Governor Kathy Hochul took office facing extraordinary challenges on crime, education, taxes, inflation, jobs and the still-lingering coronavirus pandemic.
But how the governor handles New York’s affordable housing crisis, with implications for millions of New Yorkers, could frame her legacy. New York’s housing issues are complex and require a wide range of approaches, both short-term and long-range fixes.
Over the short-term, there are three pieces of legislation the governor and state legislature should work together to enact this year that would collectively provide immediate relief to low- and moderate-income New Yorkers facing skyrocketing rents, displacement and homelessness: Good Cause eviction legislation, which will help keep 1.6 million renters from supersized rent hikes and displacement; rental assistance through the Housing Access Voucher Program (HAVP), which will house the homeless and help low-income tenants pay the rent; and the Tenants Opportunity to Purchase Act (TOPA), which would give tenants the first opportunity to purchase properties before they go on the private market and help them convert their buildings into not-for profit housing models.
Longer-range, New York needs to build more social housing – models like Mitchell Lama, HDFC cooperatives, public housing and community land trusts that are deeply affordable, decommodified, and democratically operated. We’ve done it before, and we can do it again. This is the best way to increase the city’s housing stock without throwing billions of dollars to private for-profit developers.
At her “State of the State” address last week, Governor Hochul proposed building 800,000 new homes over the next decade under her “New York Housing Compact.” To stimulate housing construction, she called for the enactment of a “successor to the 421a tax incentive that can yield further affordable housing in New York City.”
The 421a tax exemption mostly subsidized luxury housing in New York, and as such, is an imperfect model for producing the kind of affordable housing New York City needs – specifically housing for working-class and low-income people being priced out of the housing market. Indeed, before it expired in June 2022, 421a failed to significantly jumpstart the sluggish affordable housing market. Despite perceptions that New York City experienced a building boom in recent years, the Citizens Budget Commission found the city issued fewer building permits for new housing units in the 2010s (206,000) than in the 2000s.
Further, a City Comptroller study found the lion’s share of units subsidized by the program were unaffordable to 75 percent of New Yorkers. That’s notable given an affordability crisis that today is punishing low-income and working-class New Yorkers like never before.
If we want to replace 421-a, we should craft a new incentive that supports the production of affordable housing, not luxury development. Along with that we need annual audits of existing tax exemptions for affordability, and compliance and public monitoring that ensures income-targeted, tax-abated apartments remain rent stabilized. Finally, property tax laws need revision to balance the burden shared by co-ops, condominiums, small homes and rentals, and between lower- and higher-income properties.
Last month’s U.S. Census Bureau Household Pulse Survey found that 611,233 New York City households were behind in their December rent and that another 1.1 million households sometimes or often lack enough to eat. Those findings correspond with our Unheard Third poll which found that 54 percent of low-income city tenants experienced a 15 percent rent increase. Not surprisingly, more and more households, including 23 percent of those living below the poverty line, were forced to move in with others, the poll found.
That sort of pain requires action that, quite frankly, should be more far reaching than modest revisions to a tax exemption program that favors developers and has not helped produce affordable housing for the vast majority of New Yorkers who need it.
All of this is not to blame the governor; her Compact proposal is well-intentioned, and the affordability crisis did not happen on her watch but is rather the product of years of inertia and a spectacularly inefficient housing program.
The status quo has remained in place over the years, in large part, because major real estate developers are happy. They provide an ocean of campaign contributions to keep the old system in place. According to ProPublica, the non-profit investigative reporting outfit, former Gov. Andrew Cuomo was by far the largest recipient of donations from taxpayer-subsidized developers. He reportedly collected $4.2 million during his campaigns for governor and attorney general – of which a third came from the biggest political donor, Glenwood Management, followed by the Durst Organization and related companies.
In the coming weeks and months, as developers, construction unions and lobbyists agitate to resurrect a comparable 421-a tax subsidy, the governor, state lawmakers and local policymakers must reject any housing program that doesn’t have a strong affordability mission built in.
David R. Jones, Esq., is President and CEO of the Community Service Society of New York (CSS), the leading voice on behalf of low-income New Yorkers for more than 175 years. The views expressed in this column are solely those of the writer. The Urban Agenda is available on CSS’s website: www.cssny.org.