HCR presents governor's 2026 housing package, highlights $1B for City of YES and new revolving loan fund

Ruth Ann Visnauskas, commissioner and chief executive of New York State Homes and Community Renewal, told state lawmakers during a joint Assembly and Senate hearing that Governor Kathy Hochul’s 2026 executive budget focuses on increasing housing production and protecting existing affordable stock.

Visnauskas said the proposal includes $1,025,000,000 in capital for a City of YES program targeted to New York City; creation of a mixed‑income revolving construction loan fund to bridge projects that do not “pencil out” under current financing conditions; and expanded state low‑income housing tax credits to spur development across the state.

“Governor Hochul’s 2026 budget proposals build on her commitment to increase affordability by addressing the housing shortage,” Visnauskas said in prepared remarks. She said the agency has already certified 277 Pro Housing communities and reported that the five‑year housing plan has passed its midpoint, with more than 55,000 homes created or preserved toward a 100,000 target.

Why it matters: lawmakers and housing advocates at the hearing pressed HCR on how the new money would be allocated, how quickly a revolving fund could move from appropriation to loans in the field, and whether city and upstate priorities would compete for the same resources. Supporters say the package pairs important production dollars with preservation and anti‑displacement tools; critics want more clarity on allocation and safeguards to protect deeply affordable units.

Key elements Visnauskas described

- City of YES ($1.025 billion). Visnauskas said the state funds would be “flexible” and deployed through HCR programs to support new construction, homeownership, preservation (including Mitchell‑Lambas) and other city priorities. She said the state will work “closely with the city” on specific uses but did not list block‑by‑block allocations or unit targets tied to the appropriation.

- Mixed‑income revolving loan fund. The budget proposes an initial pool to provide subordinate construction financing (a second mortgage) to unlock projects that are near ready but blocked by high interest and financing gaps. Visnauskas estimated projects typically convert to permanent financing in about two years, so the fund would revolve as loans repaid on conversion.

- Additional state low‑income housing tax credits (SLIC). The executive budget would increase annual SLIC allocations (the governor proposes $30 million per year through 2029 in legislative testimony), a step HCR said would expand equity available for deals.

- Down‑payment assistance, new tax incentives to curb investor purchases of 1–2 family homes (a proposed 75‑day waiting period for institutional investors), a new revolving loan fund for mixed‑income rental construction, and expanded eligibility for state programs to build upstate housing.

Preservation, insurance and homelessness concerns

Multiple panelists and legislators pressed HCR on preservation of existing affordable housing, rising insurance costs for owners, and homelessness. Visnauskas said HCR is “very concerned” about Mitchell‑Lama stock and that the executive proposal would reduce a city option for the shelter rent tax from 10% to 5% and allow localities to opt in — a change HCR says would relieve pressure on maintenance budgets for many Mitchell‑Lamas if adopted locally.

Advocates and housing industry witnesses urged the Legislature also to fund a statewide preservation relief program and to support captive insurance solutions. Witnesses requested a statewide feasibility study for captive insurance and seed funding to help smaller nonprofit owners establish loss reserves so they can join captives. HCR and industry trade groups signaled support for further study and targeted assistance.

Homelessness and rental assistance

Testimony during the hearing included repeated advocacy for a state‑level voucher program (the housing access voucher program or HAVP) from shelters, homeless‑service providers and community groups. Witnesses said a state voucher pool would reduce shelter reliance, prevent evictions and stabilize families; several advocates asked for a $250 million initial appropriation (estimates and requests varied by witness).

HCR responded that the agency supports homelessness and supportive housing investments and that the governor’s budget maintains funding for many existing supportive‑housing commitments. Visnauskas told lawmakers that if federal changes affect HUD programs the state would “take cues” from the governor and attorney general but she did not commit to a specific new statewide voucher in the executive proposal.

Rural and small‑scale development

Representatives of rural housing organizations told the hearing the executive budget had cut several small‑rural programs or left them out of the executive packet. They asked the legislature to restore funding for the rural preservation program and the small rental development initiative (projects of 4–20 units) and to prioritize state infrastructure monies for small communities where water, sewer and electric capacity limit housing production.

Other program details and timelines

- LIHTC: Visnauskas said the state receives about $45 million in federal 9% LIHTC that it allocates between the state and New York City and that awards were imminent.

- Empty‑unit rehab and resilient retrofit: HCR reported new and expanded allocations for vacant‑unit restoration and resilient retrofit grants to help homeowners with flood mitigation and energy upgrades.

- TPU and regional offices: HCR said it is opening or staffing more regional offices, including a Poughkeepsie office for the Tenant Protection Unit (TPU) and that Buffalo and Syracuse offices are also active.

What lawmakers asked for

Legislators repeatedly pressed HCR for more specificity: how much of the city billion would be targeted to preservation versus new construction, whether the revolving loan fund could be expanded, what the timeframe would be for loan deployment, and how HCR would address rising insurance costs and tenant protections. HCR said many details would be worked out during the budget process and through program term sheets, and that it would continue to share data with legislators.

Bottom line

HCR framed the governor’s executive budget for housing as an “all of the above” approach that pairs new production financing and tax incentives with preservation, regional capacity building and pilot programs (modular housing, revolving construction loans). The hearing highlighted broad agreement that New York needs more affordable housing and better preservation tools, while underscoring key legislative decisions to come on allocation details, preservation supports, insurance interventions and whether to create new state rental vouchers.

Notes: this article summarizes testimony from HCR Commissioner Ruth Ann Visnauskas and related witness panels and legislative questioning at a joint Assembly/Senate hearing on the governor’s 2026 executive budget. Figures and program names are as stated during the hearing.