Linda Rosenthal, Between NYC Commercial Real Estate’s Wish List and Reality
Progressive chair of the New York State Assembly's Housing Committee isn't too keen on a successor for 421a or for lifting the cap on denser development. Talk to her about rent vouchers, though.
By Aaron Short March 20, 2023 7:00 amreprints
Much of the hoped-for agenda of the commercial real estate industry in New York will have to pass through Linda Rosenthal. The lifelong Upper West Side native and unabashed progressive is the new chair of the state Assembly’s housing committee,
Rosenthal became interested in politics when her family was nearly evicted from their rent-controlled apartment three decades ago. Now she’s in charge of shaping laws that incentivize the development of new homes, hold unscrupulous landlords accountable, and provide financial assistance to millions of tenants.
The assemblywoman’s agenda largely mirrors the priorities of Gov. Kathy Hochul, a fellow Democrat, but Rosenthal wants to ensure that several progressive policies aren’t left out before the state’s April 1 budget deadline. In addition, Rosenthal has spearheaded the state’s animal welfare efforts, with the passage of her puppy mill ban in December.
Commercial Observer met with Rosenthal in her Manhattan office in early March to talk about the state budget, especially potential incentives for residential development.
This interview has been edited for length and clarity.
Commercial Observer: How are you feeling? [Rosenthal slipped and hurt her knee the day before the interview.]
Linda Rosenthal: I had been at a press conference about the arrears that were not paid through the Emergency Rental Assistance Program for New York City Housing Authority [NYCHA] tenants. They are owed $390 million in arrears during COVID.
So I was at the press conference, and I had to go to another meeting. I went to the stairs, my heel must have tripped on the first step, and I landed on my knee. Thank goodness my legislative director was there, I would have tumbled much further.
I know these kinds of incidents occur on the Million Dollar Staircase [the 444-step grand staircase in the New York State Capitol]. It’s very wide and there’s nothing to hang onto when you walk down. A million sounds so quaint. If it were done today, it might be the $40 million staircase.
How did you get your start in politics?
I went to college, came back, and moved back into my grandmother’s rent-controlled apartment. Our landlord saw this and thought, “Oh no, she’s never going to move out,” and filed for an eviction. I didn’t really know much about the housing laws and what my rights were, so I went to court and the judge erroneously said, “Grandchildren are not immediate family.” He doubled the rent and said we were now rent-stabilized. Now the landlord is his son. And I’m still there.
I was on the subway and got a pamphlet on tenant rights. That started me on the path of joining political and community activities. That led me to a job with Jerrold Nadler.
What was Jerry like back then?
This was in 1992. I started as his district director when he was elected to Congress. He’s brilliant, full of good stories and a determination to get things done, which I know has rubbed off on me.
Why did you stay on the Upper West Side?
I couldn’t afford to live anywhere else, and I have a decent rent in my apartment. Plus, I was born on the Upper West Side. Why would I leave it?
Why did you want to be chair of the Assembly’s housing committee?
I had been chair of the Alcoholism and Drug Abuse Committee for five years. We achieved some meaningful victories and made an impact in the substance abuse disorder arena. After that, I became chair of the Social Services Committee, which involves housing as well.
What was open at the time [in January 2023] was the health, housing, insurance and energy committees. From the start, when I got to Albany, I was on the Housing Committee. I always had my eye on the prize, and I’m the first woman to chair that committee. Housing is really one of my passions.
Former Assembly Housing Chair Steven Cymbrowitz said he tried to bridge the divide between progressive and more conservative members. Is that a role you’ve found yourself playing in Albany?
I try to speak to all sides as well, but I am definitely in the progressive category. A large number of my colleagues also fall into that category.
I hear them, I listen to them, we talk, the conference really discusses all of the issues. I do think promoting some of the more progressive ideas is appropriate. This new position lets me learn about all different kinds of housing and the situations people find themselves in.
What has your relationship with Gov. Kathy Hochul been like? How is it different from her predecessor, Andrew Cuomo?
I think in general, people don’t feel like they’re gonna get hammered. It’s a more open dialogue. Over the last year, we’ve talked.
When she was lieutenant governor, she used to come to my district a lot. “I have half an hour, can we go somewhere interesting on the Upper West Side? Let’s go meet some people.” We used to do that. We went to senior centers. We toured the Museum of Natural History at one point to visit a science lab for youngsters.
Gov. Hochul wants to create 800,000 housing units over the next decade. Do you think that can be accomplished?
I’m glad she put housing front and center. What I’m less pleased about is the word “affordable” is not attached to those 800,000 units. Clearly we need many more affordable apartments.
Is locating development near transit hubs the best strategy for achieving this?
It’s one option. I’m not sure how pleased local suburban communities are about that.
How do you convince the suburbs to build tens of thousands of units of housing?
In some Westchester locations they have done that. Long Island is more of the problem.
I don’t think one size fits all. I’m hearing that from some people. The [suburban] Assembly members speak with local officials. They seem to be very unhappy with the proposal. It’s still in process, it’s not final yet. People agree we need more housing. It’s just how you get to it. [The Assembly’s budget proposal included a housing access voucher program and offered a $500 million local incentive for affordable housing but left out the governor’s idea to override local zoning laws. The budget isn’t finalized until April 1, and maybe later.]
What’s the best idea that was not in the governor’s budget?
Certainly a housing access voucher program, of which I’m the sponsor. It would be modeled after the federal Section 8 program. The state would give vouchers; half would go to people who are homeless, and the other half would go to people on the edge of eviction. The renters would contribute 30 percent of their income and the rest of that would be paid by the state. We budgeted $250 million.
We put it in the budget last year but it didn’t wind up in the final budget. Everyone from the Real Estate Board of New York to the most progressive advocate is in favor of this approach. It’s not final, we still have many discussions, but I haven’t met anyone who thinks it’s a bad idea.
We can’t continue to bemoan the problems without coming up with ways to address them. One is to build more housing, but the other is to enable people to be able to rent an apartment that’s affordable to them. And providing vouchers is one way to get people in safe and stable units. As people save money, work and get better jobs, they won’t need those vouchers. It’s constantly recycled.
Would asylum seekers be eligible?
It could include them, but it was conceived before our migrant emergency. There are more than 90,000 homeless people across the state. At the end of the day it’s cheaper because people fare better, their health is much better, and their ability to get a job and hold a job — all of that is the housing-first model. If you have a home base, it’s so much easier to try to climb up out of poverty. Three states already have it.
Another component of the governor’s plan is to increase the density of residential units in the city. You’ve opposed floor area ratio cap removals in the past. Do you still oppose them?
The overwhelming majority of emails I’ve gotten from constituents is “Do not remove the cap.” That was the position of the Senate and the Assembly last year. I think we would need more details from the city. It’s really unclear. They say they’d rezone, but we don’t know where that would be. It’s nice to know the details.
I know the mayor is very enthusiastic about it. Developers like it. But a lot of communities say, “Don’t we have enough tall buildings?” We need more information about how to rezone these areas. It’s about looking at this holistically. Without that cap, the city gets control of the future and the state is basically out of it.
We also need a lot more supportive housing. Addressing the mental illness that’s so prevalent post-COVID in our society certainly calls for a greater number of supportive housing beds. Everyone knows NYCHA has a $40 billion hole, but that’s because there hasn’t been an investment, and things fall apart if you don’t maintain them. The federal government hasn’t really given NYCHA money. The state used to, but that all became city-owned property. The city has given some. But we’re having a robust conversation about how to pay all those arrears. Ideally, the federal government would pay.
This year the governor did not include a replacement for the 421a tax abatement for new rental development, and instead is leaving it up to the legislature. Do you think some kind of incentive could be included?
If anyone is considering it, no one has put forth a plan. It is a bit odd to say, “I need this, I want this,” but throw it on the legislature’s lap to construct it.
I can see it from the administration’s point of view. When they had 485w in the budget [a proposed update of 421a] it was a target. People said, “No 485w.” Here there’s no target, but there’s no way to improve it, either. Gov. Hochul is a different type of governor. But weird things have happened in the last couple of weeks before the budget is due.
Another thing that is vital is homeowner protection program funding that helps communities with foreclosure. Last year it was $35 million. Speaking to people involved, they’ve needed $40 million this year. To everyone’s surprise, there was no money in the budget. I thought it was an oversight. Apparently not. It was supposed to come from settlement money the state attorney general got from banks. All the money that was given in the last budget has been used up. It’s very important, and I’m sure it will be in the budget in some form.
Both the mayor and governor have proposed zoning law changes to convert office spaces into residential use. Are there certain buildings that should be prioritized?
Finally, the city has come to the realization that a certain set of office workers are not coming back. Certainly, many city workers have said they’re not coming back. Up to now, the city’s policy has been five days a week. The mayor is softening that. Most of the world is trending that way these days. People don’t want to be tied to their office.
There are so many offices in Midtown, I think it’s a fine idea. I just want to see affordability in these conversions, and right now there’s nothing. One of the difficulties is the floor plate size. It’s an expensive undertaking, but it’s a good idea for the reuse of buildings that are sitting empty.
Are there any changes that the legislature would seek to expedite this?
The city has told me there’s some incentive programs, like tax benefits for those who build affordable housing, who create affordable housing out of these vacant buildings. So I have to look more into it.
We’ve seen with 421a, which is expired, that we didn’t get the right bang for our buck. We forwent billions of dollars in taxes. In exchange, we were supposed to have many units of affordable housing, but we see that has not happened. It was a program that subsidized the creation of luxury units. People have suggested instead that, “Why doesn’t the city give them money that would have been paid in taxes to an affordable housing developer and let them create housing?”
We also need deep affordability across the city. The people we rely on to make the city function can’t afford to live here. Whether it’s a nurse, a police officer, a cook, a delivery worker — none of them can afford to live here these days.
Is there room for tenant protections like Good Cause Eviction to be included in the budget?
Of course there’s room. There’s always a lot of horse trading. I believe that many of my colleagues believe that we need to confer some rights on tenants across the state. Here in the city we have a framework — such as rent stabilization, rent control and other programs — but outside the city and a few counties, the rest of the state has nothing.
The fact is, a bunch of counties voted to have Good Cause and those laws were struck down by the courts because the judges said they were pre-empted. That’s the state’s job. Different localities want it, and one can see that it is something needed and wanted.
People have gotten it wrong. The goals and mechanics of it have gotten lost. We know inflation is a factor in everyone’s hardship to pay rent these days. If we were to have this provision, the landlord could decide what the initial rent is. If you feel the market can bear whatever rent landlords can charge, by all means go ahead and charge it. When the lease is up, the tenant would have a right to a new lease with an increase. If a tenant doesn’t pay rent, or acts irresponsibly in their unit, they can be evicted. It’s a framework. Right now it’s very unstable with market-rate apartments. This is not right, it’s not fair, it’s destabilizing to people and families. We want to fix that.
Do you have any other predictions for the budget on the housing front?
I certainly can’t predict. There’s the issue of warehousing of units. After the [Housing Stability and Protection Act, a pro-tenant suite of legislation] was passed in 2019, certain landlords said, “We’re going to withhold our units from the market. We’d rather leave them vacant than rent them out.”
High rates were often used as a pseudo-eviction plan. And we’ve seen it happen. Five different major capital improvements — a new roof, a new gate, all of that — and the [state Department of Housing] never checked if it’s necessary or if it happened, or if prices were appropriate.
We reformed a lot of that. Then landlords said, “We can’t afford to make upgrades to apartments.” In a homelessness crisis, I think it’s morally wrong to keep a valuable asset off the market. If people were hungry and you had a grocery store and you didn’t open it … that’s not the way it should work.
The state is preparing to award three casino licenses. Should they award all three?
I don’t see the need for that. We see casinos can cannibalize each others’ clientele. We’ve seen a lot of casinos don’t perform as predicted and, in addition, there are multiple ways to gamble the days. We have mobile sports betting and we’ve gotten $900 million per year. Going forward, they predict $600 million in revenue per year.
Do you want to see a casino in Times Square?
No, I do not. Times Square is hectic enough. I don’t think it’s the right place. They’re very complicated deals. There’s one proposal to put one on top of Saks Fifth Avenue. I’m not endorsing anything. That would be enormous in scale. Coney Island? I don’t know if that’s another option out there.
I’m not keen on casinos. When I was chair of the Alcoholism and Drug Abuse Committee, gambling was an addiction we dealt with. With the spread of casinos, there are more people who will become addicted to those games. Unless you have millions and millions of dollars, I don’t think anything good can come out of it for the average person.
The speaker of the City Council wants to build NYCHA units on parking lots, playgrounds and gardens within NYCHA complexes. Do you support this?
It’s feasible. I don’t think it would work everywhere. People losing some of their parks is not great, especially in areas where there’s no access to parks and nowhere to experience the natural world. It’s probably appropriate in some areas.
You’ve passed several animal rights laws, including a ban on pet stores selling dogs, cats and rabbits, and on declawing cats. How have they been doing?
The most recent one was the ban on sales of cats, dogs and bunnies, which has a two-year effective date. It will not be legal in a couple of years. The whole goal of that is to stop the puppy mill pipeline, where puppy mills breed animals in terrible conditions. They’re sold for thousands of dollars, but when customers take them home they’re often sick. We need to put an end to that pipeline, and this is one effective way of doing so.
Now and then, I call vets across the state and ask whether they declaw, and they say it’s illegal. It’s been very effective.
How should the city handle the rat problem?
There is a more humane way of dealing with it, which is dry ice. I worked with our departments of health and sanitation. All these holes in tree pits, rats pop out of them to forage for food. If you put dry ice in the hole, they fall asleep and don’t wake up. The number of rats is out of control. But I don’t approve of drowning rats. It’s inhumane. They’re living, sentient creatures.