On the heels of comprehensive statewide tenant protection reforms passed in June, a new campaign for additional progressive housing legislation announced this month has some support from state Democratic leaders despite a $10 billion price-tag. But landlord and real-estate groups say more must be done to preserve existing housing stock.
The coalition Housing Justice for All, which was behind the recent rent-reforms package, has announced half a dozen goals for the next legislative session.
“We always knew that 2019 with the legislative fight and 2020 was going to be a big budget push,” says Cea Weaver, campaign coordinator for Housing Justice for All. “We won more than we ever thought was possible when it came to renters’ rights in 2019, and so we certainly have the wind behind us and that is propelling us forward. But we always were planning to do a big push around revenue and ending homelessness in 2020.”
Vouchers a top priority
The push will start next budget season with passing the Home Stability Support Act (HSS), first introduced by Assemblymember Andrew Hevesi in 2017. That’s a rent-supplement program that pays the difference between 30 percent of a tenant household’s income and 85 percent of the fair market rent (determined by the U.S. Department of Housing and Urban Development), although the law would give local governments the option of raising the supplement to cover 100 percent of fair market rent.
Democrats in the State Senate say this is the prime time to pass progressive housing legislation, when their party has a strong majority in the Senate. “It is obvious to me [HSS] is the answer to the growing crisis of homelessness. It has been needed for years and the problem keeps growing. We have a set of significant, omnibus bills for tenant protection and we have to make sure people have enough money to pay their rent,” says Senator Liz Kreuger, the primary Senate sponsor for HSS.
Kreuger says the HSS voucher could help end the cycle of homelessness across the city and state. “Once someone is evicted and enters the shelter system, we lose twice. We lose the family to the shelters and could possibly lose that affordable housing unit,” says Kreuger. HSS, she adds, “is a win-win.”
The cost is an estimated $400 million when fully phased in, but this legislative session is focused on getting the initial funding to begin a pilot program at $15 million dollars. Home Stability Support will be a new statewide rent supplement for families and individuals who are eligible for public assistance benefits and facing eviction and/or homelessness. The program will be phased in over five years, will be 100 percent state-funded, and will replace all existing optional rent supplements. Currently, the bill has 34 State Senate co-sponsors and has moved out of the Senate Social Services Committee.
The coalition is also pushing to require “good cause evictions” by passing a bill that would require a landlord to show “just cause” for not renewing a lease. Another goal will be to entirely eliminate major capital improvements (MCIs). Currently, when a rent-stabilized landlord makes major repairs or improvements in a building, he can increase rents to cover the cost of that MCI over 96 or 108 months, depending on building size. Housing advocates call MCIs a “loophole” and say it is critical to pass a bill to eliminate MCI increases for installations, renovations or maintenance. The Housing Stability and Tenant Protection Act of 2019, the major tenant protection and rent reform package passed in June, tightened up the rules around major capital improvements but did not actually eliminated them.
Housing Justice for All is also interested in expanding supportive housing and advocates adding $6 billion to the state’s supportive housing program for 20,000 additional housing units across the state. Supportive housing is affordable housing with on-site services which can include parenting education, counseling, independent living skills training, substance-use disorder treatment and mental healthcare, according to the state Division for Homes and Community Renewal. In 2017, Gov. Cuomo launched a five-year, $20 billion housing plan aimed at creating 100,000 affordable units, with many targeted to the homeless. Now in its third phase, the plan includes an estimated $10 billion to create 6,000 new supportive housing beds.
The campaign also proposes a “Tax the Rich” strategy which would eliminate a couple of tax breaks and create new taxes for wealthier households, all to help fund public housing and other programs.
The proposal calls for the elimination of the 421-a and 485-a tax programs. The 421-a tax abatement lowers property taxes through tax credits for developers in exchange for some affordable housing in their projects. Those tax credits can last anywhere between 10 to 25 years. The 485-a tax exemptions, a declining 12-year partial exemption from real property taxation and other levies, is tailored towards non-residential properties converted to a mix of residential and commercial uses.
The coalition also wants to introduce several new taxes to target high-value properties and multi-million dollar incomes: a Coop and Condo Tax on the 10 percent highest value co-ops and condos, which would fund public housing; a Pied-a-Terre Tax on all second homes with a market value of $5 million or above; an Ultra-Millionaires Tax on incomes of more than $5 million annually; a Carried Interest Fairness Tax on hedge fund profits; and a Stock Transfer & Stock Buy-Back Tax.
While the coalition will face some resistance on the policy front—landlords and their allies will argue that last year’s rent reforms, which significantly scaled back MCIs, went far enough if not too far—it’s the tax changes that pose the heavier political lift.
“I think some of it is the political landscape around the budget is a little slightly different,” says Emily Goldstein, Director of Organizing and Advocacy for Association for Neighborhood & Housing Development. “Some of it is timelines: There is just less time until the budget is finalized as opposed to the end of the legislative session. Some of it I think is ingrained assumptions about what can and cannot be done in terms of raising revenue and spending and there is a mindset shift that needs to happen among the public, among the elected officials, among everybody in order to get to the kinds of goals that Housing Justice for All is really looking for.”
Goldstein says there are more city and state proposals on the way that will focus on low-to-moderate income homeowners with proposals like a flip tax and the Good Neighbor tax credits, a tax abatement program that offers tax credits to property owners with two-to-four family homes who rent to eligible low- and moderate- income tenants at below market rates.
Housing experts contacted by City Limits, who asked not to be named, say the coalition’s goals are ambitious and complicated: Supportive housing, for example, involves more than just the creation of affordable housing; it requires funding for the services it provides to support individuals with drug addiction or mental health concerns. That long-term funding has to be taken into consideration in order to sustain the program’s impact.
Another concern is about the funding for the HSS program, since the city and state face difficulty sufficiently funding existing rent supplemental programs on the federal, state and city levels.
Real-estate lobby’s concerns
Landlord and real-estate groups say they support more housing for the homeless—”REBNY is committed to working with a diverse array of stakeholders to advance sensible, data-driven policies that actually address the need for more affordable housing and sustainable growth across New York,” the Real Estate Board of NY said in an emailed statement to City Limits—but warn that policies like eliminating MCIs or requiring “just cause evictions” could have a long-term impact on the preservation of good housing stock across the city.
“There was little or no thought in terms of how to preserve housing that went into the bill that was passed in June. I believe [this] package they’re proposing now is basically trying to ignore the fact that the housing stock is aging: Half the housing stocks is over 75 years old and they want to pretend that these buildings are just going to last forever with no major upgrades or infusion of capital,” said Frank Ricci, director of government affairs for the RSA.
Ricci says the city could see landlords doing the bare minimum of repairs to avoid violations because the repair or improvements will be financially burdensome, “So they’ll keep patching the roof for the next 20 years rather than replacing the roof.” Or tenants could see increased elevator problems. Ricci said most elevators outside of New York City are at least 50 years old and elevator parts have become difficult to find and repair.
RSA and Community Housing Improvement Program (CHIP) along with other groups and landlords have filed a federal lawsuit challenging the constitutionality of the rent-stabilization laws.* RSA expects oral arguments in federal court next year in January.
* Correction: This story was updated to reflect that the lawsuit concerns not just the new rent-regulations law but the system itself.