The back-and-forth at Wednesday's budget hearing on housing offered a glimpse into how difficult it could be for the Legislature and Gov. Kathy Hochul to reach an agreement in the budget before the April 1 deadline.

Progressive protesters Wednesday interrupted the final budget hearing of the year, shouting at lawmakers to tax the rich during questioning about housing supply in New York City.

The VOCAL-NY advocates briefly halted the hearing to express their anger that no formerly homeless New Yorkers were asked to testify. No one was arrested. The organization has long pushed for tenant protections in the budget to control increasing rent costs and reduce statewide eviction rates.

New York renters experience cost burdens and eviction rates that are higher than the national average, according to a report released Wednesday by state Comptroller Tom DiNapoli's office. That includes higher rates of homelessness, due in part to the influx of asylum seekers coming to New York City. 

"For almost 3 million New Yorkers, housing costs constitute more than 30 percent of household income, the most commonly used threshold of affordability," DiNapoli said in the report. "...While low-income renters are the most cost-burdened, these financial pressures are increasingly felt by middle class households."

High housing costs burden more than half of New York renters, and evictions are up nearly threefold since the moratorium imposed during the pandemic, according to the report.

The Legislature and Gov. Hochul continue to focus on different solutions to improve the state's lack of affordable housing — with the governor fixed on building more supply and many Democratic lawmakers zeroed in on rent control and making it harder to evict tenants in New York.

"Everybody agrees that the housing crisis is here and it is at our front door and we have to do something about it," state Homes and Community Renewal Commissioner & CEO RuthAnne Visnauskas said. "And we feel very strongly that supply is the answer."

In response to the comptroller's report, Visnauskas said the governor remains focused on building more housing to reduce rent and home prices, citing a Pew Research Center review that shows places in the state with the slowest rent growth added more housing stock in the last several years.

"New York state has some of the nation's strongest tenant protections, and Gov. Hochul has taken action to make them even stronger," Hochul spokesman Justin Henry said in a statement. "But every single reputable economist agrees: The only way to reduce housing costs is to build more housing, which is why Gov. Hochul is focused on ways to increase the housing supply in New York."

Lawmakers who want stronger tenant protections take issue with the governor's push to build, arguing it will take several years to complete projects to improve the state's housing stock. Hochul and the Legislature failed to compromise on housing last year. Members of the governor's administration say that has further slowed down the timeline.

"We could have started last year and be a year into that process," Visnauskas said of new building projects.

During testimony, the housing commissioner focused on the need for tax incentives to build new rentals, converting offices to units, legalizing basement apartments and more of Hochul's housing proposals.

"Until we start building housing and building it seriously, we're not going to see those rents go down and we're not going to see those rent burdens come down and that's what we have to stay focused on," she said.

But many Democratic lawmakers argued with the commissioner that supply and tenant protections go hand-in-hand. They expressed concerns that for-profit developers often do not pursue building affordable units, while tenant protections would ease the shortage immediately.

Assemblywoman Anna Kelles was one of several lawmakers who challenged Visnauskas, saying more housing will help in the future, but the budget needs a series of solutions to help tenants of all income levels.

"We can walk and chew gum at the same time, I really do believe that," the assemblywoman said. "We're really, really powerful as a state, and we're innovative."

Lawmakers pressed the commissioner why certain programs were cut in Hochul's budget, including $40 million for the Homeowner Protection Program, which helps New Yorkers facing foreclosure. Visnauskas deferred the questions to upcoming negotiations with legislative leaders.

Assembly Speaker Carl Heastie expects it won't be easy to reach a housing deal, and has publicly encouraged stakeholders on all sides of the debate to be prepared to compromise.

But tenant advocates pushing for Good Cause Eviction in the budget say a watered-down version of the rental control bill isn't good enough, and told lawmakers Wednesday the legislation should be left out of the budget if it will not be included as-is.

More than 1.6 million New York tenants live in housing without rent regulations, Tenants Political Action Committee treasurer Michael McKee said.

"Kathy Hochul says we've got more tenant protectiosn in New York state and thereofroe we don't need anymore," he said. "Well, I'm sorry, but half the tenants in this state live in unregulated apartments and they are not protected in any way."

Lawmakers have posed compromises to Good Cause, such as allowing municipalities outside New York City to opt out of the policy. Organizations like Homeowners for An Affordable New York have long warned the law would exacerbate the housing crisis.

"No builder will put another shovel in the ground the minute Good Cause Eviction passes, or even with its threat looming," Homeowners for An Affordable New York spokeswoman Leanne Politi said. "The ill-named proposal would be the final nail in the coffin for many small property owners."

McKee said it would be unacceptable for lawmakers to change the legislation or allow communities to opt out, as the law would give tenants who live in unregulated housing the right to defend themselves from an unfair eviction or rent increase.

"If you can't give us a real good Cause Eviction bill, no bill is better," McKee said. "We don't want a screwed up, watered down bill that is not going to work just so some legislators can say 'We passed Good Cause."

Hochul last week announced the first 20 municipalities to become a state-certified Pro-Housing Community to be eligible for millions of dollars in grants to revitalize their housing stock and downtowns.

Visnauskas said 20 more municipalities have applied in the days since the announcement, giving the governor hope about growing interest in the program and that her initiative will work. HCR will collect data from designated Pro-Housing Communities to keep track of development progress, but the impact of the new program cannot be determined until projects are completed within the next several years.