Who Is to Blame for Killing Kathy Hochul’s Housing Plan?

The New York Housing Compact was a good idea while it lasted. Which was not long.

On Thursday, less than four months after Gov. Kathy Hochul proposed it, state legislators bullied the plan out of the budget. The chance that they pass it before taking their annual seven-month break from Albany is now close to zero.

As a result, New York will not add anywhere near the 800,000 homes that Hochul said her Housing Compact would produce over 10 years, and the values of existing homes will be higher because of tight supply. That will mean more homelessness, higher rent burdens and more population (and political power) shifting to other states.

Homeowners and landlords will benefit from the lack of competition, but the public and the real estate industry as a whole will lose.

There is plenty of blame to go around, so let’s get to assigning it.

Gov. Kathy Hochul

It seems unfair to pin the demise of a fine plan on its architect, but Hochul failed to lay the groundwork needed to pass it. It’s possible that she assumed its beneficiaries would readily fight for it. As a veteran of New York politics, she should have known better.

Confronted with a blueprint they had no role in crafting, interest groups immediately held it hostage to their own agendas. Tenant advocates wanted eviction protections and rental subsidies. Construction unions wanted job guarantees. Suburban governments wanted veto power and free money.

But Hochul spent last year raising campaign money, hoping that a landslide electoral victory would give her the mandate, or at least the momentum, to get her plan through. Instead, she eked out a win and her fellow Democrats lost ground to the GOP, leaving them petrified to do anything that could be used against them in 2024.

The suburbs

Even if they had no fear of losing their seats next year, suburban legislators might still have opposed a key element of Hochul’s proposal: that developers stymied by localities could get projects approved by a state panel instead.

Local control of zoning is precious to these towns, and many — especially on Long Island but also in the northern suburbs and the Hudson Valley — use it to preserve the status quo. That is, single-family homes with driveways, expansive lawns and white picket fences.

Assemblyman Ed Flood (R,C-Port Jefferson) at a press conference today, March 20, 2023 (NY Assembly)

In these towns, housing growth is equated with traffic congestion, even though Hochul was telling them to put apartment buildings in walkable areas near LIRR and Metro-North stations. Some folks associate rental buildings with poverty, crime and people unlike them. And they know their home values will rise faster if no new homes are built.

Hochul’s message about the suburbs doing their part to end the housing crisis did not resonate. It made new housing seem like a burden, not a benefit. Self-interest always comes first.

Organized labor

Construction unions did not rally for Hochul’s plan. Some even opposed it because it made no special provisions for them. They wanted to ensure their members — and not lower-paid nonunion workers — would be building the 800,000 homes.

Hochul, though, is trying to make housing affordable in New York. Restricting construction to highly paid union workers would conflict with that goal. Perhaps she thought they would see the big picture, which is that more construction helps union and nonunion workers alike. But union leaders want specific provisions, such as prevailing wages, that they can tout to their members.

Progressives

The most self-defeating opposition came from the left, which demanded that good cause eviction, rental vouchers and robust affordability mandates be part of the housing plan. Why give developers tax breaks to build (or convert offices to) rentals, they figured, if at least 40 percent of the units would not be set aside as affordable?

Politically, it often makes sense to withhold support for a governor’s agenda until your priorities are included. In this case it did not, because it helped kill a plan that would have benefited their constituency: people of lesser means.

A tight housing market benefits wealthy people, who can pay more for a scarce resource. For housing-starved New Yorkers to reject an end to exclusionary zoning because it didn’t come with stronger eviction protections was like a shivering person rejecting a coat because it didn’t come with boots.

Legislative leaders

Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie, like all legislative caucus leaders, put their members’ survival first, because it ensures their own survival.

It matters little that their majorities are large enough to withstand the loss of a few seats in the next election. They don’t want to lose any seats. The idea of sacrificing members next year for a long-term alleviation of the “housing crisis” was anathema to Heastie and Stewart-Cousins.

Many of the examples above are of people cutting off their nose to spite their face. Shouldn’t suburbanites want their kids and elderly parents to be able to afford homes nearby? Shouldn’t construction workers want more construction, tenants want more apartments, and legislative leaders want legislation?

At the same time, though, for each of them, killing the Housing Compact was rational, in some twisted way. The suburbs want housing to stay expensive. Unions will say they snubbed Hochul because she snubbed them. Legislators will avoid a primary challenge, or campaign on having fought for their constituents. The majority leader and speaker will keep their posts.

It’s amazing how many benefits can be reaped by accomplishing nothing.