What "Let Them Build" Actually Means for New York Developers

Tuesday, May 19, 2026

By: Karl E. Daniel, Esq. | Partner

For decades, the State Environmental Quality Review Act has been the procedural gauntlet that New York development projects must clear before building starts. Environmental review adds cost, consumes time, and, as critics have long argued, produces results that rarely justify the delay. The Hochul administration cited a study that found that state-mandated review slows housing projects by an average of two years and adds hundreds of thousands of dollars in costs per project.

Governor Kathy Hochul made SEQRA reform the centerpiece of her 2026 State of the State address. The initiative, branded "Let Them Build," proposes to exempt broad categories of housing and infrastructure projects from SEQRA review entirely, impose binding timelines on review processes that do apply, and cut what the administration describes as duplicative procedural requirements layered over federal and local environmental permitting.

After months of contentious budget negotiations, the Governor has announced a conceptual agreement with legislative leaders that folds SEQRA reform into the final FY 2027 budget. Formal passage is pending.

What the reforms would actually do, and what they would not, is worth examining carefully.

The Problem with SEQRA as a Housing Tool

SEQRA, enacted in 1975, requires state and local agencies to assess the environmental impacts of discretionary actions, including approvals of development projects, before those approvals are issued. The process runs from an initial classification of the proposed action, through an environmental assessment, and in the more complex cases, to a full environmental impact statement. Opponents of a project can invoke SEQRA at multiple stages and use it to generate delays even where the underlying environmental concern is marginal.

The Hochul administration points to data drawn from more than a thousand projects reviewed in New York City and statewide: virtually none were ultimately found to have significant adverse environmental impacts. That finding is the empirical foundation for the reform. If the overwhelming majority of housing projects clear SEQRA without generating findings of significant impact, the administration argues, subjecting them to the full review process imposes costs without commensurate environmental benefit.

Environmental groups contest that framing. The Citizens Campaign for the Environment has argued that SEQRA is a planning tool, not merely an impact filter, and that exempting projects removes a mechanism for evaluating whether development is sited appropriately for a given community. Critics also contend that sewer deficits and infrastructure gaps, not environmental review, are the more significant bottlenecks to housing production.

The Proposed Exemptions

The core of the Let Them Build proposal is a set of categorical SEQRA exemptions for housing projects that meet specified criteria. The exemptions are structured differently depending on geography.

●       In New York City, housing projects below certain size thresholds would no longer require SEQRA review. The threshold varies by zoning density: up to 250 units in low-density areas and up to 500 units in medium- or high-density districts. Projects located in coastal flood zones are not eligible for exemption.

●       Outside the five boroughs, the exemption applies to projects on "previously disturbed land," which are areas that have already been developed, maintained, or improved, connected to existing water and sewer systems. The threshold triggering any SEQRA review would rise from the current three units to 100 units statewide.

●       Additional exemptions would cover clean water infrastructure, public parks and trails, green stormwater infrastructure, and public schools within New York City.

Exempt projects would remain subject to all other applicable state regulatory requirements, including water use permits, air quality permits, and environmental justice review, as well as local zoning and permitting. The exemptions apply to SEQRA specifically; they do not represent blanket deregulation of the development process.

Timeline Requirements and Process Reforms

For projects that remain subject to SEQRA review, the proposal imposes a two-year deadline for completing an environmental impact statement. Under current law, no such deadline exists. EIS timelines vary widely and unpredictably, creating the kind of open-ended exposure that developers and lenders treat as a project risk.

The administration also proposes to overhaul what it describes as overcomplicated bureaucratic processes that layer state review requirements over existing local zoning and other environmental permitting. The stated goal is to reduce duplication without pre-empting local zoning authority. The proposal explicitly preserves local zoning requirements, a carve-out that gave many local government officials political cover to support the reform. The New York State Association of Counties, representing all 57 counties outside New York City, backed the proposal.

The Legislative Fight

SEQRA reform proved to be the most contested element in this year's budget negotiations. The Senate included a narrowed version of the Governor's proposal in its one-house budget, with smaller thresholds and additional eligibility requirements. The Assembly went further, declining to include SEQRA reform in its budget at all, and Assembly Speaker Carl Heastie had flagged it in January as a likely pressure point that would delay a final deal.

Those divergent positions contributed to a budget now more than six weeks past its April 1 deadline, which is the latest since 2010. As of this writing, the Governor has announced a conceptual agreement with legislative leaders that includes SEQRA reform. Whether the final enacted language will match the Governor's January proposal or reflect the Senate's narrower approach remains to be seen as bill text is finalized.

What This Means in Practice

If enacted in a form close to the Governor's proposal, the reforms would represent the most significant structural change to New York's environmental review process in the law's fifty-year history. The practical consequences for development are substantial.

●       For residential developers, projects below the applicable size thresholds on previously disturbed urban land could proceed without SEQRA review, eliminating a primary procedural vehicle for neighbor and NIMBY opposition. That matters not just for the timeline but for financing: the open-ended nature of SEQRA exposure has historically made it difficult to commit capital to projects still subject to review.

●       For municipalities and local agencies, the two-year EIS deadline creates new accountability for the review process on larger projects. Agencies and lead agencies will need to structure their review processes with that constraint in mind.

●       For project opponents, the loss of SEQRA as a procedural tool on exempt projects removes a significant litigation avenue. Courts have historically been willing to scrutinize SEQRA compliance, and SEQRA challenges have been used to delay projects well beyond what the underlying environmental issues would warrant. Categorical exemptions foreclose that avenue entirely for covered projects.

●       For infrastructure projects, the exemptions for clean water systems, parks, and schools address categories where review has added cost with little apparent environmental benefit, consistent with the administration's broader data-driven rationale.

There are also risks worth monitoring. Environmental groups have raised concerns about projects near contaminated sites and floodplains. The "previously disturbed land" eligibility requirement is intended to address some of those concerns by limiting exemptions to developed areas, but the definition of that term in the final bill language will matter significantly.

Key Considerations for Developers and Counsel

Several points warrant attention as the final budget language takes shape.

●       The bill text will control. The Governor's January proposal and the final enacted statute may differ materially on threshold sizes, eligibility criteria, and the definition of "previously disturbed land." Practitioners should review enacted language carefully rather than relying on the legislative framework as announced.

●       Local zoning authority is preserved. The reforms do not override local zoning. A project exempt from SEQRA still requires all applicable local approvals. The practical benefit of SEQRA exemption is the removal of an additional procedural layer, not the elimination of local land use control.

●       Other state permits remain in effect. Water use, air quality, and environmental justice review requirements apply regardless of SEQRA exemption. Development counsel should conduct a full regulatory inventory, not assume that SEQRA exemption equals regulatory clearance.

●       Flood zone exclusions are firm. Projects in coastal flood zones are ineligible for the NYC-based size exemptions. Developers with sites in or near such zones should determine their flood zone status early in the planning process.

●      The two-year EIS timeline applies prospectively. Projects already in review will need to assess how the new deadline interacts with their existing review posture and any lead agency commitments already in place.

Kenney Shelton Liptak Nowak LLP regularly advises developers, municipalities, and landowners on New York real estate, land use, and construction matters. For questions about how pending SEQRA reforms may affect your projects, contact our real estate and construction practice groups.