NY Gov. Kathy Hochul Putting Housing Compact Aside for Now

The governor has set aside her proposal to make localities meet housing targets — the centerpiece of her real estate agenda.

In a statement Tuesday, Gov. Kathy Hochul said that while she and lawmakers have not reached “a final agreement,” the legislature remains opposed to “core elements” of her New York Housing Compact, including the housing growth targets.

Senate and Assembly Democrats have pushed for an incentive-based program, rather than one that would allow the state to override local zoning in areas that don’t try to meet her housing goals.

Hochul indicated that she is now turning to other housing proposals in state budget negotiations.

“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,” Hochul said. “I will continue to discuss other elements of the plan and policy changes that will increase supply and make housing more affordable.”

Those proposals include allowing more conversions of office buildings into housing, lifting New York City’s cap on residential floor-area ratio, and letting the city legalize basement apartments.

The governor has also proposed extending the construction deadline for projects grandfathered under the old 421a property tax break, though lawmakers have been discussing only giving certain projects more time.

Legislators have also turned their attention to establishing a state-based voucher program, Spectrum News reports.

It is not clear what housing-related measures, if any, will be included in the budget. The governor has more influence over the budget process than the rest of the legislative session, so any of her proposals not in the budget figure to have little chance of passing before the session ends June 8.

Rachel Fee, executive director of the New York Housing Conference, said in a statement that she was disappointed that the legislature “failed to address segregation and the housing shortage.” Restrictive zoning promotes segregation by raising the cost of housing, which tends to exclude residents of color.

“It is especially shocking that the Legislature, made up of members who run for office on solving the housing crisis, rejected such a comprehensive, data-driven policy plan and instead capitulated to powerful NIMBYs who prefer the status quo,” Fee said in a statement.

“By doing so, New York’s elected officials have once again let their constituents down and signaled that the ongoing housing emergency is acceptable.”

The governor’s Housing Compact set targets of 3 percent growth in housing stock every three years for downstate localities and 1 percent upstate. Those that failed to meet the targets would be subject to a builder’s remedy-type process, where developers could get approval for housing projects too dense for local zoning. For many towns, the proposal would have also required denser housing in areas near rail stations.

The Housing Compact faced considerable opposition from suburban lawmakers, who framed the plan as a gateway to inner-city culture and population density invading their communities.

In their one-house budget resolutions, the Senate and Assembly proposed instead offering a $500 million statewide incentive pool for localities willing to meet these housing goals. Critics argued that such incentives in other states have failed to make a dent in housing shortages.

Tenant advocates and lawmakers rallied in Albany on Tuesday, demanding that the budget include good cause eviction and a state housing voucher program or no housing proposals at all.

Annemarie Gray, executive director of Open New York, emphasized that the budget is not final. Lawmakers passed another extension on Monday, which is set to expire Thursday. Negotiations over bail reform dragged on for weeks, and the terms of any housing deal could similarly fluctuate as lawmakers work to reach a deal.

Still, the reemergence of the Housing Compact in negotiations would likely require a significant change in the governor’s mandates or her stance on incentives, which probably would have happened by now if they were ever going to.

Gray said an incentive-based version of the Housing Compact would not lead to real housing opportunities because the goals need to be enforceable.

“It has to be a mandate-based framework to be worth passing,” she said in an interview. “If that is not possible, then we will fight on. We’re not going anywhere.”