Good cause, bad cause: Albany’s recipe for failure

Four reasons legislators are struggling to reach a housing deal

Four Reasons New York Lawmakers Can’t Make a Housing Deal
State Senator Julia Salazar and Governor Kathy Hochul (Getty)

It’s risky to let politicians regulate real estate, because most of them don’t understand it. They do understand politics, though, which is why it’s surprising that New York lawmakers have messed that up, too.

Legislators have boxed themselves into a corner on several proposals crucial to the future of the industry — and of the state. Taken together, the measures will determine if developers can build enough housing to alleviate the shortage and allow New York to compete with other states.

The Empire State has been losing this battle for a while. New York once had 45 House of Representatives members. It now has 26. Population shifts have shrunk the delegation by 42 percent. As Gov. Kathy Hochul keeps saying, we have the jobs and the amenities to turn things around. We just don’t have enough homes.

The debate over housing looks deceivingly like a typical political dance that eventually leads to a compromise: Progressives say they are willing to allow more development, but only if tenant protections are beefed up. Specifically, they want “good cause eviction.” Media coverage has repeated this narrative ad nauseum.

What are the media missing? Four things.

1. The folks pushing for good cause eviction also want more housing. Their argument is: Give us something we want, and in exchange, give us something else we want.

It’s good that progressives have realized that when demand outstrips supply, prices go up. But they have forgotten the fundamentals of negotiation. They have taken their own child hostage and demanded a ransom.

2. Most landlords are not developers. They oppose good cause, but they don’t want more housing. After all, new housing is competition: The less there is, the more rent they can charge.

Progressives’ argument to these owners is: Give us something you hate (good cause), and in exchange, we will give you something you don’t want (lower rents).

3. Good cause eviction — in particular the version from Sen. Julia Salazar that New York progressives are demanding — violates landlords’ most fundamental principle: The owner controls the property.

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This is not a bargaining chip for owners. For them, it’s visceral. Their view is: “If your lease expires and I want you out, you must leave because it’s my property.” It’s akin to the pro-choice movement’s belief that women have the right to control their own bodies.

For landlords, this is non-negotiable. It’s obtuse to think they would give up basic property rights to get various housing policies — whether a new 421a, higher floor-area ratio cap, or legalization of basement apartments and accessory dwelling units.

4. Landlords almost never evict good tenants. Of course, almost never is not never. Some investors buy underperforming buildings and choose to not renew leases so they can renovate units and raise rents. But this happens rarely, and does have larger benefits — it improves the housing stock and creates jobs.

About 90 percent of evictions are for nonpayment of rent. The rest are mostly evictions of nuisance tenants. Proving in court that someone is a nuisance is expensive and difficult, so landlords typically just wait for a bad tenant’s lease to expire. The good tenants appreciate these evictions.

It is disingenuous to claim that good cause would only protect good tenants. It might well protect more bad tenants than good ones. Landlords are well aware of that.

These are just a few of the many implications of good cause. But media coverage rarely mentions the tradeoffs.

Put all of these ingredients together and you have a recipe for failure. Making this meal appetizing will be exceedingly difficult for Senate and Assembly leaders because they have many mouths to feed. They want to solve problems, but their first priority is to keep every member of their conferences happy.

As a result, politicians have made promises they probably cannot keep. The big one is that tenant protections will be part of the housing package, even though the rest of it will also benefit tenants.

The deal on the table not only lacks balance, it lacks logic.

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