By Greg David, The City
This article was originally published on by THE CITY
Ever since Gov. Kathy Hochul and Mayor Eric Adams put on the table sweeping reforms to accelerate housing construction, Rachel Fee has been meeting with state lawmakers to convince them New York has to do something dramatic to solve its housing crisis.
“Every legislator we meet with starts out with an acknowledgement that we have a housing crisis and that we need housing in every district,” said Fee, the executive director of the New York Housing Conference, a housing advocacy nonprofit.
But Tuesday night, her confidence that the legislature would act on the crisis was dealt a blow when both the state Senate and Assembly rejected virtually every housing proposal from the governor and mayor. Both sides are girding for what will be included in the budget — which is supposed to be adopted by the end of the month.
“There is a disconnect” between what individual representatives told her and what the leadership presented in their budget proposals, Fee admitted. But she remains hopeful.
“The next several weeks is the time for negotiation,” she added. “The governor put out a strong plan and there is room to modify it.”
The legislature’s challenge to the governor goes beyond housing; both houses also rejected Hochul’s measures to modify bail reform, add charter schools and fund the MTA. The legislature also proposed raising income taxes on the wealthy, which the governor opposes. But nowhere is the gap as large as on housing.
Through zoning changes, the governor and mayor want to force communities to accept more housing, following a model pioneered by California and other states. They also are proposing tax breaks to help make new development and restoration of dilapidated older buildings feasible.
The legislature, on the other hand, is proposing a far more limited approach that would offer financial incentives to communities to encourage more housing development. And they would add no new tax relief to promote development.
And the two houses are also pushing bills that would cap rent increases and allow tenants to legally challenge unreasonable rent hikes while requiring landlords to renew tenants’ leases in most instances, seeking to allow evictions only for “good cause.”
New York has not built enough new housing to keep up with a growing population, which has led to sky-high prices for homes and rents. The governor and the mayor agree on the solution. Hochul has proposed the state build 800,000 new housing units over the next decade, which includes Adams’ target of 500,000 for the city in the same time period.
The proposal necessarily targets New York City’s suburbs, where new housing gains have lagged the nation’s. Many suburbs that have limited new housing construction mostly to pricey single-family houses have remained home to virtually all white residents.
The governor wants to require localities to increase their housing stock by 3% over three years or lose their ability to reject development proposals. Hochul also proposed that New York suburbs with transit hubs be required to allow density as high as 50 units per acre near those stations. She proposed a fund to help towns with infrastructure needs, and a tax break to encourage affordable units.
Responding to an uproar in the suburbs about the loss of local control, the legislature decided to try a carrot rather than a stick, proposing a $500 million fund to award incentives to communities that meet the target. It is unlikely to work, Fee said.
“This approach has not been successful in other states,” she said. “By focusing on weak incentives that will not motivate local leaders to act, the legislature has endorsed the status quo and enabled the regressive forces working to keep New York unaffordable and segregated.”
The 3% target would also apply to every community district in the city, which the Adams administration has supported. A Furman Center study released last month showed that about half of the districts in the city — including all of Staten Island, southwest Brooklyn, central and northeastern Queens — had not added 3% to their housing stock between 2017 and 2019.
It wasn’t just the governor the legislature ignored. The mayor got the Assembly’s back hand on all his requests and only some help from the Senate.
The Adams administration is asking Albany to change housing law to help spur the conversion of office buildings to residential use. City Hall also asked for a tax break that would help make it feasible for conversions to include affordable housing. The Assembly rejected those ideas. The Senate seems open to the ideas with tweaks, including requirements for affordable units.
Real estate experts say the measures Adams proposed are needed in order to convert office buildings in Midtown into housing, as THE CITY previously reported.
The administration also pushed for a replacement for the expired 421-a tax break — which provided an exemption from property taxes in exchange for the creation of affordable units — and a new version of another tax incentive, called J-51, which encouraged rehabilitation of older apartments.
Not only did the Assembly and the Senate not propose replacement tax breaks — they even ignored a modest proposal that would have extended the deadline for completing building projects under the old 421-a program. The Real Estate Board of New York (REBNY) recently said an extension could result in 32,000 more housing units.
‘Good Cause’ Push
What the legislature did do in its proposal was endorse, for the first time, so-called good cause eviction rules, which would limit rent increases in market-rate apartments, give tenants the power to legally challenge a rent hike, and define the reasons for which a landlord could refuse to renew a lease.
The concept is detested by real estate groups like REBNY, although it has garnered support from pro-housing groups like Open New York, a grassroots “Yes in My Backyard” (YIMBY) organization pushing for proposals like suburban building requirements.
In an echo of the issue over suburban requirements, tenant advocacy groups argue that their “good cause” proposal is based on laws passed in states like California, Oregon, New Jersey and elsewhere. The comparison is controversial.
“Most other states have more carve-outs than the tenant group’s proposal, don’t apply to new buildings for a number of years, and establish much less onerous rent limitations,” said Sherwin Belkin, a real estate lawyer whose firm has been challenging local good cause laws around the state.
Most states with such laws have no rent caps, instead prohibiting extreme rent increases. Two states with rent caps — California and Oregon — allow annual double-digit increases. The New York proposal allows for rent increases of up to 1.5 times the consumer price index, which would have limited hikes to less than 5% annually in recent years — although, with high inflation this year, it likely would be around 9%.
It isn’t unusual for the governor and the legislature to be at odds in mid-March as they begin intense, behind-the-scenes horse trading that results in a budget that includes most of the other policies each side is attempting to advance. But the stark differences on housing took advocates by surprise this week. By getting behind good cause, the legislature may have been seeking to split the real estate industry and the housing advocacy groups that have supported the idea like Open New York.
The optimists — including the mayor — see room for compromise. “It’s part of the process and so we’re looking forward to the next level of this. It is not done until it is done,” Adams said on Wednesday.
Good cause can be revised, say its supporters. “We are expecting to negotiate around the rent increase limit,” said Cea Weaver, coordinator of the good cause campaign for Housing Justice for All, a statewide tenant advocacy group.
And in an interview with THE CITY last week, state housing commissioner RuthAnne Visnauskas said the Hochul administration was willing to negotiate around transit hub density and other provisions.
How much the governor will be able to pass remains to be seen.
“There was a lot in this proposal for the legislature to consider and to understand impact in every legislator’s district,” noted Fee. “We’d like to pass the strongest version possible this year, but understand compromise will be necessary to even advance parts of it. A compromise will still be a win.”
But others are already looking beyond this year.
Vicki Been, the deputy mayor for housing under former Mayor Bill de Blasio who is back at her longtime post at the Furman Center, says one way to keep the issue in the spotlight is to require all local governments to report on their housing production — and how it compares to the 3% growth target.
“The natural inclination of any elected official will be to stay away from this topic if these proposals fail this year,” Been said.
Open New York vows that will not happen.
“We are going to fight this year, next year whatever it takes to happen,” said Andrew Fine, the group’s policy director.
THE CITY is an independent, nonprofit news outlet dedicated to hard-hitting reporting that serves the people of New York.
People routinely say that we’re a high cost area because of high taxes. That, of course, puts the cart before the horse.
We’re highly taxed because we’re high cost. Governments have to pay those high costs and provide such as housing assistance for those who have to be here (we can’t survive without our essential workers) and can’t pay full fare.
IF we can create significant affordable housing in the most logical places (like near train stations) we can promote growth and stability.
And denying incentives to developers because they make profits? Would these legislators deny food stamps to eligible people because the grocer drives a nice car?
Or you could remove barriers to new construction all over the state. And go to a free market.
Bulk if not most of Hochul’s housing plan was DOA.
Even woke, socialist, liberal, progressive democrats in Albany representing areas such as LI, Westchester and upstate knew they would have their behinds handed to them at next election of they supported even half of what Hochul wanted.
People moved or live in suburbs or upstate to get away from high density living an all that comes with it; they don’t want it brought to their doorsteps via forced zoning and so on.
3% additional housing is NOT high density living. That is literally 3 homes for every hundred. It is a pittance. What’s worse, is places who won’t even build 3% more housing stock are the same communities that consistently act as if most homeless people deserve what they get. News flash, there are plenty of people who would love to be able to afford a home.
If you think about the cost of living in the tri-state area, a family making $125k a year with $40k in savings cannot afford to own a decent home in a safe area anywhere close to the city. That is insane and needs to change.
That’s too bad? LI and Westchester are only valuable because of their proximity to NYC and the state has spent billions on LIRR and Metro North, so it makes sense to allow more housing near those train stations
Those supporting much of Hochul’s progressive, liberal, socialist housing plans always point to California, Oregon and other states where similar things have been rolled out.
They gloss over fact rent regulation in say CA is quite different than NYS.
In CA instead of the annual circus you see in NYC every year as RGB comes up with numbers for increases (largely politically interfered with), there is a simple straight forward formula. LL’s get three percent increase plus portion of CPI per year up to a cap of about ten percent. New Jersey’s rent control laws are pretty much same IIRC.
Our epitome of the suburb, Scarsdale, has multiple blocks of affordable apartments within a five block radius of the train station. That doesn’t hurt property values or the school district.
Opposition to rezoning the land around transit stations is devoid of reason.
Hochul has to address this and sell it.
There is multi-family housing in Scarsdale in area around Metro-North, but as to it being “affordable” that is up for debate.
Overall Scarsdale is not much different than many other parts of Westchester. And many intend to keep it that way.
Others OTOH are trying to “wake-up” Scarsdale and do something about “affordable” housing, but are fighting an uphill battle.
Hochul’s proposal is the one up for discussion and it’s focused on the areas proximate to suburban train stations. Just like Scarsdale.
And the apartments there are well within most bands of “affordable,” which is not the same as low income.
The idea that Kathy Hochul is socialist is hysterical.
Thanks for covering. We fight so much about housing and it seems so impossible…we need to know what is happening even if it is depressing.
So, nothing is likely to be done about bail reform either?
Maddening thing is as with many other major issues facing NYS this whole housing mess is being handled as part of budget process. And we all know how that goes….
Three people in a room (governor, speakers of house and senate) cook-up a budget. It is released with a few days or hours before 1 April deadline and thus rank and file are forced to vote on something they haven’t had time to fully read and understand.
Worse voters don’t find out what’s included or not until after thing is signed into law. As Nancy Pelosi famously quipped “we have to pass the bill to see what’s in it…”.
The problem with socialism is that you eventually run out of other people’s money.
What Margaret Thatcher actually said:
“Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them. They then start to nationalise everything, and people just do not like more and more nationalisation, and they’re now trying to control everything by other means. They’re progressively reducing the choice available to ordinary people.”
Call it what you like, but democrats in NYS and NYC have sought to control rental housing one way or another for over seventy (70) years and counting.
Yes we saw how Thatcher policies went in UK – de nationalized British rail – fiasco with prices through the roof – not much choice there
?? Hochul is not a socialist. Some of the legislators might lean toward socialism, I don’t know. But raising taxes on the wealthy is not “socialist.” Socialism is when the producers of surplus value — workers — determine how to put that surplus value to use. Socialism presumes that wealth is being created. Who gets that created wealth is the question Socialists try to zero in on.
I’m a capitalist, btw, heh heh. And I think Hochul is terrible. One of her few virtues is that she isn’t Zeldin.
Problem is every year it’s same thing from Albany; there needs to be more revenue so lets tax the “wealthy”. Thus various “temporary” taxes are enacted that never sunset. Instead are increased or others piled on.
This ignores simple fact that wealth is portable. That and at some point people affected by said taxes believe they are better off elsewhere.
Yes, that’s a problem. Among many. Maybe if there were less govt intervention, things would shake out better … ?
Just great. Maybe she will be a better advocate and legislation promoter if we elect her again.
The thing with upzoning the suburbs is that if there was a UWS rezoning that built more housing, where most of the demand for rentals actually is, the community would be in a bigger uproar than during the homeless shelter controversy in 2020. Try rolling back historic district protections to build more housing and see how controversial that would be. This housing plan makes NYC more unaffordable while banishing “unwanted” people to the suburbs.