Monroe County Expands Tax Incentives for Housing Construction

Rochester, Monroe County — Monroe County is taking aggressive action to address a critical housing shortage by expanding tax incentives for new rental housing construction. According to a study released this week, the local market is stuck, lacking sufficient inventory at every price point — from affordable to market-rate units.

The County of Monroe Industrial Development Agency (COMIDA) announced the expansion on an interim basis on January 5, 2026, allowing developers to qualify projects while leadership works toward a final framework and formal policy changes.

The Housing Crisis Demands Action

Monroe County's expansion of tax incentives comes as both a housing solution and an economic development priority. Ana Liss, executive director for COMIDA, highlighted the broader context: site selectors evaluating Rochester for major manufacturing facilities like fairlife's milk processing plant are now factoring in housing availability as a key criterion.

"The 300 people that I want to hire to man this plant, where are they going to be able to afford to live?" Liss said. "That's a real consideration." This demonstrates how housing directly influences a region's competitive advantage in attracting major employers and good-paying jobs.

The expansion represents a significant shift in policy approach for COMIDA, which has focused on affordability for lower-income renters in recent years. The current expansion removes requirements that a percentage of units be affordable to lower-income residents, instead targeting workforce housing for people earning average and median incomes — teachers, nurses, firefighters, and other essential workers.

COMIDA's New Approach: More Flexible Incentives

The expanded program includes several key changes designed to accelerate housing development:

• Removal of affordability percentage requirements — Developers can now propose projects with market-rate or workforce-rate units
• Extended tax break periods — COMIDA can increase the number of years tax incentives are applied
• Front-loaded incentives — Larger tax reductions in early project years when financing is most critical
• Case-by-case evaluation — Projects are evaluated individually rather than against rigid criteria

Developer Matt Drouin of OakGrove Development highlighted the necessity of this flexibility. His company recently completed an assembly of three historic downtown buildings at Four Corners and plans to add 92 units of housing targeting workforce housing costs.

"Government assistance is mission critical to make housing development of any type financially viable," Drouin explained. Construction costs have skyrocketed to $250 to $275 per square foot — nearly double the costs from 20 years ago — far outpacing inflation and making market-rate housing economically challenging without incentives.

Why This Matters for Rochester and Monroe County

The expansion addresses a real market failure: 31 percent of downtown office space is vacant, a problem that emerged as remote work became standard post-COVID. Adaptive reuse projects like those by OakGrove can convert these vacant buildings into housing, but only with financial support.

COMIDA board chairperson Truman Tolefree emphasized the economic development purpose: "The purpose of the incentive is to actually incentivize investment in underserved areas. And so from that standpoint, the focus really should be on crafting an economic benefit that truly spurs economic development."

Beyond downtown redevelopment, the county is also pursuing other housing solutions. Monroe County's land bank is working to place modular homes on blighted residential lots in Gates and Greece, providing additional housing options and neighborhood revitalization opportunities.

What Happens Next

COMIDA is currently operating under interim authorization while leadership crafts a formal, permanent framework. This allows qualified projects to move forward immediately while the agency refines its long-term housing strategy.

The initiative reflects a nationwide trend: industrial development agencies across the United States are integrating housing into their core mission. As Liss noted, "We're certainly not alone here in having that existential paradigm shift around, 'Well, we're an industrial development agency, not a housing development agency.'"

For contractors and developers in Rochester and Western New York, this expanded tax incentive program signals increased opportunity for housing projects throughout 2026 and beyond. The message is clear: Rochester is serious about solving its housing crisis through strategic public-private partnerships.

According to WXXI News, published January 5, 2026, the interim program is already accepting new project submissions.

For more on Rochester's construction and development landscape, explore our coverage of Rochester's $100M Inner Loop North transformation project and the region's $98M affordable housing investments.

Learn more about Monroe County's industrial development initiatives at Monroe County Government and COMIDA at Monroe County's Economic Development Department.