Hochul’s housing puzzle

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Apr 05, 2024 View in browser   By Nick Reisman, Janaki Chadha and Emily Ngo Presented by  With help from Shawn Ness Gov. Kathy Hochul and top Democrats in the state Legislature are saying they are close on a housing deal. | Mike Groll/Office of Governor Kathy Hochul Securing a statewide housing deal over the last two years has been a maze for Gov. Kathy Hochul and state lawmakers. But the governor and top Democrats in the Legislature insist they are close to an accord — one that will broadly offer support for renters while encouraging developers to build. The goals on housing have always sounded deceptively simple: expand available supply to drive down costs and help tenants at the mercy of an unforgiving rental market. But the politics have been more than complicated. Labor wants higher wages in a new housing tax break, while lawmakers want more low-rent units. Real estate wants to roll back tenant-friendly rent laws, while tenant activists want to extend protections to a wider swath of apartments. In an interview Thursday with Playbook, Hochul said the three sides are “in the home stretch of aligning on a really complicated housing deal.” But the devil is in the details. “I’ve described it as a game of Jenga. You’re building all the pieces here, but if you pull a piece out, it could result in the whole building collapsing,” she said. “We’re still trying to structure the delicate balance. But there’s been a lot of conceptual agreement on some key areas that are, I believe, are going to get us to the result we need.” Later in the day to Capitol reporters, Hochul said differences remain between the various factions. “It’s beyond just this Legislature. It is factors out in the community,” she said. “We have to address their concerns. Otherwise, I can’t force the private sector to build. I can’t make them go do it. They will not build if the conditions are not right for them.” Many specifics have yet to be finalized, like the parameters of “good cause”-esque tenant protections. The three sides are working through complicated questions like where to set the effective cap on rent hikes, the size of buildings that would be covered and how long newer ones should be exempt, and whether high-rent apartments should be carved out, according to people familiar with the talks. Other major issues on the table include construction wages and affordable housing required under a new 421-a tax break, and how much rent-stabilized landlords should be able to raise rents after making apartment improvements. Hochul’s fellow Democrats in the Legislature agree the endpoint will likely include a mix of the key issues pushed by tenants and real estate interests. Deputy Senate Majority Leader Mike Gianaris told reporters Thursday the discussions have broadly centered around “a subsidy for affordable housing development partnered with a version of Good Cause.” “I think that’s where we’re headed,” he said. Talks over the state budget are now stretching a week past their due date as education aid and how to address illegal cannabis shops also remain unresolved. The Capitol became a veritable ghost town Thursday afternoon after lawmakers approved their second spending extension. A third one will be considered as soon as Sunday. But privately, lawmakers have said a housing deal is needed as many Democrats face primary challenges from their left flank in June. That pressure has made measures meant to protect tenants a priority. “Negotiations are moving along,” Senate Housing Chair Brian Kavanagh said. “Obviously we don’t have an agreement, but the Senate is continuing to ensure we have affordability, produce new housing, protections for tenants, money to ensure there are lawyers for tenants who might be facing housing insecurity.” But as labor and real estate interests continue a long and truculent negotiation over a wage deal that is seen as necessary to move the ball forward on a tax incentive for affordable housing, lawmakers have no plans to kick the issue outside of the budget. “There’s been a lot of attention for the need of additional production,” Kavanagh said. “So far, to my knowledge, those negotiations are continuing with the expectation they would be part of a deal.” — Nick Reisman and Janaki Chadha  HAPPY FRIDAY: Got news? Send it our way: Jeff Coltin, Emily Ngo and Nick Reisman.   A message from Amazon: When Lisa-Jae and Kammy started 3 Moms Organics in their hometown of East Hampton, New York they turned to Amazon to help their business grow. “Amazon’s tools helped our small business tell our brand story and attract new customers,” they said. More than 60% of sales in Amazon’s store are from independent sellers, like 3 Moms Organics. See the impact.   DO WE HAVE A BUDGET YET? No. WHERE’S KATHY? In Albany, with no public schedule. WHERE’S ERIC? Appearing on FOX5’s “Good Day New York,” then on PIX11’s “Morning News at 7,” hosting a summit for youth gun violence prevention, delivering remarks on a celebration for life for Dr. Marcella Maxwell, speaking at Rep. Robert Garcia’s Legacy Fund’s documentary trailer screening. QUOTE OF THE DAY: “As long as it’s in April, I think they’re OK. If it gets into May, then people become intractable.” — former Gov. David Paterson, asked by Playbook when he believes the state budget will be settled. ABOVE THE FOLD Texas Gov. Greg Abbott came to New York City for a GOP gala and ended up accusing Mayor Eric Adams of baiting him into sending migrants to New York City. | Irie Senntner/POLITICO LONE STAR SPARRING: Texas Gov. Greg Abbott came to New York City on Thursday armed with barbs for Eric Adams. But the mayor gave it right back. “The complaining by Mayor Adams is nothing short [of] stunning. What he has is a tiny fraction of what Texas gets every day,” Abbott told attendees of a glitzy midtown Manhattan gala Thursday night raising funds for his fellow Republicans. The governor also accused the mayor of all but baiting him into sending migrants to New York City, a charge Adams’ top aide rejected, POLITICO reported. And while immigrant advocates protesting outside the New York GOP event sought to send the message that Abbott is not welcome here, Adams earlier in the day offered the governor a terse invitation doubling as a challenge. “I’m going to offer him a stay in one of the HERRCs so he can see what he has created and understand we are treating people with dignity and respect that he should have shown,” the mayor told reporters at City Hall, using the acronym for the sprawling migrant tent complexes the city has constructed to shelter newcomers. Abbott and Adams are central figures in the immigration and border security challenges that Republicans aim to keep front and center in this year’s House and presidential elections. Republican House Conference Chair Elise Stefanik made that clear at the gala, saying, “Joe Biden has turned every state into a border state.” — Irie Sentner and Emily Ngo CITY HALL: THE LATEST Mayor Eric Adams wants to make sure that the cost of congestion pricing doesn't burden working-class New York residents. | Benny Polatseck/Mayoral Photography Office TOLL NO: Adams is — and has been — a nah on the congestion pricing plan in its current form. Not aggressively or even actively opposed, just a nah as his ally Hochul advocates for the tolling scheme to improve air quality and alleviate traffic. And the mayor has kept up his relative diplomacy on the $15 tolls to drive into Manhattan as the MTA board voted to approve the plan and as New Jersey fights it in federal court. “We have to deal with congestion in the city, but we have to make sure we do not do it on the backs of those working-class people,” Adams said Thursday on The Block’s “Jones in the Morning.” “And we don’t displace the toxic fumes into communities such as the Bronx and Staten Island.” The sentiment echoed the one he shared when asked late last month point-blank on another morning radio talk show, “The Breakfast Club,” if he agrees or disagrees with the congestion pricing plan. He had presented this hypothetical: “You may have to go into your chemotherapy and this is the doctor you have to go to. You should not be hit over the head because of that.” And the mayor also has been stressing where the onus lies, a signal to New Yorkers that he’s not to blame, saying, “This is the MTA’s baby.” — Emily Ngo More from the city: — A newly released accounting of expenses tied to Adams’ legal defense fund shows two lawyers began working on the case the same day his top fundraiser was raided by the feds. (Daily News) — Adams’ campaign strategy involves finding eye-catching ways to highlight public safety, including photos of outreach he’s done at Burger King and Rikers Island. (New York Times) — The city’s buildings commissioner wants to grant inspectors the power to make arrests and even carry guns after complaints of attacks on the job, an email revealed. (Gothamist)   A message from Amazon:   NEW FROM PLANET ALBANY Microsoft is backing a bill that would create a payroll tax credit to help local newspapers. | Drew Angerer/Getty Images MICROSOFT FOR NEWS: One of the world’s biggest tech companies is throwing its support behind a bill meant to provide a financial lifeline to local news organizations. Microsoft in a letter to top state leaders endorsed a proposal that would create a payroll tax credit meant to hire and retain journalists in local newsrooms. “In a year where more than half the world’s population will cast ballots in democratic elections around the world, journalism is critical,” the company’s state government affairs, Ariana Caplan, wrote in the letter. “Reporting — especially local reporting — ensures voters have the information they need to understand their communities and the world.” The proposal has been made in prior years, but fallen short in final budget deals. This year, an intense lobbying campaign backed by local newspaper publishers has sprung up around the issue. — Nick Reisman More from Albany: — Hochul ordered the MTA not to pursue charging a toll from the organizers of the New York City Marathon. (New York Post) — State officials have reached a settlement with people in prison over a lawsuit entailing viewing the eclipse on Monday. (Times Union) — The “hold harmless” fight over school aid may get dropped in the budget talks. (POLITICO Pro) NEW YORK STATE OF MIND — Parts of I-90 are closing on Friday, which could pose issues for people trying to get in the path of totality for Monday’s eclipse. (Buffalo News) — Suffolk County settled a case involving the death of a man who was beaten to death by police, and they now owe the family $20 million. (Newsday) — A new report found discrepancies with housing programs. (State of Politics)   A message from Amazon: Small and medium-sized businesses selling on Amazon, like 3 Moms Organics, employ more than 1.5 million Americans. That’s why Amazon invests billions of dollars in small and medium sized businesses, people, resources, and tools that support selling partners in every step of the process. Learn how Amazon supports independent sellers.   SOCIAL DATA Edited by Daniel Lippman MAKING MOVES — Matthew Fery is now a principal at Invariant, a consulting firm. He previously was chief of staff for former Rep. Brian Higgins (D-N.Y.). … Fred Dixon is the incoming president and chief executive officer of Brand USA, a public-private partnership led by the U.S. Travel Association. Dixon comes from NYC Tourism + Conventions, New York City’s official destination marketing organization, where he has worked since 2005 and has been CEO for a decade. … Shantel Destra has been promoted to managing editor and host of New York Now on PBS. MEDIAWATCH — Jonathan Greenberg is joining POLITICO as executive vice president after a long career at ABC News, most recently as Washington bureau chief. … The Council on Foreign Relations tapped Millie Tran as vice president and chief digital content officer. Tran was most recently vice president of content strategy and growth at Condé Nast. HAPPY BIRTHDAY: former FCC Chair Tom Wheeler … former Rep. Peter King (R-N.Y.) (8-0) … CNN’s Dan Berman … Adam Rubenstein … POLITICO’s Maya Kaufman … NYT’s Jill Rayfield … Microsoft’s Howard Wachtel … Wilson Shirley … Scott Clifford … (WAS THURSDAY): Mike Epstein ... Skadden alum David J. Friedman … Abshalom Lahav … (WAS WEDNESDAY): City Council Member Sandy Nurse. YOUR NEW YORK NUMBER OF THE DAY 48.8 percent The “capture rate” for paper recycling in New York City in 2023, according to a Department of Sanitation study showing a decline in recycling as detailed in THE CITY.   Subscribe to the POLITICO Playbook family Playbook  |  Playbook PM  |  California Playbook  |  Florida Playbook  |  Illinois Playbook  |  Massachusetts Playbook  |  New Jersey Playbook  |  New York Playbook  |  Ottawa Playbook  |  Brussels Playbook  |  London Playbook View all our political and policy newsletters Follow us

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