sEach state budget agreement with lawmakers was supposed to be the hardest part of the year. Gov. Cathy Hochhol could hardly enjoy approval of her $220 billion budget after six extra days of closed-door negotiations with legislative leaders and a long weekend of votes, when her deputy governor was arrested for receiving illegal campaign contributions and the worst subway shooting in the past forty years on the same day.
Hochhol warned New Yorkers on April 12 of an “active shooting situation” with a suspect still at large and lamented an escalation of violence on the subway that could jeopardize the return of passengers to their offices. Hours later, she accepted the resignation of Lieutenant Governor Brian Benjamin, writing in a statement, “It is clear to both of us that he cannot continue to serve as Deputy Governor.”
The next morning, Hochul was still grappling with the fallout from both events. Just a week ago, she stood by the second-in-command saying she had “full confidence” in her candidate despite rumors of a federal investigation into his campaign spending. Now you will have to replace it.
“I want New Yorkers to have complete confidence in their government, and to let them know that I will continue to help them,” Hochhol said on WNYC’s “Brian Lehrer Show” the day after Benjamin resigned. “I will find a real partner who will continue to do the same too. So we need a little time.”
The state budget was supposed to provide a powerful boost to the governor’s agenda ahead of the Democratic primary. Instead, it was overshadowed by the incomprehensible violence and unrestrained corruption that occurred within her administration.
But allocating nearly a quarter of a trillion dollars in new spending will have lasting effects on New York’s economic recovery, housing shortages, and quality of life. The budget includes $600 million to fund a soccer field for the Buffalo Bills, a major rollback of bail reform laws passed just three years ago, new money for vulnerable New Yorkers whose incomes have struggled during the pandemic, as well as new rules that will benefit the state’s beleaguered food and entertainment industries.
Not everything Hochul wanted was included in this roundup. Much of the governor’s housing agenda, including the affordable housing tax cut that developers wanted, were left out of the budget bills and a measure that would reduce carbon emissions from buildings across the state was also scrapped because he didn’t have a financial component in it.
Housing and environmental issues are likely to dominate the second half of the legislative session that ends in mid-June, just two weeks before the primaries. Hochhol and state lawmakers will have two months to tackle some of the state’s most intractable problems with the climate crisis, homelessness, gun violence and the acute housing shortage that threatens to displace long-running New Yorkers.
“Passing the budget now allows the legislature to step back as the governor deals with increased shootings, economic issues and moral concerns exacerbated by the arrest and resignation of former Lieutenant Brian Benjamin,” political advisor Hank Shenkoff said. It won’t be easy. Suburban local elections signal an early Republican wave.”
She might have a new deputy governor line up before voters have their say at their polling stations.
what’s in
When the governor proposed her budget in January, she framed it as an opportunity to renew the state’s recovery and help its most vulnerable residents.
The focus of Hochul’s housing plan has set aside $25 billion to fund the construction and maintenance of 100,000 units below market over a five-year period. About a tenth of these units will provide support services. That amount reached the final budget as well as $800 million poured into a rental assistance program for renters who have experienced financial hardship during the pandemic.
“I have a strong commitment to achieving affordable housing for all,” Hochhol said April 12 in WNYC. “We have programs that go to schools; we have a real mental health crisis. I have members of my family who have dealt with substance abuse. I know these challenges personally.”
Financing renters could have the biggest impact on the lives of New Yorkers every day, if they could have the money. State leaders had to refuel the Emergency Rental Assistance Program (ERAP) after the Legal Aid Association sued to reopen it, but the gate dried up by October 2021 and a state-imposed moratorium on eviction expired three months later. About 315,000 tenants have applied for ERAP financing as of March and are awaiting decisions at that time as well. Another 400,000 tenants who did not apply may be eligible to benefit from the fund.
Housing advocates have urged the state to ensure that tenants receive financial assistance in a timely manner without further delay.
“We are grateful to see a commitment of $800 million to meet the urgent, short-term needs of New Yorkers who have defaulted on their rent payments during the pandemic, but we hope that more funding will be included to meet the urgent need,” said Jennifer Marsh, executive director of the Citizens Committee for Children and a co-member of Family Homelessness Alliance.
Hochul’s belated addition of changes to the state’s bail reform law surprised lawmakers and contributed to a week-long delay in negotiations before Senate and Assembly leaders reached an agreement. The measures, which New York Mayor Eric Adams has been pushing for months, will give judges more discretion in setting bail for a broader range of misdemeanors and nonviolent crimes and detaining defendants who have committed repeat offences.
Business leaders applauded the move. Cathy Wild, president of Partnerships for New York City, whose group represents hundreds of CEOs across the city, said addressing public safety was among the top priorities for budget executives.
“The budget includes many of the actions Mayor Adams said he needs to reduce crime, reduce gun violence, and transition homeless and mentally ill people to appropriate treatment and shelter,” she said.
The state’s dining and entertainment sectors also scored victories in the final budget deal. Last year, the legislature legalized recreational marijuana after a decade-long campaign by criminal justice advocates. This year’s drug allowance was not a long wait.
Also, then Gov. Andrew Cuomo has allowed restaurants and bars to serve ready-to-eat drinks to help them stay afloat during the pandemic, but the order expired last June. Lawmakers have now revived the three-year order and modified it so that establishments must serve food alongside liquor orders.
The debate over what constitutes “big food” continues to play out – soups and sandwiches are good but chips and dessert are not – but restaurants are happy to have what you want.
“The return of popular politics to the Empire State will be an important lifeline for countless restaurants across the state and allow New Yorkers to once again deliver wine to their front door or pick up a margarita with their takeout from their favorite neighborhood restaurants,” said Andrew Riggi, CEO. For the NYC Hospitality Alliance.
State leaders also signed off on a measure that could eventually lead to a new casino in New York City. This ruling would allow the State Gambling Commission to require bidders to apply for one of three licenses to operate a arcade with card games and slot machines. The state currently has four casinos in the north of the state as well as two casinos in Queens and Yonkers that offer slots only.
Two race tracks – a racetrack with slot machines – are likely to become full-fledged casinos but the third location could become controversial. Lawmakers are already opposed to having one in Manhattan or in Coney Island, Brooklyn.
“We’re only half the time in this process, and it’s too early to know what will happen in the second half,” said Ivan Stavisky, a lobbyist at the Parkside Group who specializes in gaming issues. “The community consultation process does not prevent the Manhattan casino, but it does make it less likely to gain approval.”
What is out
Hochul couldn’t deliver on all of her promises and some important budget proposals didn’t make the final cut.
This year, real estate lobbyists targeted the renewal of an affordable housing tax incentive that would make it financially feasible to build housing projects offering a portion of their rental units at below-market rates. It was known for decades as 421a, until it was modified and renamed under Cuomo as Affordable New York. Hochul suggested updating the incentive, which it now calls 485w, and extending it beyond June 15 when it was due to expire.
The developers were optimistic that the measure would pass as the city faces an acute housing shortage. But progressive lawmakers argued that the plan was too similar to the current version, which did not deliver the number of affordable units it promised. Instead Hochul canceled it.
“It is fair to say that rent is very high and that it is on track to get worse with the governor’s proposed housing tax cut,” Kenny Burgos, a Bronx assembly member chirp. “That’s why I’m encouraged that the speaker stood with our conference to ensure that the program already responsible for New York becoming the nation’s most expensive housing market is not incorporated into the budget without a fair and open discussion about its repercussions.”
Real estate leaders had to recalibrate. The last time the stimulus was renewed in 2016, landlords and labor unions disagreed over prevailing wage requirements for construction sites in a months-long impasse.
Now developers, labor unions and apartment building workers agree that the tax cut should come back but they haven’t worked out a strategy on how to get the incentive to pass a legislature full of lawmakers who want to see it end.
Instead, they relied on dire warnings about inaction in general. Building and Construction Trade Council President Gary Labarbera, SEIU 32BJ President Kyle Bragg and REBNY President James Whelan issued this joint statement last week: “A program like this also creates much-needed opportunities for family-supporting jobs and much-needed housing.” New Yorkers. Without it, the crisis will only get worse as the city fails to produce enough housing to keep pace with population growth and jobs, and workers will pay the price.”
One option might be to continue to review the reduction so that it provides higher levels of affordability or additional incentives that would push developers to build in areas of New York City that were recently redistricted. Another option would be to tie the measure to something progressives would like, such as rules that would severely restrict tenant evictions, which also didn’t come into the budget.
“The idea of linkage is inevitable. Laws are not being considered out of thin air, there will be a horse trade,” said Daniel Bernstein, head of the Affordable Housing and Tax Incentives Unit at Rosenberg & Estis. “We have seen historical linkages to development incentives and other legislative initiatives from before”.
The governor may also consider reintroducing a law banning oil and gas hookups in newly constructed buildings by 2027. The proposal follows New York City’s new rule and is part of the Hochul administration’s ambitious climate agenda, which would cut greenhouse gas emissions by 40% by the end of Contract.
A coalition of energy groups lobbied against the bill, but real estate leaders largely support switching the energy flowing into city buildings from natural gas to electricity.
“This proposal appropriately balances the need to reduce emissions from buildings with the ability of the development community and suppliers to efficiently achieve this goal,” a REBNY spokesperson said. “We still hope that legislation compatible with these building code changes can be agreed upon before the end of the session.”
