A Comeback on Housing for New York’s Governor?

New York Gov. Kathy Hochul announced a budget agreement with state legislators Monday that includes what she called “the most comprehensive housing policy our state has seen in three generations.”

The housing deal, if it stays intact through a final vote, would represent a comeback for Hochul, whose Housing Compact last year failed to attract much support before crashing and burning at the end of the budget session. That proposal was built around a state intervention in local zoning, requiring cities to permit denser development and meet certain housing production targets. The current deal, as outlined by Hochul in a press conference, leans more on state incentives and investments to produce new housing, and offers some new protections for tenants.

The announcement comes amid a nationwide housing crisis that is especially acute in big population centers like New York. Hochul has said that a scarcity of high-quality affordable housing is pushing residents to neighboring states and contributing to the state’s population loss. “New York is in the throes of a housing crisis, and the consequences are so painfully evident,” she said Monday. “Families literally packing up and leaving. Front-line workers, teachers and firefighters struggling to find something they can afford in the communities they’re serving. Seniors on fixed incomes unable to downsize and find other options. Sometimes they have to just leave our state.”

The deal — really “the parameters of a conceptual agreement,” as Hochul described it — includes the revival of a New York City tax break that developers say will help unlock new housing supply. The city’s apartment vacancy rate is at a historically low 1.4 percent, according to a recent report from the city comptroller’s office. The expiration of the old program, known as 421a, was partly blamed for a drop in housing production in the city in the last few years.

The deal announced Monday also includes incentives for multifamily housing and accessory dwelling units statewide, state funding for “pro-housing communities” that zone for more housing production, and investment in new housing on state-owned property, much of which Hochul called for in her State of the State address earlier this year. It also includes provisions that would require landlords to offer lease renewals and justify big rent increases in some instances, according to reports.

“From the beginning I’ve maintained that we could find a balanced approach that would protect tenants from price gouging without undercutting our ability to build the housing we need,” Hochul said. “Today I’m proud to say we’ve reached an agreement that will make this happen.”

Tenant groups are less sanguine. Advocates have been fighting for years for “good cause” legislation — policies protecting tenants from unreasonable rent hikes and retaliatory or discriminatory evictions — and last year’s housing deal partly crumbled in the state Legislature amid landlord opposition to that policy. The deal outlined by Hochul on Monday includes some protections for renters, but far less than what tenant groups have asked for.

The proposed policy would be “the worst in the nation,” according to the Met Council on Housing, a tenants rights group in New York City. It would also roll back some protections tenants won in Albany in 2019, according to the group. Another tenant advocate group, New York Communities for Change, said in a statement that the Legislature “should reject [the deal] outright” because it “weakens protections, fails to deliver rental assistance and won’t result in new housing.”
New York lawmakers have often relied on balancing real estate interests and tenant protections to advance housing policy in state budgets. Real estate industry groups applauded the revival of 421a in the deal that Hochul announced. But some acknowledged that dissatisfaction among tenant advocates could complicate the passage of the bill. Hochul said the deal has the support of the top Democrats in the state Senate and Assembly, but they did not appear at the press conference, and leaders of the Legislature's housing committees were not immediately available for interviews.

“We recognize that lawmakers still have work to do on tenant protections,” Carlo A. Scissura president and CEO of the New York Building Congress, a building trades association, said in a statement. “Still, we urge them to reach a consensus expeditiously and solidify this housing package from the supply and demand sides.”

Hochul’s announcement comes amid a wave of new housing policies in other states. State lawmakers in California have been passing laws for years to allow more housing supply, while a number of states have recently taken steps to permit more two- and three-unit housing projects on single-family lots.

Like his counterpart in New York, Colorado Gov. Jared Polis took a big swing at local housing reform last year but wasn’t able to get approval from the legislature. This year, Polis is pushing a package of housing bills and hoping that a piecemeal approach will stand a better chance politically. This week, for example, he signed a bill preventing local governments from enforcing occupancy limits in most homes, a step toward a larger program of promoting more housing supply.