BILL NUMBER: S8585A

SPONSOR: RYAN
 
TITLE OF BILL:

An act to amend the private housing finance law, in relation to estab-
lishing the infill housing pilot program in the city of Buffalo

 
PURPOSE:

This bill would create a pilot program developing 2,000 new units of
infill housing in the city of Buffalo.

 
SUMMARY OF PROVISIONS:

Section 1: amends the Private Housing Finance Law to create a new Arti-
cle 32: infill Housing Pilot Program. Section 1290 of this new article
outlines the need for new affordable housing development in upstate New
York, particularly in the City of Buffalo. Section 1290 outlines
requirements that this housing be accessible to low-to-moderate income
earners and sold to those living in the same census tract as the newly
built properties. Section 1291 of the new article describes the infill
              

housing pilot program. The Division of Housing and Community Renewal
(DHCR) is directed to make funding available for the construction of
2,000 one- to two-family housing units in the city of Buffalo over a
5-year period. DHCR is further directed to promulgate regulations to put
this plan into effect and to identify vacant lots owned by the city of
Buffalo for development.

Section 2: Establishes the effective date.

 
JUSTIFICATION:

There are currently 13,000 residential vacant lots in the City of
Buffalo, including roughly 7,500 owned by the city. These vacant lots
currently sit languishing, providing little to no tax revenue to the
city or county. They also serve as a source of blight for communities,
driving down the value of surrounding homes. Utilizing infill housing
that matches the style of the community will simultaneously increase
supply, making housing more affordable for new buyers, while improving
the quality of the neighborhoods in which they are built, which will
increase the value of surrounding homes.  In addition, these new homes
will generate millions in tax revenue that can be used to further
improve the livability and desirability of the City of Buffalo.

Housing prices are on the rise throughout the state. In many areas the
culprit is a low supply of turn-key ready real estate on the market.
Buffalo is a prime example of this phenomenon, as supply has consistent-
ly failed to keep pace with demand. Out of the largest 100 metro areas
in the United States, Buffalo ranked second to last in housing supply as
of January 2023, with just over a month's worth of housing supply. When
combined with the rising population in the city, a perfect storm of low
supply and high demand has created an extremely tight housing market,
making it difficult for new homebuyers to enter the market.

Housing is also an economic and racial justice issue. In the City of
Buffalo, two-thirds of households make less than $70,000. Combined with
home prices that have been inflated by low supply, this means that the
mortgage payment on an average home is a significant obstacle to those
who might want to enter the housing market. This problem is exacerbated
when considering the housing gap between white households and black
households. While homeownership rates for white people have risen to
more than 70% nationwide, the black homeownership rate has stayed stag-
nant at around 34%. Research has found that the gap in Buffalo is even
wider than the national average. Addressing this gap should be a priori-
ty for the state, and one of the best ways that goal can be accomplished
is by increasing housing supply and lowering housing costs.

As the largest upstate city in New York, Buffalo is the perfect locality
in which to pilot this program. With a growing population and plenty of
vacant lots, Buffalo is an ideal location to test the efficacy of large-
scale infill housing programs. If the program is successful, it can be
implemented in other upstate cities.

The program will be straightforward to execute, as DHCR already has the
tools to implement the pilot. Using DHCR funds, the State would subsi-
dize the cost of building homes on some of these vacant lots and selling
them to first-time buyers at an affordable price. It is estimated that
this project will require the use of approximately $160 million per year
over the five-year roll out. It is also estimated that this proposal
will generate nearly $12 million in local and county property taxes
every year going forward.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

$800 million over 5 years or $160 million per year.

 
EFFECTIVE DATE:
This act shall take effect immediately.