“Development was key to the agenda” New York Gov. Kathy Hochul laid out in her executive budget last week, according to one of her key aides.
Along with more funding for public safety and mental health initiatives, the governor is keen to start up stalled economic development efforts and up capital spending, Elizabeth Fine, counsel Hochul, told The Bond Buyer National Outlook conference last week in New York.
“There’s no point in sugarcoating, it’s a difficult period in municipal finance, with volume down and interest rates,” the moderator of Fine’s panel, Jonathan Ballan, a partner law firm of Harris Beach, told attendees. “I hope we as an industry approach the new Congress, House, and Senate with gusto.”
Ballan recommended municipal officials engage government leaders to consider “increasing or eliminating volume caps for all categories and adding new categories of tax-exempt private activity bonds to address today’s environmental, energy, and inner-city problems.”
RuthAnne Visnauskas, Fine’s co-keynoter at Thursday’s conference luncheon, who is commissioner of the New York State Division of Housing and Community Renewal, said the state needs to address a growing housing crisis and up construction to meet population changes.
“The housing crisis is not something that just popped up yesterday, this is really a result of over the last decade,” she said. “Our economic growth reduces our housing options.”
The looming fiscal cliff faced by the New York Metropolitan Transit Authority was especially high on the governor’s agenda, Fine added.
The MTA saw steep ridership dips during the COVID-19 pandemic and relied on federal funds to keep up operations. Fine said those funds have all but dried up and ridership rates are yet to fully rebound, resulting in an immediate $1.3 trillion budgetary gap.
The popularity of hybrid work models was also “killing the MTA” she added.
“We need people to come to work so that places like this can thrive; people will have jobs, and the restaurants and stores will have customers,” she said. “The MTA is essential to New York’s success.”
To close the gap, officials have had to “get creative” in seeking out additional funding streams.
Fine said ongoing discussion include proposals to up the state’s annual funding quota, slightly increasing a payroll mobility tax, or leveraging some new or soon-to-come income streams, including earnings from casinos slated for development in New York City.
Visnauskas said that over the same time period that the state added 1.2 million jobs, it only constructed 400,000 units of housing. That’s led to a dramatic increase in mortgage and rent costs putting a strain on working-class families across New York.
The governor’s mission in the near future was “to build and preserve and protect affordable housing,” she said, estimating New York needed to put up about 800,000 new homes over the next decade to keep pace with demographic and population changes.
Officials are currently working on building a financing framework that would include the use of two existing bond programs to double current construction output to the level necessary to meet that goal.
“I think sometimes we use housing projects to achieve a lot of policy goals, which means the projects are complex,” Visnauskas said. “But it’s certainly an exciting, exciting time to be doing this.”