Gov. Kathy Hochul, D-NY, is expected to sign off on a landmark proposal that aims to address the housing affordability crisis this weekend.
The New York Legislature and Gov. Hochul on Saturday reached an agreement on a final $237 billion budget plan that included new legislation to bolster housing developments and protect New York's existing tenants amid the state's housing affordability and migrant crisis.
The sweeping housing measures included in the package are:
"Good Cause Eviction"
Under New York's new "Good Cause" laws, tenants can take their landlords to court if they raise rental prices by more than 5% or 10% plus inflation, whichever is lower. However, it also lets landlords evict tenants for "gross negligence," failure to pay rent, and refusing to allow the landlord to make any repairs. Landlords are also not required to renew leases.
Housing Developments
The new housing deal will implement a new version of the existing 421-A property tax exemptions for housing developments with a percentage of affordable units.
For smaller developments, or those with less than 100 apartments, they must keep a fifth of their units priced at affordable levels to be eligible for property tax exemption. Larger buildings with over 150 units and located south of 96th Street in Manhattan, Cobble Hill and Williamsburg in Brooklyn, and Long Island City in Queens must make 25% of their units affordable or equivalent to 60% of the average median income.
In addition, developers will receive different exemptions depending on the number of units in a building. Smaller buildings with 10 or fewer units are exempt from property tax during construction and 10 years after. The exemption goes up to 35 years for larger buildings with 100 or more units.
Converting Office Buildings To Housing
The bill also creates a new program that would encourage developers to convert abandoned office buildings into housing. Developers that receive a permit by June 30, 2026, will receive a 35-year, 90% discount on their effective residential tax rate. This will shorten to 30 years for projects approved by 2028 and 25 years for projects approved by 2031.
That being said, developers would be required to set aside at least a quarter of their units at 80% AMI and 5% of units at 40% AMI.
Other Initiatives
The plans will allow landlords of rent-stabilized apartments can make larger rent increases of up to $30,000, or in some cases $50,000, provided they make improvements to their apartments.
Furthermore, the plan will allow New York City to implement a pilot program to legalize basement apartments in Brooklyn, the Bronx, and Manhattan.
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