Are New York’s Affordable Housing Lotteries Delivering Segregation?

For decades, affordable housing in New York City followed a seemingly simple rule: To make new construction more attractive, half of new affordable apartments must first be offered to people already living in the area.

The policy, introduced in 1988 by Mayor Ed Koch, was designed to take advantage low-income communities.

It has since been used by politicians to enact major neighborhood transformations, such as the redevelopment of Greenpoint and East New York, while allaying fears of displacement. San Francisco, Minneapolis, Portland And Austin have adopted similar strategies as housing costs rose and gentrification accelerated, allowing local residents to stay in their neighborhoods even as new luxury buildings were built.

But New York City’s policy, known as “community preference,” has led to a battle over whether it reinforces segregation.

A federal judge in New York allows a civil rights lawsuit against the city to proceed after eight years of trying to quash it. The lawsuit says that by giving preference to each neighborhood’s current residents, the city’s affordable housing system violates the Fair Housing Act and Human Rights Law of the City of New York.

The city uses a lottery system to distribute leases for new affordable housing. The competition is cutthroat: in 2022 there were about 430 applications per home, according to the housing department. People living in the same neighborhood as a new development are typically given priority for half of the units, even though they make up a relatively small proportion of applicants.

The plaintiffs say the system maintains segregation because, say, a black New Yorker living outside the community neighborhood around the West Village, who is more than 71 percent white, is at a disadvantage. That same New Yorker could also be in trouble in the community district that includes Flushing, Queens, which is more than 57 percent Asian.

“Anytime you’re looking for a home, you need to be able to compete on a level playing field, regardless of race,” said Craig Gurian, the executive director of the Anti-Discrimination Center, the nonprofit representing the plaintiffs. “The city’s policy is taking that away from them.”

The city declined to answer specific questions about the case, but it has argued in court filings that the policies helped the city become less segregated overall, as black and Hispanic people are among the largest recipients of new affordable housing.

It also said the policy helps the city address fears of displacement, a “serious and legitimate concern of elected officials (and their constituents), who are ultimately responsible for enacting many of the actions needed to make affordable housing possible.” make,” according to court documents.

The outcome of the case could reshape the city’s affordable housing lottery, which receives millions of applications each year for a scarce number of lower-cost housing subsidized by the city.

More broadly, it could force New York City to rethink its approach to development, which relies on difficult negotiations with City Council members who have enormous influence over the fate of each project. The case is also likely to help set a standard for other high-priced cities that are planning to build more housing while tackling displacement.

Thomas Silverstein, deputy director for fair housing and community development projects at the Lawyers’ Committee for Civil Rights Under Law, said previous cases have shown that citywide preferences violate fair housing laws — when, for example, a mostly white suburb gives priority to its own residents. But New York City appears to be the first to test a neighborhood-level policy.

Despite its diversity, New York City remains highly segregated. The divisions create inequality in wealth, schools, environmental health and more.

Rafael Espinal, a former city councilman, said a rezoning of East New York in his district in 2016 would not have been possible without a community preference for the roughly 1,200 below-market homes.

“The community wanted to make sure the development that was being built included them,” he said.

David Yassky, a former city councilor who represented an area that includes Greenpoint, said the policy helped him win over neighbors who opposed a 2006 rezoning. But he added that today most people accept that big projects should come with cheaper housing.

“Community preference isn’t as necessary to generate interest,” he said.

Mayor Eric Adams has said in the past that he would end the policy in wealthier areas. During his 2021 campaign, he said the preferences exclude New Yorkers from “desirable” neighborhoods. However, the city has not dropped its opposition to the lawsuit.

A spokesman for the mayor, Charles Lutvak, said Mr Adams’ strategy to “make our city more affordable is to build new housing in every corner of the city – especially in neighborhoods with access to jobs, public transportation and economic opportunity.”

In her April 28 ruling, Judge Laura T. Swain of the United States District Court for the Southern District of New York rejected the plaintiffs’ attempt to resolve parts of the case in their favor, and instead paved the way for a jury to decide whether the policy amounted to deliberate discrimination that perpetuated segregation.

She agreed that “multiple racial demographics are affected” in different types of community districts.