On April 15th, New York Governor Hochul announced a preliminary agreement with state legislative leaders on the budget for the 2025 fiscal year, totaling $237 billion. One of the most prominent aspects of this agreement is a large-scale reform of housing policies.
Hochul made the announcement during a press conference at the state capitol building, revealing a preliminary agreement totaling $237 billion, which is $40 billion more than the $233 billion executive budget she proposed in January. Majority leader of the State Senate, Andrea Stewart-Cousins, and Speaker of the State Assembly, Carl Heastie, are set to submit the agreed-upon budget for votes in the State Senate and Assembly. It is expected to garner enough support and may only undergo minor revisions to specific details before hopefully being passed before the 19th and sent to Hochul for signing.
On April 12th, Hochul, Heastie, and Stewart-Cousins had reached a significant agreement on housing policy reform. This includes providing new tax incentives for new housing construction to replace the expired 421-a program, enacting the “Good Cause Eviction Act” to protect tenants, allowing landlords of rent-stabilized apartments to significantly increase rents for renovations, raising the residential floor area ratio cap in New York City, and encouraging the conversion of office buildings into residential units. Additionally, $500 million will be allocated to build 15,000 new housing units on state-owned land.
Although the “Good Cause Eviction Act” is included in the budget agreement, there are limitations compared to the original proposal. Apartments with rents exceeding 245% of the market average (approximately $6,000 for a one-bedroom apartment) will be exempt from annual rent increase limits. Apartments below this threshold will have their annual rent increases capped at 10% or 5% plus the inflation rate, whichever is lower. The exemption of small landlords with less than 10 units from the “Good Cause Eviction Act” restrictions will be subject to further discussion and determination in the state legislature.
Despite Mayor Adams’s call for increased state aid to help New York City address the immigrant crisis, the agreement maintains the previously proposed $2.4 billion. However, the budget agreement includes an extension of two years for the city’s control over public schools during the final stages of the negotiations. It also involves enhancing measures to assist local authorities in shutting down illegal cannabis shops and allocating $40 million to combat in-store theft and increase penalties for assaulting retail workers. While both the State Senate and Assembly had hoped to tax millionaires, Hochul remained firm in her opposition, and it was not included in the agreement.