Earlier today, Governor Hochul is a Guest on WNYC's "The Brian Lehrer Show" to discuss the conceptual agreement with legislative leaders on the Fiscal Year 2025 Budget that will address New York’s housing crisis and make our state more affordable, livable, and safer.

AUDIO of the Governors remarks is available here.

A rush transcript of the Governor's remarks is available below:

Brian Lehrer, WNYC: It's the Brian Lehrer Show on WNYC. Good morning again, everyone. Governor Kathy Hochul joins us now with details of what she says is a conceptual agreement on the new State Budget that could have massive implications for affordable housing in New York State and a lot of other things. We have about 10 minutes with the Governor today. So, Governor Hochul, always good of you to come on with us. Welcome back to WNYC.

Governor Hochul: Thanks, Brian. Looking forward to our conversation.

Brian Lehrer, WNYC: A couple of things about housing. To start, all I've seen so far is this language like preliminary agreement and conceptual agreement. So, can you give us any specifics — first of all, of the so-called “Good Cause Eviction” rent increase limits, or the tax breaks that developers could get as part of a deal for building how much affordable housing?

Governor Hochul: Well Brian, as you mentioned, this is still a conceptual agreement. All those specific details will be out, within a matter of days, I believe. But what that does is when I had that press conference — it signals that there is a handshake deal between myself, the Speaker of the Assembly and the Majority Leader of the Senate that we’re prepared to have them go back to their conferences and then bring to us. We'll settle on the final details.

So, all that will be out there. But I will say, we realize — and everyone talks about this shortage of housing crisis and the fact that New York City has a 1.4 percent vacancy rate. I knew the only way out; an economist knows the only way out is to build more housing. And ultimately, the larger the housing supply you have, the better it is for tenants because it starts driving down the prices, which right now are high because there's a shortage of supply.

So, there's a lot of initiatives in there. We have incentives for the developers to build, because when that lapsed a couple of years ago — literally, they stopped building, 85 percent decline. So, that means affordable housing units weren't even on the book, they just walked away from them. So, I'm trying to jumpstart that again.

Also, using office space — why is it so difficult to look at a building in Midtown, for example, that's only half full or a third full since the pandemic; and say, “Why can't people live in Midtown and be able to have a 24/7 lifestyle here not far from their work?” But also, tenants have always been important to me — and this is the most significant changes for our tenants that they have seen.

We worked really hard to find anti-gouging measures to limit what landlords could charge them. And I believe, again, of course there's always questions, there's always controversy. Everybody wants what they think is the perfect deal, but this is so much more than they had, I would take that as a win.

Brian Lehrer, WNYC: Well, tenant advocates like Housing Justice for All and the Met Council on Housing are saying Good Cause Eviction provisions were gutted so much from the original versions, that they don't really protect tenants very much from eviction or heinous rent increases if they're not already in rent stabilized homes. Get as specific as you can to argue that tenants should be happier than that about this.

Governor Hochul: Of course, they should be. And again, I know how passionate these advocates are about their cause. I understand that. But I've been in elected office for 30 years — and what I know is that compromise is not a dirty word.

It does not mean that you're selling out, to get your foot in the door, to do something that the legislature with these advocate’s support has not done until now because I'm not sure they have the votes, Brian. Because otherwise this would have been on my desk before. This was the only path.

Brian Lehrer, WNYC: So, what's the something that they're going to get?

Governor Hochul: We're going to be protecting tenants from massive rent increases. And so that is significant. That is what the biggest complaint has been, that they're being driven out of their homes. You cannot just raise rents on someone and drive them out of their home. There are limits, 5 percent is all you can raise it on plus CPI.

And that's not what the status quo is right now. And that is a win. But getting back to the fact that the whole focus is to build more, so tenants don't have to deal with such outrageously high prices right now — And that's what the ultimate goal of this is.

Brian Lehrer, WNYC: Although, progressives were unhappy with the old tax break for developing new apartment building systems because they saw it as giving taxpayer subsidies to for-profit developers for too little actual affordable housing.

So, can you get specific at all about why this would be better in that respect? Are there higher percentages, 50 percent, 75 percent of units that would have to be substantially below market rates, anything like that?

Governor Hochul: All I would say is that under that program that was started in the 1970s, 421a, to really be a catalyst at a time when New York City was really in decline, and nobody wanted to build there. This was an incentive that says, “Developers, if you make 25 percent of your building affordable, we'll give you incentives.” Because otherwise, what the landlords or the property owners are doing right now — they're taking those building lots they have and the space they have — they're doing expensive condos and co-ops. So, that is what has happened in the last two years since it has expired, when they are building and there is not much building going on. They're not focused, they will not do any affordable housing if it's not in the range.

So, all we did was — just two things here, Brian — we expanded the existing language for six years because a lot of projects weren't able to be finished while that tax break was in place. But we also said, “We're going for a new model of this. We call it 485x,” and what that does is, and the labor unions are very pleased that the hardworking men and women of New York City will have a shot to be building the new houses of the future. So, they did not have a place before. This is negotiated since last summer. We brought all the players together. And if you ask the leaders of the labor unions, the building trades, they're delighted that they'll be able to have their workers building these projects because there are public dollars involved.

Brian Lehrer, WNYC: But you're saying 25 percent below market rate is the most you could get?

Governor Hochul: Yes. Because if it doesn't pencil out, if it doesn't make financial sense for the developer, I can't force them to build. I can't say, “No, you must build here,” because it is their property and what they're doing is building condos and co-ops with it instead.

So, you have to find that sweet spot. And that's why this was so hard fought for between everyone. And we had to work with the legislators and work with the industry to say, “We want to make sure that you don’t have restraints on what you can do.” Also, very much aware that this is ultimately to help the tenants.

But we need the tax incentives to jumpstart new construction. We also have affordability. If we leave it on its own, all we're going to get is new construction with zero affordable, 25 percent is better than zero.

Brian Lehrer, WNYC: One more housing item that we've been reporting on is making legal and bringing up to code basement apartments with housing for new immigrants —badly needed — and often used with basement apartments and after the flooding of out of code basement apartments after Hurricane Ida. Advocates are concerned, again, that the original proposal, is being very watered down. Can you tell us if there's a basement apartments provision in the Budget and specifically how extensive it is?

Governor Hochul: Sure. I walked – and I was a brand-new Governor for about a week when Hurricane Ida hit – I walked those streets in Queens. I saw what happened, and places and homes where people were flooded and literally drowned in their own home because they were trapped in those illegal basement apartments. That was one of the reasons I said, “We must bring them into code.”

We want places for people to live. It's often very affordable. It helps a homeowner be able to make some more money to pay their mortgage. And as you mentioned, it's a home for our migrant community where we're struggling to get them out of the shelters where they are now and get them into real homes. What we have to do is also be sensitive to what communities want and what you'll see when this is unveiled, all the details. We have to make sure that there's local involvement, the Assemblymembers and the council members who represent a district because some neighborhoods really want this, some do not. And so, we don't want Albany to always be dictating exactly what's going to happen at the street level. So, you'll see a compromise that allow us for it to happen on a pilot basis.

But, just as a note, this is one of the reasons places in California, Los Angeles and others are starting to crawl out of their affordability and their housing crisis because they're finding creative ways where there's been barriers before. Like ADUs, accessory dwelling units, and basement apartments, which I think makes sense in most areas. But again, sensitive to what the local communities want. But we need to get people into safe housing. No doubt about it.

Brian Lehrer, WNYC: I know our time is very limited. I want to try to touch two other items very briefly. One is mayoral control of New York City public schools. I read that you reinserted it into the Budget process rather that let it wait for later in the year and advocates want some strings attached, including that the Mayor will comply with a smaller class size law that has already been passed. Are you going to include a smaller class size requirement on the Mayor?

Governor Hochul: I will say this, I proposed this in my Budget to get it done during the Budget process so we can have the certainty for our children and our teachers and our principals to know what's going to happen.

So, I’m focused on the kids and people often will criticize this way to do it, but I'm saying, “I want to get this done so we can get focused on what's most important.” And we brought together City Hall, the legislature, education advocates and labor. And I will assure you that what ends up being enacted, I feel confident in.

It’s not 100 percent done right now, but I feel confident that it will meet those needs and make sure that the law we passed two years ago that deals with class sizes — I signed that into law, that was something that happened under my first year as Governor. But that is being adhered to. That's very important. And the Mayor knows that. And we’re structuring a very complex deal here, but I think ultimately, again, is everybody happy? Never. That's not the world we live in, you know that. But compromise is important, and I think we'll get to a good place.

Brian Lehrer, WNYC: That sounds like a yes on smaller class sizes. And the last thing is something that the Mayor has been asking you for and even asking President Biden for, what he calls a decompression strategy on all the asylum seekers coming to New York City.

And as by decompression, he means he wants you to say, “No, you can't all be in New York City. It's too much of a burden on one city. We're going to have some of you in the Capital District. We're going to have some of you in the Rochester area. We're going to have some of you in Westchester.” Are you giving him anything on decompression?

Governor Hochul: We have migrants in all those cities you mentioned, Brian. They have already been going there. In fact, the state has a program where we will pay for accommodations for migrants who go upstate for a year once they have their work authorization and I have to tell you this, I'm surprised at how few have taken advantage of it.

We can't force them to leave the city. They came here and now there's already communities being established. Someone, just like all migrant communities, whether they're coming from China or India, people come here, someone plants the flag. They start building a sense of community and they start getting jobs. They start finding housing and they share housing with the next group coming in. And that's what is starting to happen, with the individuals who've been literally coming for the last two years now. So, they have options to go elsewhere. Many are turning it down, but those who have, they're being welcomed and not 100 percent of the state, but it's working out well.

We also put $2.4 billion into support what the Mayor is doing, $500 million more than even last year. So, I don't know that they even expected that, everybody always wants to ask for more. I asked for more out of Washington, always. I know how that's done.

But ultimately, Brian, this will be solved, if the Republicans that we have in the State of New York, 10 Republican Members of Congress will walk into Speaker Johnson's office and say, “We will support your re-election or your position as Speaker only if you take up what the Senate did, a bipartisan negotiated by Democrats and Republicans bill to address the border crisis, more border control agents, more enforcement, more support, decompression at the border and help us at our northern border and money for cities like New York.” And they'd walked away only for one reason – Donald Trump told them to because they did not want Democrats or President Biden to look like they could solve this problem.

So, that's a frustrating part for us. I'm working hand in hand with the Mayor because this should not fall on his shoulders alone. And that's why we've been supporting, last year we did $1.9 billion. We're paying for all the shelters you see, that is fully funded by the state, on Randall's Island and Creedmoor and Floyd Bennett Field. I have over 2,100 National Guard totally paid for by the state. We're picking up their health care costs. I don't think people realize the scale of what we're already doing.

But, again, the point is, we are at capacity, we want to make sure those who are here get the work permits they need so they can enter the legal economy and not be abused by employers in the underground, which worries me a lot. And make sure that they have the shot that other people came here, like my very poor Irish immigrants did, two generations ago.

Brian Lehrer, WNYC: I'm going to let you go after just a bit of breaking news here that maybe you can explain. Apparently, I'm seeing that there was some kind of cyber-attack on the bill drafting system up there. What happened? As far as is it going to delay the Budget?

Governor Hochul: No, it's okay right now. We have to go back to the more antiquated system we had in place from 1994. This happened very early in the morning, and so we've been on top of this. I have one of the top cyber teams, cyber security teams in the entire country. I knew that was a priority, so, no one will do it better than we do in trying to get to the bottom of this attack.

But our understanding right now is it'll take a little bit longer to deal with the legislative side of it because a lot of data is included in the computers that we need to do the, what they call, bill drafting and then the printing and then the passage. So, the agreements, I would say, are in good shape, obviously, if we’re doing drafting and printing. That's a message about how far we've come along. But we're finding the path forward using 1974 computers that we still have access to.

Brian Lehrer, WNYC: Seventy-four or 94, right?

Governor Hochul: Ninety-four. 94. Yeah, still an eternity ago.

Brian Lehrer, WNYC: So, that means a couple of more days on the actual bills and the actual vote.

Governor Hochul: I can't tell you that right now because we've been more concerned about finding the source, finding how we can remedy this, how we can just get back to normal. It's something we've been dealing with since the wee hours of the morning.

Brian Lehrer, WNYC: Was this a politically motivated attack?

Governor Hochul: I don't know. I won't be able to answer that. We'll let people know what we know when we know it, but right now we just have to solve the problem.

Brian Lehrer, WNYC: Governor Kathy Hochul, we always appreciate when you come on the show.

Governor Hochul: Thank you very, much. Thank you, Brian. Appreciate it very much. Bye-bye.