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Four Months for Kathy Hochul to Save Her Governorship


Governor Hochul talks housing affordability (photo: Governor's Office)


For much of the 10-year Reign of Terror that was the governorship of Andrew Cuomo, New York’s State Senate and Assembly were subservient to his will (the strengthening of rent regulation in 2019 was the most notable policy exception). Kathy Hochul, New York’s current Governor, has had a quite different experience: in the first six months of her first full term, the Legislature flexed its muscles by rejecting Hochul’s initial nominee to become Chief Judge of the state’s highest court, and then went on to toss her signature proposal to deal with New York’s housing shortage – a production-focused “Housing Compact” – into the garbage.

If Hochul expects to achieve better results – particularly but not exclusively in the sphere of housing – she needs to make the Senate and Assembly understand something very basic: “I’m the Governor – It would have been in your interest to work with me and take my Housing Compact proposal seriously. Maybe you’ll realize that now.”

Legislative Failure on Housing
As the legislative session ends this month (those not familiar with Albany politics are often surprised that the Legislature of the fourth largest state only meets for half the year), little has been accomplished to address New York’s housing crisis. This despite near-universal agreement that extensive action was needed urgently.

The leaders of the Senate and the Assembly put out a bulleted list of broad housing policies on which there was apparently legislative agreement in principle. But neither house voted on a bill (whether because it was known that there were not the votes to overcome a Hochul veto or for other reasons is not clear), and, it turns out, there wasn’t really anything to vote on: detailed legislative text had yet to be finalized.

There is a lot of finger-pointing going on now, but the legislative treatment of Hochul’s Housing Compact is quite striking. The proposal was designed to get every locality to begin pulling its weight in terms of housing production. After 50 years of seeing that the exhortation method had no impact on resistant municipalities, Hochul’s proposal had some teeth. 

But the Senate and Assembly did not negotiate with Hochul on those mandates, nor did they address some of the weaknesses of the proposal, including inadequate requirements for affordability. Instead they rejected the fundamental idea of mandated growth altogether, ignoring history, pretending that there isn’t a problem with inadequate housing supply, and treating the interlinked crises of residential segregation and exclusionary zoning as unimportant.

They did this first during the budget negotiations, and got away with it. Then, in the race-to-adjourn they did it again: there was to be horse-trading on some housing policies, in the Legislature’s view, but Hochul was expected to proceed with the torpedoing of her central initiative taken as a given.

Notably, while the rejectionist stand on mandates from New York’s Democratic supermajorities was attributed to suburban Senators and Assembly members (joining with rock-solid defense of exclusionary zoning from their GOP colleagues), there was very little support for the Housing Compact heard from legislators based in New York City, either.

Avoiding Lame-Duck Status
Hochul has three-and-a-half years left in her first full term. If she doesn’t want to be in the sorry position of a very premature lame duck – not with the power of a newly ascendant governor, but with the limited power associated with being at the end of one’s tenure – she needs to force the Legislature back to the negotiating table on her terms.

Her spokesperson said last week that the governor “will continue fighting to address our housing crisis, including through Executive Action in the weeks ahead.” If the Governor is serious, though, the executive actions can’t be modest, she can’t fiddle at the margins. Hochul needs to roll out initiatives that are more aggressive than the original Housing Compact.

At the foundation are two facts. First, the federal Fair Housing Act does actually apply in New York State and does continue to prohibit exclusionary zoning (and other local government maneuvers) that either perpetuate segregation or cause racially disparate impacts.

Second, longstanding New York State case law (what is called the “County of Monroe” doctrine) already allows a superior interest of the state to override local zoning restrictions. It is not conceivable that a desperate statewide need for more affordable housing would not be seen as the superior interest.

The Program
Step 1: Solicit expressions of interest from for-profit and not-for-profit developers who would be prepared to build mixed-income housing in localities that: (a) have resisted affordable housing construction; (b) have median household income in the top 25 percent in the state; and (c) are characterized by sharp residential segregation.

One key here is the “mixed-income” part. The original Hochul plan was profoundly deficient in its failure to specify affordability requirements, including a portion of deeply affordable units, in all projects.

Step 2: Retool the large pool of federal housing assistance that comes to New York State to be used directly or passed along to municipalities. Make funds available to help subsidize the affordable units that are part of this “bust exclusion” project.

Step 3: Establish a process where developers would act as the agent of New York (so County of Monroe would be clearly applicable) and provide funding for litigation challenges that wind up having to be made to exclusionary local rules. Unlike the Housing Compact, there would not be a multi-year “safe harbor” before projects could begin – there would be no safe harbor for localities who had not in the last three years met the modest but important annual targets like those in the Housing Compact.

Step 4: Establish November 1, 2023, as the commencement date for the actions described.

Step 5: Call a special session of the Legislature for the first Monday in October and see if the Legislature has begun to see the light.

(I would also suggest that the Governor, legislators, and others review the very useful recent piece by James Lloyd, director of policy for the New York State Association for Affordable Housing, on executive actions Hochul should take on housing.)

The Other Side of the Equation
Just as the Legislature needs to recognize the Governor as a co-equal negotiating partner, so the Governor must do the same. Part of that is not playing the retrograde Albany game of holding cards close to the vest, but rather letting the public know what you are prepared to do to meet the priorities of others (or at least most of what you are prepared to do).

Significantly increasing the number of housing vouchers should be an easy one given the extreme scope of need.

Recognizing that the 421-a developer tax break for some affordable housing was too much of a giveaway as it had existed should also not be too much of a lift.

It is finally widely recognized that the way out of the affordable housing crisis and the residential segregation crisis is building new housing where you haven’t been building (while rehabilitating housing and making non-housing community investments in areas of poverty).

This is at the heart of the U.S. Department of Housing and Urban Development’s proposed new “affirmatively furthering fair housing” regulation. Thus, new affordable housing construction needs to happen in wealthier communities and neighborhoods. Those are areas where market-rate units will be able to generate more cross-subsidy to support affordable housing than those units do when located in less wealthy areas. That gives plenty of room for some combination of less of a windfall for developers and/or deeper affordability for some units.

The Governor should drop her resistance to enacting new protections against eviction and limitless rent increases for the huge number of tenants who are currently not already protected by rent regulation. (I first wrote about the disastrous false premises of deregulation nearly 20 years ago.) Accepting “good cause” should not be a matter of “giving up” something. But the reality is that: (a) agreeing to a version of good-cause is a “give up” from Hochul’s perspective; and (b) neither the Senate nor the Assembly would appear to have the two-thirds majority necessary to pass such legislation over a Hochul veto.

A short-term compromise that should be acceptable to Hochul, and one she should propose, is fully funded statewide right-to-counsel in lieu of good-cause: providing attorneys for tenants threatened with eviction. This certainly does not do the job that good-cause would, but it would help very substantial numbers of tenants. (That right-to-counsel is a powerful way to bring evictions down has been demonstrated in New York City under its landmark – but nowhere-close-to-fully-funded right-to-counsel law.)

All parties, including advocates, should be aware that it is more likely than not that the Supreme Court will, unless its composition changes dramatically, strike down rent regulation in its entirety. The real estate industry and its allies, in fact, are trying right now to have the Supreme Court take on the cases to act as such a vehicle. (The June 9, 2023 amicus brief in support of the petitions for certiorari filed by the U.S. Chamber of Commerce is here. These may not turn out to be the cases that the Supreme Court takes, but it is dangerous and naïve not to believe that the risk is real and that planning for that eventuality needs to happen now. Presumably, that would take two forms: first, rent regulation as a condition of government tax-break or other subsidy; two, a substantially higher default tax rate that would be lowered for those landlords opting in to a rent regulation system.)

In other words, there may have to be a wholesale revision of the way to retain and expand rent regulation, and it may be the case that the best course right now is a combination of expansive right-to-counsel and planning for an alternative rent-regulation system. The contours of that new system – including the extent to which it would cover some or all of those who would be covered by good-cause – would be the subject of intense debate and need the kind of advocacy that won the day for tenants in 2019. 

Time to Act Boldly
The affordable housing crisis is not going away. The segregation crisis is not going away. As the recent New York State draft fair housing report states (p. 156):

Exclusionary zoning was widely described as the factor that precludes the development of affordable housing in areas of opportunity, limiting opportunities for protected classes, particularly people of color and families with children, to move to these areas. Well-resourced areas, including suburban areas, often have zoning regulations in place that limit possibilities to build affordable multifamily housing. Allocating affordable housing in a more equitable way through zoning would increase opportunities for low-income families and families of color. 

Failing to push a bold approach would be a disaster for New York State, would violate New York’s own affirmatively furthering fair housing law,  and would signal to the legislature that it can continue to ignore the Housing Compact that, for Hochul, would be a historic achievement. 

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Craig Gurian is executive director of the Anti-Discrimination Center. On Twitter @pursuethefacts.

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Only More Licensed Stores Will Solve New York’s Gray Market Pot Problem


Legal cannabis on sale in New York (photo: John McCarten NYC Council Media Unit)


Law-enforcement sources, anti-gentrification community boards, and other detractors have been up in arms for more than a year about the many smoke shops selling unlicensed cannabis in New York, which have grown to dominate the retail market for the substance.

According to their narrative, these stores are turning New York City into an urban hellscape. But their criticism is more than a bad-faith dog whistle about a legal substance. It’s actively allowing the gray market to flourish.

Here's the simple reason why: When detractors make noise about gray market cannabis, they cement in the minds of cannabis consumers the false equivalency that cannabis purchased in the state’s vibrant gray market is of the same quality as the good, legal stuff available in licensed retail locations. They're validating the gray market every time they criticize it. 

That is a key contributor to the fact that, right now, New Yorkers have an alarming amount of misplaced trust in gray market cannabis. We know this because we asked them.

An estimated 1.6 million New Yorkers report having used cannabis within the past 30 days, according to a 2020 study administered by the CDC. We surveyed 384 of them, asking questions about the prevalence of the gray market for cannabis. We expected to validate the conventional wisdom that it persists merely because of convenience, but our results were more nuanced and informative than that. 

Among the New York cannabis users we surveyed who “sometimes” or “always” shop in the gray market, 71% say they trust the products have been tested for contaminants, and 70% trust they’re accurately labeled. But there are no testing requirements for cannabis sold in the gray market, and there is significant counterfeiting. When the products are accurately labeled, it's because they were smuggled in from out of state.

We also found that, despite this trust, most New Yorkers don’t have positive experiences with gray-market cannabis. 

Sixty-five percent of respondents who shopped in the gray market said the product didn’t get them high enough, while 30% said it got them too high, and 31% said it smelled or tasted weird. A smaller but not-insignificant 12% of shoppers said cannabis products purchased from gray market retailers made them sick. This suggests the longer the gray market lingers, the more it will become a genuine public health threat. 

Our respondents also said that price is just as important a factor as convenience when purchasing cannabis.

Forty-two percent said it’s important to know if a shop is licensed. 

We found that medical cannabis certificate holders, who have better access to licensed, regulated products, are far less likely to shop at gray market retailers; meanwhile, the state has been doing a disappointing job of allowing more legal recreational dispensaries to open their doors to the public. 

This polling data directly from cannabis users makes an iron-clad case for more licensed dispensaries, which in turn suggests that more progressive, not more restrictive, policy is necessary for New York’s cannabis market to function in a safe, lawful way. 

There are still just 13 licensed recreational dispensaries open in New York State, with five clustered in one three-mile radius in Manhattan, and 40 medical dispensaries. To grow these numbers, the licensing process should be faster. Cannabis stores should have multiple financing and banking options. Policy should better incent landlords to lease vacant commercial space in well-off neighborhoods, perhaps through a larger tax on unoccupied space or an auction system to fill tenants. 

The cannabis community dislikes unsafe retailers. A licensed, regulated retailer in every community will solve this problem. There's certainly no lack of demand.

We get it. Regulating this newly legal space is hard, and every state that does it operates from an inherent position of weakness because cannabis still exists in statutory no-man’s-land, banned at the federal level but commonly legal or decriminalized at the state or municipal level.

But, more than two years after New York passed recreational cannabis into law, there is still a clear lack of access to convenient, licensed, and regulated cannabis in practically all areas of the state. All New Yorkers deserve better. 

***
Alex Milligan is co-founder and CMO of NuggMD.com, the nation’s largest telemedicine platform for cannabis.

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Our Chance to Increase AAPI Representation in New York City Government


City Council Member Linda Lee, the author (photo: Emil Cohen/NYC Council Media Unit)


Despite being the fastest-growing immigrant group within New York City, the Asian American Pacific Islander (AAPI) community still severely lacks representation in government. In New York City, only 5% of my fellow City Council Members identify as AAPI, while none of our citywide electeds do. The population of Asian residents increased by 7% since 2010, but we haven’t seen a proportional increase in representation in the City Council, especially when it comes to AAPI women. While we did achieve greater representation in 2021, that cannot be the ceiling, but rather the foundation on which we build. 

Not only are we a growing demographic group, but across all five boroughs we are reshaping New York’s socioeconomic landscape, generating nearly $121 billion in economic activity, and contributing to our city’s rich cultural fabric.

Our communities need adequate representation, now more than ever. Anti-Asian hate continues to threaten our communities. In 2021, hate crimes against Asian American adults increased by 361%, according to NYPD data. Meanwhile, we face persistently high poverty levels and research from the Asian American Federation finds that roughly 30% of the AAPI community is rent-burdened, driving severe overcrowding in AAPI households.  

If we want to address these issues, it’s incumbent upon us to platform and support candidates that deeply understand our communities. On practically every level of government, AAPI women are still vastly underrepresented. We hold elected office at lower rates than Asian American men and make up only 1% of state legislatures, according to the Rutgers Center for American Women and Politics

As an AAPI woman running for re-election, I am fearlessly committed to tackling the socioeconomic issues my community is facing head on, but I can’t do it alone. We need to make a real, coordinated effort to get more AAPI women elected. 

The New Majority NYC (formerly 21 in ‘21) has invested resources and built networks for AAPI candidates like myself, actively working to dismantle the existing power structures that overwhelmingly still benefit white male candidates. The organization has a history of upending the status quo, and this year, through investing in my candidacy and seven more AAPI women candidates across five districts, they are refusing to squander the opportunity to ensure that New York City Council Districts that are majority-AAPI are represented by AAPI women.

And they’re using ranked-choice endorsements to make that happen. Ranked-choice voting has virtually eliminated the vote-splitting that disproportionately harms candidates of color. Through utilizing ranked-choice endorsements, The New Majority NYC supports a continued commitment to electing candidates that reflect the diversity of their communities. 

The New Majority NYC’s endorsement and support made a major difference in my first race, in 2021, when the organization also helped elect the Council’s first-ever women majority. Through their support petitioning to get on the ballot and connecting me with mentors, voters, donors, and networks, they helped dismantle the barriers that so many AAPI women running for office traditionally face. 

As the AAPI community continues to grow, in our city and across the country, it’s clear that our communities deserve a voice across all levels of government. New York has the opportunity to be a leader in AAPI representation in government and be an example for our nation in truly diverse representation. 

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City Council Member Linda Lee represents parts of Eastern Queens. On Twitter @LindaLeeforNYC.

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