Hochul Takes Housing Plan off Budget Negotiation Table

Governor Kathy Hochul last week withdrew her much-criticized housing creation program from the discussions of the state budget as wrangling with state legislators stretched into a fourth week and the disagreements over the program threatened stalemate.

The governor hinted that she was not letting the housing plan die, but that she did not want to let the impasse hold up other important programs awaiting the budget approval.

“After weeks of negotiations, the legislature continues to oppose core elements of the Housing Compact, including the requirement that communities across the state meet growth targets,” Hochul said in a statement acknowledging she was withdrawing the housing compact from the budget discussions. “We have not yet come to a final agreement, but it remains clear that merely providing incentives will not make the meaningful change that New Yorkers deserve. I will continue to discuss other elements of the plan and policy changes that will increase supply and make housing more affordable.”

Among the goals of the program, which the governor’s office had dubbed the New York State Housing Compact, was spurring the development of 800,000 new housing units statewide, by the private sector, largely through mandates that would have forced local governments to clear the way for new development — in particular multi-family apartment buildings — or face having a state review panel step in and override local zoning and grant approvals to developers itself.

The plan was widely panned by suburban communities where zoning rules protect the aesthetic “character” of existing neighborhoods but also often block lower and middle-income housing in wealthy communities and fuel racial and economic segregation.

On the East End, lawmakers groused that the demands in the state proposal did not come with any pricing controls that ensured housing remain affordable or aide for improvements to infrastructure on what the sale or rental prices of the new units would be and warned that simply allowing more development would just mean more high-end residences that would be far out of the financial reach of the local residents who need housing and would further stress already over-burdened infrastructure.

During the budget negotiations this month, legislators from suburban neighborhoods, including the East End, had pressed for an incentive-based program rather than state mandates and threats of the state usurping zoning control.

The housing compact was intended to trump decades of restrictive zoning in small communities where concern for property values has driven laws that prohibit or discourage multi-family housing development but have left vast shortages in housing for lower and middle income residents.

State Assemblyman Fred W. Thiele Jr. said that the governor’s approach was ill-conceived, but that state officials and the governor will sit down after the budget process is over and work on a strategy where the state can address the statewide housing crisis appropriately.

“This whole housing compact dropped out of the sky on February 1 with major changes to New York State law, but none of the stakeholders were involved in formulating them,” he said this week. “What she should do now is what she should have done in the first place: sit down with local governments, sit down with community groups, sit down with housing advocates, and come up with a blueprint for how the state can help housing moving forward.”

Including a program like the housing compact in the budget was a common tactic of Hochul’s predecessor, Governor Andrew Cuomo, who used the strategy several times during his tenure, including with a bail reform package that also drew criticism.

This year’s budget includes amendments to that legislation that will give judges more discretion in requiring bail for some defendants accused of nonviolent crimes. Also included in the budget is language mirroring that in a bill Hochul vetoed last year that gives protections to unmarked Native American graves.

Thiele said that one of the key problems with the housing compact was that it relied too heavily on mandates that forced the hands of local lawmakers with a one-size-fits-all approach. That was particularly problematic on the East End, and especially the South Fork, where any new development will have the distorted pressures of the luxury housing market hovering around it.

The governor’s proposal was just a housing program, it wasn’t an affordable housing program,” Thiele said. “None of it was required to be affordable, and on the East End of Long Island they wouldn’t have been.”