By: Ilana Siyance

New York has been ailing from a housing crisis– marked by a dire shortage of housing inventory, affordability problems and  increased homelessness.  As reported by the NY Times, on Monday, Democrats in the NYS Senate proposed legislation which included a number of ideas -old and new -in a bid to add more affordable housing to the city.  One of the ideas included in the sweeping  legislation is the Mitchell-Lama program, formerly launched in the year 1955, which would create a new public benefit corporation with which to finance housing construction on state-owned land.

The 70-year-old initiative had first been enacted after World War II to enable construction of  over 100,000 units of middle-income housing at a time when the city was similarly ailing from a housing crisis due to an influx of immigrants and refugees.  “Mitchell-Lama 2.0,” the $250 million proposal, would differ in a few important ways.

Per the Times, it would form a new state entity that could finance developments on state-owned land. Developers would be given cheap leases on state land, exempt from taxes and from parts of the lengthy public review process. The state would also lend money to developers, to help make the building process faster and less expensive for companies.  In exchange, condos and rentals built through the program would need to be priced affordable for middle-income households. In NYC for example, that threshold would need to be affordable to a family of four earning $232,980.

The proposed plan will also bring back a version of the 421a tax break for developers, which had expired in 2022.  Per the NY Times, the property tax exemption for developers building new housing will this time, however, include more robust affordability protections than the earlier versions. The program had been criticized by liberals as giving generous tax write-offs to big  developers planning multi-family housing projects in exchange for setting aside some units at affordable prices.  When legislators had failed to renew the tax break, however, developers stalled on planning new projects and construction of new housing fell, prompting legislators of the need to bring it back.

In order to include the left wing, the proposed program would also include a “good cause eviction” legislation, which restricts landlords’ ability to evict tenants, forces most landlords to offer tenants automatic lease renewals and requires landlords to justify larger rent increases.

The Senate’s new proposal, released within the One House budget bill on Monday, is the first draft of the coming budget negotiations.

The governor and both houses of the Legislature each propose their own version, and leaders in Albany have to come to an agreement by the April 1 budget deadline, all supporting the final budget.  The successful plan needs to incentivize as much new development as possible, while supporting both landlords and tenants, said Andrea Stewart-Cousins, the Senate majority leader and a Democrat from Yonkers, NY.  She called for a “big idea” which could holistically help affordability for generations of New Yorkers.

“I want my kids and grandkids to be able to hang around,” she said. “I want to be able to hang around!”

For years, lawmakers have been struggling to pass legislation that will actually help create more affordable housing.  Last year, Gov. Kathy Hochul set forth an ambitious plan that would force suburban communities to allow for more development.