The Legislature actually passed some (minor) housing bills

If you asked a tenant advocate, housing activist or real estate developer about how they fared during the state legislative session, they might provide a laundry list of items lawmakers failed to pass. “Good cause” eviction tenant protections and a housing voucher program never got passed, the 421-a developer tax break didn’t get a replacement and localities did not get any new directives to build more housing. Suburban lawmakers killed Gov. Kathy Hochul’s ambitious housing plan, and a two-way deal between legislative leaders for a last-minute housing package fell apart at the end of the session.

It’s easy to look back at the various failures and conclude that the state Legislature didn’t take any action on housing policy this year. But even as the highest-profile bills died, lawmakers still quietly approved several consequential pieces of housing legislation, including renewing a real estate tax abatement and limiting how landlords can raise rent-regulated rents.

Assembly members didn’t quite finish all their work during their regularly-scheduled legislative session, but they did manage to approve a bill that would create a replacement for the J-51 tax incentive program for developers that expired last year. The old program offered tax abatements and exemptions for landlords who renovated their buildings in exchange for regulating the rents of units for the duration of the tax incentive. The new program, dubbed the “Affordable Housing Rehabilitation Program,” would only offer tax abatements, prioritize rehabilitation of already rent-stabilized buildings and require rent stabilization for at least 15 years, even if the abatement period is longer. 

The bill, which the state Senate also passed before breaking for the year, closely resembles a proposal from Hochul made as part of her executive budget earlier this year. And unlike the more controversial 421-a program that incentivized developers to build affordable housing and expired last year, the new J-51 program appears likely to become a reality – even if the real estate industry doesn’t particularly like the version that passed.

When the Assembly returned this week to wrap up the last of their legislating, they also took up several housing bills that the state Senate had already approved. One addresses what tenant advocates have called a “Frankenstein” loophole, which lets landlords combine multiple existing apartments into one, effectively creating a new unit and therefore erasing all past rent history. That allows landlords to set a new “first rent,” one which could be dramatically higher than the previous rent, and increase the price higher than what the Rent Guidelines Board would normally allow. If any one of the merged units wasn’t subject to rent regulation, the newly combined apartment could be made market-rate, as well. The Division of Housing and Community Renewal announced steps last year meant to crack down on the practice.

The newly passed legislation, which now awaits the governor’s signature, sets standards for how landlords can set rent on the newly combined unit, limiting how high the price can go. It also mandates that if any one of the previous apartments was regulated, the new one must be subject to rent regulation as well. The bill also strengthens the 2019 rent laws by requiring landlords to prove that they engaged in substantial renovations before  taking a unit out of stabilization, establishing new penalties for landlords who don’t file proper registration paperwork and amending the processes for proving retroactive rent overcharges following a Court of Appeals ruling.

Both chambers also approved a tweak to the 2019 rent laws meant to clarify how landlords must record regulated rent histories and make it easier for tenants to bring rent overcharge fraud claims. The state Senate passed the bill earlier this month, while the Assembly passed it this week when it returned. The legislation complements the other, broader tenant protection bill.

The two bills received starkly opposing receptions by the two sides of the housing debate. Tenant advocates praised the legislations’ passage and urged Hochul to sign them. “We applaud the New York State Legislature for passing these critical bills that will strengthen the Housing Stability and Tenant Protection Act of 2019 and bolster long-standing rent regulation laws that have protected tenants for over half a century,” the Legal Aid Society said in a statement. Reps for rent stabilized landlords, meanwhile, pleaded with the governor to veto the bills. “The state legislature continues to show they are more interested in being retroactively punitive than proactively advancing pro-housing solutions,” Jay Martin, executive director of the Community Housing Improvement Program, said in a statement.