LEGISLATIVE AFFAIRS: Governor Cuomo Delivers State of the State Address

On Jan. 8th, Gov. Andrew Cuomo delivered the State of the State annual address. The governor’s proposals were painted in broad strokes with scant detail.

Of particular concern are initiatives relative to the real estate industry. The governor discussed funding for building affordable housing. With a looming deficit of $6 billion and no mention of funding mechanisms, the industry needs to remain engaged to ensure it will not be negatively affected by the governor’s proposals.

Although not a revenue issue, one of the bills we strongly oppose is a good cause eviction bill authored by State Senator Julia Salazar that would make it nearly impossible to evict a tenant if they do not pay their rent. The bill would cap rents at 1.5 times the consumer price index. The bill prohibits landlords from evicting tenants if they cannot pay and forces them to go to court to get a judgement for good cause. The bill also takes away a landlord’s right to lease the apartment to another tenant even if they do not fall under rent stabilization guidelines. This would take away private property rights. We urge every Senator and Assembly Member to oppose this.

We are also in opposition to a bill that would require independent contractors to become employees. The taxi drivers’ unions and other employees say these workers are being harmed by not being allowed to collect benefits and not being paid for the work they do. However, we oppose Realtors in any way becoming a part of this law. Realtors want to be independent contractors—they appreciate their ability to conduct their real estate activities as their individual business, In California a bill similar to the New York proposal passed, but included a carve out keeping Realtors as independent contractors.

Some of the proposals to address the budget gap are to legalize sports betting, legalize recreational marijuana and pass a pied a terre tax, which died in the legislature last year due to strong opposition. Among the reasons for its demise was the potential difficulty in its implementation as these owners in large part live outside the City of New York.

While many of the proposals included in the State of the State address may prove to be aspirational, and do not appear to have a direct affect on real estate, the ultimate funding sources may spell an unanticipated result.