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Over the past few days, a package of housing bills and programs have come together in Albany as part of New York State’s annual budget negotiations. As in prior sessions where housing has been a large part of the political and fiscal story, this year’s package will find most of the stakeholders involved somewhere between somewhat unhappy to furious and disappointed. I am not one of those people. Given what happened in 2022 and 2023 amid a widely acknowledged housing crisis – essentially nothing – few advocates, labor leaders, developers, politicos, pundits, elected officials thought there would be meaningful action on housing in 2024. So let’s take a moment to acknowledge and appreciate what did get done, and applaud the Governor, her team and those in the housing world who rolled up their sleeves, got into the ring, took a lot of punches, but got stuff done.
The new 485-x tax incentive program, which replaces the expired 421-a, is mission-critical to New York City. Without it, no mixed-income rental projects would be built. We know that’s true because virtually none have begun since 421a expired in 2022. What little production there has been is either fully affordable (relying on a different tax exemption) or luxury condos. 485x will catalyze tens of thousands of new rental apartments, while assuring that at least 25 percent will be permanently affordable to lower and moderate-income families who earn up to $84,000. That is a big deal: building new two-bedroom apartments that will rent for approximately $2,100 a month without any direct subsidy is a good deal for the public.
Moreover, in a time when racial and economic segregation is front and center in our debate around inclusion and equity, 485-x is the City’s most powerful tool to create affordable housing in desirable neighborhoods long out of reach for most renters. The Adams Administration deserves credit for its successful push to eliminate the option to provide units affordable to families who earn up to 130% of AMI under the program. Although I still believe it is important for the city to include middle-income units in its housing goals, those units are not the most needed right now, and have proven the hardest to lease. The last thing anyone wants is more vacant units.
Removing the cap on a longstanding and nonsensical law limiting the density of residential buildings (and only residential), which by some estimates have cost the city around 200,000 new apartments, is also a huge victory. I first proposed this as part of the Housing New York Plan in 2014 as part of our efforts to change the blueprint for housing development in the city.
Now the market can dictate the use, and the city can initiate rezonings in areas where higher density is appropriate and deliver more housing, and more permanently affordable housing, through its Mandatory Inclusionary Housing program. Other than a few high-end projects made possible by the Midtown East rezoning, I don’t think there are a lot of people who think building more office space makes a lot of sense right now.
I am also pleased the housing package includes support for existing rent-regulated housing by incentivizing owners to upgrade and renovate apartments, while also instituting guardrails to ensure that tenants do not receive egregious rent increases. We cannot allow our housing stock to deteriorate or contribute to climate change, and renovation and sustainable upgrades are a lot less expensive than building new apartments. We often forget that housing is about people and neighborhoods, not just unit counts and math, so assuring that families have quality healthy housing that they can afford is really what matters.
Which leads me to what’s known as Good Cause Eviction. Although there is no doubt that most of the unhappiness will be focused on this issue – on both sides – I think there is reason to be positive here too. If New York is going to continue to be a jurisdiction where rents are regulated, then providing some protections to renters who are not otherwise covered by existing laws is the right thing to do. It’s a matter of fundamental fairness. If we don’t make it a priority, the implications for our children, our neighborhoods, and our economy are real, and we cannot afford them.
I look forward to seeing more cranes on the skyline, more housing being improved, and more families feeling secure. And I also know the movie isn’t over. We need to do more, to keep pushing the case for the tools, federal resources, and private investors to make a real dent in the problem.
Alicia Glen is the former deputy mayor for housing and economic development under Mayor de Blasio. She is also the founder and managing principal of MSquared, a real estate investment company.
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Alicia Glen , 2024-04-23 18:00:00
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