By Greg David, The City
This article was originally published on by THE CITY
NEW YORK - With Gov. Kathy Hochul abandoning her effort to force New York’s suburbs to build more Housing, Mayor Eric Adams’ administration and its allies are redoubling their efforts to save the city’s laundry list of proposals to spur more housing construction through converting office buildings, extending tax credits for developers and allowing greater density.
To help push those through, the governor for the first time has indicated she is willing to accept a statewide voucher program, a key objective of tenant advocates. The program would provide money to the city’s public housing authority to cover unpaid rent, say sources who have been briefed by those in the negotiations. As THE CITY has previously reported, more than 70,000 NYCHA tenants owe a total of $466 million in back rent.
The sudden rush of developments from Albany on Tuesday may serve as a break in the impasse that has held up the state budget, now 19 days late — but they also mean a significant defeat for Hochul.
Tuesday’s concession by the governor comes after she made housing the centerpiece of her policy goals once she won the governor’s race in November. Hochul called on the state to build 800,000 new housing units over the next decade, a number that includes the 500,000 new units that Adams promised to create over the next 10 years.
The governor’s original Housing Compact proposal established goals for new housing in every community and set up a statewide board that could greenlight projects that had been rejected in towns and villages that failed to meet their housing goals. Lawmakers in the state’s suburban districts — especially in Long Island and Westchester — had staunchly opposed the plan, saying it ripped control away from locals.
As word circulated in the capital on Tuesday that Hochul was giving up on her previous housing requirements, the governor essentially conceded defeat.
“After weeks of negotiation, the legislature continues to oppose core elements of the Housing Compact, including the requirement that communities across the state meet growth targets,” Hochul said in a statement. “I will continue to discuss other elements of the plan and policy changes that will increase supply and make housing more affordable.”
Instead of specific requirements for new housing creation, the budget is now likely to include some version of a proposal the legislature has made to create a $500 million fund for infrastructure upgrades, such as improving roads and sewers, to communities that meet goals for new housing.
Groups that have spent the last year arguing that the state’s housing shortage is a result of too little housing development, and that local community resistance preserves segregation in the suburbs, wasted little time in blasting state lawmakers.
“We are extremely disappointed that the Legislature failed to address segregation and the housing shortage by rejecting the visionary Housing Compact and instead capitulated to powerful NIMBYs who prefer the status quo,” said Rachel Fee, executive director of the New York Housing Conference. “By doing so, New York’s elected officials have once again let their constituents down and signaled that the ongoing housing emergency is acceptable.”
The housing goals would have applied to every community district in the city as well.
What’s Left for NYC
Still alive are various proposals advanced by the Adams administration. They include legislation to ease the conversion of obsolete office buildings into residential housing — possibly including a tax break to encourage some of the units to be designated as below-market-rate housing; changes to state law to allow thousands of basement apartments to be legalized, and extending a deadline for completion of residential buildings that poured their foundations before the valuable 421-a tax break expired last spring.
In a statement on Tuesday, a spokesperson for Adams promised to keep pushing the administration’s plan.
“Our administration has been on the ground daily in Albany in recent months advancing critical tools like flexible regulations for office conversations, lifting the floor area ratio cap, creating a pathway to make basement and cellar apartments safe and legal, and creating tax incentives to develop new housing while maintaining housing quality,” said Charles Lutvak, a spokesperson for the mayor.
A major fight looms over a plan to lift the “floor area ratio” (FAR) limit, which restricts the density of residential buildings in the city. If the cap is removed or raised, builders could construct larger apartment towers. The Adams administration has argued that change is needed both to make office conversions possible and to increase the number of apartment units in the city, while Manhattan politicians have lined up to oppose it.
“New York City’s housing and affordability crisis has hit a boiling point and affluent areas of Manhattan have to do their part to create hundreds of thousands of units before this crisis becomes a catastrophe,” said John Sanchez, executive director of 5 Borough Housing Movement, an advocacy group formed to back the Adams agenda.
Sources with knowledge of the negotiations say to get the remaining housing proposals enacted, the governor is now willing to consider a demand by tenant groups and Democratic legislators for a state housing voucher plan, which would begin with $250 million this year before reaching $1 billion in five years. It would provide rent assistance for tenants who do not qualify for federal vouchers, such as undocumented immigrants.
Hochul is also willing to allocate money to cover unpaid rent by NYCHA tenants, sources said, although it isn’t clear if she is willing to cover the entire deficit of about $466 million.
What About Rent?
It also is not clear how Tuesday’s developments affect demands for “Good Cause Eviction” legislation, which would limit rent hikes on market rate apartments as well as the reasons a landlord could refuse to renew a lease.
Tenant advocates had pinned their hopes on a deal in which Hochul and real estate industry groups would agree to good cause legislation in return for passage of the Hochul’s housing plan. That seems less likely now.
As Hochul outlined the housing proposal in her State of the State address in January, she noted that more than half of New Yorkers are rent-burdened, meaning that they pay more than 30 percent of their income on rent — the second-highest rate in the nation.
While the full extent of the governor’s defeat won’t be clear until the remaining issues are resolved, Albany insiders say the governor failed to develop a political strategy to counter the opposition to her ambitious proposals that she knew would develop. (They asked not to be identified to avoid angering the governor.)
Housing groups that supported the Hochul plan say the legislature’s resistance will perpetuate the housing crisis. Incentive programs — like the ones the legislature wants to fund infrastructure — have failed everywhere they have been tried, including in states like California, Washington and Oregon, said Andrew Fine, policy director of Open New York, an pro-development advocacy group pushing construction of more housing.
Those places then passed the kind of laws that Hochul had proposed for New York, Fine said, noting that in each case, it took several years to convince the legislature to adopt strong measures.
“Mandates are the only way forward,” he said. “But we know this can be a long fight and we will be here fighting in the future.”
But that is little solace to some who have been fighting for the Hochul plan.
“We support getting to agreement on the remaining housing issues but without a housing supply framework, we are back to incremental piecemeal solutions without getting to the heart of the issue — lack of supply,” said Fee of the Housing Conference.
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