A wide-ranging housing deal that emerged in Albany late Friday has come under intense criticism from both tenant and landlord groups for its handling of tenant protections, as negotiations continued over the weekend in hopes of reaching a final accord as soon as Monday.
The uncertainty remains even as labor unions and large developers appear to have agreed on the basics for a new affordable housing tax break seen as crucial to jumpstarting construction.
More details on the potential deal are expected to be handed down to rank-and-file lawmakers by Monday afternoon or Tuesday, following days of continued talks between the governor’s office and leaders of the Senate and Assembly. The package will likely include some changes to the framework announced Friday, which progressives blasted over its weakened tenant protections and landlords slammed over its inadequate help for rent-stabilized buildings.
The tentative deal that legislative leaders described to state lawmakers on Friday would include a replacement for the 421-a tax break — now known as 485-x — a significantly scaled-back version of “good cause” eviction protections, and other measures that would allow more residential density in New York City and encourage office-to-apartment conversions.
The 485-x tax break would raise construction workers’ wages to the level that building trade unions had sought, expand high-wage positions to more neighborhoods and apply them to buildings as small as 150 units – more generous than the previous 300-unit cutoff, according to a person familiar with negotiations. A union official who spoke to Crain’s touted the deal as a “clean sweep for labor,” while the Real Estate Board of New York said only that it “will review” the deal when it is final.
Developments will need to set rents of about one-quarter of units at 80% of the area median income to get the tax break, which is about $102,000 for a family of three. And the 2026 cutoff date for projects already in the lapsed 421-a program will be extended to 2031, said one lawmaker briefed on the deal.
But the version of good cause eviction agreed upon by Gov. Kathy Hochul and legislative leaders appears to significantly limit the law’s reach. Annual rent increases would be set at 10% or 5% plus the rate of inflation, whichever is lower. That is more generous to landlords than the 3% or 1.5-times-inflation formula that lawmakers had wanted. Localities outside of the city would need to opt into the program, and pricier apartments would be excluded above a rent threshold that still appeared fluid Monday morning as lawmakers pushed to cover more middle-income housing.
Friday’s framework would also exempt landlords who own 10 or fewer units from good cause. That provision received immediate criticism from progressives who noted that few tenants would have the ability to determine their landlords’ portfolio size and challenge an eviction on that basis. (Hochul weakened a bill last year that would have made it easier to identify building owners.) One advocate familiar with negotiations told Crain’s that they considered the proposal “impossible to verify or communicate in any way that’s actually governable.”
The housing package is also likely to include lifting the city’s residential density cap — potentially just for office-to-residential conversions or projects that set aside 25% of units as affordable housing — and a pilot program to legalize basement apartments in parts of Brooklyn, Queens and the Bronx, according to a source familiar with the deal. Landlords will likely receive more flexibility to raise rents on regulated apartments after renovating them as well, marking a rollback to the state’s 2019 rent law which has also soured tenant advocates on the potential deal.
Heavy criticism
Groups including the Community Housing Improvement Program, Homeowners for an Affordable New York and the Rent Stabilization Association all released statements panning the proposal over the weekend.
RSA and CHIP, two landlord advocacy groups that plan to merge, claimed the package did nothing to benefit rent-stabilized buildings, while Homeowners for an Affordable New York, an anti-good cause eviction group, slammed it for doing “nothing to alleviate the housing crisis anywhere in the state.”
Specific changes to stabilized apartments would allow landlords who renovate units to recoup $30,000 of those costs through rent hikes, or $50,000 for longer-term tenants — up from the existing $15,000 cap. But the allowable increases would be part of a more complicated three-tier structure that CHIP blasted as “convoluted”, saying no threshold below $100,000 would allow landlords to actually renovate small apartments.
Proponents of good cause eviction were dismayed by the carve-outs reported Friday. Cea Weaver, a leader of the tenant group Housing Justice for All, posted to social media that the version of good cause was a “total disaster” that she was “livid” and “heartbroken” over. And the Legal Aid Society released a statement calling the package “a blank check to the real estate industry.”
Assemblywoman Linda Rosenthal, who chairs the body’s housing committee, stressed Monday morning that discussions were ongoing, and nothing has been finalized yet.
“The devil is in the details,” she said, “and all the details are not yet worked out.”
Mayor Eric Adams’ administration was among the few willing to praise Friday’s framework. Maria Torres-Springer, a deputy mayor for housing who has pushed hard for a deal, said in a statement that “New Yorkers can breathe a sigh of relief” if the agreement holds, and she praised its pairing of tenant protections with measures to increase the housing supply.
The fact that a package appears poised to come together at all marks a remarkable turnaround from last year’s session and predictions for this session at the beginning of the year.
Although Hochul made housing a top priority in 2023, a deal never emerged, as proposals such as statewide housing mandates proved too controversial. And Hochul herself appeared to have low expectations for progress in 2024, saying she would not be pushing for anything as ambitious as what she did in 2023 given the realities of it being an election year for the state Legislature.
But progress has not been as elusive this year as it was last year. Hochul and other state leaders have repeatedly signaled they are close to a deal, which could be officially announced as soon as Monday afternoon.
A representative for the Hochul administration declined to comment on a potential deal.
Lawmakers returned to Albany on Monday and have been asked to stay through Friday, in hopes of passing a budget before a two-week break begins April 22.
Nick Garber, Eddie Small , 2024-04-15 18:41:47
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