BUFFALO, N.Y. — There's good news and bad news when it comes to the housing markets in New York state.

In many ways, it's robust. This month, Zillow, the most-visited real estate website in the United States, predicted Buffalo will be the nation's hottest housing market in the United States. That should be great for sellers but Gov. Kathy Hochul said there's also a downside. 

"We're very excited about it being the hottest housing market in the nation," she said. "I don't think anyone could have foreseen that just a few years ago, but that means that there's a limited supply of very desirable housing and we want to make sure that people grew up here, raised their kids here, that the kids who want to grow up and raise their own family here, have the opportunity or that seniors that want to downsize into a smaller place have that available to them."

While the lack of affordable housing in New York City is a well-documented issue, Hochul said it is also a problem in other parts of the state, particularly Western New York. In Buffalo Friday, Hochul talked about her plans in the executive budget proposal to remedy the issue. 

The governor said it will come down to building more. She said there are incentives in her proposal for developers.

She is also pushing a plan to build housing on state-owned properties and has called for the Legislature to approve a $500 million allocation. Finally, Hochul wants to create a Pro Housing Communities program.

"I'm encouraging communities, like all the ones in Western New York, to go to their town boards, their city councils, sign a resolution, agree to a resolution that says they'll continue growth targets and those communities will have available to them over $650 million in discretionary funds," she said.

Last year, the state Legislature rejected Hochul's "developer's remedy" which she said would have allowed developers who hit all other metrics but were rejected anyway by localities to ask a different board to review their application. She said lawmakers suggested they "need more carrots, not sticks." 

She said she has never been in favor of forcing communities to allow more development but hopes they will be more open and consider less restrictive zoning rules.

"I'm monitoring whether or not I'm going to see sufficient growth to meet the demand, especially in a place like Western New York," Hochul said.

The governor said the federal government also has an important role to play. She said she supports the effort of U.S. Senate Majority Leader Chuck Schumer to created more federal credits for low- and moderate-income housing.

Currently she said the state is at its cap for affordable housing credits. The definition of affordable housing varies widely by community, based on market rate of average of income of regions.