Dozens of state Democratic lawmakers told housing advocates they will not support a state budget with a housing package that exempts certain tenants from stronger eviction protection laws or rollbacks to rent regulations passed in 2019.

As state leaders work on the state budget, now 10 days late, discussions to reach a housing deal continue to suck most of the air out of the negotiating room. State lawmakers up for election this fall are feeling a heightened urgency to finalize a deal to increase housing stock and strengthen tenant protections and rental assistance programs after major housing policy was removed from last year's budget.

"I think we are close, but we're certainly not there," Senate Majority Leader Andrea Stewart-Cousins told reporters Tuesday. "We're still discussing a lot of elements of housing. ... I think it's doable. I know it's doable, and that's why we're working so hard at it."

But more than 40 state lawmakers are joining ranks with Housing Justice For All, a statewide coalition lobbying for tenant protections, after Stewart-Cousins said a housing package will likely include changes to the Individual Apartment Improvement cap, or how much landlords can charge rent-stabilized tenants in New York City for building improvements. Housing advocates and a growing number of state Democrats argue they will not support a budget that rolls back the state's sweeping 2019 rent regulations, or one with watered-down eviction protections.

Senate Housing, Construction and Community Development Committee chair Brian Kavanagh played a significant role in passing the 2019 rent regulations law. He said he won't support undermining the protections, but the law is complex and he's open to adjusting the cap amid higher costs and inflation to compromise with leaders.

"There are adjustments that might make sense," Kavanagh told Spectrum News 1 on Wednesday. "And then there are changes that would really undermine the purpose, and we're certainly not interested in undermining the purpose of the law."

State leaders say housing talks have been productive this year, but with lawmakers rumbling about resisting changes to certain proposals, the ongoing negotiations could mean a housing package will not be part of the final spending plan.

Legislative leaders are expected to have another lengthy budget meeting Thursday, but did not meet Wednesday as Gov. Kathy Hochul attended a White House state dinner in Washington, D.C. and leaders returned home Tuesday because of the Islamic holiday Eid al-Fitr, which marks the end of Ramadan.

Discussions have come to a head on legislation known as good cause eviction to control rent increases statewide and make it more difficult to evict a tenant.

Leaders are exploring carve-outs for the bill for luxury high-rent apartments or property owners in certain areas. But lawmakers say they're fighting back.

"We are resisting anything that would be genuinely bad," Kavanagh said, adding lawmakers will not back down.

"We're resisting anything that trades the basic rights of one group of millions of New Yorkers for another group of millions of New Yorkers," the senator said. "There's no reason to undermine what we have in order to get protections for a different set of people."

Republican leaders stood together Wednesday and made a last-ditch effort to push back against Democrats' insistance to include principles of good cause in the budget — arguing it will further decrease New York's supply of affordable housing.

Senate Minority Leader Rob Ortt said he's concerned it will impact construction of houses and homeownership across the state, and carve-outs for certain areas outside New York City aren't enough.

"They're going to make it an incentive to not own property and rent properties in the state of New York," Ortt told reporters Wednesday. "We're going to collapse property values. Whatever the intention may be, I don't care about intentions, I care about results. Government is filled with people with great intentions and terrible results."

Chris Kausner owns 14 rental properties in Buffalo and said the good cause provision to impose a 3% statewide cap on rent increases will make it difficult to be in the business of owning property in New York and will discourage people from owning apartments in the state.

"As it becomes less profitable, more risky and more expensive to own these apartments, fewer and fewer people will want to do it," Kausner said. "That actually goes right back to our original problem, which is there isn't enough supply."

Property owners and supporters of tenant protections alike aren't pleased with the current housing negotiations, but housing advocates are leading the charge to alter, or defeat, the current deal being considered by legislative leaders.

Cea Weaver, coalition director of Housing Justice For All, said the planned diluted version of good cause eviction and rolling back rent stabilization will negate each other.

"This is a deal that is a net negative — unless the parameters of the deal have changed — when it comes to tenants' rights," Weaver said. "Not only are unregulated renters getting virtually nothing out of this version of good cause, rent stabilized tenants are actually losing rights, and that sort of work of pitting one set of tenant interests' against another is not acceptable to us."

She said the current deal does little for the 4.5 million unregulated New York renters or building new housing and should be removed from the budget.

"What's on the table right now, we really think it's just a deal not worth doing when it comes to tenants," Weaver said. "If that is what Gov. Hochul is willing to give, we think that the state Legislature should walk away and should say 'No' and maybe do something during the session."

The Legislature completed last year's budget in the first week of May, but the housing deal was not nixed from the plan until the third week of April.