NYS Passed Its 2023 Budget Last Week. How Did Our Priorities Fare?
(May 12, 2023) The deadline for the Governor and the State Legislature to pass a budget to keep the state running is April 1. This year, state leaders blew past that deadline through protracted negotiations over thorny issues like bail reform and what to do with the myriad of housing issues, including the Governor’s proposals to encourage communities to reform their zoning or otherwise be part of the solution of reversing the decades-long trends that have created our housing shortage.
The final $229 billion budget was passed last week and signed into law. How did BRI’s issues fare?
The “Year of Housing” Turns Into the Year of No Housing Policy
Beginning in January, 2023 was the year that everyone was talking about housing.
The Governor proposed a bold, robust plan that would have jumpstarted the building of 800,000 new homes across the state within five years. Dubbed “The New York Housing Compact,” the ambitious plan included new housing goals for each city, town and village, both within and without the Greater New York City region; offered “Safe Harbor” rezonings and reforms that municipalities could pass in lieu of reaching their housing goals; and included a state board of appeals for affordable housing projects to be built even in municipalities that refused to take any action. There were many other moving parts, including a heavy emphasis on transit-oriented development, robust data collection, planning support for municipalities, property tax incentives for the creation of affordable housing or for accessory dwelling units, an extension of 421-a projects, and much more.
Within the legislature, tenant activists continued their push on the “Good Cause” eviction bill which would upend the rental market by providing tenants at all ends of the market – affordable, market-rate, and luxury – a lease for life, providing for automatic renewal except for some narrow circumstances, and capping rent increases across the board for all properties. Less extreme, there was a push to help tenants who were legitimately encountering a financial catastrophe and at risk of homelessness through a Housing Access Voucher Program (which the BRI also supported), and a push by the Assembly to encourage the construction of new Mitchell-Llama style limited equity co-ops (which we enthusiastically supported.) There were also efforts to legalize basement apartments in New York City so long as they were up to code. No matter who you talked to, housing was what everyone was interested in making progress on.
And absolutely none of it made it into the budget.
Despite being one of the two issues (besides bail reform) that prolonged the budget past its deadline in the first place, none of those policies made it into the budget this year. Particularly surprising was how many supporters of “Good Cause” Eviction were willing to sacrifice other parts of the agenda that would help New Yorkers in need – including policies that they purportedly supported, like the Housing Access Voucher Program, Right to Counsel, or legalizing basement apartments – if “Good Cause” wasn’t also included.
There was some money included in the budget for emergency rental assistance for tenants of public housing authorities who had been left behind by the previous Emergency Rental Assistance Program (ERAP), but that was it as far as housing went – a big missed opportunity for this year.
We have already been in touch with the Governor’s office as well as some legislative leaders, and it is clear this will be a prime topic for next year’s budget as well. The BRI plans to stay involved both as a resource and as an organization where housing is the connective tissue that connects our members working in so many different corners of the real estate industry.
New Construction to Go All Electric
As part of the ambitious climate goals established by law in 2019, the budget also contains policy language prohibiting the installation of fossil fuel-based equipment for heating and cooking in new construction only.
The prohibition will happen on 12/31/2025 for buildings with fewer than 7 stories and 12/31/2028 for buildings with more than 7 stories.
Unlike previous drafts of the policy, the budget explicitly exempts existing buildings and rehabilitation work from this requirement (yes, including stoves). It also exempts emergency backup generators and dual fuel systems where the electric heat pump is the primary system.
Importantly, the Public Service Commission is required to evaluate energy supply and grid reliability within a region, and to allow for exemptions to the deadline if electric service cannot reasonably be added to the grid. Additionally, the Energy Code Law allows for the application of a variance if there are practical difficulties or hardships with exactly meeting the deadline (for example, if you’re working on a 10 home subdivision, have installed the infrastructure for natural gas, but because of delays only built 7 of the 10 units for whatever reason by 12/31/2025, you might apply for a variance for the remaining units.)
You’ll note that many of these additions are the “guardrails” that BRI members had been advocating for, and the policy is more practical with their addition.
Because of the lateness of the budget, there are only 4 weeks left in the legislative session. Bills that have lain dormant all session long suddenly start moving, deals are struck, and bill sponsors attempt to beat the clock on an expiring session. If we’ve learned anything from past few years of new laws being passed in Albany that have had a dramatic effect on homebuilders, developers, remodelers, landlords, property owners, co-op and condo board members, and managing, it’s that the old political adage is as true as ever: “You’re either at the table or you’re on the menu.”
Here’s how you can get involved:
- Make an investment in our industry with an investment in the Stars and Stripes Political Action Committee (PAC) fund to support candidates who share our pro-housing, pro-smart growth, and pro-property rights values, or who have demonstrated a willingness to take the concerns of builders, landlords, property owners, property managers, and others in our industry into account. This has been a critical tool for increasing our political outreach and working with legislators who understand the practical challenges our members face. Please go to www.buildersinstitute.org/pac and consider what you can give.
- Take action online at www.buildersinstitute.org/take-action/. The BRI is constantly updating our priority online campaigns, and making your voice heard has never been easier. Click on a campaign to automatically have messages go to your member of the State Assembly, State Senate, or to the Governor. You can use our talking points or craft your own message.
Thanks for everything you do,
CEO & Executive Vice President
The Building & Realty Institute