with a community land trust to develop public property just as easily as it could empower tenants to take control of their building via a cooperative agreement.

“Basically, it is a government authority and the reason why that's important is because government authorities issue their own debts and they can maneuver in different ways than any other kind of organizational model,” said Gallagher. “So this is not doing just one thing, It will be involved in the land trust movement in certain parts of the state, it can work with creating single-family homes, it can work with creating enormous apartment buildings like Co-Op City. It can do all of these different pieces.” 

The focus on building new housing represents something of a shift in strategy for progressives, who for the past few years have campaigned aggressively on tenant protections like beefed-up rent stabilization and “good cause” eviction. Housing activists view the possible creation of the Social Housing Development Authority as a complement to their continuing efforts to secure tenant protections. Housing Justice for All Campaign Coordinator Cea Weaver said that she envisions a world where tenants protected by “Good Cause” eviction live in Social Housing Development Authority properties. 

The new Social Housing Development Authority bill could change the political dynamics of the housing debate in Albany. Last year, there was speculation that the governor and progressive legislators might eventually agree to a grand bargain that would include both a 421-a replacement (to incentivize the development of new housing units) and “good cause” eviction (to protect tenants at risk of losing their housing). But now that progressives have their own plan to build housing, they may be less willing to accept any kind of 421-a replacement. 

“You need measures to keep people in their homes and you need measures to build new housing,” said Weaver. “We think that this is a better way to build new housing than some of the proposals that the governor has put forward and rather than like, trade a bad thing for a good thing, we actually just want both things.”

Weaver acknowledged that like other big-ticket housing bills, the Social Housing Development Authority could take years to play out. But she said that the authority was better set up to succeed statewide than Hochul’s plan last session.

“The proposal that she put forward, she was sort of trying to tell municipalities that they have to grow, but that's a lot of reason to expect that that might just not really happen because they might not have like the market conditions,” said Weaver. “This is a way to actually ensure that building happens.”

Given the high appetite for affordable housing throughout the state and the unique way that the Social Housing Development Authority would be able to operate, Weaver said there wouldn’t be a difference in its performance based on region. “It's just as profitable for the SHDA to build in Syracuse as it is to build in Bedstuy,” she said.

Housing legislation is up in the air for the time being, with the state Legislature still kicking into gear and unresolved fights from last year percolating. Weaver said she and lawmakers are ready to dig in. “This is the kind of thing that relies on the government wanting to do this,” she said. “So I do think we have lots of hearts and minds we’re going to have to win over in the coming months.”

The Real Estate Board of New York, which has supported 421-a and opposed some tenant protections, released a dismissive statement in response to the social housing bill. "While we look forward to reviewing this legislation in more detail, solving our housing crisis will require data-driven solutions, not idealism and ideology," the statement said. 

The bill already has the support of a number of unions, including the Building Construction Trades Council, New York City District Council of Carpenters and the United Federation of Teachers. It’s also a top priority of the New York City chapter of the Democratic Socialists of America, which counts Gallagher as a member, and the Working Families Party.

An internal DSA resolution names the bill as a key part of its broader “Green Social Housing” strategy, which aims to popularize the idea of social housing and make it a key issue in the 2026 state legislative races. The DSA also has plans for Rep. Alexandria Ocasio-Cortez to introduce a companion social housing bill in Congress and for New York City Council Member Tiffany Cabán to introduce a companion resolution in the City Council.

A broad coalition of elected officials and advocacy groups turned out for a raucous rally in support of the bill on Tuesday, which was held in a stairway behind the Assembly chambers. Members of the Housing Justice for All coalition – which includes DSA, WFP, Community Service Society, New York Communities for Change, Citizen Action of New York, VOCAL-NY, Desis Rising Up and Moving, Fifth Avenue Committee, UHAB and Neighbors Together – showed up in force.

“Fortunately now, when people ask, ‘What will the new state housing affordability program be?’ we have a definitive answer,” Cleare said at the rally.

New York City Comptroller Brad Lander, a strong supporter of the bill, spoke about the importance of social housing.

“One way to understand what we mean by social housing in the Social Housing Development Authority is to talk about what we’re actually doing most of the time, which is anti-social housing,” Lander said to applause. “A lot of that is in the model that we currently have even for affordable housing development.”

Other elected officials present at the rally included state Senate Housing Committee chair Brian Kavanagh, Assembly Housing Committee chair Linda Rosenthal, state Sens. Julia Salazar, Jabari Brisport and Brad Hoylman-Sigal, and Assembly Members Harvey Epstein, Tony Simone, Zohran Mamdani, Khaleel Anderson, Sarahana Shrestha and Marcela Mitaynes.

The outpouring of support, especially from the state Legislature’s two housing chairs, could signal stronger support for the legislation than drafters realized.

“It is time for Albany to move in a smart direction,” said WFP co-executive director Jasmine Gripper. “Our public dollars go to public people for the public good so social housing needs to happen now and it cannot wait.”