New York state could build its own housing under a new bill
The left wing of the Democratic Party has long advocated rent control and eviction bans to address the state's housing crisis. Now progressives in New York also want to revive an old concept: let the government develop thousands of affordable housing units.
A bill, set to be introduced Tuesday, would create a government agency that could build housing with its own money or money raised in the bond market. It follows similar efforts in Atlanta, Rhode Island and Montgomery County, Maryland, and is a recognition from the left that solving the housing crisis will inevitably mean building more homes.
The idea is reminiscent of the public housing that governments built decades ago, which was intended to keep rents lower than private developers could charge. But advocates say the new agency, the Social Housing Development Authority, could avoid the neglect that characterizes many public developments by relying less on government subsidies.
“This shifts the conversation from the fact that there is only one way to do housing, and that is private development,” said Emily Gallagher, a Democratic state lawmaker backed by the Democratic Socialists of America, which represents parts of North -Brooklyn represents and a sponsor of the bill.
The bill is likely to encounter resistance. The state, facing possible budget shortfalls, should provide significant subsidies to make rents affordable for people on the lowest incomes. Ms. Gallagher and other proponents of the agency are floating an initial capital price tag of up to $5 billion between bonds and government grants.
Conversations about “social housing” often become proxies for broader struggles over government power and have evoked the failures of the federal public housing program.
But supporters say the new agency would be different. While it may need some state money for start-up and ongoing costs, it would also float bonds whose interest could be paid in part by rent generated from new mixed-income developments. Federal public housing, by contrast, is largely dependent on federal subsidies, which have rarely kept pace with the costs of maintaining developments.
The agency could work with private developers and property managers while maintaining control over the new homes. Ultimately, the housing developed by the agency would remain relatively affordable because they would not have to achieve the same level of profit as fully private developments.
The plan could also keep housing production going when private developers struggle with high interest rates, as is now the case.
“The failures of the old programs left a bad taste in people's mouths,” said Paul Williams, executive director of the Center for Public Enterprise, a nonprofit that advises governments on setting up housing programs. “Because these agencies have come up with creative tools that don't address these problems, they have created this opportunity to spread a new kind of program.”
Housing is a major point of contention in Albany this year. Most discussions focused on coming up with a new tax incentive for the development of rental buildings and protecting new tenants. But the real estate industry, left-wing lawmakers and unions – key players in these discussions – have yet to reach a formal agreement. It's not clear they will do that this year.
It's also unclear how the public developer bill might fit into these discussions. But Ms. Gallagher acknowledged that one reason state officials could not agree on housing policy last year was that “the Legislature had not presented a plan for new housing.”
In some ways, the bill isn't that different from steps officials in New York are already trying.
The New York City Housing Authority plans to transfer thousands of apartments to a state public utility company known as the NYCHA Preservation Trust, which was formed in 2021. The city's housing authority lends millions of dollars to developers to build affordable housing. .
Supporters of the new bill say it builds on the success of a 1955 program known as Mitchell-Lama, which encouraged the construction of more than 100,000 middle-income homes by giving developers low-interest mortgages and tax breaks.
The bill has the support of New York City's influential teachers union, the construction union and Open New York, a nonprofit that advocates for more development.
Annemarie Gray, executive director of Open New York, said her group was “excited about the arrival of new forms of public housing in New York.”