The Kingston Housing Authority has broken ground on the second phase of a $112 million redevelopment that will demolish the 32-unit Penn Court development and rehabilitate hundreds of apartments across two other aging complexes in the city. The project, now underway in Kingston, is designed to modernize public housing that in some cases dates back more than half a century while adding a new 80-unit senior living building to the authority's portfolio.
Phase Two calls for rehabilitating 98 family apartments at Colonial Gardens and 60 senior apartments at Wiltwyck Gardens, both built during the 1970s, according to New York YIMBY. The new construction, bounded by Penn Court, Colonial Drive, and Flatbush Avenue, will also include the new senior building, which reserves 30 units for seniors struggling with homelessness through the Empire State Supportive Housing Initiative. Kingston Housing Authority and Mountco Construction and Development Corp. are developing the project, with buildings designed by Aufgang Architects.
Once complete, the redevelopment will comprise 238 public housing units in total. Thirteen apartments are dedicated to households with mobility impairments, and six more are set aside for households with audio or visual impairments, per the outlet's reporting. Gateway Hudson Valley and the New York State Department of Health will provide supportive services focused on stable housing and independent living, and all units will be affordable to households earning at or below 100 percent of area median income.
Penn Court Demolition and the Fight Over Displacement
The plan to tear down Penn Court has been a source of local tension since it first surfaced. Community advocates and elected officials raised concerns over potential displacement of the complex's 32 households, prompting KHA Executive Director Harolda Wilcox to clarify in late 2024 that displaced residents would be temporarily relocated to Rondout Gardens with a guaranteed first right to return, according to Kingston Citizens. That relocation process falls under federal Uniform Relocation Assistance rules, which govern how tenants of subsidized housing must be treated when their homes are demolished.
The stakes of that debate are tied to just how much of Kingston relies on KHA housing. The authority manages 481 rental units across six developments, providing deeply affordable housing estimated to house about 10% of the city's population, Kingston Citizens has reported. Those units serve households earning at or below Very Low and Extremely Low Income levels, making the authority one of the largest providers of low-cost housing in the city.
Financing the $112 Million Project
Federal and state low-income housing tax credits are expected to generate nearly $58 million in equity for the project, per New York YIMBY's reporting. New York State Homes and Community Renewal provided approximately $35 million in program funding, and the agency says it has created or preserved more than 1,400 affordable homes in Ulster County. Ulster County is also providing $700,000 through its Housing Action Grant Program, funding specifically earmarked for transforming the Penn Court site into senior and supportive housing, according to Mid Hudson News.
Securing that financing required local approval. In September 2025, KHA and Mountco Construction submitted a formal request to the Kingston Common Council for a Payment In Lieu Of Taxes agreement, a step needed to secure 4% low-income housing tax credits and tax-exempt bond financing from state agencies, per City of Kingston municipal finance documents. PILOT agreements reduce long-term property tax burdens to keep projects like this financially viable over decades.
Going All-Electric With State Clean Energy Money
The redevelopment buildings are designed to meet Enterprise Green Communities Plus criteria and will be all-electric, incorporating rooftop solar arrays, electric vehicle charging stations, and energy-efficient mechanical systems, per the seed reporting. A clean energy initiative that Homes and Community Renewal and NYSERDA partnered on provided $2 million for project funding. No completion date for Phase Two has been announced.
The project is part of Governor Hochul's five-year, $25 billion statewide housing plan, which the state says is on track to create or preserve 100,000 affordable homes. Statewide, that plan has created or preserved more than 81,000 affordable homes through mid-2026, with an additional $250 million in capital funding added in the FY 2027 Executive Budget, according to the New York Construction Report.
Building on Phase One's Track Record
Phase Two follows the completion of Phase One in 2025, which rehabilitated 120 apartments at the Leonard & Vera Van Dyke Apartments, previously known as Stuyvesant Charter Apartments. KHA also enters this construction phase with strong federal marks: the authority scored 96% in HUD's Section 8 Management Assessment Program in January 2025, earning an official High Performer rating for its voucher administration, according to the Kingston Housing Authority.
The redevelopment also arrives against the backdrop of a tight local rental market. Kingston became the first upstate city to adopt rent stabilization under the Emergency Tenant Protection Act in 2022, a move the New York State Court of Appeals upheld in June 2025 along with the city's 15% rent reduction, according to New York State Homes and Community Renewal. A city vacancy survey released in August 2025 found a 7.04% overall net vacancy rate among rent-stabilized properties, though properties with more than 22 units remained below the 5% emergency threshold that would trigger renewed rent regulation review.
The Kingston Housing Authority itself traces back to 1948, when it was formally established during the post-WWII housing boom, later opening its first complex, Colonial Gardens, in 1953. That history underscores just how old some of the buildings now being overhauled are, even as Phase Two pushes the authority's aging portfolio toward all-electric, climate-friendly housing designed to keep low-income Kingston residents in their community for decades to come.
