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The State of New York

The Winners and Losers of New York State’s Budget Deal

Winners: real estate, Governor Hochul, and independent media. Losers: New Yorkers who desperately need housing, and weed bodegas.

Governor Kathy Hochul standing at a podium that says "shutting down illegal stores"

(Susan Watts / Office of Governor Kathy Hochul)

Three weeks after the April 1 deadline, New York state lawmakers passed a set of budget bills on Saturday totaling $237 billion in spending for next year, the culmination of months of political horse trading and millions in lobbying. 

Who imposed their will? Who got punked? And how will the budget affect New Yorkers? 

WINNER: The real estate lobby

With rental vacancy rates hovering around one percent, and poor and middle-class New Yorkers leaving the state in droves because it is becoming impossible to afford, addressing the housing crisis was everyone's top budgetary priority, and the debate over how to fix it was the main reason the budget was so late.

Housing advocates, some Democratic lawmakers, and renters across the state were rooting for Good Cause Eviction legislation introduced in 2019—which would cap annual rent increases at three percent or 150 percent of the change in the consumer price index and prevent evictions without a legitimate justification—to make it into the state budget.

Instead, the housing deal passed by state lawmakers allows for higher rent increases, is riddled with exceptions, and will be difficult to fully enforce. To put it another way: Drowning tenants cried out for a life preserver, and their elected officials tossed them a copy of "Swimming for Dummies."

For the best summary of how the housing deal will affect tenants, look to City Limits, but here's the gist: Instead of creating a hard limit for rent increases, the language allows tenants to challenge rent increases that are above five percent plus inflation or 10 percent, whichever is lower. Except, and please read the following in the harried used car radio commercial fine-print voice, in cases where the landlord owns fewer than 10 apartments; in owner-occupied buildings with as many as 10 units; in buildings certified for occupancy after January 2009; in apartments that are currently really, really expensive (think $5,846 for a studio); and apartments that are condos and co-ops. 

The law also only immediately applies to New York City—the rest of the state, which is also reeling from the housing crisis, will have to opt in—oh, and it expires in 10 years.

And as part of the budget deal, landlords of rent-regulated units received an increase on the repair costs they can recoup via rent increases, from $15,000 to $30,000 for all apartments and $50,000 for apartments that are empty that have been occupied for 25 years, and those that were empty from 2022 to 2024. The group that represents these landlords, CHIP, was asking for that cap to go into the six digits.

On the housing supply-side, which Governor Kathy Hochul clearly prioritized over tenant protections, builders got an extension of the 421-a tax incentive program, as well as the next generation of this program called 485-x, which will create slightly higher affordability requirements for developers who want to take advantage of it.

The Real Estate Board of New York released a statement expressing their displeasure with the whole deal, mostly focusing on the new requirements under 485-x. But looking at the Good Cause protections before and after they entered Albany's Black Box of Budget Negotiations, it's hard not to argue that they got their lobbying money's worth—$13.6 million from 2019 through 2023.

LOSERS: Tenants trying to figure out how many apartments their landlords actually own

The housing deal passed in the budget requires landlords who want to jack up the rent or not renew a lease to notify their tenants if this version of Good Cause applies to them. But how can tenants check to see if their landlords own fewer than 10 apartments, given that it's exceedingly difficult for even the state to parse how many apartments landlords own, since they can just hide behind anonymized LLCs?

Well…tenants might have to take landlords to housing court to find out. The LLC transparency bill passed in 2023 was supposed to make the LLC database public record, but Governor Hochul ripped out that provision of the law when she signed it. You'll have to trust good old New York state. (This search tool might help too.)

It's still not clear how many tenants the new eviction protections will cover, but state lawmakers claimed victory by asserting that 75 percent of all tenants in New York City will be under some form of protection, whether its existing rent regulations or this new law.

Housing Justice for All, the coalition fighting for the original 2019 good cause bill, countered that more than three million tenants would be left out, though they counted the two million that were excluded because the law itself only applied to New York City.

LOSERS: The neediest New Yorkers who deserve a place to live

The Housing Access Voucher Program, which would have created a statewide housing voucher system that would apply to people earning 50 percent or less of their region's area median income—$69,900 for a family of three in New York City—did not make it into the budget.

WINNER: The fossil fuel lobby

New York state is supposed to phase out fossil fuels by 2050, and we are nowhere close to where we need to be in order to do that. Which is why lawmakers introduced the HEAT Act, which would end the legal requirement that utility companies provide natural gas to any customer who wants it, which in turn subsidizes a fossil fuel industry that we're supposed to be weaning ourselves off from.

Governor Hochul supported putting the HEAT Act in the budget, and so did the State Senate. Utility companies like Con Ed were also behind it.

But the HEAT Act died in the Assembly. Climate advocates blamed Assembly Speaker Carl Heastie. "From where I sit, it’s the speaker’s fault," one told NY Focus. "It’s very clear that it’s not the Senate or governor killing this thing. It's not the [Assembly] rank and file—we had like a million events with legislative champions across the state."

National Fuel, one of New York's biggest gas-only utilities located upstate, also lobbied hard against the HEAT Act, spending gobs of cash on pro-gas TV ads.

WINNER: New York City residents who don't want to be killed by speeding drivers

Sammy's Law, which will allow New York City to lower its default speed limit from 25 mph to 20 mph, passed in the budget. Yes, the bill was watered down to exclude streets outside of Manhattan with three or more lanes, but lowering the speed limit has been shown to result in significant reductions in fatalities. Early last week, there still appeared to be some resistance to the legislation in the Assembly, but according to Streetsblog, the governor pushed it through (maybe she reads Hell Gate?).

WINNER: Hell Gate (?) and other independent sources for local journalism

This year's budget included the first payroll tax credit for local news organizations in the United States. The Local Journalism Sustainability Act sets aside $30 million for three years to give a 50 percent refundable credit for the first $50,000 of a journalist's salary, and publications can receive up to $300,000.

Eligibility will ultimately be determined by Empire State Development, a quasi-public entity essentially controlled by the governor, but we are cautiously optimistic! Full parameters of the program can be found here, way down at Part AAA. (Disclosure: Earlier this year, a representative of Hell Gate met with a member of the bill's State Senate sponsor, Brad Hoylman-Sigal, to discuss the legislation.)

LOSERS: Illicit weed bodegas

The SMOKEOUT Act passed in the budget, giving both state authorities and localities—like New York City—the power to padlock illicit weed shops and fine landlords up to $50,000 if they fail to evict them. 

Mayor Eric Adams and the lawmaker he once referred to as a "beast", Queens Assemblymember Jenifer Rajkumar, are very happy about this. (Rajkumar authored the bill.)

WINNERS: Assholes who block their license plates

With congestion pricing taking effect in mid-June, the MTA and the governor asked lawmakers to increase penalties for drivers who obscure their license plates. Increased penalties did make it into the budget—fines for obscuring your plate go from $50 to $100 and max out at $500, instead of $300. But somehow, state lawmakers (i.e., drivers) still allow you to be convicted of this offense THREE TIMES in five years before the DMV is empowered to suspend the vehicle's registration…for 90 days.

In a city where dangerous drivers view tickets for blowing past red lights and speeding through school zones as simply the cost of doing business, we're skeptical that these penalties will actually change anyone's behavior. 

WINNER: Governor Kathy Hochul

A recent Siena Poll showed that Governor Hochul has a sub-50 percent favorability rating with her constituents, but she is faring far better with the state legislature, especially compared to last year, when her nominee for the State Court of Appeals was voted down by the legislature in an embarrassing rebuke.

In this year's budget, Hochul got a bunch of new increased penalties as part of her crackdown on retail theft, a major expansion of what is considered a hate crime, and successfully resisted efforts to tax the rich (the Assembly and the State Senate wanted to hike taxes on New Yorkers making millions of dollars).

This story has been corrected to reflect that Assemblymember Rajkumar authored the SMOKEOUT Act.

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