Housing to take center stage in Albany in 2024 — again

Published Jan 2, 2024 at 5:00 a.m. ET

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Published Jan 2, 2024 at 5:00 a.m. ET

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Last year was supposed to be the year Gov. Kathy Hochul and New York state lawmakers tackled the housing crisis.

This year, they’ll try again.

The state Legislature will kick off its 2024 session Wednesday at the Capitol in Albany, a six-month period when lawmakers will pass a critical state budget and hundreds of bills that Hochul, a Democrat, will decide whether to approve or veto.

But after Hochul and the Democrat-dominated Legislature failed to strike a deal on housing policy last year, much of the focus in 2024 will be on the growing crisis — and whether the sides can finally reach consensus at a time when rents are rising, mortgage rates are climbing after pandemic lows and the state’s housing stock isn’t keeping pace with demand.

“While everyone called 2023 the year of housing, I believe every year is the year of housing because there are so many needs across the state for more housing — whether it's affordable, market-rate, supportive [housing],” said Assemblymember Linda Rosenthal, a Manhattan Democrat who chairs the housing committee. “We really need to finally address the issues head on.”

The governor says she will change her approach in 2024, partly because all 213 state lawmakers will be on the ballot in November — which may limit their appetite for making tough votes that could harm their chances at re-election.

“I'm not going to head down the same path we did last year with the exact same plan, and in a year that is an election year for the members, where they have different focus and priorities,” Hochul told reporters in late November.

Last year, Hochul kicked things off by outlining a broad housing agenda she claimed would create 800,000 new units across the state over the next decade.

But the governor’s plan went nowhere.

State lawmakers from both parties objected to its centerpiece: a mandate forcing every town, city and village in the state to boost their housing stock by up to 3% over the next three years, and giving the state the power to step in and approve projects if local governments miss the mark.

Hochul, meanwhile, objected to some of the Legislature’s housing priorities: A measure restricting landlords’ ability to increase rent and evict tenants without a bona fide reason, and a state-funded voucher program for homeless people or those facing eviction.

Already, state lawmakers and New York City officials are floating a potential compromise — one that Democratic lawmakers nearly struck on their own in June, sans Hochul.

The compromise deal would see the Legislature approve the so-called “Good Cause” eviction protections, at least in New York City. The measure would let tenants challenge annual rent increases above a certain percentage and give tenants in market-rate apartments a right to a lease renewal, in most cases.

In exchange, lawmakers would agree to reup a version of an expired tax credit for developers, known as 421-a. The measure, which was up for approval every few years, provided housing builders with a significant tax benefit if they included a certain percentage of affordable units in their developments. The powerful real estate industry says the tax benefit is necessary to increase the city’s below-market-rate housing stock.

Both the Good Cause and 421-a measures have long divided developers, landlords, tenants rights advocates and elected officials. The real-estate industry deeply opposes the Good Cause protections, and tenant rights advocates and progressive lawmakers decry the tax credit as a giveaway to developers. But as New York City and the state are mired in worsening housing and homelessness crises, this may be the year lawmakers reach a compromise to achieve both policies.

Mayor Eric Adams says he’s up for that.

Earlier this month, the mayor told Crain’s he would even support a deal that includes a 421-a extension and Good Cause eviction protections. It was the first time he said he would back the Good Cause proposal.

Rosenthal, in an interview with Gothamist, said she’s open to discussing it, too.

“I'm not going to say no to anything right now because we need to have big ideas and ways to get housing built,” she said.

Rosenthal said 421-a needs oversight and ”if we do come up with a [tax break] program, we’d have to make sure it wouldn't have the same deficiencies that previous ones have had. But I think tenant protections are necessary.”

Opponents of the 421-a program say it diverted nearly $2 billion in tax revenue from the city in exchange for too few deeply affordable apartments. They have called for a version that caps rents at lower rates and is tailored to individual projects.

But the tax break remains at the heart of Adams’ legislative agenda, and his housing goals, many of which need approval from Albany.

About half of the income-restricted apartments financed by the city last fiscal year were located in projects that received the 421-a tax break, according to city housing data.

Deputy Mayor Maria Torres-Springer urged lawmakers to enact “a better program with appropriate labor standards and deeper affordability.”

“Having no program is not an option,” Torres-Springer said. “The ramifications for new housing supply are nothing less than catastrophic.”

But so far, the real-estate industry — which is a major funder of Hochul’s political campaign — is showing it’s unlikely to support any deal that would include the Good Cause legislation, even if it means getting the 421-a tax break it craves.

Hochul has also expressed concern.

“I'm willing to work with the Legislature, but I'm not going to have policies that will suppress the urgent need we have for more developers to put shovels in the ground and build more housing,” Hochul said last month. “We're falling behind every other state. It's unconscionable to me that we cannot work together to find a path.”

“We need to get more housing built. That's what I'm starting with — and always willing to look at tenant rights, as well.”

For the fourth consecutive year, tenants’ rights advocates are placing Good Cause protections for all tenants at the heart of their agenda.

Millions of renters across the state “don’t have any rights at the end of their lease and can be evicted for any reason — or no reason,” said Legal Aid Society attorney Judith Goldiner.

Across the five boroughs, evictions are on the rise, and marshals removed tenants from nearly 12,000 apartments in 2023, according to city data.

Jay Martin, executive director of the Community Housing Improvement Plan, a trade group representing landlords of rent-regulated buildings in New York City, said the broader real-estate industry’s staunch opposition to a housing deal that includes Good Cause eviction protections “is not tenable in the long term.”

At some point, he said, the Legislature will wrangle enough votes to approve it and use it as a bargaining chip, forcing the governor into a tough political decision.

“Eventually, they’ll put the votes together and go to the governor and say, ‘OK, we've got the votes. We want to get this done. You don't get a budget without it,’” said Martin, a former Senate aide.

Martin said his organization wants to make sure any potential housing deal includes a method to make it easier for landlords of rent-regulated units to make improvements to vacant units. He would prefer allowing them to raise rent beyond what the current regulatory system allows, though lawmakers have previously discussed making state funding available for dilapidated units.

Adams’ office, meanwhile, has other housing priorities, including a bill to lift a limit on residential building size.

The city’s housing agenda also includes another property tax incentive that makes it easier for landlords converting office buildings to apartments to include income-restricted units in their final project, a core tenet to Adams’ plan to spur housing development.

“From a fair housing perspective, being able to take a conversion opportunity and create affordable housing is an amazing potential opportunity,” said Kim Darga, a deputy commissioner at the New York City Department of Housing Preservation.

The Adams administration is joining tenants rights advocates in calling for a measure that would allow New York City to legalize basement apartments and let landlords bring them up to code at an affordable price. The push took on new urgency after 11 people drowned inside basement units during Hurricane Ida in 2021.

Sylvia Morse, policy program director at the Pratt Center, said changing state multiple dwelling laws would allow New York City to legalize basement and cellar apartments and make them safer for tens of thousands of tenants in the five boroughs.

“We can’t make the changes at the city level without the state reforms,” Morse said. “Lack of regulation makes these homes unsafe, and it means people lose their homes or, in the case of Ida, lost their lives.”

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Jon Campbell covers the New York State Capitol for WNYC and Gothamist. Prior to that, he covered the Capitol for more than a decade for the USA TODAY Network. He has twice earned the Walter T. Brown Memorial Award, an honor given annually by the Legislative Correspondents Association alumni for outstanding state government coverage. Jon grew up in the Buffalo area and graduated from the University at Albany. Got a tip? Email Jon at jcampbell@wnyc.org or Signal 518-210-7087.

David is a reporter covering housing for Gothamist and WNYC. Got a tip? Email dbrand@nypublicradio.org or Signal 908-310-3960.

Gothamist is funded by sponsors and member donations

Gothamist is funded by sponsors and member donations

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