Although the New York State Fiscal Year 2027 (FY27) budget was due on April 1, 2026, the government is continuing to evaluate numerous components, including potential reforms to the State Environmental Quality Review Act (SEQRA) intended to fast-track environmental review for housing development. Governor Hochul’s Executive Budget and the Senate’s budget bill reflect different visions for SEQRA reform, as summarized below. The Assembly does not address SEQRA reform in its budget bill but does in a standalone bill, 2025-A6283A.

SEQRA, part of Article 8 of the NYS Environmental Conservation Law, along with the SEQRA regulations in 6 NYCRR Part 617, establishes a process for systematically evaluating the environmental impacts of discretionary actions that are directly undertaken, funded, or approved by local, regional, and state governments. The proposed SEQRA reforms explicitly address development in New York City, which has a local analog—the City Environmental Quality Review (CEQR).

Actions Exempt from SEQRA Review

The core of the Governor and the Senate’s SEQRA reform proposals is the addition of actions exempted from environmental review. These types of actions, called Type II actions, are categorically deemed to have no significant adverse impact on the environment and are statutorily exempted from SEQRA review. Type II actions do not require preparation of an environmental assessment form, a negative or positive declaration, or an environmental impact statement (EIS). The Governor’s proposal creates five new Type II actions: two related to housing development, as well as actions related to projects at previously disturbed sites, involving water or wastewater infrastructure, or involving sustainability retrofits. The Senate’s proposed Type II amendments are limited to housing development.

The Governor’s proposal distinguishes Type II criteria for housing development in municipalities with over one million people, thereby establishing a unique framework for New York City. In New York City, actions involving housing construction would be deemed Type II when the project meets all of the following criteria:

1. Is not located within a coastal flooding area (a term left to be defined by the “relevant local agency”).
2. Is not located within an area zoned exclusively for industrial uses.
3. Does not contain more than 50,000 square feet of non-residential uses.
4. Does not exceed 250 dwelling units (or 500 dwelling units if within a medium- or high-density residential district, or a medium- or high-density mixed-use district).

Outside New York City, actions involving housing construction would be deemed Type II when the project meets all of the following criteria:

1. Is connected to existing community or public water and sewerage systems at the commencement of habitation.
2. Is located at a previously disturbed site.
3. Has no more than 50,000 square feet of non-residential uses or 20% non-residential uses by gross floor area, whichever is less.
4. Has a maximum of 100 dwelling units.

The Executive Budget defines a “previously disturbed site” as one that meets all of the following criteria:

1. Has been developed prior to two years before the application for approval of an action.
2. Is substantially altered by, for example, buildings, impervious surfaces, or maintained lawns.
3. Is not located in a FEMA designated 100-year floodplain.
4. Has not been used for agricultural purposes within three of the last five years before the application for approval of an action.

The Senate budget bill also establishes a Type II action for housing construction but sets the unit limit based on population and connectivity to public water and sewer systems. In addition, the buildings must meet a long list of other factors. For example, housing construction in a municipality with greater than 90,000 but fewer than one million people may be exempt from SEQRA when there are fewer than 500 total residential units in the building and no more than 20% of the floor area consists of commercial or community facility uses connected to existing community or public water and sewerage systems. In New York City, buildings with fewer than 1,000 total residential units may be exempt where no more than 20% of the floor area consists of commercial or community facility uses connected to existing community or public water and sewerage systems.

Under the Senate’s proposal, even buildings meeting the above standards will only qualify as a Type II action if they also satisfy certain environmental standards. Interested parties should consult the Senate bill for the full list of requirements, but by way of example, qualifying multifamily buildings must:

1. Be located on previously disturbed land.
2. Be located outside of a flood risk area, as detailed in the bill.
3. Be located outside of a critical environmental area designated by the NYS Department of Environmental Conservation.
4. Complete a Phase I environmental site assessment and testing for lead water and paint, asbestos, and radon.
5. Comply with state wetland, stormwater, and drinking water laws.
6. Meet green building standards.

The Senate’s proposal is similar to New York City’s Green Fast Track program, which streamlines CEQR reviews for small- and medium-scale multifamily projects and according to the NYC Department of City Planning, can reduce review times by two years.

Actions Subject to Limited Environmental Review

The Senate budget bill includes a procedure for limited environmental review (i.e. not a Type II exemption), which the Executive Budget does not contain. This procedure would allow certain multifamily projects to undergo SEQRA reviews limited to “core environmental concerns,” which the Senate bill says will be defined through regulation. The bill provides examples of non-core environmental concerns (i.e., those that would not be evaluated under the limited review), such as shadow and viewshed impacts. Qualifying projects must also meet location requirements, such as being located on previously disturbed land, as well as wastewater and stormwater requirements. Projects located in disadvantaged communities must meet additional requirements related to pollution generation and housing opportunities.

Procedural Amendments

Both the Governor and Senate proposals would establish milestone deadlines and clarify the statute of limitations for legal challenges. The proposals set a one-year limit on the initial determination of whether an EIS is needed for an action, running from designation of the lead agency. The proposals set a two-year limit on providing the EIS after the date a draft EIS is determined to be required, unless extended under limited, prescribed circumstances. As for challenging a SEQRA determination, the proposals state that “the time to commence a proceeding to review an agency determination under [SEQRA] shall begin to accrue when the agency determination to approve or disapprove the action becomes final and binding upon the petitioner.”

SPR will continue to monitor the budget negotiations and ultimate resolution of the SEQRA reform proposals.