Fierce pushback against potential limits on tenant protections is contributing to dragged-out negotiations on a potential housing deal in the state budget, according to people familiar with negotiations.
Some formerly intractable issues now appear at least partly resolved, including a replacement for the 421-a tax break for affordable housing construction, lifting New York City’s cap on residential density and creating incentives for office-to-residential conversions, according to several lawmakers and others following the negotiations. Talks are taking place behind closed doors, led by Gov. Kathy Hochul and the leaders of the state Senate and Assembly.
Notably, according to people familiar with talks, Hochul has gotten behind a version of “good cause eviction”: the policy that would limit rent increases and require landlords to justify attempts to force out tenants. But Hochul, in line with the real estate industry, has proposed scaling back the policy in several ways: making it apply only in New York City while allowing upstate localities to “opt in,” exempting higher-rent apartments, and limiting allowable rent increases at either 10% or 5% plus the rate of inflation. (The existing Senate proposal called for a stricter 3% rent-hike limit.)
One “good cause” proposal from Hochul’s office would limit the eviction protections to apartments that rent for less than about $3,700 for a studio or $5,900 for a four-bedroom. Also at issue is whether to exempt new buildings within a few years of their construction to ensure new development isn’t deterred — Hochul’s office has proposed as high as a 30-year exemption, according to two people — and whether landlords should be exempted if they own fewer than a certain number of buildings.
Public discord erupted this week over those potential limits to good cause, as well as another proposal on the table: changing New York’s 2019 rent law to allow landlords who renovate stabilized apartments to further raise rents on tenants. Landlords are currently barred from recouping more than $15,000 of those renovation costs, but Hochul has proposed raising it as high as $75,000 or $100,000, according to Cea Weaver, a leader of the tenant group Housing Justice for All.
“I think it’s totally unnecessary and an overcorrection for a small number of distressed apartments,” said Weaver, whose group protested at the State Capitol on Tuesday.
Both Senate leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie have confirmed that they are discussing changes to the so-called Individual Apartment Improvement cap. But Weaver’s organization is marshaling its own letter from 49 rank-and-file Democratic lawmakers opposed to the change, signaling that legislative leaders will need to persuade their own members to get on board with a deal that includes a higher dollar limit.
“It’s going to be hard for members to vote for all of this as it’s currently described,” one state senator said Thursday.
On the other hand, there appears to be little resistance to some other housing policies, like lifting the cap on floor-area ratio in New York City in order to allow bigger apartment buildings — although lawmakers are pushing for affordability requirements to be included. Also likely to pass are measures to legalize basement apartments and create a tax break to incentivize office-to-residential conversions — both of which have been strongly supported by Mayor Eric Adams.
As for the all-important replacement for the 421-a tax break, labor unions have said little publicly in recent days amid negotiations with state officials and the Real Estate Board of New York over wage standards for eligible projects. Given that unions loudly rejected REBNY’s earlier offers last month, the recent silence might be a positive sign, noted one labor official.
Instead of pay levels, the biggest unresolved question now involves geography: which neighborhoods in the city will be subject to each of the new wage standards, another person familiar with negotiations said Thursday.
“We’re at the 30-yard line,” the person said. Rank-and-file lawmakers still have little clarity about other terms of the 421-a replacement, such as the allowable rents that landlords could charge after receiving the tax break.
If a deal is ultimately reached, several people said it will likely be one that disappoints many Democratic lawmakers who wanted full-throated tenant protections and no changes to the 2019 rent laws.
“We’re all going to be a little unhappy about something,” said Manhattan Assemblyman Harvey Epstein. “But the question is, how unhappy will we be?”
Nick Garber , 2024-04-11 22:47:18
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