Hochul’s housing compact scrapped in budget talks
The stalemate is a significant defeat for Gov. Kathy Hochul in her first few months after being elected to a first term.
NEW YORK — A wide-ranging suite of housing proposals — including key tenets of Gov. Kathy Hochul’s signature plan to boost production — is expected to be dropped from state budget negotiations in a bid to break a stalemate over the late state budget.
The sides Thursday indicated they were shelving the governor’s proposals to boost housing supply and a measure pushed by tenant groups to limit rent increases, saying they hope to revisit the issue later in the legislative session, eight people with knowledge of the talks told POLITICO.
Assembly Democrats were told in conference that Hochul’s sweeping housing compact to build 800,000 new homes through production mandates and other measures was off the table. That included required growth targets that have proven especially controversial in the New York City suburbs.
Lawmakers, particularly in the Assembly, have increasingly balked at having the complex issue in the budget and had wanted proposals tied to new tenant protections, some of which appears to still be under discussion, including several of Mayor Eric Adams’ priorities.
“Trying to cram this into the budget is problematic, and as we have seen, it has caused delay in getting the financial piece done, which is what the budget is all about,” Assemblymember Harry Bronson (D-Rochester) said. “It is unfortunate that we couldn’t reach an agreement, and I think part of that was because it was put in the budget.”
Left-leaning lawmakers have been pushing a controversial measure to effectively limit rent increases on market-rate apartments, known as “good cause” eviction, but Hochul has been resistant to the measure, as has the real estate industry, and lawmakers appeared divided on it.
While the lack of a housing deal might move the sides toward a budget agreement next week, the stalemate is a significant defeat for Hochul in her first few months after being elected to a first term. She made the housing measure a top priority of her agenda, along with changes to the bail laws.
She appears poised to get most of the bail changes she wants to allow judges to more easily set bail in violent cases, but the housing proposal was increasingly met with resistance. In particular, lawmakers in the outer boroughs and suburbs opposed a mandate that would allow the state to override local zoning to require more housing.
Sen. Peter Harckham, a Democrat from Westchester County, said earlier Thursday that even if Hochul’s proposal falters, the sides should try to help tenants with funding in the budget.
“We do need some form of tenant protection,” he said. “I have a feeling we’ll end up with something that’s not quite (Hochul’s plan), but it’s clear that part of the housing crisis is the high prices. I think the two things we can do to help tenants are a housing voucher program and assigned counsel to everyone in housing court.”
Hochul has said her housing plan has been aimed at lowering costs by increasing supply, particularly in the New York City suburbs.
“I’ve laid out my priorities on how to make New York safer, more livable and more affordable. And that’s the budget I plan to deliver,” she told reporters April 13.
But Hochul appeared to ditch core aspects of the plan earlier this week, indicating in a statement that she would shift her focus to other housing policy items she included in her executive budget.
“After weeks of negotiations, the Legislature continues to oppose core elements of the Housing Compact, including the requirement that communities across the state meet growth targets,” the Democratic governor said in a statement Tuesday.
“We have not yet come to a final agreement, but it remains clear that merely providing incentives will not make the meaningful change that New Yorkers deserve. I will continue to discuss other elements of the plan and policy changes that will increase supply and make housing more affordable.”
Some of them might still make the final deal, according to officials briefed on negotiations.
For instance, there is still talk about housing vouchers to help renters stay in their homes — advocates have wanted a $250 million program this year — and perhaps a bailout to help the New York City Housing Authority, which is facing upwards of $466 million in rent arrears.
The sides have been talking about a number of proposals, specifically for New York City. Among them were proposals to lift a state cap on residential density, ease regulatory barriers for office-to-residential conversions, extend a completion deadline for projects that qualified for the expired 421-a tax break and allow the city to legalize basement apartments.