New York City is stuck in a never-ending housing crisis. It’s not for a lack of effort – New York City’s homelessness budget rivals that of the federal government’s national budget. But every time the government pours money, time, and assistance into increasing and improving housing a new problem arises, making all that work seem futile. 

Recently, the COVID-19 pandemic exacerbated New York City’s housing crisis. The pandemic not only increased unemployment rates but also led to a surge in evictions and foreclosures, putting even more people at risk of losing their homes. Homelessness soared – going from hovering around 3.63% in 2017 to 4.5% in 2021. 

Luckily, New York City is nothing if not resilient. To combat the housing crisis, the FY (fiscal year) 2023 budget included a $25 million investment toward a 5-year plan meant to restore or build 100,000 housing units. In April 2024, it was announced that the FY 2025 budget will allocate $600 million to improve housing across New York. 

However, the New Housing Plan is not just increasing physical housing. Many laws regarding property taxes and tenants rights are being modified.

Tax Exemptions

Law 421-A, passed in 1971, was designed to stimulate residential real estate development in New York City by offering tax incentives to developers who agree to include affordable housing units in their projects. Law 485-X, which grants tax exemptions for the construction of housing deemed affordable, is a continuation of Law 421-A included in the New Housing Plan.

A part of the New Housing Plan, tax exemption 485-X incentivizes property owners to create affordable housing, adding to the ones created directly by the city. 

There are two stipulations to qualify as an affordable housing unit. First, the unit has to be in an area in which ANNY (Affordable Neighborhoods for New Yorkers) benefits are applicable. Second, the renters have to be a household whose income falls under a percentage of the area’s median income. The percentage of affordable housing units necessary varies depending on the size of the housing project and the income bands of the affordable housing units in relation to the area’s median income. 

The most straightforward way to meet the definition of affordable is to have a percentage of the housing units be affordable housing units. The housing getting a tax exemption having to be affordable housing is an essential part of the Housing Plan’s goal to direct aid towards those who are lower-class, ensuring that the benefits reach those who need them most. 

Law 485-X not only helps alleviate the housing crisis but also promotes social equity by ensuring that lower-income families have access to safe, affordable homes within the city.

Eviction Rights

The New Housing Plan also includes The Good Cause Eviction Clause, which details all the new regulations for why a landlord may evict a tenant.

1. The tenant can not meet rent. 
   1. If a tenant feels they are being evicted due to an unfair rent increase, they can bring the case to court. 
2. The tenant is breaking important lease terms or house rules and hasn’t fixed the problem after a 10-day written notice
   1. These rules must be deemed reasonable.
   2. These rules must be included in the lease from the start.
3. The tenant is causing a nuisance or significant damage to the property, affecting others’ comfort and safety.
4. The tenant is breaking laws, causing the landlord to face penalties.
   1. Only if the violation requires their removal.
   2. Only if the landlord didn’t cause the problem by neglect.
5. The tenant is using the property for illegal activities.
6. The tenant unreasonably refuses the landlord access for necessary repairs or to show the property to potential buyers or interested parties.
7. The landlord needs the property for their own or a close family member’s primary residence
   1. This does not apply if the tenant is 65 or older
   2. This does not apply if the tenant is disabled.
8. The landlord wants to demolish the property
   1. The landlord can prove they plan to do so in good faith.
9. The landlord wants to take the property off the rental market
   1. The landlord can prove they plan to do so in good faith.
10. The tenant won’t agree to lease changes or rent increases, even after getting written notice 30 to 90 days before the lease ends.
    1. Lease changes or rent increases have to be deemed reasonable.

Through The Good Cause Eviction Clause, the housing deal aims to protect tenants from significant rent increases. However, there are still many loopholes that allow landlords to evict tenants. Specifically, any rental unit will be exempt from these eviction provisions if its monthly rent exceeds a certain percentage of the fair market rent. This means that tenants who can afford higher-rent units are more likely to face eviction and greater rent increases.

The fair market rent is determined and published by the United States Department of Housing and Urban Development (HUD) and is further specified for each county in the state by the Division of Housing and Community Renewal. This percentage of fair market rent that determines exemption is established in the local law adopted by each area.

If a local law does not specify what this percentage is, the default rule applies. Under this default rule, any rental unit with a monthly rent greater than 245% of the fair market rent will be exempt from the protections provided by the housing deal. 

Effects

The positive impact of government-funded housing has been proven many times throughout New York City’s history. One instance is in the 1970’s, when the large, bustling city that New Yorkers know today did not exist. Economic stagnation drove many of its residents to the suburbs, leaving its homes and apartments barren. These empty homes deteriorated, so, when the city started repopulating, there was a lack of housing units. The situation was soon declared a housing crisis.

Then came the Ten Year Plan for Housing. Even though its effects were not permanent, this plan alleviated New York City’s housing issues. 

Similarly to today, the Ten Year Plan for Housing originally started off as a $4.4 billion 5-year plan meant to restore or build 100,000 housing units and expanded to be 10-years long. It also included government assistance like property tax decreases to incentivize the private construction of housing.

The impact of this Ten Year Plan for Housing showed that increased housing is not only beneficial for people who obtain housing. Improved housing conditions lay the groundwork for stability and growth in the surrounding communities.

Abandoned properties – dubbed zombie properties – beckon criminal activity and, without proper maintenance, generate safety and health hazards. By filling these zombie properties with people who are invested in the well-being of these homes, the risks to the surrounding neighborhood are reduced.

Furthermore, as a result of the housing from city-funded plans like the Ten Year Plan for Housing, the value of homes in the neighborhood increases. The Furman Center found that, “prices of properties right next to city-assisted housing sites rose by 10.6 percentage points more than those in the surrounding neighborhood.” 

Just like the Ten Year Plan for Housing, the new Housing Plan paves the way for a more livable and sustainable New York City. Yes, the effects of these plans may not be permanent. Yes, future crises may arise. But, just like always, New York City’s resilience ensures it will find a way to recover. These housing reforms are crucial steps towards achieving this long-term stability for all New York City residents. 

New York City is stuck in a never-ending housing crisis. It’s not for a lack of effort – New York City’s homelessness budget rivals that of the federal government’s national budget. But every time the government pours money, time, and assistance into increasing and improving housing, a new problem arises, making all that work seem futile.