The Daily Dirt: State lawmakers sound off on 421a, “good cause”

State electeds are worried about giving the city local control. At the same time, they are   worried about their districts losing control.

Lawmakers like the idea of the state building housing. They just aren’t crazy about the current iterations of that practice. 

During a hearing Wednesday about housing proposals in the governor’s executive budget, state senators and Assembly members were concerned about the state overriding local zoning at state-owned sites, where Gov. Kathy Hochul wants to build 15,000 apartments. 

Assembly member Edward Braunstein criticized the scale of the 2,800-unit project planned for the state-owned Creedmoor Psychiatric Center. He said that while the state held Zoom meetings and hearings with community members, the ideas and concerns raised during those encounters were not reflected in the plan announced by the governor. 

Meanwhile, some praised a bill, which is not in the budget, that would create a state authority to build housing, even though such an agency would have the ability to override local zoning.  

Lawmakers also questioned allowing the city to determine affordability levels of apartments created through a new 421a-like program. 

The governor’s budget includes a framework for creating a new 421a program, which would allow the city’s Department of Housing Preservation and Development to determine the incentive’s affordability requirements. RuthAnne Visnauskas, head of the Division of Housing and Community Renewal, indicated that this could ultimately change in the budget.

Assembly member Linda Rosenthal asked a number of questions about the effectiveness of 421a in creating affordable housing. 

“We overly rely on [private developers] to produce affordable housing, and we’re sort of under the gun here,” she said. 

Here’s a very brief overview of the topics covered in the part of the hearing that involved the Hochul administration (the hearing lasted hours): 

FAR cap: Assembly member Harvey Epstein asked if the state would bake in a requirement that any residential building that exceeds a floor area ratio of 12 would include permanently affordable units.Visnauskas noted that the current proposal would leave this decision up to the city. 

Good cause eviction: No surprise here, the commissioner did not really engage on this issue. When asked by Sen. Robert Jackson if she supports good cause eviction, Visnauskas said the administration is “incredibly focused on housing supply.” Gov. Kathy Hochul has not publicly supported the measure. 

Vacancies: Visnauskas said, as of April 1, 2023, fewer than 40,000 rent stabilized units are vacant, which she emphasized is along the lines of historic norms. (Jay Martin, head of the Community Housing Improvement Program, disagrees.) 

When asked by Assembly members Edward Ra and Grace Lee what can be done for owners of rent stabilized apartments who are struggling to maintain their buildings and, in some cases, facing foreclosure, Visnauskas pointed to existing state programs, including the recent revival of the tax break J-51. 

Ra also asked about the cap on major capital improvements, and Visnaukus acknowledged that she has heard from landlords that the limit is not sufficient. Sen. Leroy Comrie mentioned his bill that would allow owners to reset rents on stabilized apartments if they are vacated after being occupied for 10 or more consecutive years.

Visnauskas said she was aware of the bill, but has not read it. 

Pro-Housing Communities: There seemed to be confusion among lawmakers about this program, under which localities must be certified as “pro-housing” in order to qualify for certain discretionary funding programs. 

Also, Visnauskas confirmed that New York City is not among the 120 localities that have so far applied for certification — and that if it doesn’t, this funding would not be available to the city. 

What we’re thinking about: Why did Bob Knakal leave JLL? What’s next for the top commercial broker? Send a note to kathryn@therealdeal.com. 

A thing we’ve learned: Vornado Realty Trust is considering turning the former Hotel Penn site into a tennis court, according to Crain’s. The real estate investment trust indicated that it is considering multiple interim uses for the site.  

Elsewhere in New York…

— City Hall is taking on TikTok, Instagram, Facebook, Snapchat and YouTube. The Adams administration is suing the social media companies, alleging that the platforms have contributed to a spike in mental health issues among young people, Gothamist reports. The lawsuit seeks to force the companies to change their practices, and pay for mental health treatment and education services. 

— ICYMI: Democrat Tom Suozzi won back his former seat in New York’s Third Congressional District, beating out Republican challenger Mazi Melesa Pilip, Politico reports. 

— New York legalized human composting in late 2022, but no cemetery companies have applied to the state to begin offering this service, the Times-Union reports.

Closing Time

Residential: The priciest residential closing on Wednesday was $3.5 million for a condo at 141 Skillman Street in Bedford-Stuyvesant Brooklyn. 

Commercial: The most expensive commercial closing of the day was $3 million at 69-38 47th Avenue in Elmhurst, Queens. 

New to the Market: The priciest home to hit the market on Wednesday was a condominium unit at 101 Warren Street in Tribeca for $18 million. Ryan Siciliano and Brian Logvinsky of Douglas Elliman have the listing.