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NY Gov. Announces Sweeping Housing Initiative

Gov. Kathy Hochul announced at a press conference on Monday the "parameters of a conceptual agreement" with legislative leaders on housing initiatives that will be included in the $237B state budget, which is expected to come to a vote by the end of the week.

However, while Hochul called the broad outlines—and few specifics—she revealed on Monday a "landmark" agreement, several state legislators cautioned that the package is still being negotiated and some elements could change.

The governor said the deal includes a replacement for the 421a tax break on affordable housing, to be known as 485x, as well an extension by six years of the deadline to finish projects started under 421a, which expired in 2022.

The deal also doubles the cap for apartment improvement costs that can be passed down from landlords to tenants under NYC's 2019 rent control law—increasing the cap to $30,000 from $15,000—and it increases the fraction of the cost that can be passed on to tenants, making rent increases associated with improvements permanent.

While details are still being finalized, the 485x tax break is expected to provide up to a 40-year property tax exemption for projects with a set level of low-income housing and lowers the ceiling for rents deemed affordable, according to a report in Gothamist.

Construction wage requirements negotiated with unions will kick in for 485x projects with more than 150 units, down from the 300-unit threshold under 421a.

Hochul said the deal includes lifting the cap on New York City's residential floor area ratio, which is expected to facilitate the conversion of empty office buildings into housing and the rezoning of several neighborhoods in NYC to allow high-density housing projects.

Hochul said the budget deal will include new protections for tenants to prevent "price gouging" by landlords, a proposal also known as a "good cause" eviction.

Tenant advocacy groups have been lobbying for years to give tenants the ability to challenge evictions due to "unreasonable" rent increases. According to several reports, the good-cause proposal in the budget bill will establish a rent increase trigger of 10%, or the consumer price index plus 5%, whichever is lower.

The good-cause policy will not apply to tenants in buildings whose landlords have fewer than 10 units across their portfolios. New construction is exempt from good cause for 30 years and the policy will allow municipalities outside NYC to opt out, according to report in City & State.

The proposed budget allocates $500M for the development of up to 15,000 new housing units on state-owned property.
Reprinted with permission from the Tue, 16 Apr 2024 05:14:45 EDT online edition of GlobeSt © 2024 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.