CHOOSE YOUR OWN ADVENTURE: Housing Deal
Scenario: You are waiting for lawmakers to announce a housing deal as part of the overdue state budget. You hear proposals to increase rents to pay for individual apartment improvements and wonder if that could disrupt a potential deal that includes a replacement 421a and a version of good cause eviction. You wish, again, that important policy decisions were hashed out in a more transparent process.
You begin pre-writing stories with different permutations of a deal, hoping at least one of them is close to correct. Fearing that your eyeballs will fall out of your head, you decide to map out just three scenarios.
If you predict a housing deal that includes 421a, good cause eviction and several other housing-related policies, skip ahead to IT’S MAY NOW.
If you choose a housing deal without 421a, head over to MAYBE 485Y WILL BE THE ONE.
If you think a housing deal will have to wait until after the budget, scroll down to PRIMARIES ARE IN JUNE.
IT’S MAY NOW. The Real Estate Board of New York and the Building and Construction Trades Council came to an agreement over wages for a new 421a program. The specifics are a bit fuzzy. The program now goes by 485X in the state’s tax law, so good luck remembering to use that after decades of calling it 421a.
As part of the package, lawmakers also agreed to a version of good cause eviction, though they changed its name. The new policy closely mirrors California’s Tenant Protection Act. It might carve out small buildings and allow localities to opt out, but you’ll have to wait for the actual budget bills to see the fine print.
The housing deal also lifts the city’s cap on residential floor area ratio, paving the way for the city to create residential districts that allow greater density, and a measure that lets churches build housing as-of-right on their properties. It does not, for some reason, allow the city to legalize basement and cellar apartments. There’s some mention of an incentive for office-to-residential conversions, but remember when I mentioned the fine print? Yea, details of the incentive are in there. Ditto on details about a state-based housing voucher program.
MAYBE 485Y WILL BE THE ONE. REBNY and the construction unions have not reached an agreement on wage requirements for a new 421a, so the issue will have to be addressed after the budget process. Lawmakers were not keen to pass another budget without anything on housing, so they agreed to an extension of the construction deadline for the expired 421a, a version of good cause eviction, a modest increase to the individual apartment improvements threshold, lifting the FAR cap and several other less controversial policies.
PRIMARIES ARE IN JUNE. With no 421a wage deal and concerns rising about rolling back the 2019 rent law, efforts to revive the property tax break, negotiate a version of good cause eviction and offer relief to rent-stabilized owners fell apart. Those policies dragged the FAR cap and office-to-residential conversion incentive down with them.
What we’re thinking about: My scenarios, obviously, are not the only possible outcomes for this year’s budget process. What are your predictions? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: The Mason Tenders’ District Council is calling on the governor and lawmakers to “immediately” codify a deal it reached with the Real Estate Board of New York to set a wage floor for construction workers citywide. It could, feasibly, be incorporated into the governor’s framework to replace the property tax break 421a. It remains to be seen if lawmakers will sign off on a framework as part of the budget.
“To be clear: Other trade unions negotiating separate deals should not prevent the governor and legislature from acting now to codify the $40 minimum wage as part of a new 421a program,” Dave Bolger, business manager of the union, said in a statement. H/T to City & State for first reporting on the union’s push.
Elsewhere in New York…
— The MTA wants $750,000 per year from the organization that runs the NYC Marathon to make up for lost toll revenue on the Verrazzano-Narrows Bridge, the New York Times reports. The New York Road Runners has not agreed to this, and the agency has threatened to limit the race to the bridge’s lower deck.
— Most 311 complaints about parking permit misuse do not result in a summons, according to a new report by the Department of Investigation. The city agency found that the NYPD resolved a quarter of complaints made from Jan. 1, 2019, through August 14, 2022, within 20 minutes, Gothamist reports. “A 20-minute timeframe is so tight as to raise questions about whether [the] NYPD took sufficient steps to address the complaint,” the report states.
— Inmates at Woodbourne Correctional Facility are suing the state over their inability to witness Monday’s total solar eclipse, the Associated Press reports. The lawsuit alleges that total lockdown during the eclipse denies inmates their constitutional right to practice their faiths. “A solar eclipse is a rare, natural phenomenon with great religious significance to many,” the complaint states.
Residential: The priciest residential sale on Wednesday was $17.8 million for a 5,000-square-foot condominium unit at 27 Wooster Street in Soho. The Leonard Steinberg Team at Compass had the listing.
Commercial: The most expensive commercial sale of the day was $25.3 million to the MTA for a 55,000-square-foot property it has been leasing since 1999 at 1590 Bedford Avenue in Crown Heights.
New to the Market: The highest price for a residential property hitting the market was $20.9 million for a 5,575-square-foot townhouse in Greenwich Village. Chris Poore of Sotheby’s International Realty has the listing.
Breaking Ground: A new building application was filed for a 25,700-square-foot, five-story residential building at 748 41st Street in Sunset Park. Chang Hwa Tan of Tan Architect filed the application. — Matthew Elo