To solve a housing crisis, New York’s leaders are trying to revive an idea from the 1950s

To address the growing housing crisis, New York Senate leaders will propose sweeping legislation Monday that would encourage new construction, provide new tenant protections and also revive some older ideas for building affordable housing.

Including: the creation of a new public utility company that would finance housing construction on state land. Leaders see it as a successor to the popular Midcentury program known as Mitchell-Lama.

New York has faced rising rents and a homelessness crisis, exacerbated by an influx of migrants. There is broad consensus that the state must take action. But leaders have struggled to find a compromise that could unite a fractious group of stakeholders behind a housing program that meets the state’s needs.

Senate lawmakers hope that this year’s proposal, by including ideas valued by tenant groups, unions and major developers, can finally help break the impasse.

Last year, Gov. Kathy Hochul introduced an ambitious plan that would have forced suburbs and other communities to allow more development, among other growth-enhancing measures. Lawmakers representing several constituencies balked and little progress was made.

The Senate proposal, which will be released Monday in the One House Budget bill, could be interpreted as an opening bid for the upcoming budget negotiations: Every year the governor and both chambers of the Legislature propose their own vision for the state. Leaders in Albany have until the April 1 budget deadline to reach an agreement.

A successful plan must spur massive amounts of new construction while supporting landlords and tenants, said Senate Majority Leader Andrea Stewart-Cousins. She called for a “big idea” that would holistically address affordability for generations of New Yorkers.

“I want my kids and grandkids to be able to hang out,” she said. “I want to be able to hang out!”

The Senate plan will call for a new tax break for developers with more robust affordability protections than its predecessor, known as 421a, which expired in 2022.

Critics called the previous program a giveaway to developers, who could secure millions of dollars in tax write-offs in exchange for building some units with lower rents. But in the years since it expired, construction has fallen off, underscoring the need to bring developers to the table.

A crucial element to entice the left wing of the party is the inclusion of legislation known as “just cause deportation,” which has long been a progressive priority.

Senate leaders say any housing package should include some version of this legislation, which would limit landlords’ ability to evict tenants. It also requires most landlords to offer tenants automatic lease extensions and forces them to justify rent increases of more than 3 percent.

But the legislation, which landowner groups say would stifle development and make it difficult for them to care for their properties, is causing division, especially in the State Assembly. Including an item in the budget requires the support of both Houses of the Legislature, as well as the governor.

And while Ms. Hochul has said she supports tenant protections, she has opposed “good cause” legislation, a position that played a role in the collapse of last year’s housing deal.

The plan presented Monday also includes smaller but still important proposals, including a push for more construction of larger residential buildings in Manhattan and the legalization of basement units. Both are at the top of the wish list of city officials and housing activists.

But perhaps the boldest idea is also one of the oldest, with roots going back almost seventy years.

The $250 million proposal is based on the 1955 Mitchell-Lama legislation. The program, which takes its name from the two state legislators who were its primary sponsors — Senator MacNeil Mitchell, a Republican, and Assemblyman Alfred A. Lama, a Democrat — helped transform New York’s housing landscape after World War II by making construction possible to create more than 100,000 middle-income housing units at a time when the city was experiencing a housing crisis exacerbated by an influx of returning military personnel, as well as immigrants and refugees. It aimed to boost affordability for both renters and homeowners by using incentives for developers to create a protected supply of housing available to residents with incomes below a certain threshold.

The new version, which lawmakers are calling “Mitchell-Lama 2.0,” would differ in several key ways. It would, among other things, create a new state entity that could finance developments on state land.

The state would give developers cheap leases on state land, which would be exempt from taxes and certain elements of the public assessment process. The state would also lend money to developers to make construction fast and cheap for businesses.

The apartments and rental properties built through the program should be affordable for middle-income households. In New York City, for example, housing must be affordable for a family of four earning $232,980.

It is not yet clear how many units the program can yield.

The Senate proposal is in some ways a response to what Ms. Hochul and others have already proposed. Ms. Hochul, for example, is exploring building apartments on state land and called for the new tax incentive as part of her budget proposal this year.

As with many things in Albany, the details of the Senate proposal will determine how much impact it can have and whether it will be embraced by the governor and the General Assembly.

For example, a tax incentive may not make financial sense for developers depending on how affordable the apartments need to be, which could lead to them building fewer units. And even in its current form, the charity eviction measure excludes small buildings, potentially leaving tens of thousands of New Yorkers without protection.

But both proposals have the potential to transform New York’s housing market. And officials agree the need for action is clear.

Rents in New York City remain high and are expected to rise as summer approaches. The number of eviction cases is increasing.

The housing shortage in New York is estimated at hundreds of thousands of homes. A city survey this year found that only 1.4 percent of apartments were available for rent in 2023, the lowest number in 50 years.

On Monday, the General Assembly is also expected to release its budget proposal, which will cover everything from funding for migrants to school aid and health care spending.