Pressure is mounting on New York’s political leaders to find solutions to the city’s worsening housing crisis as pandemic-era tenant protections expire and rents soar to record highs.
New York City
A statewide eviction moratorium expired over the weekend after the median residential rent in the city hit more than $3,400 in December, a record high for this time of year. The heat is on Mayor Eric Adams, who is just three weeks in the role, and Governor Kathy Hochul, who will face her first gubernatorial run this year, to formulate policies that will support landlords. and tenants.
Real estate actors told bisnow they’re optimistic the city and state will take a pragmatic approach, but there are pressing issues to address.
“They need to understand some of these legislative and policy issues around eviction moratoriums,” said Karim Hutson, CEO of affordable housing development company Genesis Cos. “What they are going to do, what kind of grants are going to give, if [there is] any need for Covid relief and helping families in need.”
The state began accepting applications for emergency rent relief again this month, but state leaders are still asking for more funds from the federal government. The Treasury Department will provide an additional $27 million from reallocated funds, it announced last week.
“There needs to be some communication about what’s going to happen there and some transparency, because any market that works needs transparency,” Hutson said.
Housing advocates are also awaiting details on the concrete plans of the new political leadership – starting with who will implement them.
“We just have no idea of the housing leadership at City Hall right now,” said Rachel Fee, executive director of the New York Housing Conference. bisnow.
Bisnow/Mark F. Bonner
Posters of Eric Adams in November 2021, the day after the New York mayoral election
Adams named Maria Torres-Springer, former commissioner of the Department of Housing Development and Preservation, as deputy mayor for economic and workforce development. Fee said his organization still wanted to know who would be responsible for guiding housing policy at the city level — Adams did not announce his choices to lead the city’s Department of Housing Preservation and Development or Housing Development Corp.
“Those two positions are quite critical,” she said.
Reportedly, Jessica Katz, the current executive director of the nonprofit Citizen Housing and Planning Council, will be appointed to a newly created housing position in the administration, an appointment Fee said she would welcome.
Adams’ team is taking shape as Hochul has begun sketching out his housing plans for the state. His proposed executive budget, announced Tuesday, includes $25 billion for a housing plan that aims to create and preserve 100,000 affordable homes over five years. She also gave some details about the future of Affordable New York, a controversial tax incentive previously known as 421-a that developers use to cover apartment development costs.
Renamed again Affordable Neighborhoods for New Yorkers, the plan would require any building over 30 units to reserve 25% of apartments for people earning between 40% and 80% of the area’s median income. In buildings with less than 30 units, 20% of rental units should go to those earning up to 90% of the AMI.
Affordability requirements would be permanent for units in buildings over 30 units but would still stop at 35 years for buildings under 30. The current plan allows developers a tax holiday for 35 years if they book 25% to 30% off units for low and modest income tenants when building a rental building at market price of more than 300 units.
Critics have long criticized the tax relief, and the Legal Aid Society told Crain’s New York Business this week that Hochul’s reform was a “missed opportunity” to address what it described as a “colossal waste of taxpayers’ money.”
But supporters of the program, who are worried about its future, were excited by Hochul’s announcements.
“I think this is a great start that anyone can live with,” YuhTyng Patka, president of the New York City Real Estate Tax and Incentives Practice Group at Duval & Stachenfeld, wrote in an email. “Governor Hochul has shown her commitment to solving New York’s housing crisis. … We want to inspire as many developers as possible to deliver new products to the communities that need them, and helping private developers do so in a way that makes economic sense is the only way to fill the gaps. .
Kathy Hochul, then lieutenant governor of New York, at Coney Island on April 9, 2021.
But major tensions remain between communities and developers, with differing views on how best to deal with the housing crisis. Policies such as the “for good reason” eviction bill, which would give tenants the right to a lease renewal in most cases, are a concern for many landlords.
At the city level, several rezonings, aimed at stimulating housing development, have aroused the ire of residents in recent years. Earlier this month, a newly elected council member canceled a rezoning for two new developments in Brooklyn, forcing the developer to go back to the drawing board and rethink the proposal.
But Joy Construction manager Eli Weiss, who is part of Adams’ housing transition team, said he was confident in the new mayor’s ability to create an environment that promotes both affordability and business prosperity.
“I feel very optimistic since Mayor Adams took office,” Weiss said. “There’s always time for a change after eight years – he seems to have a very pragmatic approach to the job.”
In the long term, Hutson, who has several apartment projects underway in Harlem, hopes state and city governments will take a more holistic approach to affordable housing, but so far is pleased to see Adams and Hochul stepping up. publicly commit to prioritizing a focus on affordable housing.
“I really commend them for working together,” Hutson said. “We haven’t had that level of collaboration with de Blasio and Cuomo.”
Weiss said the friendly working relationship between the city and state will mean an easier time for everyone, though he doesn’t expect an overnight solution to the city’s myriad housing problems. .
“At the end of the day, I’m a developer,” he said. “I have to be optimistic.”