N.Y. Democrats, at Odds Over Tenant Protections, Fail to Reach Housing Deal

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Democratic lawmakers in New York had scrambled this week to assemble a plan to tackle the state’s housing crisis: They said it included measures to protect tenants from eviction and cap rent increases, incentives to remodel empty offices into apartments and an extension of a tax break for developers to build affordable housing.

But it all unraveled on Thursday, when Democrats who control the State Legislature and Gov. Kathy Hochul failed to reach a deal, leading to a new round of finger pointing among Democrats in Albany.

Lawmakers blamed Ms. Hochul for opposing their housing measures, particularly those to protect tenants, while the governor said lawmakers never presented her with any housing bills to approve.

The one unarguable point was that Democrats were bound to finish the 2023 legislative session this week without addressing the state’s housing crisis for the second time this year, despite proclaiming the issue a top priority.

Mayor Eric Adams of New York City sharply criticized Albany’s failure to act. “Without action from the state, we will not be able to come close to achieving our moonshot goal of 500,000 additional homes or fully address this housing crisis.”

The lack of a resolution underscored the lingering fissures between Ms. Hochul, a moderate Democrat recently elected to her first full term, and more left-leaning Democrats in the Legislature who have clashed with the governor over everything from the state’s bail laws to her chief judge nomination.

The last-ditch effort to address the state’s high living costs and housing shortage collapsed on Thursday when Senate and Assembly leaders claimed they had reached a two-way agreement on a package of housing policies, even though they did not unveil any legislation or provide details. But in a rare joint statement, the Democratic legislative leaders sought to blame Ms. Hochul for opposing their plan.

“Unfortunately, it was clear that we could not come to an agreement with the governor on this plan,” Andrea Stewart-Cousins, the Democratic majority leader in the State Senate, and Carl E. Heastie, the Assembly speaker, said in the statement.

The governor’s office shot back by suggesting that both houses had not actually reached an agreement, noting that lawmakers could have introduced or passed legislation for Ms. Hochul to review, but did not.

“In the final hours of the legislative session, the Assembly and the Senate are blaming the governor for their own failure to act,” Julie Wood, the governor’s communications director, said in a statement. “Absolutely nothing stood in the Legislature’s way.”

The failure came less than two months after lawmakers opposed Ms. Hochul’s more ambitious plan to build over 800,000 units of new housing by imposing construction mandates on local communities, a contentious proposal that drew intense backlash from suburban lawmakers.

After the governor’s plan fell apart during state budget negotiations, lawmakers vowed to revisit housing before the end of the legislative session, eventually creating a bicameral task force to come up with a workable plan.

Legislators met late into the night this week to discuss policies to convert commercial building into housing, a housing voucher program and, according to the joint statement, “the creation of a local affordable housing plan.”

To help boost housing production, legislators were coalescing around a proposal that would have extended a contentious tax exemption, known as 421a, that served as an incentive for developers to build affordable housing.

Extending the program, which progressives have criticized as a giveaway for developers, has been a priority of both Ms. Hochul and Mr. Adams, as well as the Real Estate Board of New York, an influential lobbying group.

The main priority for lawmakers appeared to be a so-called good cause eviction measure, a contentious left-wing goal opposed by the real estate industry that would limit a landlord’s ability to raise rents and evict tenants. Instead of imposing it statewide, lawmakers were looking to have the protections apply only to New York City, giving other localities the option to take part.

While legislative Democrats have mostly focused their attention on tenant protections, Ms. Hochul has opposed the good cause eviction measure, instead anchoring her efforts on increasing housing production to boost overall supply and ease prices.

The situation appeared to worsen on Wednesday in a meeting where the governor threatened that she would veto the housing legislation because it included the good cause eviction measure, according to two people briefed on the discussions.

In theory, Democrats could have pushed through legislation and dared the governor to veto it — a move that left-leaning tenant activists were clamoring for.

“Governor Hochul would not veto a wildly popular omnibus bill in the midst of a historic housing crisis,” Housing Justice for All, an organization that advocates on behalf of tenants said in a statement. “We urge the State Legislature to call her bluff.”

With supermajorities in both houses, Democrats have the ability to potentially override a veto from the governor, though it would require minimal defections from lawmakers, which could have proved challenging.

“All New Yorkers get today is a statement saying that a proposed compromise won’t even be brought to the floor for a vote,” said Carlo A. Scissura, the president and chief executive officer of the New York Building Congress. “You can’t enact legislation you don’t vote on or dismiss out of hand.”

Grace Ashford contributed reporting.

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