NYC affordable housing is getting its biggest funding boost in a decade. Mayor Adams just committed $1.8 billion to create and rehabilitate nearly 6,500 affordable homes, while Governor Hochul signed legislation banning institutional investors from buying single- and two-family homes during their first 90 days on the market. These two moves, arriving at the same time, reshape the playing field for homeowners, buyers, and investors across New York and New Jersey.
Here is what the NYC affordable housing 2026 agenda includes, who benefits, who faces new restrictions, and what SI, Brooklyn, and NJ property owners should prepare for.
In This Guide
The $1.8 Billion NYC Affordable Housing Investment: Where It Goes
The $1.8 billion breaks down into two buckets:
$1.5 billion to HPD (Housing Preservation and Development):
This funding accelerates the construction and preservation of roughly 4,000 new affordable units. HPD’s FY26 budget increase is the largest in the agency’s history and is expected to boost its annual affordable housing output by approximately 25%.
$300 million to NYCHA:
This allocation funds the conversion of 2,500 public housing units to Section 8 through the Permanent Affordability Commitment Together (PACT) program. These conversions bring private capital into NYCHA buildings to fund repairs and system upgrades while maintaining permanent affordability for residents.
| Funding Area | Amount | What It Creates |
|---|---|---|
| HPD new construction | $1.5 billion | ~4,000 affordable units |
| NYCHA Section 8 conversions | $300 million | 2,500 unit conversions |
| Total | $1.8 billion | ~6,500 affordable homes |
Since 2022, the Adams administration reports creating, preserving, or planning over 426,000 homes. The NYC affordable housing 2026 push is designed to address the city’s vacancy rate of 1.4% (well below the 5% “housing emergency” threshold), which keeps rents and home prices elevated across all five boroughs.
City of Yes for Housing Opportunity: 80,000 New Homes
The “City of Yes for Housing Opportunity” zoning reform, endorsed in December 2024, is the city’s most ambitious affordable housing policy since the Bloomberg era. The plan targets 80,000 new homes over 15 years through three mechanisms:
1. Accessory Dwelling Units (ADUs): Homeowners across all five boroughs can now convert basements, garages, and backyard structures into legal rental units. For Staten Island and Brooklyn property owners, this is a direct wealth-building opportunity. A legal ADU can generate $1,500-$2,500/month in rental income on a property you already own.
2. Transit-oriented development: New residential density is permitted near transit hubs. On Staten Island, this affects areas around the SIR stations and major bus corridors. In Brooklyn, Gowanus, Downtown Brooklyn, and neighborhoods near the planned IBX light rail are prime targets.
3. Office-to-residential conversions: Commercial buildings in Midtown and Downtown Manhattan can be converted to apartments, adding supply to the rental market. This indirectly benefits outer-borough homeowners by absorbing some rental demand that would otherwise push rents higher in Brooklyn and Staten Island.
Governor Hochul backed the City of Yes with $1 billion in state funding from the FY26 budget. An additional $100 million goes to pro-housing communities that remove regulatory barriers to new construction, and $100 million funds mixed-income housing development statewide.
NYCHA Section 8 Conversions: What Is Changing
The 2,500-unit Section 8 conversion under the PACT program is part of a larger plan to renovate 25,000 NYCHA apartments. Here is how NYC affordable housing 2026 policy changes the equation:
Before conversion: NYCHA buildings operate under direct federal funding. The buildings are chronically underfunded, with an estimated $40 billion capital repair backlog. Residents experience ongoing maintenance issues with heating, plumbing, mold remediation, and elevator service.
After conversion: Units shift to Section 8 vouchers administered by private management partners. The private partners bring capital for repairs, and residents keep permanent affordability protections. Rents remain income-based (typically 30% of household income).
What this means for surrounding property owners: NYCHA conversions tend to improve building conditions in the surrounding area, which can stabilize or boost nearby property values. In neighborhoods where NYCHA housing sits next to market-rate homes (North Shore Staten Island, parts of Brooklyn), this is a net positive for homeowners.
NY Institutional Investor Ban on 1-2 Family Homes
This may be the most directly impactful policy in the NYC affordable housing 2026 package for homeowners and individual buyers.
What the law says: Starting in early 2025 as part of the FY26 state budget, private equity firms and large institutional investors are banned from purchasing single- and two-family homes during the first 90 days they are listed on the market. After 90 days, institutions can make offers, but individual buyers get priority during the exclusive window.
Why it matters for Staten Island and Brooklyn:
Staten Island and Brooklyn have the highest concentrations of single-family and two-family homes in NYC. These are exactly the properties that institutional investors have targeted for rental conversions. The 90-day ban gives individual buyers a competitive advantage on these properties.
The numbers:
- Institutional investors own roughly 2-3% of US single-family homes nationally
- In NYC, their share is lower, but their purchasing activity in outer-borough neighborhoods has been rising year-over-year
- The ban is expected to reduce competition for individual buyers, particularly on two-family properties on Staten Island and Brooklyn
Federal echo: President Trump signed an Executive Order in January 2026 directing federal agencies to prevent programs from facilitating single-family home sales to institutional investors. While enforcement details remain unclear, the bipartisan direction at both state and federal levels signals this trend is here to stay.
How NYC Affordable Housing 2026 Affects Staten Island Homeowners
Staten Island stands to benefit disproportionately from the 2026 housing policy changes. Here is why:
ADU opportunity: Staten Island has the borough’s largest stock of single-family homes with unused basement, garage, and yard space. Under City of Yes, homeowners can now legally convert these spaces into rental units. A legal basement apartment in Eltingville or Great Kills can generate $1,800-$2,500/month, adding $21,600-$30,000 in annual rental income.
Investor ban protection: The 90-day institutional investor ban on single- and two-family homes protects Staten Island’s housing stock from being converted into institutional rental portfolios. Families looking to buy a two-family home now have a 3-month head start before any private equity firm can bid.
NYCHA neighborhood uplift: North Shore neighborhoods like St. George and Stapleton have NYCHA buildings adjacent to market-rate housing. The PACT conversion program’s $300 million investment should improve these buildings, which tends to lift surrounding property values.
Property value impact: With median home prices at $757,000 and rising 8.2% YoY, Staten Island homeowners are already building equity. The affordable housing supply increases planned under City of Yes may moderate price growth slightly (good for affordability) without causing price declines (the inventory deficit of 22% provides a floor).
How NYC Affordable Housing Affects Brooklyn Homeowners
Brooklyn’s market dynamics are different from Staten Island’s. Here is how the NYC affordable housing 2026 policies play out:
Gowanus and Downtown Brooklyn rezoning: Both areas are receiving major affordable housing allocations. New mixed-income buildings will add rental supply, which may moderate rent growth in surrounding neighborhoods like Park Slope, Carroll Gardens, and Crown Heights.
ADU conversions in Brownstone Brooklyn: Townhouse owners in neighborhoods like Bay Ridge and Sunset Park can legalize existing basement apartments or create new ones. Many of these units already exist informally. Legalization under City of Yes removes code violation risk and enables owners to charge market-rate rents.
Investor ban protects brownstone stock: Brooklyn’s two-family brownstones are prime targets for institutional conversion. The 90-day buyer priority window gives individual families a competitive edge, particularly on properties in the $800K-$1.2M range where institutional capital was most active.
How NYC Affordable Housing Affects NJ Homeowners
New Jersey is not directly covered by NYC’s affordable housing policies, but the spillover effects are real:
Demand shift: When NYC adds affordable housing supply, some NYC renters who would have moved to NJ may choose to stay. This could slightly moderate the migration-driven demand that has been pushing NJ home prices higher. The effect is likely modest, since NYC’s supply additions (6,500 units from the $1.8B package) are small relative to total demand.
Policy contagion: New Jersey legislators are watching New York’s institutional investor ban closely. Similar legislation restricting corporate buyers from competing with individuals for 1-2 family homes could appear in NJ within the next 12-18 months. NJ homeowners should monitor this for its potential effect on investment property values.
Cross-border ADU trend: New Jersey’s accessory dwelling unit policies vary by municipality, but the trend toward legalization is spreading. Homeowners in Middletown, Holmdel, and other NJ towns served by DeFalco should check local zoning rules for ADU eligibility.
What Buyers Should Know About NYC Housing Policy in 2026
If you are planning to buy a home in NY or NJ in 2026, the NYC affordable housing 2026 policy changes create several advantages:
1. Less institutional competition. The 90-day investor ban gives you a head start on single- and two-family homes. Use that window aggressively with a mortgage pre-approval already in hand.
2. ADU income potential boosts affordability. When evaluating a property, factor in the legal rental income from a potential ADU. A home priced at $800,000 with a $2,000/month ADU effectively costs you $576,000 on a net basis over 10 years (after rental income offsets).
3. Neighborhood uplift from NYCHA conversions. Properties near NYCHA buildings that are entering the PACT conversion pipeline may see value increases as the buildings improve. This is a buying opportunity that most buyers overlook.
4. City of Yes increases long-term supply. More housing supply means slower price appreciation over the long run. Buying now, before the bulk of the 80,000 City of Yes units deliver, locks in today’s prices. Most of these units will take 5-10 years to build.
The Bottom Line
NYC affordable housing 2026 policy changes represent the largest housing investment in a decade. The $1.8 billion HPD/NYCHA package, City of Yes zoning reforms, and the institutional investor ban on 1-2 family homes all shift the balance toward individual buyers and existing homeowners. For Staten Island and Brooklyn property owners, the ADU legalization is the biggest near-term opportunity. For buyers, the 90-day investor ban is a window that did not exist a year ago.
Connect with a Robert DeFalco agent to understand how these policy changes affect your specific neighborhood, or browse homes for sale across our NY and NJ service areas.
Frequently Asked Questions
What is the $1.8 billion NYC affordable housing plan for 2026?
Mayor Adams committed $1.8 billion in the FY26 budget to create and rehabilitate nearly 6,500 affordable homes in New York City. Of that total, $1.5 billion goes to HPD (Housing Preservation and Development) for constructing approximately 4,000 new affordable units, a 25% increase in the agency’s annual output. The remaining $300 million funds NYCHA Section 8 conversions under the PACT program, which brings private capital into 2,500 public housing units for repairs while maintaining permanent rent protections for residents.
Does the NY institutional investor ban affect Staten Island homeowners?
Yes, and it benefits them directly. The law bans private equity firms and large institutional investors from purchasing single- and two-family homes during the first 90 days of a listing. Staten Island has the highest concentration of these property types in NYC. This gives individual buyers and families a 90-day head start before institutional capital can compete. For sellers, it means more individual buyers (who typically offer fewer contingencies) during the exclusivity window. For current homeowners, it protects neighborhood character by limiting investor-driven rental conversions.
What is City of Yes for Housing Opportunity?
City of Yes is a zoning reform plan endorsed by NYC in December 2024 that aims to create 80,000 new homes over 15 years. It allows homeowners to build accessory dwelling units (ADUs) like basement apartments and backyard cottages, permits increased residential density near transit hubs, and enables office-to-residential conversions in commercial districts. Governor Hochul backed the plan with $1 billion in state funding. For homeowners on Staten Island and Brooklyn, the ADU provision is the most immediate opportunity, enabling legal rental income from converted spaces.
Can I build an ADU on my Staten Island property under City of Yes?
The City of Yes zoning changes allow homeowners across all five boroughs to convert basements, garages, and backyard structures into legal accessory dwelling units. On Staten Island, this applies primarily to single-family homeowners with compliant setbacks and lot sizes. A legal ADU in South Shore neighborhoods like Eltingville or Great Kills can generate $1,800-$2,500 per month in rental income. You will still need to meet NYC building code requirements for egress, ceiling height, and fire safety. Consult with your local community board and a licensed architect before starting construction.