When Will New York Solve Its Housing Crisis? Probably Not This Year.

It seemed like 2023 would be the year New York did something big to help solve its housing crisis.

As skyrocketing rents punished residents, the progressive wing of the Democratic Party rallied around new safeguards for tenants. Gov. Kathy Hochul, a centrist Democrat, vowed to build more homes in the suburbs. The real estate industry seemed open to revamping a coveted tax break for developers in ways that would make new apartments more affordable to rent.

Instead, lawmakers went home without doing much at all.

Now, state leaders will get another try. The 2024 legislative session, set to begin on Wednesday, will again test New York State’s willingness to tackle one of its most debilitating problems.

The context this year is in some ways worse than it was in 2023. A surge of migrants arriving in New York City has overwhelmed its homeless shelter system. High interest rates and the expiration of the tax break, known as 421a, have slowed apartment construction to a trickle, threatening to deepen the city’s housing shortage. Rents and home prices remain among the highest in the nation, straining everyday life for the lowest-income New Yorkers and driving the middle class away in droves.

Yet interviews with state and city officials, housing experts and advocates suggest the chances of a major deal in Albany are mixed at best.

For one, there is a growing sense that state officials tried to do too much, too quickly in 2023. Years of campaigning and painstaking coalition building preceded big policy changes in other states like California and Massachusetts.

But in New York, the powerful lobbying arm of the real estate industry and the influential tenants’ rights movement, backed by an emboldened group of progressive lawmakers, are still at odds. Without a resolution on new tenant protections in particular, a broader housing package remains out of reach.

Ms. Hochul has said she won’t reintroduce her ambitious housing plan in 2024 because of resistance from the State Legislature, especially as Democrats hope to regain influence in the suburbs ahead of November’s elections.

Most agree that any lasting solution to the housing crisis must eventually run through the state government. But there appear to be few champions willing to take on an issue wrought with political pitfalls, and if and how anything will happen is unclear.

If the governor steps back, “who is leading this discussion through the complex desert of compromise?” said Alicia Glen, founder and managing principal at MSquared, a development firm.

What went wrong?

Before Ms. Hochul became governor, political leaders in Albany typically focused housing reform efforts on New York City, the place where the housing crunch inevitably receives the most attention.

But last year, the governor decided that a deeper solution needed a broader approach. If New York was ever to fix its housing shortage, the state needed to force the suburbs around New York City to allow for more housing, as California and Massachusetts had done, Ms. Hochul said.

Doing so, however, brought another influential party into the fray: the wealthy and politically powerful suburbs of Long Island and Westchester County, where resistance to the denser housing the governor was proposing was strong.

In other states, it took years — and sometimes decades — to pull together political coalitions that could overcome suburban resistance. Last year, it quickly became clear that Ms. Hochul “hadn’t built a coalition,” said Cea Weaver, campaign coordinator of Housing Justice for All, which supports tenants.

Jessica Katz, the former chief housing officer under Mayor Eric Adams, supported Ms. Hochul’s effort and was involved in negotiations in Albany. “We were hopeful you could get it done right out the gate,” she said. “But history teaches us that these things take a moment to gain traction.”

With the centerpiece of Ms. Hochul’s housing agenda, the suburban housing mandates, lacking legislative support, she took them out of the mix.

At the same time, the tenant and landlord factions were also at a stalemate over a “good cause eviction” bill that would insulate tenants from sharp rent increases and give them a right to renew their leases. The real estate industry, which has donated heavily to Ms. Hochul’s campaigns, opposed the bill. The progressive caucus would only support a housing plan that included it.

So, nobody got what they wanted.

Ms. Hochul declined to comment, but her office pointed to a November speech she gave at New York University, where she said she took a “big shot but I didn’t get an assist.”

“But, if anybody knows me, there’s always another season,” she said, adding, “I’ll step up again, tempered with the reality that there’s a lot going on out there, including an election this year for our Legislature, so that changes the focus for our members.”

Andrea Stewart-Cousins, the State Senate majority leader, did not respond to requests for comment. Michael Whyland, a spokesman for Carl Heastie, the speaker of the State Assembly, said in an email that it was “up to all sectors to come together” to address New York’s housing crisis.

A solution next year — or years from now?

The state’s failures to pass a housing plan last year drew widespread criticism and dismay, but housing advocates and others noted that, typically, New York City officials have been the ones to initiate change, not state leaders.

“Housing policy generally originates in the city and then works its way through Albany,” said Ms. Glen, who was a former deputy mayor for housing and economic development under Mayor Bill de Blasio and helped negotiate between the city and the state during her tenure.

“This was sort of an inversion, where you had the state taking the lead,” she added.

Many housing advocates felt that Mayor Adams could have done more to try to broker a housing deal and that other issues — like criminal justice — were getting more attention.

Mr. Adams did publicly call for a renewal of the tax incentive and for help in converting vacant office buildings to homes, and he helped push bills to assist public housing residents. At the city level, he is advocating new rules to allow development above commercial strips and near subway stations and elsewhere within city limits, though he has said even those would need new state tax incentives to meet their potential.

More recently, however, he has been louder in calling on Albany to make a housing deal. The mayor, who had previously expressed reservations about good cause eviction, signaled he might be more open to it.

“We need to come to a resolution,” he said last month. “A part of that resolution is to sit down and come up with tenant protections. I’m open to that conversation because I believe in tenant protections.”

As city-based progressive lawmakers re-up their efforts to pass a good cause eviction bill, many have signaled they are more willing to compromise this year, and would be open to pairing such a bill with a new tax break for developers. State Senator Michael Gianaris, the Democratic deputy majority leader, said he and his colleagues were open to a discussion with Ms. Hochul “to enact real tenant protections in addition to constructing additional affordable housing.”

The governor is still figuring out how she plans to approach housing in the upcoming session. There is a trade-off, her office said: Would backing a deal exchanging tenant protections for tax incentives undermine the push for a bigger, more transformational approach to housing?

At a news conference on Tuesday, Ms. Hochul said she was “hoping that the Legislature will work for it with us again, to focus on supply.” But her office also confirmed that she would not be pursuing her suburban growth bills this year.

And the real estate industry seems unlikely to bend on its opposition to good cause eviction.

Officials with the Real Estate Board of New York, the industry’s lobbying arm, said they had not seen a proposal that felt workable. James Whelan, the president of REBNY, said in a statement that the organization hoped the state would address lagging housing production this year “with data-driven policies that reverse these trends.”

Even some of the strongest supporters of Ms. Hochul’s broader housing initiatives concede it might take a multiyear effort to complete all of them. Annemarie Gray, the executive director of Open New York, a nonprofit that supports housing development, said that smaller, pro-growth measures that “broaden the coalitions and momentum towards larger reforms” made the most sense now.

Supporters of the governor note that there has already been some of that incremental movement: The governor signed a bill to help rehabilitate affordable homes, for example, and helped steer money to public housing residents dealing with rent debt from the coronavirus pandemic.

She also took executive actions that did not require the Legislature’s approval, including one that provided development incentives similar to the lapsed 421a for some city projects already underway. As of mid-December, New York’s economic development agency had received 19 applications covering up to 5,500 units, including 1,400 considered affordable, state officials said.

Ms. Gray said 2023 was the first year in decades that state politicians had seriously debated “pro-housing reforms with real accountability.”

“That momentum is a big step compared to where the conversation was even two years ago,” she said.

Grace Ashford contributed reporting.