When will New York solve its housing crisis? Probably not this year.
It seemed like 2023 would be the year New York would do something big to solve the housing crisis.
As skyrocketing rents punished residents, the progressive wing of the Democratic Party rallied around new safeguards for renters. Gov. Kathy Hochul, a centrist Democrat, pledged to build more housing in the suburbs. The real estate industry seemed open to renewing a coveted tax break for developers in a way that would make new apartments more affordable to rent.
Instead, lawmakers went home without doing much.
Now state leaders will get another try. The 2024 legislative session, which begins Wednesday, will once again test New York State’s willingness to tackle one of its most debilitating problems.
The context this year is in some ways worse than in 2023. A wave of migrants arriving in New York City has overwhelmed the homeless shelter system. High interest rates and the expiration of the tax break known as 421a have slowed apartment construction to a trickle, threatening to worsen the city’s housing shortage. Rents and housing prices remain among the highest in the country, straining the daily lives of New Yorkers with the lowest incomes and driving out the middle class en masse.
Still, interviews with state and city officials, housing experts and advocacy groups suggest the chances for a major deal in Albany are mixed at best.
First, there is a growing sense that government officials were trying to do too much, too fast in 2023. Years of campaigning and painstaking coalition building preceded major policy changes in other states such as California and Massachusetts.
But in New York, the real estate industry’s powerful lobbying arm and the influential tenants’ rights movement, backed by an emboldened group of progressive lawmakers, are still at odds. Without a resolution on, in particular, the protection of new tenants, a broader housing package remains unattainable.
Ms. Hochul has said she will not reintroduce her ambitious housing plan in 2024 due to resistance from the state Legislature, especially as Democrats hope to regain their influence in the suburbs ahead of the November election.
Most agree that any lasting solution to the housing crisis must ultimately pass through state government. But there appear to be few champions willing to tackle an issue fraught with political pitfalls, and whether or how anything will happen is unclear.
If the governor steps back, “who will lead this discussion through the complex desert of compromise?” says Alicia Glen, founder and director of MSquared, a development company.
Before Ms. Hochul became governor, political leaders in Albany typically focused their housing reform efforts on New York City, where the housing crisis inevitably receives the most attention.
But last year, the governor decided a deeper solution needed a broader approach. If New York ever wants to solve its housing shortage, the state must force the suburbs around New York City to allow for more housing, as California and Massachusetts had done, Ms. Hochul said.
However, this brought another influential party into the fray: the wealthy and politically powerful suburbs of Long Island and Westchester County, where opposition to the denser housing the governor was proposing was strong.
In other states, it took years — and sometimes decades — to assemble political coalitions that could overcome suburban resistance. It quickly became clear last year that Ms. Hochul “had not built a coalition,” said Cea Weaver, campaign coordinator for Housing Justice for All, which supports renters.
Jessica Katz, a former housing chief under Mayor Eric Adams, supported Ms. Hochul’s efforts and was involved in the negotiations in Albany. “We were hoping you could get it done right away,” she said. “But history tells us that it takes a while for these things to gain traction.”
Because the centerpiece of Ms. Hochul’s housing agenda, suburban housing mandates, in the absence of legislative support, took it out of the mix.
At the same time, tenant and landlord factions were also at an impasse over a “good cause for eviction” bill, which would protect tenants from steep rent increases and give them the right to renew their leases. The real estate industry, which has donated heavily to Ms. Hochul’s campaigns, opposed the bill. The progressive caucus would only support a housing plan that included this.
So no one got what they wanted.
Ms. Hochul declined to comment, but her office pointed to a November speech she gave at New York University, where she said she had a “great chance, but I got no help.”
“But if anyone knows me, there’s always another season,” she said, adding, “I’ll take another step further, tempered by the reality that there’s a lot going on out there, including an election this year for our legislature, so that changes the focus for our members.”
Senate Majority Leader Andrea Stewart-Cousins did not respond to requests for comment. Michael Whyland, spokesman for State Assembly Speaker Carl Heastie, said in an email that it is “up to all sectors to come together” to address New York’s housing crisis.
A solution next year – or years from now?
The state’s failure to pass a housing plan last year sparked widespread criticism and consternation, but housing advocates and others noted that New York City officials are typically the ones initiating changes, not state leaders.
“Housing policy tends to originate in the city and then work its way through Albany,” said Ms. Glen, who was a former deputy mayor for housing and economic development under Mayor Bill de Blasio and helped negotiate between the city during her tenure and the state. .
“This was a kind of reversal, with the state taking the lead,” she added.
Many housing advocates felt that Mayor Adams could have done more to broker a housing deal and that other issues – such as criminal justice – received more attention.
Mr. Adams publicly called for a renewal of the tax incentive and help converting vacant office buildings into housing, and he helped draft bills to help public housing residents. At the city level, he is calling for new rules to allow development above shopping areas, near subway stations and elsewhere within city limits, though he has said even these will need new state tax incentives to realize their potential.
Lately, though, he’s been calling more loudly on Albany to strike a housing deal. The mayor, who had previously expressed reservations about a deportation for good reasons, indicated that he might be more open to this.
“We have to find a solution,” he said last month. “Part of that resolution is to sit down and come up with tenant protections. I am open to that conversation because I believe in protecting tenants.”
As progressive urban lawmakers renew their efforts to pass eviction bills, many have indicated they are more willing to compromise this year and would be open to pairing such a law with a new tax break for developers. Senator Michael Gianaris, the Democratic deputy majority leader, said he and his colleagues were open to a conversation with Ms. Hochul “to implement real tenant protections in addition to building additional affordable housing.”
The governor is still figuring out how she wants to tackle housing in the upcoming session. There is a trade-off, her office said: Would backing a deal that trades tenant protections for tax breaks undermine the push for a bigger, more transformational approach to housing?
At a news conference Tuesday, Ms. Hochul said she “hoped the Legislature would work with us again to focus on supply.” But her office also confirmed she would not pursue her suburban growth plans this year.
And it seems unlikely that the real estate industry will bow to its opposition to evictions for good reasons.
Officials at the Real Estate Board of New York, the industry’s lobbying arm, said they had not seen a proposal that felt workable. James Whelan, the president of REBNY, said in a statement that the organization hoped the state would address lagging housing production this year “with data-driven policies that reverse these trends.”
Even some of the strongest supporters of Ms. Hochul’s broader housing initiatives admit that it could take a multi-year effort to complete them all. Annemarie Gray, executive director of Open New York, a nonprofit that supports housing development, said smaller, pro-growth measures that “broaden coalitions and momentum toward bigger reforms” make the most sense now.
Supporters of the governor note that some of that incremental movement has already occurred: The governor has signed a bill into law help rehabilitate affordable housing, for example, and helped channel money to social housing residents struggling with rental debt due to the coronavirus pandemic.
She also took executive actions that did not require legislative approval, including one that provided development incentives similar to the expired 421a for some city projects already underway. By mid-December, the New York Economic Development Agency had received 19 applications for up to 5,500 units, including 1,400 considered affordable, state officials said.
Ms Gray said 2023 was the first year in decades that state politicians had seriously debated “pro-housing reforms with real responsibility”.
“That momentum is a big step from where the conversation was even two years ago,” she said.
Grace Ashford reporting contributed.