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.
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