City Council Forms Co-Op & Condo Caucus

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Hey there, let’s get into today’s news at the intersection of policy and real estate:

• The NYC City Council is forming a co-op and condo caucus, The Real Deal has learned.
• Policy wonks are spooked by a new prevailing wage requirement that may be included in Gov. Kathy Hochul’s proposed SEQRA reforms.
• State lawmakers and good government advocates are making a last-ditch push to end Opportunity Zone tax breaks in New York as part of state budget negotiations.
• Republican state lawmakers aim to kill the Revive Act.

In this edition we mention: City Council members Kevin Riley and Julie Won, the Citizens Budget Commission’s Director of Housing and Economic Development Studies Sean Campion, State Sen. Michael Gianaris, Assembly member Jeffrey Dinowitz and others.

We Heard

• Co-op and condo caucus: Members of the City Council are forming a co-op and condo caucus to advocate for the policy interests of the tens of thousands of New Yorkers who live in such apartments, according to two people familiar with the matter. Among the caucus’ priorities would be preserving co-ops and condos as affordable homeownership options in the five boroughs and the equitable implementation of Local Law 97, a 2019 law that sets limits on large buildings’ carbon emissions. “There’s a lot of talk about affordability now, and we don’t want to kill the goose that lays the golden egg — affordable co-ops are precisely that,” said one of the people involved in conversations on the caucus. The caucus’ anticipated members include some influential Council names: North Bronx Council member Kevin Riley, who chairs the body’s Committee on Land Use, and West Queens Council member Julie Won, chair of the Committee on Workforce Development, according to the people briefed on the situation. The City Council declined to comment on the caucus’ creation and referred TRD to Riley and Won’s offices; each did not return requests for comment.
• SEQRA reform worries: Albany lawmakers and Gov. Hochul are locked in negotiations over her bid to streamline the lengthy state environmental reviews most large housing projects must go through. The State Senate and the Assembly each have put forth counterproposals to modernize the State Environmental Quality Review Act, or SEQRA, that don’t go quite as far as the governor’s proposal and add requirements. But a series of new restrictions in the Assembly’s current draft plan has alarmed the policy community and spurred pushback. The Assembly’s vision for the reforms would add affordability requirements for new housing projects, restrict where they can be built and a new provision would require workers to be paid a prevailing wage. The changes also wouldn’t be permanent, expiring in 2029, under the Assembly’s draft. “It ultimately winds up offsetting any sort of cost savings that you would get from the SEQRA reform,” said Sean Campion, director of housing and economic development studies at the Citizens Budget Commission. “So in effect, where the proposal is meant to help make it easier to build more housing, this completely undermines that goal.”
• Death of a tax break?: State lawmakers and advocates are making an 11th-hour push to kill tax breaks for New York-based investors into out-of-state, low-income Opportunity Zones. As part of state budget talks, State Sen. Michael Gianaris and Assembly member Jeffrey Dinowitz are pushing a bill that would uncouple the state from a federal program that encourages investment in real estate, businesses and other projects in more than 9,000 Opportunity Zones across the country in exchange for a tax deduction for their capital gains. The bill would force investors to pay state and city taxes on their Opportunity Zone profits — clawing back an estimated $420 million in New York tax revenue each year through 2029, according to the government watchdog Reinvent Albany. “The Opportunity Zone program has proven to be a giveaway to wealthy developers, people that don’t need this kind of support at all,” said Gianaris. “This stuff is crazy, and it should be an easy choice to sit here and save the state a lot of money.” The bill has repeatedly passed in the Senate, but stalled in the Assembly. It’s getting a fresh push this budget season as state lawmakers look between the couch cushions for revenue as they navigate federal funding cuts and budget shortfalls.

• REVIVE Act pushback: State Senate and Assembly Republicans are coming out strongly against the REVIVE Act, arguing that the proposal to expedite projects that would convert empty malls and offices into housing would diminish the power of local governments to manage zoning and development in their communities. “There’s no question we need to tackle New York’s housing shortage, but you don’t solve a statewide issue by stripping local communities of their ability to make decisions,” said Assembly Minority Leader Ed Ra. State Sen. Steven Rhoads, who represents part of Nassau County, argued that the legislation replaces locally-driven planning with a “one-size-fits-all mandate from Albany.” The legislation, sponsored by State Sen. James Skoufis and Assembly member Michaelle Solages, is building momentum with Senate and Assembly Democrats but is beginning to face opposition from municipalities that see the bill as a threat to their authority. Hempstead Town Supervisor John Ferretti claimed the measure would effectively “silence the voices” of his community. “Local decisions belong in local hands — not dictated from Albany,” said Ferretti.

Have a tip or feedback? Reach me at caroline.spivack@therealdeal.com. 

Bill Tracker

The Catch-Up

With nearly 100 days in office Mayor Zohran Mamdani has rankled landlords but also moderated on some of his key housing-related campaign promises, writes TRD’s Kathryn Brenzel on his first 100 days in office.

The Mamdani administration is initiating a crackdown on co-op and condo tax abatement recipients by introducing a new document requirement to verify primary residency, writes columnist Erik Engquist.

Federal prosecutors are investigating whether Council member and zoning subcommittee chair Farah Louis and her sister, an aide to Gov. Hochul, accepted bribes or kickbacks in connection with the allocation of city funds to a migrant shelter provider, reported The Associated Press.

Gov. Hochul and state lawmakers passed a budget extender to at least April 7 after it became clear the budget would not be settled by April 1. Negotiations are still underway on major proposals to reform environmental reviews for housing and delay renewable energy targets tied to the state’s 2019 climate law, reports NY1.

The redevelopment of two NYCHA complexes in Chelsea has emerged as a key issue in the high-profile race to succeed retiring U.S. Rep. Jerry Nadler, writes Gothamist.

The Kicker

“We really haven’t started talking about the money part. This is the pattern: we do the policy, then we get to the finances,” State Sen. Majority Leader Andrea Stewart-Cousins told reporters Tuesday on negotiations for the state’s budget, which is typically due April 1 but is increasingly looking like it’ll be several days if not weeks late.

Read more

Mamdani crackdown targets condo and co-op tax cheats

State proposal aims to fast-track mall, office-to-resi projects

Senate looks to enshrine Opportunity Zones in tax code