New York Is Failing in Affordability and Homebuilding: Can Gov. Hochul Fix the Crisis?

New York’s housing crunch has reached a breaking point.

Realtor.com® State-by-State Housing Report Card gave the Empire State an F—the lowest possible grade—highlighting severe affordability challenges and minimal new construction activity. The report, part of the Let America Build campaign, evaluates how each state balances housing supply and cost.

But this is a national problem. In fact, President Donald Trump recently put pressure on homebuilders to increase construction nationwide, given the issues with construction in the country. In a post on his Truth Social platform in early October, he accused major builders of hoarding lots to prop up prices—likening them to OPEC, which restricts oil output to maintain high prices.

“They’re my friends ... but now, they can get Financing, and they have to start building Homes. They’re sitting on 2 Million empty lots, A RECORD,” Trump wrote. He urged Fannie Mae and Freddie Mac to intervene and “get Big Homebuilders going” to “restore the American Dream.” 

In New York’s case, restrictive zoning, high costs, and sluggish permitting have kept the state from making meaningful progress toward affordability. So what can be done to ramp up production?

New York’s “F” grade explained

Realtor.com analysis gave New York a total score of 13.2, placing it near the very bottom of the national rankings. The state’s median listing price hit $664,622 in 2024, while the median household income was $81,057—creating one of the steepest affordability gaps in the country. The Realtors Affordability Score was just 0.50, indicating that only a fraction of listings are affordable to middle-income households.

On the construction front, New York accounted for 3.1% of national housing permits in 2024 despite making up 5.8% of the U.S. population. That results in a permit-to-population ratio of 0.53—one of the lowest in the nation. The new construction premium, or the price difference between new and existing homes, stood at 76.2%, showing that new homes are priced far out of reach for most buyers.

Realtor.com economists note that New York’s combination of high costs and low construction creates a “worst of both worlds” scenario. Limited building keeps supply tight, while regulatory and land-use barriers drive up costs. The result: a market that works for very few and leaves most would-be homeowners on the sidelines.

The Northeast’s affordability problem

Nationwide, new construction has begun to ease affordability pressures, but the benefits are not reaching New York or its regional neighbors. According to the Realtor.com New Construction Insights, the median new-home price nationwide held steady at $450,797, while resale prices climbed 2.4%, narrowing the national new construction premium to just 7.8%—the lowest on record.

But the Northeast remains the nation’s most supply-constrained region. It has the smallest share of new-construction listings and some of the highest new construction premiums, reflecting a heavy concentration of older housing stock and strict local zoning.

New York epitomizes that challenge. In metro areas like New York City, Albany, and Buffalo, demand far exceeds supply. Apartment construction has slowed, and single-family development remains scarce due to high land costs and lengthy approval processes.

And building new homes is vital in New York, as well as the rest of the country.

“America is short more than 4.7 million homes, and every new home built helps close that gap while fueling local economies," says Shannon McGahn, executive vice president and chief advocacy officer at the National Association of Realtors®.

"NAR research shows that the U.S. has faced a persistent housing shortage for more than a decade, driving up prices and limiting options for buyers. Expanding housing supply creates jobs, supports small businesses, and affords families the opportunity to build generational wealth.”

Governor Hochul’s housing compact stalls

Governor Kathy Hochul has made housing reform a centerpiece of her administration, but progress has been uneven. Her 2023 “New York Housing Compact” proposed an ambitious plan to build 800,000 new homes over the next decade by easing zoning restrictions and incentivizing local development. However, the plan faced significant resistance from suburban municipalities and failed to advance in the legislature.

In 2025, Hochul renewed her push, introducing smaller-scale measures to revive construction and encourage growth in key transit corridors. The administration’s newest package includes funding for infrastructure, incentives for accessory dwelling units (ADUs), and a proposed “Pro-Housing Communities” certification program designed to reward municipalities that meet production targets.

“New York needs more housing—period,” Hochul said in a June 2025 press briefing. “We cannot solve affordability without building more homes, and we cannot build more homes unless every level of government steps up.”

Despite these efforts, experts say state action has yet to translate into significant increases in supply. Developers cite high material costs, complex permitting, and local opposition as persistent barriers to new housing.

Therefore, New York’s F grade is more than a statistic—it’s a reflection of a housing market under immense pressure. Governor Hochul’s incremental reforms could help, but without bold statewide zoning reform and sustained investment in infrastructure, affordability will continue to deteriorate.

This article was produced with editorial input from Dina Sartore-Bodo and Gabriella Iannetta.