NYS Senate, Assembly Make Hochul’s Bad Housing Plan Worse

If you’re in the business of writing about Albany making things worse for the real estate industry and all New Yorkers, you never run out of material.

Recently I wrote about Gov. Kathy Hochul’s proposal to crack down on an entirely nonexistent problem: large investors cornering the market on single-family and two-family homes in New York.

Governors are supposed to be the adults in the room — executives with a broad purview who can stop the wackiest bills advanced by clueless or ideological legislators.

In this case, Hochul did the opposite: Her plan was like dangling crack cocaine in front of a drug-addicted legislature.

Predictably, the Assembly and Senate smoked that rock and came back for a much larger hit, as my colleague Kathryn Brenzel reported Wednesday.

Senate Democrats’ formal 2025 agenda includes the End Hedge Fund Control of New York Homes Act, a truly Orwellian name because hedge funds do not control homes in New York. How can you end something that has not even started, probably never will, and even if it did, wouldn’t necessarily be bad?

The bill covers homes with up to four units, instead of Hochul’s two. Even more extreme, it slaps a 50 percent tax on investor purchases of homes. That is the equivalent of a ban. It’s probably unconstitutional and is definitely bad policy.

Most investors who buy, renovate and flip (or rent out) houses are mom-and-pops, the kind of folks who have become popular on HGTV. You’d think state lawmakers would want to encourage this kind of thing, especially now that renting is more economical than buying in every metro area in the U.S., as a LendingTree analysis found.

Yet the Assembly defines an institutional investor as anyone with a net worth of $5 million or more. That means if you own a townhouse in the city, or just have a co-op and a decent-sized 401(k), the Assembly would impose a 10 percent tax on your next home purchase.

Chances are, you wouldn’t even be able to make an offer: The Assembly’s agenda also calls for not allowing sellers to receive bids for 90 days from potential buyers who have $5 million to their names.

Just imagine an agent telling an affluent home shopper, “I cannot share your offer with the seller because the state legislature defines you as a hedge fund.”

You cannot make this stuff up. And there’s no need to, because politicians provide an endless stream of senseless ideas.

The vast majority of bills do not pass, but this one actually might because the governor, Assembly and Senate each have a version of it in their budget proposals.

The days of “three men in a room” are technically over, because now two of the three leaders are women. What Albany really needs in the room is at least one adult.