Housing Deal Collapses At Eleventh Hour As New York Legislative Session Ends

Any hope New Yorkers had for legislation that would alleviate the state's punishing housing shortage was extinguished Thursday afternoon when lawmakers announced they couldn't reach a deal.

In a joint statement, New York Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie laid the blame at the feet of Gov. Kathy Hochul, saying the legislature had reached an agreement on "historic rent protections as well as a massive and transformational housing program” but that  Hochul wouldn't agree to sign it.

The deal would have extended the 421-a tax break that expired last year, without which developers say they can't afford to build rental housing, as well as include "good cause" eviction provisions and rules that would ease the conversion of commercial buildings to housing, Stewart-Cousins and Heastie said.

“Unfortunately, it was clear that we could not come to an agreement with the governor on this plan. It takes all three parties — the Senate, the Assembly and the governor — in order to enact legislation into law,” the statement said. “There is no debate — New York is experiencing a housing crisis. All three chambers must immediately redouble our efforts and come up with a plan that the governor will sign into law. This plan must prioritize not only the construction of new units of affordable housing but also robust protections for tenants including good cause eviction.”

Housing Justice for All, a tenant advocacy group, urged the state legislature “to call [Hochul's] bluff” and pass the legislation, forcing the governor to veto or sign it.

“The time for leadership is now, as millions of lives hang in the balance. Governor Hochul would not veto a wildly popular omnibus bill in the midst of a historic housing crisis,” Housing Justice for All said in statement. “Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie — leaders of Democratic supermajorities — must respond to the consensus in their respective conferences by bringing this entire package to the floor for an immediate vote."

The writing on the wall on housing became clear last month, when the legislature passed the budget without any housing policies included at all. Sen. Brian Kavanagh told Bisnow that there was still time to pass housing policies before the end of the session, and officials from New York City Mayor Eric Adams' administration were in Albany in recent weeks to lobby for a housing deal.

Hochul declared an ambitious goal of creating 800,000 new housing units across the state in the next decade through a plan released in January called the New York Housing Compact. However, none of the policies she put up — mandating municipalities to grow their housing stock and lifting the density cap for New York City residential structures among them — were approved. The result was a major disappointment for tenant and landlord advocates alike.

Hochul, in response, shot back at the legislature.

“Governor Hochul put forward nation-leading housing legislation in her executive budget that the legislature flatly rejected. Now, in the final hours of the legislative session, the Assembly and the Senate are blaming the governor for their own failure to act,” Hochul's spokesperson told The Real Deal in a statement. “To be clear: Unlike the more than 500 bills the legislature has passed since January, no housing package was ever even introduced, let alone passed, for the governor’s review. Absolutely nothing stood in the legislature’s way.”

The issue of housing in New York has reached a crisis point, with the median rental price in Manhattan in May hitting $4,395, another record, according to Douglas Elliman. It is not just a city problem: Statewide housing costs rose more than 20% on average between 2021 and 2022, according to data from the U.S. Census Bureau's American Community Survey.

"For months, the building industry has implored our elected leaders to act and give us the tools we need to build our way toward a more affordable and equitable housing system. Instead, weeks of haggling seem to have led to zero action,” Carlo Scissura, the CEO of the New York Building Congress, said in a statement. “All New Yorkers get today is a statement saying that a proposed compromise won't even be brought to the floor for a vote. You can't enact legislation you don't vote on or dismiss out of hand.”