New York Has a Budget and Housing Deal
Three weeks past the deadline, New York lawmakers approved the last bills comprising a $237 billion state budget. It includes new funding for migrants, an extension of mayoral control of New York City schools, provisions to crack down on illegal cannabis shops and an omnibus housing package billed as the biggest overhaul to New York housing policy in decades.
As I reported last week in The Wall Street Journal, lawmakers are seeking to supercharge construction of new affordable housing while also giving thousands of existing apartment dwellers stronger protections against evictions and rent increases.
State officials estimated the entire package would spur around 200,000 new housing units over the next decade. It includes tax breaks for construction, incentives to convert offices into apartments, the removal of a state restriction on New York City zoning and a form of “good cause” eviction protection.
It was approved on Saturday as part of a “big ugly” budget bill, but the deal left advocates on nearly every side wondering whether it will actually improve the state’s worsening affordability problem.
The new tax break, called 485-x, is a modified version of the 421-a program that expired in 2022. Developers say the program is needed to spur creation of apartments; more housing supply will eventually drive down rents, Mihir Zaveri laid out in the New York Times.
“Having this tool back in the toolbox is absolutely fundamental to, and mission critical to, the city,” said Alicia Glen, a former deputy mayor who is now chief executive of MSquared, a real-estate investment and development firm.
Just over 40% of New York’s 2.4 million rental housing units are rent-regulated, meaning allowable increases are set by a special board and evictions are more closely restricted. The good-cause provisions would expand a form of those protections to the private market.
But there are several loopholes in who would be covered. Newly constructed units would be excluded for 30 years, and the exemption would apply retroactively to units built as early as 2009. Units in small owner-occupied buildings are exempted, as are dwellings where the landlord owns 10 or fewer units across an entire portfolio. Units with higher rents would also be excluded; the threshold is based on 245% of HUD’s calculated fair market rent. That’s currently about $6,000 a month for a one-bedroom apartment.
Gov. Kathy Hochul and Democrats who lead the state Legislature said the new protections would cover thousands of people, but tenant activists who have lobbied for good-cause laws were unhappy.
“It’s not clear how many of the unregulated tenants we were seeking to protect would be covered,” said Judith Goldiner, attorney in charge of the civil law reform unit at the Legal Aid Society, which represents many low-income tenants.
THE QUESTION: What do they got, a lot of sand? (This one is for the Millennials. Don’t overthink it; the right answer is the first thing you think of.)
Know the answer? Drop me a line at jimmy.vielkind@gmail.com. Or just write with thoughts, feedback or to say hi.
THE LAST ANSWER: Last week I posted a photo from the globe in the lobby of the Daily News Building on East 42nd Street. You might have seen Clark Kent and Lois Lane walk through in the “Superman” movies
.