Last year, Gov. Hochul laid out a bold plan to address New York’s housing crisis and succinctly described what’s at stake for New Yorkers: stagnating economic growth because people cannot find an affordable place to live. For years we’ve watched the cost of housing climb and develop into the affordability crisis we have today where countless families are rent-burdened, unhoused, or leaving the state.
Despite the governor’s leadership, last year, like so many years prior, folks in Albany watched this happen, said it needed a fix, and then found themselves unable to agree on a solution. Just days ago, many of us were scratching our heads wondering, “How the hell — during this historic crisis — are we going to do nothing again?”
Well, here we are with a housing deal. At last.
The housing agreement in this budget puts an end to that gridlock. Is everyone happy with the product we see here? Of course not. But that’s fine. Despite what today’s politics would suggest, our country was built on compromise. And that’s what we have here — compromise in the name of the necessary, aggressive action that is so urgently needed.
From new tax incentives to allowing reasonable rent increases to pay for capital improvements to vacant apartments to changes that will boost housing density in New York City, we finally have a broad common-sense framework to address the underlying issues that have exacerbated this crisis.
Let’s give the governor and the Legislature the applause they deserve.
This deal will bring a new wave of development with a six-year extension of the deadline for projects that got their start under the old 421-a tax incentive, allowing them to advance to completion and create the housing they promised. On top of that, it establishes a new incentive in New York City, 485-x, with stronger affordability requirements that expand access to the lowest-income renters while spurring housing production on sites that would otherwise sit vacant.
Outside the city, the state is delivering tax incentives and funding to communities that want to grow and making state-owned land available for affordable housing development with $500 million in funding to back it up.
With development incentivized, the budget also takes critical steps to increase the housing density in New York City.
Since 1961, there’s been a density cap on new residential development based in neighborhoods where commercial density could be larger. By eliminating this nonsensical cap, running a pilot program for basement dwellings, and supporting the conversion of commercial real estate to residential, we’re making it possible for more housing to be created in a city where vacant land is scarce.
Combined with the Adams administration’s City of Yes; this is a big step forward for New York City.
Our rent-stabilized housing, roughly 27% of our city’s housing stock, is struggling. It’s old, it’s deteriorating, and the income from restricted rents can’t keep up with the skyrocketing costs of maintenance and operations. With common sense changes to the Individual Apartment Improvement program, we’ll see owners finally be able to recoup the resources they need to keep apartments in good condition and get more vacant units back on the market.
At the same time, we know that the redlining of the past divided our state and has held generations back from opportunity. For years, insurance companies have been charging significantly higher premiums to affordable housing buildings in low-income neighborhoods — justifying them as riskier because of where they’re located.
This budget takes crucial steps to put an end to the modern-day redlining perpetuated by discriminatory insurance practices, and we should all be proud to support that.
Getting to this point took an incredible effort by stakeholders from across the state working with the Legislature and governor to help inform their decision-making and provide clarity on the measures needed to start making a difference.
While there’s certainly more to be done and more tools that can be delivered, we must also remind ourselves that we can’t let the perfect be the enemy of the good. There is no plan that has ever satisfied everybody, but this one is solid, and it can deliver real results to communities across our state.
Let’s take the win and get back to work, because if this plan fails due to inertia and political posturing, we only have ourselves to blame.
Cestero is the president and CEO of the Community Preservation Corp. (CPC), which finances affordable housing, and a former commissioner of the New York City Department of Housing Preservation and Development (HPD).