New York state leaders have reached a deal on the framework of a legislative plan to address one of the worst housing crises in the nation, according to three people familiar with the deal who spoke anonymously because they did not want to jeopardize negotiations.
The agreement was negotiated by the governor and leaders in the Legislature, following a weekend of closed-door talks, and will be presented to the full Senate and Assembly on Monday. Some lawmakers raised concerns about some of its critical elements — leaving open the possibility that parts of the deal might still change or that it could conceivably fall apart.
The agreement includes enticements for two major constituencies: tenants and developers. For developers, the deal would include significant tax breaks that would make it more affordable to build. For tenants, it would include protections that would make it more difficult to evict renters in some apartments.
It would also let landlords of rent-stabilized apartments increase rents to cover the cost of some renovations. And it would lift size limits on new Manhattan apartment buildings — provisions city officials have wanted for years.
Together, the measures are an attempt to tackle New York’s housing shortage by making it much easier to build, while also delivering new safeguards for tenants. The package, which is projected to yield tens of thousands of affordable homes in the coming years, is meant to be an urgent response to the worsening affordability problem in New York City and across the state that has been watched nationwide.
Despite the gathering momentum behind the package, left-leaning lawmakers are likely to find fault with the deal, whose tenant protections are not as sweeping as many had hoped for.
Last year Gov. Kathy Hochul proposed a wide-ranging plan to spur construction, but that plan failed, after key players in the negotiations — the real estate industry, the left wing of the Democratic Party and labor unions — remained at odds.
But it appears the bleak situation in New York City has pushed all sides toward a compromise.
Development of new rental buildings in the city has all but stalled, evictions are ticking up and rents are poised to soar even higher as the summer approaches. An influx of migrants has overwhelmed New York City’s shelter system, and the number of available affordable apartments is functionally zero, according to the most recent city survey.
As part of the deal, lawmakers would trade a new developer tax break for broadened tenant protections — a key priority for the left wing of the Democratic Party.
Labor unions and the left agreed to support a new tax break package, known as 485x, that would apply more broadly than a previous tax break that expired, according to the people familiar with the negotiations. Left-leaning lawmakers denounced previous versions of the tax break as overly friendly to corporate interests.
The deal would also lift restrictions on large apartment buildings in Manhattan, give developers incentives to convert vacant office buildings to housing and pave the way for more development statewide with tax breaks and incentives.
In exchange, tenant advocates would win protections that are inspired by a bill introduced unsuccessfully in previous years, known as “good cause eviction.” The measure would restrict the ability of landlords to evict tenants in market-rate units. It would also prevent most landlords from removing tenants after a lease expires and force them to justify rent increases beyond certain thresholds.
The protections would apply broadly to apartments renting for less than certain levels: roughly $6,000 for a one-bedroom apartment in the New York City area, for example. It would apply to tenants whose landlords own more than 10 units across their portfolio. The protections would apply automatically to New York City while localities in the rest of the state would be able to opt in. New construction would be exempt for 30 years.
The deal would also loosen tenant-friendly laws passed in 2019 for landlords who invest in renovations of rent-stabilized apartments. Currently, landlords can only recuperate $15,000 worth of improvements on a single apartment through rent increases — a figure they say is inadequate to keep up with the necessary maintenance, particularly after long-term tenants vacate.
The changes would allow for more investments to be made the longer a unit had been occupied: up to $30,000 for an apartment occupied by the same tenants for more than 15 years, and up to $50,000 for apartments occupied for more than 25 years.
The result is an agreement that state leaders hope could make housing in New York less scarce and more affordable, stemming the exodus of families and people of limited means, and put the city and state economies on a more secure path.
In an interview before the deal was announced, Ms. Hochul said: “What we’re on the cusp of doing is creating a generational shift in how New York State is operating in the housing market.”
Whether the lawmakers can get the deal over the finish line remains to be seen.
