New York’s new $225 million program would help municipalities expand drinking-water, sewer and stormwater systems when limited capacity is blocking new or rehabilitated housing.

Clean Water for Housing grants are now available to eligible New York municipalities through the state Environmental Facilities Corporation. The program is designed for a basic problem that can stop housing before construction begins: a community may approve homes, but its water plant, sewer lines or stormwater system may not have enough capacity to serve them.

Gov. Kathy Hochul announced the program Friday, October 23. The state set aside $175 million for projects statewide and another $50 million for rural communities. Applications will be reviewed on a rolling, first-come basis until the money is committed.

This is not a grant that individual homeowners, renters or private developers can apply for directly. Municipalities and certain counties are the eligible applicants. Developers with housing plans may still have a reason to work with local governments if public infrastructure is the barrier holding up a project.

How the Clean Water for Housing grants work

The program can provide up to $30 million for one project, covering as much as 75 percent of eligible costs. That means a project receiving the maximum percentage would still need other money for at least 25 percent of eligible costs, plus any expenses the program does not cover.

Eligible work includes the installation, extension, reconstruction or upgrade of public drinking-water, sewer and stormwater systems. The grant may also cover related planning, engineering, permitting, site preparation, excavation, construction, equipment, labor and materials.

The water project must address a real capacity constraint that impedes housing development, improvement or rehabilitation. The state says the goal is to fund projects that can begin construction within one year of an award. The related housing work is expected to begin within two years.

A municipality may submit more than one application, but it may receive no more than two awards. Private for-profit developers and nonprofit housing developers are not eligible applicants.

Who can apply

A city, town or village generally must be certified through New York’s Pro-Housing Community Program. A municipality that has submitted a complete certification application may apply for a water grant, but it must receive certification before EFC can make an award.

A county can also apply if it documents that the proposed project is necessary to promote housing development, improvement or rehabilitation, or if the work will occur in a certified Pro-Housing Community.

More than 460 communities have received certification statewide. The City of Utica is among them, and the Village of Boonville has also received state support available to certified communities. Other local governments should confirm their current status through the state’s dashboard because the list is updated regularly.

The certification rule links infrastructure money to local action on housing growth. Supporters see that as an incentive for communities to allow more homes. Critics may question whether tying water aid to housing policy could leave some places behind. The program partially addresses that issue by allowing a completed certification application before award and by reserving $50 million for rural communities.

Why this matters in the Mohawk Valley

Water and sewer systems are especially important in older upstate communities. Pipes, pumps and treatment facilities can last for decades, but they eventually reach capacity or require costly replacement. A small municipality may have land suitable for apartments, townhomes or rehabilitation while lacking the system capacity needed to approve the project.

That can create a difficult cycle. Limited infrastructure blocks housing and growth, while a limited tax base makes it harder to pay for infrastructure. A grant covering up to 75 percent of eligible costs can narrow that gap, although local officials still need a plan for the remaining cost and long-term maintenance.

The program could be useful in places where downtown buildings need rehabilitation, a subdivision requires a water extension, or new housing would add more wastewater than an existing system can reliably handle. It is not limited to affordable housing, but local officials should explain what types of homes a publicly funded project will support and whether any units will be affordable to local workers, seniors or lower-income households.

The Phoenix recently reported on $26 million in Mohawk Valley water projects, including lead-line replacement and system upgrades in Herkimer and Gloversville. We also examined how a Webster wastewater upgrade used grants and interest-free financing. Those programs focus on public health, aging systems and affordability. Clean Water for Housing has a different test: the infrastructure must help remove a barrier to housing.

What municipalities need to submit

The Environmental Facilities Corporation application page says a complete application must include a project description and budget, an engineering report, environmental-review documents and an explanation of how the proposed work addresses an infrastructure constraint affecting housing.

That requirement favors communities that have already studied their systems and identified a housing project or development area. Because awards are made first come, first served, municipalities with engineering work ready may move ahead faster than small governments with limited staff.

EFC’s Community Assistance Teams offer on-site and virtual consultations to help municipalities plan projects and prepare funding applications. Local officials who are interested but not application-ready should contact the team quickly rather than submit incomplete material.

Questions officials should answer publicly

• What housing project or area is being delayed by the capacity problem?
• How many homes could the public investment make possible?
• What share of the homes would be affordable, accessible or supportive?
• How much will the grant cover, and where will the local match come from?
• Will water or sewer rates change after construction?
• Who will own, operate and maintain the new infrastructure?
• Can construction begin within one year and housing within two years?

Clear answers would help residents judge whether an application supports a realistic housing plan or simply shifts a development cost to the public without enough community benefit.

First-come funding creates urgency and risk

Rolling grants can move money faster than a single annual competition, but they can also reward communities with larger planning departments, experienced consultants or engineering reports already completed. Rural governments may need more assistance even though $50 million is reserved for them.

The maximum award is also not a blank check. At the 75 percent limit, a $20 million eligible project could receive up to $15 million and would still need at least $5 million from other sources. Municipalities should identify that match before committing residents to new debt or rate increases.

State officials should report where the grants go, how quickly construction starts, how many homes result and whether the housing promised in an application is completed. Public tracking is important because the water work may happen before the housing project, and market conditions or financing problems could later change the housing plan.

The wider housing and water strategy

The governor’s office says New York has provided $10.6 billion for local water projects since 2021. It also points to a new $3.75 billion water-infrastructure plan and a $500 million grant round announced this week. These totals cover multiple programs and years and should not be confused with the separate $225 million Clean Water for Housing fund.

EFC is also accepting applications for $45 million in Green Resiliency Grants. Those grants have different rules and focus on projects that reduce flooding and improve climate resilience.

On housing, the state says its five-year plan is intended to create or preserve 100,000 affordable homes, including 10,000 with supportive services. More than 87,000 homes have been created or preserved so far, according to the governor’s announcement. The Phoenix has covered individual projects, including the recently completed 57-home Stately Apartments development in Ithaca.

Water infrastructure alone will not solve the housing shortage. Zoning, land cost, interest rates, construction prices, labor availability and neighborhood opposition can all delay development. But a housing plan cannot move forward without safe drinking water, wastewater treatment and stormwater capacity.

What residents and local leaders can do now

Residents cannot submit a Clean Water for Housing application, but they can ask their city, town, village or county whether it has identified infrastructure barriers to housing. Municipal board agendas, capital plans and engineering reports may show projects that could fit the program.

Local leaders should confirm Pro-Housing certification, review the full grant summary, request EFC assistance and identify the local share before filing. Housing developers should bring documented capacity needs and realistic construction schedules to municipal officials rather than assume public funding is automatic.

Is limited water or sewer capacity holding back housing in your Mohawk Valley community? Tell us what project residents should be watching and what safeguards should accompany public funding. Do not share private account, property-access or security information.

Sources: New York Governor’s Office; Environmental Facilities Corporation; Homes and Community Renewal.