New York Governor Hochu proposed a package of new housing policies on January 9 as the fourth proposal of the 2025 State of the State address. She specifically called out hedge funds, private equity firms, and other large institutional investors for driving up housing prices, vowing to legislate restrictions to make housing more affordable for the general public.
Hochu previously proposed a $25 billion five-year housing plan to add 100,000 units of affordable housing across the state, with 50,000 units already created in the past two years. On January 9, she unveiled another set of new housing policies as the fourth proposal of the 2025 State of the State address. She particularly emphasized how behind-the-scenes private equity giants have been acquiring housing in various New York communities, resulting in fewer affordable homes for prospective buyers. Thus, she plans to introduce new laws and revise policies to restrict such activities, allowing more New Yorkers to achieve the American dream of owning a home.
In her statement, she pointed out that in recent years, hedge funds, private equity firms, and other institutional investors have been using cash to purchase single-family and multi-family homes, making it challenging for regular homebuyers to compete with them. The rise of digital technology has further enabled institutional investors to hoard properties in large numbers, exerting control over the market and driving up property prices.
Currently, private equity firms own over 500,000 properties nationwide, and it is estimated that by 2030, they will hold up to 40% of the single-family rental market, pushing prices even higher. Therefore, she proposes legislation to limit large institutional investors from bulk buying single-family and multi-family homes. After new properties are listed, if no one purchases them within 75 days, institutional investors would then be allowed to bid. Additionally, she suggests canceling certain tax incentives for institutional investors when purchasing new properties, such as interest deductions, depreciation deductions, and other cost offsets.
Hochu also aims to address appraisal discrimination in housing, where homes owned by regular buyers are appraised lower, leading to reduced loan amounts or higher interest rates, thus depriving many families of homeownership opportunities and widening racial and wealth disparities. She plans to introduce a series of laws and policies to declare discriminatory appraisal practices illegal and diversify the sources of appraisers.
Among other new housing policies proposed by Hochu are allocating $50 million as “First Home Innovation Fund” in dollars to incentivize developers to build more entry-level housing; allocating $50 million in grants to assist first-time homebuyers with down payments on mortgages; and implementing tax incentives for affordable housing homebuyers.