Thorny discussions about housing will further delay New York’s state budget until at least Monday, but a wide-ranging deal on housing now seems at least plausible, according to Gov. Kathy Hochul, several legislators and people familiar with ongoing talks.
“Everybody started at the far ends of the field, and we’re getting closer to the middle here,” Hochul said in an interview with Crain’s on Thursday. “We’re not done, but there are areas where there was very firm disagreement last year on policies where we’ve found some windows for consensus.”
Lawmakers passed a bill Thursday to extend the state’s budget deadline to April 8, marking the second extension past April 1. Much of the delay owes to housing negotiations, as labor unions spar with developers over a new tax break for housing construction and legislators push for the “good cause” eviction protections that are opposed by landlords.
“[I’m] hopeful that the pieces are coming together,” one state senator told Crain’s Wednesday evening.
It remains far from clear whether the ultimate deal will include all the major components under discussion. These include a new affordable housing tax break to replace 421-a, raising a cap on residential density in New York City, incentives for office-to-apartment conversions, and some kind of tenant protection to guard against evictions and major rent hikes.
“We’re making significant progress, but it is still very delicate with the different interests at play here,” Hochul said.
Assembly Speaker Carl Heastie made waves earlier this week when he told reporters that legislative leaders were considering a real estate industry request to expand how much landlords can raise rents on stabilized apartments after carrying out renovations. That potential change, which would mark a rollback of the state’s landmark 2019 rent law, was quickly condemned by tenant advocates but could be part of a bargain in exchange for new protections for renters.
Legislative leaders have said any housing deal must include some form of good cause eviction protections — but it is unlikely to be an exact match of the existing bill, sponsored by Brooklyn state Sen. Julia Salazar. Her bill would limit the allowable reasons a tenant can be evicted and cap annual rent increases at either 3% or 1.5 times the rate of inflation. Instead, some lawmakers are discussing a version that would allow local governments to “opt-in” to the program, an exemption that critics say would leave hundreds of thousands of renters unprotected.
Coming up with a new version of 421-a that developers and unions can agree on appears to be the biggest pain point for a broad housing deal. Although the two sides achieved an early win after agreeing on a $40-per-hour wage floor for construction workers starting in 2026, further progress has remained elusive. (A subset of construction unions is urging lawmakers to pass the wage floor now, even without a broader agreement on a new tax break.)
An extension of the eligibility deadline for projects already in the 421-a program seems closer to making it into a final package. A proposal by Senate Democrats to finance the construction of affordable and mixed-income housing on state-owned land — compared by supporters to the bygone Mitchell-Lama program — also remains on the table.
Mayor Eric Adams and Hochul both strongly support eliminating a decades-old density cap for residential buildings in the city as well, while some of the Manhattan lawmakers who previously opposed it may have softened their stance this year. State Sen. Liz Krueger, who had opposed those efforts, told Crain’s last week she was open to lifting the cap so long as the bulkier buildings were required to have some affordable housing.
Hochul referred to the potential deal as her “Lazarus package,” given that it would hopefully include many proposals that had seemingly been left for dead.
“I’ve likened it to a Jenga game, where you’re building this, but all of a sudden one piece gets out, and the whole building can collapse,” she said. “That’s how delicate this has been.”
At least one issue will not be resolved for now: Mayor Adams’ request to renew mayoral control over city public schools for another four years. Senate Majority Leader Andrea Stewart-Cousins told reporters Wednesday that the potential extension would not be included in the budget, deferring it to the rest of the legislative session that ends in June.
Nick Garber, Eddie Small , 2024-04-04 22:13:48
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