Cuomo In Tantalizing Bind Over Housing
Update: As of Monday April 3, there is still no budget agreement. The Governor has asked for an emergency extender to continue the existing budget.
Tonight is the deadline for New York State’s elected officials to pass the next budget before the new fiscal year starts tomorrow. By all accounts it won’t happen. New York is not alone in struggling to pass a budget in the absence of clarity at the federal level. President Trump has proposed severe cuts, which could imperil the $150b New York budget, making any proposals fraught with doubt. But the president isn’t the only actor harming the process. Governor Cuomo has placed his ambitions and calculations ahead of the immediate needs of the state, particularly on housing.
I generally don’t care much for the horse race stuff about Governor Cuomo looking towards 2020 for a presidential run, but it is clearly a big part of his calculations right now. Unfortunately, this has a big immediate impact on affordable housing, so I’ll play along. Though the presidential calendar has gotten shorter and shorter, it’s still too early for any candidate to be discussed seriously. (For what it’s worth, I predict son following father and ultimately getting cold feet anyway.)
Before the governor can dream about 2020, he must get re-elected in 2018. That’s likely, but not guaranteed. That’s why this budget season is so crucial for him. It will signal what kind of Democrat he will position himself as on the national level. President Trump indirectly offers the Governor two radically opposed, equally fraught, options in my opinion.
Before I get to those two options, let’s remember a couple of important facts. First, last year Governor Cuomo announced a huge five year $20b affordable housing plan that would build 100,000 units and outlined a longer-term plan for 20,000 supportive housing units. Though light on details — it was through a Memorandum of Understanding (MOU) which isn’t handled like a normal budget allocation process and serves more as a wish list — it was a major policy shift that scored political points from housing advocates across the state.
Second, Governor Cuomo also announced a (slightly) revamped plan called Affordable New York to replace the controversial 421a tax policy that expired last year when the governor blocked a compromised proposal over union wage labor. The new plan would largely continue the existing framework of 421a, which would create dubiously affordable units at considerable cost to the city and state. Many advocates hate 421a, but developers love it.
In both cases, little has come to show for those initiatives. Of the initial $2b allotted in the 5-year plan, only $150m has been dispersed, while the rest remains frozen. There is no deal yet on the new 421a/ANY plan either.
This lack of progress is because Governor Cuomo, relying on his love of MOUs, directly linked both proposals and one can’t happen without the other. Because Democrats dominate the State Assembly and Republicans control the State Senate, the Governor seemingly made a political calculation that he could appease both chambers (or, more aptly their leadership) and deliver on his promises by using both proposals as balancing weights. That has not panned out, despite the fact that both parties have agreed to allocate the frozen funding.
Governor Cuomo has had a history of making grand promises on affordable housing, attempting to deliver them through MOUs, and failing to do so. In addition to the current mess, has attempted to use settlement money from JP Morgan to combat homelessness to no avail, he has withheld funds for NYC over petty squabbling with Mayor de Blasio, and even his handling of the 421a expiration appeared to have been in bad faith. It’s almost as if, even as a former HUD Secretary in the Clinton Administration, he isn’t that interested in housing policy.
Now we can return to the two democrats Governor Cuomo could portray himself as if he were serious about a 2020 run. The first is the pragmatic power broker who gets things built while working with the other side. This candidate is a more accurate representation of the Governor and could conceivably appeal to the donor class of the Democratic Party as well as moderate Republicans further alienated by the Trump Era.
The second is the liberal firebrand championing infrastructure spending, gay marriage, and environmental protection that can rally the progressive wing of the Democratic Party without totally alienating centrists. Despite some notable achievements on some ‘liberal’ policies, this is not a natural position for the Governor to hold, even if that’s likely where the electorate will be.
This is why housing has proven to be such a challenge for Governor Cuomo to follow through on, despite his background in it. Right now, today, the issue is forcing him to pick one version of himself to commit to and it’s not clear which he should choose.
If he could deliver on affordable housing, it would further his narrative of being an effective progressive at the national level. But to do this would alienate much of his bi-partisan bonhomie in the Senate and with wealthy developers whom he needs for his re-election in 2018. Progressive affordable housing reform is deeply unpopular with these stakeholders and disappointing them poses an immense risk.
If he doesn’t deliver on affordable housing, it would leave him open to attacks from progressives at the state level. The need for affordable housing is so obvious and so urgent that failing to deliver on it could absolutely summon a credible challenger in a primary. This might not ultimately cost him the election in 2018, but it would solidify enough resistance that would damage his campaign and undermine his already flimsy progressive narrative on the national level.
Housing isn’t getting much of the focus in today’s last minute budget negotiations and there are certainly other issues holding up the process. But that won’t let the Governor off the hook. Housing looms over everything.
Though the state budget proposal does not spend much time addressing the potential cuts the state faces from the federal government, the Governor and elected officials from either party are rightfully concerned about them. No one knows exactly how much of a gap this proposed budget will face if federal support dramatically changes over the next few years.
What is entirely left unsaid is that the state will be on the hook for the federal cuts expected to hit HUD and housing programs in general. Given that NYCHA gets over 2/3 of its $3b budget from HUD, and HPD gets hundreds of millions, among other city-level programs, this leaves a potentially crippling whole that cities, even NYC, can’t possibly fill. The fact that Governor Cuomo is dodging genuine leadership on housing even before these cuts should be alarming. What happens if they do come? Will the Governor be there to help?
It’s possible that the budget will get worked out, housing funds will flow as promised, and these federal cuts won’t materialize. Governor Cuomo could waltz along to re-election and to the national stage and New Yorkers would perhaps finally have some relief from the housing crisis.
But it is also possible that federal cuts will come, that their impact will effectively kill the current housing proposals, and potentially let the Governor off the hook for not delivering, while still appearing to champion affordable housing. It would be deeply cynical to build a political strategy on this dire outcome, but politicians have done worse.
There are over 88,000 homeless in the New York State and nearly half of NYC renters are rent burdened. The affordable housing crisis is too large to be viewed through a narrow political lens and it’s unacceptable that Governor Cuomo has chosen to do so. Even without impending cuts from the federal level, the Governor has not delivered on his promises so far. History will judge his next actions long after the voters in 2018 or 2020 get their say.
Pete Harrison is the CEO/Co-Founder of homeBody. www.joinhomebody.com @peteharrisonnyc
