A potential site for housing (photo: Kevin P. Coughlin/Governor's Office)
For months, Governor Kathy Hochul and members of the Legislature have reiterated that housing is one of the state’s most pressing crises. However, throughout the 2023 Albany calendar — state budget season followed by the post-budget legislative session that ended earlier this month — they have struggled to agree on much beyond that. The Democratic governor just beginning her first full term in the role and the Democratic supermajorities in the two legislative houses did not agree on a package of substantial legislative action that might address the state’s massive housing challenges.
New York State has been slow to develop new housing, especially in New York City and its suburbs, where demand soars. During the COVID-19 pandemic, rents sank briefly, and due to moratorium measures passed by the state that ran until January 2022, eviction rates also decreased. Now, however, both have risen sharply again. Over half of New Yorkers are rent-burdened, according to the Population Reference Bureau, and tens of thousands are homeless.
Earlier this year, Hochul set forth a plan to build more than 800,000 units of new housing over the next decade, including by imposing mandatory growth targets for all local communities with a variety of mechanisms to help meet them. But the proposal was met with opposition in the Legislature, where there was more focus on tenant protections and some openness to efforts to further encourage but not require housing growth.
After no deal was reached in the state budget passed a month late in early May, negotiations continued to sputter through the weeks of legislative session to follow. As that session neared its mid-June end, the two legislative leaders said they had the framework of an agreement on a package of housing proposals, but they did not vote on it or even publish many details, claiming Hochul stood in their way.
“Unfortunately, it was clear that we could not come to an agreement with the governor on this plan,” said State Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie in a joint statement. “It takes all three parties — the Senate, the Assembly and the governor — in order to enact legislation into law.”
In the June 8 statement, the leaders said that “the Legislature was able to work toward an agreement on historic rent protections as well as a massive and transformational housing program,” and listed about a dozen housing policies that were part of the framework.
Hochul, in response, said through a spokesperson that the Assembly and Senate were blaming her for “their own failure to act” and appeared to challenge the two houses to produce an actual bill and vote it through.
Inaction has spurred a great deal of frustration and finger-pointing, along with some resolve. Hochul has pledged to announce executive action on housing in the near-term and to continue to work for more support for her New York Housing Compact, while many legislators have said they will continue to pursue policies to address the multi-faceted housing crisis.
In recent interviews on Gotham Gazette’s Max Politics podcast, two key State Senators from New York City — Brian Kavanagh, a Manhattan Democrat and chair of the Senate’s housing committee, and Julia Salazar, a Brooklyn Democrat who is the lead sponsor of the controversial Good Cause Eviction bill that was a key part of negotiations — deconstructed the Albany session and discussed the future of state housing policy.
What Happened
Kavanagh and Salazar both expressed deep frustration and disappointment with the outcome of the Albany year. Both senators were also supportive of a grand bargain that would incorporate many of Hochul’s ideas as well as the Legislature’s priorities, including Good Cause Eviction, but not enough of their colleagues felt similarly in order to make such a deal possible.
Kavanagh stressed that the Senate and Assembly had the votes to pass the package of housing policies listed in the legislative leaders’ June 8 statement, but, believing Hochul would veto it based on a threat to do so, decided against advancing that confrontation.
“The critical thing is that we manage these negotiations, including the relationship between the two houses and the governor, in a manner that gets us to success,” Kavanagh said.
Salazar recognized that the two leaders were forced to make a difficult decision on short notice but said she still wished they had opted to vote through the package. “Whether the governor would ultimately decide to veto it or try to negotiate chapter amendments or sign the bill, we still have a responsibility as a legislature to act,” she said. “It was deeply disappointing and shocking to learn that it just wasn’t going to happen.”
The package outlined by legislators included few of the pieces of Hochul’s Housing Compact, which found limited support in either house, and instead focused on more support and protection for tenants, some incentives for housing development, and a number of other specific planks.
It contained a compromise version of Salazar’s Good Cause Eviction legislation, an extension of the 421-a tax break to incentivize some construction of affordable rental housing, the Housing Access Voucher Program, efforts to encourage conversions of commercial space to residential, and more.
Salazar supports elements of Hochul’s Housing Compact, including mandatory growth targets and transit-oriented development, but acknowledged that the majority of legislators do not. “We wouldn’t have been able to arrive at the two-way agreement that we did at the end of this session if the mandates from the governor’s Housing Compact — basically any version of them — had been in this bill,” she said.
Kavanagh likewise supports growth targets but knew that policy diminishing local land use control would be met with fierce legislative resistance. Still, he was disappointed that the Legislature failed to reach a consensus that ensured localities were “doing their part,” he said.
Even though no package made it to Hochul’s desk this month, Kavanagh added, the negotiations were not all for nothing. “This is, I think, the halting and strange way Albany makes progress,” he said. “I do think that the template that we’ve laid out will be part of whatever fruitful negotiations we have in the future.”
Good Cause Eviction
Hochul opposes Good Cause Eviction, which aims to protect tenants in unregulated housing, but it remains unclear if she would support a version of it in order to win her Housing Compact — a question that does not appear to have ever been on the table given the Legislature’s opposition to the Compact’s central planks.
Good Cause Eviction would prohibit landlords from evicting tenants except in “good cause” cases like failure to pay rent, or other instances of lease violation, and would set limits on annual rent increases.
Many tenants have been hit with rent increases of 25%, Salazar said, though in extreme cases, that number has exceeded 500% — surges she described as “unethical [but] completely legal.”
“It is absolutely unaffordable for the vast majority of New Yorkers for their expenses to suddenly increase like that, but it’s happening right now,” she said, detailing the original bill that she’s sponsored for several years as well as the compromise version that was part of the package the two legislative houses say they had agreed upon but Hochul would not back.
The bill creates metrics for an “unreasonable” rent increase and a rebuttable presumption in the case that a landlord sought to evict a tenant after increasing rent by such an amount. In both versions of the bill, the cap would hit at whichever is greater of either a 3% rent increase or 1.5 times the percent change in the Consumer Price Index (a measure of inflation). Under the rebuttable presumption, if a landlord were to sue tenants who did not pay such a rent increase, the judge would presume rent to be unreasonable — though the landlord could convince the judge otherwise based on a number of potential factors like expenses.
The original bill applied to the entire state, though the compromise proposal would apply automatically only to New York City while other localities would be able to opt-in to the law and customize their program by adjusting threshold values, Salazar explained on the podcast.
The compromise version of the bill also added that rental buildings would be exempt for their first 15 years after construction, a clause created based on the pushback that Good Cause would disincentivize new rental housing development.
Salazar said, though, that it is “demonstrably false” to assume the expansion of tenant protections to unregulated renters would decrease development. California and New Jersey have implemented variations of the bill, and no evidence points to a decline in the construction of new housing as a consequence, she said.
“I would say it’s a really significant compromise, not one that I wanted to make, but that I knew was necessary,” Salazar said of the version of the bill in the agreement the legislative leaders said was in place but opposed by Hochul. “If I thought that this was the best version of Good Cause, then I would have made that the bill in the first place, so I won’t pretend that I like it. But it was something that I and everyone I’m accountable to — who have been fighting for this for years now — were ready to accept and live with.”
Salazar emphasized the bill’s importance in any housing package, arguing that building more housing or making housing more affordable without protecting the tenants who live there would fail to solve the crisis the state faces.
“What will help people the most immediately is providing protections from unjust evictions and unreasonable rent increases through Good Cause,” she added.
Kavanagh stressed how significantly the bill’s supporters compromised in order to ensure it made it into the package. “For all our talks about Good Cause Eviction legislation, it’s not something that has moved through either house in the last couple of years,” he said.
He added that he believes concerns about Good Cause halting new construction were in part “a function of a very effective, well-funded public relations operation by the real estate industry.”
Other Policies
The legislative compromise package also contained the Housing Access Voucher Program, which Kavanagh is the lead sponsor of in the Senate and seeks to establish a statewide rental subsidy for individuals experiencing homelessness or severe housing instability.
“Even if we get production right and dramatically increase supply, that’s a very long-term process,” Kavanagh said. “We need an immediate solution to that, and it has become a very broad consensus — not just in the Legislature, but across the spectrum — that [a housing voucher program] is necessary.”
In their joint statement, the leaders also mentioned the inclusion of “a local affordable housing plan,” but did not elaborate on what that meant. Asked on the podcast, Kavanagh said it would require every locality to assess their own housing needs and put forth a public plan explaining how they expected those needs to be met.
Beyond the failed package, Kavanagh stressed that some housing bills were passed: the renewal of J-51, which provides tax breaks to landlords undertaking renovations of low-cost housing; the allocation of almost $400 million more into the Emergency Rental Assistance Program (ERAP); the addition of $40 million for the Homeowner Protection Program; and a few other items.
What’s Next
While looking ahead to another budget and legislative session next year in which she wants to win major housing policies, Hochul has repeatedly stated a vow to take executive action in the near-term to address the housing crisis. There are a number of potential steps she may take, including the use of state-owned land, but the governor has also acknowledged that fixing the state’s housing supply shortage will need to be done with the Legislature.
Kavanagh said that though he supports action from Hochul, the solution would ultimately require consensus with the Senate and Assembly. “At the end of the day, I don’t think we’re going to solve these problems without legislative and budgetary action,” he said.
Salazar voiced skepticism about the governor’s pledge, explaining that she didn’t believe Hochul fought as hard as she could for many of her Compact’s unpopular policies in negotiations about the state budget. “[To] take executive action to impose those things just seems kind of inconsistent and maybe a political risk that I wouldn’t expect her to take,” she said.
“But I’m definitely interested to see the governor demonstrate that she wants to take action on creating more housing,” Salazar added.
She also said she plans to advocate for a special session in Albany later this year. “We have the opportunity to do this — and really the responsibility to do it — and ultimately, if it wasn’t done by the time session ended, then my perspective is that we still have that responsibility,” Salazar said. “It would really be a shame at this point … if we fail to act and act soon.”
LISTEN: Max Politics Podcast: Senate Housing Chair Brian Kavanagh on State Negotiations & What Comes Next
Ben Max contributed to this story.
