BALCONY - Business and Labor Coalition of New York
June 16th, 2016

In an otherwise sleepy end-of-session up in Albany, one of the supposed hallmarks of Gov. Andrew Cuomo’s finalized budget this spring – $1.9 billion for affordable housing and supportive housing for the homeless – is being held hostage, potentially jeopardizing an entire year’s worth of affordable housing development throughout the state.

Housing advocates are understandably anxious after state Sen. Jeff Klein emerged from a meeting with legislative leaders to say that it was unlikely a memorandum of understanding would be signed by leaders of the Assembly and Senate to release the money before the legislative session concludes at midnight on Thursday.

The problem is that nobody can really pinpoint why the MOU hasn’t been signed, save for a stalemate over a tax break that would not directly impact affordable housing. Sources say the Real Estate Board of New York is pressuring Senate Republicans not to sign the MOU unless Assembly Democrats support the recently introduced 421-a legislation, while the governor refuses to budge on that bill without an agreement between REBNY and the building trades unions on paying a living wage for developments that use 421-a.

Because of these obstacles, nobody with knowledge of the negotiations at the state level believes that 421-a has a prayer of passing this session, nor does anyone believe that the tax break is directly related to the lack of movement on the housing MOU. After all, even Senate Majority Leader John Flanagan admitted to Politico New York that the tax abatement and MOU “are really separate issues,” and he’s right, at least partially. A good portion of the $1.9 billion budgeted for affordable and supportive housing would go to nonprofit developers that don’t use the 421-a tax break (nonprofit developers have their own tax abatement program, 420-c, that they use in partnership with for-profit developers).

What nobody knows is what Cuomo is looking for in these negotiations. If it’s a strategy to extract concessions from the Senate and Assembly on 421-a, when the clock strikes midnight the governor’s leverage expires. Even more puzzling is that the housing money has already been budgeted for, and would address a pressing statewide issue of working to get 80,000 homeless families and individuals off the street.

A cynical political observer would also point out that as long as Cuomo is hell bent on scoring political victories over New York City Mayor Bill de Blasio – who has already made great progress on developing affordable and supportive housing in the five boroughs – why would the governor not want to move forward with a statewide pipeline of affordable housing?

What we do know is that Klein’s statement that the MOU negotiations are not on “any time frame” is probably true. As Coalition for the Homeless CEO Mary Brosnahan noted in her Daily News op-ed on Thursday, history does not bode well for MOUs getting agreed upon post-session, most recently evidenced by the protracted negotiations over what to do with the JP Morgan Chase settlement money in 2014, which was put into the budget only this year.

The truth is, there is very little political fallout for letting negotiations drag on into the summer or beyond, as your average voter likely won’t notice whether the $1.9 billion has been spent come November. Perhaps there will be movement in August, when the state issues requests for proposals to developers for housing tax credits. Without the capital to pair with those credits, housing deals will be hard to come by and affordable housing development will stall. Is that the end game the governor wants?

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