ALBANY, N.Y. — It seemed like 2023 would be the year that New York would finally take the most consequential steps in decades to address the state’s dire housing shortage.

Rising rents and homelessness had made housing a top issue for voters. Gov. Kathy Hochul had unveiled a grand plan, focused on cajoling communities to build more homes through new mandates, that was met with praise from housing experts and pro-development groups. And her fellow Democrats in control of the State Capitol had pledged to make housing a priority.

Yet the plan collapsed last week amid closed-door budget negotiations between Ms. Hochul and Democratic lawmakers, dragging down nearly every major housing proposal with it, in a spectacular failure that has prompted a game of intraparty finger pointing and now threatens to deepen one of the worst housing crises in the nation.

The disintegration underscored Albany’s often dysfunctional policymaking process and marked a significant setback for a new governor who had made housing a top focus. But it also raised fears that the trends that threaten the city and state’s economy could continue unchecked, including the outflow of middle-class workers, like teachers and nurses; the departure of families and subsequent decline of public schools; and a rise in homelessness.

“It’s irresponsible to walk away from this at this moment in time,” said Rachel Fee, the executive director of the New York Housing Conference, a nonprofit group that advocates more affordable housing.

Some state officials, like in California, Oregon, Maine and Utah, have pushed towns and cities to drop resistance to new development and tried to insulate tenants from rent increases. Ms. Hochul’s plan included similar mandates that would have required localities to build bigger and higher by allowing the state to override local zoning laws in order to make way for 800,000 new homes over the next decade.

But her plan fell victim to entrenched political forces, including fierce opposition from the suburbs, Democratic lawmakers scared to lose seats and a widening ideological split on the left.

Both critics and supporters of the governor have also faulted her for rushing the rollout of a far-reaching proposal without rallying broad enough support beforehand. The breadth of Ms. Hochul’s plan might also have contributed to its undoing: Each piece had opponents but few outspoken allies.

“The governor was courageous,” said Assemblywoman Anna Kelles, a Democrat from Ithaca, N.Y., adding, “But we needed a lot more conversations to get buy-in.”

Ms. Hochul has laid the blame squarely on the State Legislature. On Tuesday, she vowed to continue marshaling support for her proposal, which she said had been misconstrued. In a nod to the daunting nature of the undertaking, she quoted the Hall of Fame hockey player, Wayne Gretzky, who famously said, “You miss 100 percent of the shots you don’t take.”

“I took the shot,” she told reporters in the State Capitol. “This is going to be something I’m going to continue to work on until we solve this. That’s my commitment to New Yorkers.”

The governor is still hashing out the state budget plan with lawmakers, after hitting the impasse over housing earlier this week in discussions with Andrea Stewart-Cousins, the State Senate majority leader, and Carl E. Heastie, the Assembly Speaker.

Mr. Heastie, whose chamber emerged as the most recalcitrant to any mandates, said there was not enough time to work through the complexities of the plan, which Ms. Hochul unveiled a few months ago, especially after weeks had been spent negotiating Ms. Hochul’s changes to the bail laws.

“When you want to make transformative change in policy, there has to be an education period,” he said this week, stressing that lawmakers would continue to discuss housing policy this legislative session, which ends in June.

Either way, legislative leaders will have to contend with disparate interests within their ranks.

The most passionate resistance came from legislators representing the Westchester and Long Island suburbs, where new construction has lagged after decades of local restrictions favoring single-family homes. Ms. Hochul’s proposal requiring that localities build a certain number of housing units each year riled local officials, who said it amounted to state overreach. And it quickly energized Republicans who began wielding the proposal as a cudgel against Democrats.

“That represented a threat,” said State Senator Charles D. Lavine, a Democrat from Nassau County. “Even though there is a Democratic majority in the Senate and Assembly, we Democrats want to make sure we continue to control those majorities.”

Left-leaning lawmakers, especially in the State Senate, were more eagerly focused on extracting measures that provided immediate relief to renters facing evictions and rent increases. There was, in their view, a deal to be done: Support Ms. Hochul’s plan to boost construction and, in return, get the governor to back a so-called good cause eviction measure, a left-wing proposal that would limit a landlord’s ability to raise rents.

But the governor “was completely unwilling to discuss good cause or anything that would provide protections for unregulated tenants,” said State Senator Julia Salazar, a Democrat from Queens who first introduced the legislation in 2019.

Regardless, any hope of a big housing package with tenant-friendly measures evaporated following staunch opposition from Assembly Democrats to Ms. Hochul’s mandates, leading her to pull all housing policies from budget negotiations.

The plan’s failure means that the affordability problems may worsen when many of the state’s residents, particularly in New York City, are already struggling financially. An economic rebound from the worst of the pandemic has reinforced many of the city’s problems: The median rent on new leases in Manhattan, for example, rose to more than $4,100 from $3,400 in March 2019, according to the brokerage Douglas Elliman; and homelessness is at record levels.

The amount the typical New York City household spends on rent, for example, has steadily increased over the decades to just under 35 percent, according to a recent city survey. State Senator Brian Kavanagh, a Democrat who chairs the housing committee, said lawmakers will continue to feel “real pressure” from voters to respond.

Ms. Hochul and lawmakers like Mr. Kavanagh unsuccessfully pushed several measures in addition to the growth mandates that could have helped thousands of New Yorkers and made way for tens of thousands of new homes.

The real estate industry and advocates for tenants supported a new state housing voucher program, which was discussed with Ms. Hochul during negotiations. City Hall also lobbied to allow the city to legalize basement apartments, incentivize the conversion of office buildings to housing and raise limits on residential development in Manhattan. Another tax incentive program would have helped owners rehabilitate crumbling homes.

All of these proposals were left on the cutting room floor, too.

One of the governor’s priorities would have given developers more time to receive a contentious tax exemption known as 421a, after they said pandemic-related construction slowdowns threatened their ability to finish projects by the program’s deadline.

Because that effort did not succeed, however, officials in New York City and the real estate industry say thousands of apartments — including a 1,400 unit apartment project on a vacant waterfront lot in Queens seen as an example of a more welcoming approach to housing — will be delayed.

“We’ll continue to see anemic rental housing production,” said James Whelan, the president of the Real Estate Board of New York, an influential industry group. “There’s no reason to think that’s going to turn around.”

Though they are disappointed, some housing advocates also said that the moment marked major progress.

“We saw more momentum this year than ever before,” said Annemarie Gray, the executive director of Open New York, a pro-development group that sought to ally with advocates for tenant-focused measures to build more pressure on lawmakers. “It was always going to be a multiyear fight.”

Groups like Open New York plan to retool their approach by finding ways to partner with other influential groups like unions, environmental groups and advocates for older people — a strategy seen as effective in places like Oregon and California.

Michael Mulgrew, the president of the United Federation of Teachers, the powerful New York City teachers’ union, said he had pushed legislators to address housing, a top issue for teachers struggling to afford the cost of living in New York City. But he said a better plan, one that would have garnered more forceful union support, would have included provisions that guarantee affordability for teachers and other workers — a point echoed by many lawmakers.

“Everyone is now going to retreat to their corner, lick their wounds and then come back,” said Assemblywoman Linda B. Rosenthal, a Democrat and chair of the housing committee. “All the problems remain.”