Real Estate

NY's Housing Shake-Up: 485X and Good Cause Eviction in Play

New York's housing policy at a crossroads with debates on 485X tax incentive, good cause eviction, and balancing development with affordability.

By Tal Alexander

4/4, 07:34 EDT

Key Takeaway

  • New York's housing deal includes a 421a replacement (now 485X), good cause eviction adaptation, and lifts the city’s residential density cap.
  • Failed agreement on 421a wages and other policies could delay significant housing reforms until after the state budget process.
  • Mason Tenders’ District Council pushes for a $40 minimum wage in construction, potentially influencing future housing policy frameworks.

Navigating New York's Housing Policy Maze

In the labyrinth of New York's housing policy, lawmakers are at a crossroads, deliberating on pivotal changes that could reshape the state's real estate landscape. The overdue state budget has become a battleground for housing policies, with proposals ranging from rent increases for apartment improvements to the controversial replacement of the 421a tax incentive, now dubbed 485X, and the introduction of a version of good cause eviction. These discussions unfold against a backdrop of a housing market in flux, where the demand for affordable housing collides with the interests of developers and construction unions.

The 485X Conundrum and Good Cause Eviction

The Real Estate Board of New York (REBNY) and the Building and Construction Trades Council have reached an agreement on wages for a new 421a program, now referred to as 485X. This agreement is part of a broader housing package that also includes a version of good cause eviction, mirroring California’s Tenant Protection Act, and other measures aimed at increasing residential density and incentivizing housing development on church properties. However, the exclusion of basement and cellar apartment legalization and the vague details surrounding office-to-residential conversion incentives highlight the complexities and compromises inherent in policy-making.

The Broader Housing Landscape

The housing deal, or lack thereof, is symptomatic of a larger struggle within New York's housing sector. On one hand, the state grapples with underbuilding and restrictive zoning laws that stifle development. On the other, there's a push for more public-led housing initiatives, as evidenced by Senator Jessica Ramos's proposal for the Jobs and Housing Act. This act aims to leverage state funding and land for affordable housing, setting a precedent for a shift away from reliance on private developers. Meanwhile, the construction industry and various unions are lobbying for their interests, further complicating the negotiation process.

A Tale of Two Cities: New York's Housing Dichotomy

New York's housing saga is a tale of two cities: one where overbuilding in the Sun Belt leads to a real estate disaster, and another where stringent zoning and bureaucratic hurdles result in chronic underbuilding. The state's housing crisis is exacerbated by lengthy rezoning processes, landmark preservation challenges, and departmental inefficiencies, painting a grim picture of a city struggling to meet its housing needs. Amidst this, the push for a new 421a program and good cause eviction legislation reflects a desperate attempt to find a middle ground that satisfies both the demand for affordable housing and the economic realities of development.

A Path Forward: Balancing Development and Affordability

The ongoing negotiations and proposed policies underscore a critical juncture in New York's housing policy. The introduction of 485X and good cause eviction, alongside other measures, represents an effort to balance the interests of developers, unions, and tenants. However, the success of these policies hinges on their ability to address the underlying issues of underbuilding, zoning restrictions, and the need for more public-led housing initiatives. As New York navigates these challenges, the outcome of these negotiations will have lasting implications for the state's housing market, affordability, and the overall economic landscape.