CREF Policy Update: HUD Provides Relief from Environmental Review on Multifamily Projects

HUD Provides Relief from Environmental Review on Multifamily Projects

Last month, the Department of Housing and Urban Development (HUD) removed the requirement for environmental assessments for projects over 200 dwelling units to be sent to the Field Environmental Clearance Officer (FECO) or Program Environmental Clearance Officer (PECO) for review and comment. 

• The interim final rule was made as part of the Trump administration’s recent Executive Order on National Environmental Policy Act (NEPA) regulations and will streamline processing of larger projects. The rule is effective as of June 22, 2026.

Why it matters: FHA multifamily loans require significant environmental reviews that add to the cost of development. MBA has long called for reforms and believes removing this and other burdens will result in more housing construction.

What’s next: MBA will continue to advocate for streamlining of FHA’s MAP and LEAN programs.

For more information, please contact Megan Booth at (202) 557-2740.

New York City Mayor Releases Housing Plan

Last Tuesday, New York City Mayor Zohran Mamdani unveiled “Block by Block,” a sweeping $22 billion housing plan aimed at tackling the city’s affordability crisis. The 10-year agenda promises to build and preserve hundreds of thousands of new affordable and rent-stabilized homes alongside large investments in public housing and new tenant protections.

Why it matters: The plan’s key elements include: A $22 billion investment over five years to create and preserve 400,000 total units over a decade, with half of new units targeted for extremely low- and very low-income residents; $5.6 billion for the NYC Housing Authority to conduct repairs and enhance inspections for deteriorating buildings; and, a $40/hour wage standard for subsidized projects and a streamlined Housing Connect lottery process aiming to cut application times in half.

Go deeper: Landlords and housing industry groups have been critical and are arguing the plan will stifle private investment, increase construction costs, and ultimately shrink New York City’s housing supply.

• For example, the Partnership for New York City and the Real Estate Board of New York warned that imposing a $40/hour wage mandate for subsidized projects—even for non-union workers—will drastically inflate development and financing costs and make new projects financially unfeasible.
• These groups were joined by landlords in objecting to the Mayor’s promise to “transfer ownership” of chronically neglected private buildings to tenants, land trusts, or nonprofits as an aggressive infringement on private property rights that will chill capital investment.

Business leaders note that threatening property confiscation changes NYC’s risk profile and will compel underwriting firms to reevaluate or pull back on investment.

What’s next: MBA and the New York MBA will continue to review the proposal and work with other industry partners to engage, as appropriate.

For more information, please contact William Kooper at (202) 557-2737 or Megan Booth at (202) 557-2740.

Enacted New York State Budget Includes Key Changes to Environmental Review Laws to Speed Housing Development

Last Wednesday night and into Thursday morning, the New York Legislature approved a final 2026-2027 state budget nearly two months after the constitutionally mandated April 1 deadline. The budget included much of Governor Kathy Hochul’s “Let Them Build” agenda to address the state’s affordable housing crisis, including major reforms to the 50-year-old State Environmental Quality Review Act (SEQRA).

Go deeper: SEQRA requires developers to file detailed plans showing how a project could affect the surrounding environment. Under the budget changes enacted this week, most new housing projects will be exempt from that review process, though they will still need to comply with other environmental laws and regulations.

• The Governor, developers, and the real estate finance community have argued that SEQRA is overly bureaucratic and often duplicates local requirements. The changes are intended to help environmentally sound housing projects move forward more quickly.

Why it matters: In New York City, the SEQRA exemptions will apply to proposed housing in medium- and high-density areas of up to 500 units, and to projects in the rest of the city of up to 250 units. Outside New York City, the exemptions will apply to qualifying housing projects of up to 300 units in urbanized areas, 100 units in non-urban areas, and 20 units in areas without zoning. To qualify, housing must be built on previously disturbed land and connected to water and sewer systems upon occupancy.

What’s next: MBA and the New York MBA will continue reviewing the budget bills and will brief members on additional real estate finance provisions as they are identified.

For more information, please contact William Kooper (202) 557-2737 or Megan Booth (202) 557-2740.

Upcoming MBA CREF Council and Committee Meetings

MBA’s CREF Councils and Committees are a key way to connect to everything MBA has to offer around policy, advocacy, market intelligence and research, education, and networking. Visit www.mba.org/yourCREF to find out more.   Councils and Committees are built around specific capital sources and serve as an opportunity for you to join other commercial real estate finance professionals to hear from experts, discuss opportunities and challenges, and connect with peers.

Upcoming virtual meetings include:

• FHA Committee: June 11
• Life Company Council: June 16
• Private Credit Finance: June 17
• Bank Council: June 18
• Structured Finance Council: June 24
• Agency Council: July 9
• Servicer Council: July 16
• Commercial Council: July 21

For more information, click on the links above and/or contact Kelli Burke at (202) 557- 2742.

Upcoming MBA Education Webinars on Critical Industry Issues

MBA Education continues to deliver timely commercial/multifamily and single-family programming that covers the spectrum of challenges, opportunities, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – all complimentary to MBA members:

• Understanding Tax-Exempt Private Activity Bonds in Affordable Housing Finance – June 12
• Fundamentals of Commercial Insurance Issues and Problems – July 15

MBA members can register for any of the above events and view recent webinar recordings by clicking here.  

For more information, please contact David Upbin at (202) 557-2931.