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NYC residents get a leg up in housing lotteries in their own neighborhoods. Does
that perpetuate segregation?
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NYC RESIDENTS GET A LEG UP IN HOUSING LOTTERIES IN THEIR OWN NEIGHBORHOODS. DOES
THAT PERPETUATE SEGREGATION?



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By
Arya Sundaram

Published Jun 26, 2023

Modified Jun 26, 2023

39 comments

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By
Arya Sundaram

Published Jun 26, 2023

Modified Jun 26, 2023

39 comments

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For decades, New York City has reserved half of the below-market-rate housing
units in new developments for local residents living in the same community.

A federal lawsuit recently cleared for trial argues that this so-called
community preference policy perpetuates racial segregation, limits the housing
choices of applicants who want to move beyond their neighborhood and violates
federal fair housing law.

“The city…says, ‘do not honor the choices that New Yorkers are actually making.
We're going to put our municipal thumb on the scale,’” said Craig Gurian,
executive director of the Anti-Discrimination Center and the plaintiffs'
attorney.

The litigation, which was filed on behalf of two Black women who are both city
residents and applicants, shines a spotlight on the city’s affordable housing
lotteries, which award below-market leases for thousands of apartments across
the city each year, including in some of its trendiest neighborhoods, and
sometimes at substantial discounts, depending upon household income and family
size.

The units are privately owned but often publicly subsidized or eligible for
developer tax breaks. They’re available to households whose occupants earn a
certain percentage of the local area’s median income, with extremely low-income
families being eligible as well as those earning upward of $230,000 a year for a
four-person family.

Competition is stiff, with millions of people applying each year for just a few
thousand units, in a city where officials say there is a shortage of some
800,000 housing units. For many families or individuals, “winning” a housing
lottery can mean moving to a neighborhood with a lower crime rate or
better-performing schools, or away from environmental hazards, such as polluted
air from a nearby highway.



Under community preference, as the contested rule is known, locals have
significantly better chances of prevailing in lotteries for buildings in their
own community district. The plaintiffs contend that unlawfully restricts their
housing choices.

Shauna Noel, one of the plaintiffs, who lived in Queens when the lawsuit was
originally filed, said in a deposition that she was looking for a neighborhood
with better schools, access to transportation, cultural hubs, and food. She
applied to several affordable housing lotteries from 2015 to 2018, including in
Murray Hill and Harlem, but she wasn't selected to be interviewed.

> I want everybody who lives in any part of the city to be able to apply for
> affordable housing in any part of the city on an equal playing field. That’s
> all I want.

Shauna Noel, plaintiff in fair housing lawsuit

“I want everybody who lives in any part of the city to be able to apply for
affordable housing in any part of the city on an equal playing field,” she said.
“That’s all I want.”

The city Law Department declined to answer questions about the case, and the
Department of Housing Preservation and Development didn’t respond to a request
for comment. But in court papers, city officials claim that the community
preference policy helps prevent future displacement, which they say is hard to
track, in lower-income Black and Latino neighborhoods facing gentrification. The
plaintiffs in court documents say that the city offers no concrete data to back
up this claim.



City Hall spokesperson Charles Lutvak declined to respond to questions about the
community preference policy, but said, “at the heart of Mayor Adams’ strategy to
make our city more affordable is building new housing in every corner of the
city – especially in neighborhoods with access to jobs, transit, and economic
opportunity.”

Nonetheless, the city has argued that the community preference policy rule helps
quell “fears of displacement,” ensuring that new and often controversial
below-market housing gets built in the first place.

In Downtown Brooklyn, for example, at 80% of area mean income, rent for seven
one-bedroom apartments in the 42-story Paxton Building was listed at $1,509 for
two-person households earning $54,652 to $90,400; rent for five studio
apartments was listed at $1,407 for two-person households earning $50,812 to
$90,400, all according to the housing lottery website.

At 130% of area mean income, rent for 22 one-bedroom units in the same building
was listed at $2,838, with income limits of $97,303 to $146,900 for two people;
rent for 34 studios was listed at $2,500, with income limits of $85,715 to
$146,900 for two people. Market-rate one-bedroom units in the same building were
listed on StreetEasy for upward of $4,700 and studios for upwards of $3,900.

Elsewhere, in the “fine high-end luxury building” at 54-56 Fulton St. in
Downtown Manhattan, nine two-bedroom apartments were listed on the housing
lottery website at $1,082, for those at 60% of area mean income, with two-person
household incomes of $41,932 to $67,800. Six one-bedroom units were listed at
$659, for those at 40% area mean income, earning $26,435 to $45,200 for two
people. Market rents on average are several times higher.

While the lawsuit argues that community preference discriminates against white,
Black, Asian and Latino applicants in some way, it zeroes in on the historic
exclusion of Black and Latino New Yorkers from historically white, wealthier
community districts.



The complaint argues the city’s policy only makes it harder for non-whites to
move to those communities.

THE POLICY’S ORIGINS

When the city originally adopted the community preference policy, the purported
goal was to aid longtime residents of “disinvested” low-income neighborhoods
where new city-funded affordable housing was being built. Other U.S. cities like
San Francisco adopted similar rules with similar aims.

In the late 1980s, the administration of then-Mayor Ed Koch adopted the
community preference policy in the midst of a massive plan to ramp up the city’s
affordable housing stock.

As city-backed developers transformed run-down and vacant lots, local residents
who had endured years of neglect were concerned they weren’t getting enough
access to the new housing, according to a written court statement by Vicki Been,
who was HPD commissioner under former Mayor Bill de Blasio. In response, the
city created the policy “out of a sense of justice and fairness for people who
had remained in the disinvested communities,” Been said.

Despite New York’s inclusionary aims, residency preferences have historically
been used in furtherance of segregation.



Federal courts have struck down community preference rules in wealthier white
suburbs that gave priority to their own residents for affordable housing,
effectively excluding non-white residents in the surrounding areas. (More than a
decade ago, Gurian’s group won a novel court settlement that required towns in
Westchester County to build 750 units of affordable housing and to market those
units to communities with significant nonwhite populations.)

> It’s very hard to justify the city’s policy overall as it’s written when you
> think about the context of those affluent, historically exclusionary
> neighborhoods.

Thomas Silverstein, Lawyers' Committee for Civil Rights Under Law

Thomas Silverstein, associate director of fair housing and community development
projects at Lawyers' Committee for Civil Rights Under Law, which filed an amicus
brief in support of the plaintiffs, said he’s concerned about a similar effect
in New York, given the policy’s citywide scope.

“It’s very hard to justify the city’s policy overall as it’s written when you
think about the context of those affluent, historically exclusionary
neighborhoods,” Silverstein said.

While many housing advocates have criticized the community preference policy,
some say they worry that entirely gutting the policy will leave the city with
few, if any, alternative programs that directly tackle displacement.



The lawsuit arises as New York City also faces an exodus of African American
residents, at least in part driven by economic woes. Even as New York City’s
population continues to grow, the number of non-Hispanic Black residents has
declined by more than 125,000 in the last 20 years, a more than 6% decline, the
majority of which comes from the city’s shrinking African American community.

“This (the community preference policy) is community groups fighting for their
members and being thrown a few crumbs,” said Harry Derienzo, president of the
Banana Kelly Improvement Association, a community development group. “Even those
crumbs are insufficient. That’s all we had.”

DeRienzo suggested tailoring the policy to the most vulnerable neighborhoods
instead. For example, after the federal Department of Housing and Urban
Development rejected San Francisco’s policy over concerns of discrimination and
segregation, the city limited its residency preferences to census tracts that
were most at risk of displacement.

A SEGREGATED PRESENT

More than 50 years after the passage of the federal Fair Housing Act, New York
City consistently ranks among the most segregated metro regions in the country –
the long-tail effects of racially discriminatory covenants and official
government policies.

“Segregation in New York [for many decades] was not only widespread and lawful,
but government and public policy sanctioned it and helped to create it: there
were whites-only signs in Manhattan apartment buildings, racially restrictive
covenants in property across the region, whites-only classified job
advertisements, whites-only hotels and restaurants in the heart of Manhattan,
and segregated seat assignments by American Airlines at LaGuardia,” wrote Martha
Biondi, a scholar of African American studies and history at Northwestern
University, in a 2007 paper.



Today, the New York City region has the country's second-highest level of
segregation between Black and white residents, and between Latino and white
residents, according to a Brookings analysis last year of 2020 Census data. And
the report also found the region had the fifth-highest levels of segregation
between Asian and white residents. Community preference endures against this
backdrop.

CUNY sociologist Andrew Beveridge, on behalf of the plaintiffs, analyzed data
from over 7.2 million lottery applications for 10,245 apartments from 2012 to
2017.

Beveridge analyzed demographic differences between “insiders,” applicants who
lived inside the district of the development they applied for — and thus
eligible for community preference — and “outsiders,” applicants living
elsewhere.

He found that the moves sought by “outsiders” were far more integrative — that
is, helping to contribute to integration — than moves sought by “insiders.”

But, both sides in the litigation agree, insiders still have a significant leg
up, even though the vast majority of applicants for any of the below-market
units in a given building don’t live in the same community district.

“What the city’s policy does is it squeezes down the percentage of those
[integrative] moves that could come from outsiders,” said Gurian.



He added, “It’s kind of an obvious way that the policy interferes with
desegregation that would otherwise occur."

Instead, Gurian said, the city should just honor the choices New Yorkers are
making.

SETTLEMENT TALK FIRST

The city, meanwhile, argued in court papers that any of the policy’s effects on
segregation are insignificant, and that the lottery still reduces segregation
overall.

Among some housing advocates, both critics and supporters of the community
preference policy contend that it’s unlikely that it is a major driver of
segregation in the city, though some admit it reinforces the segregated status
quo.

Sylvia Morse, policy program manager at the Pratt Center for Community
Development, is skeptical of the current policy, but said that its impacts can’t
be separated from the realities of where most affordable housing is being built.



Morse pointed to the fact that most of the city’s new affordable housing in
recent years have been built in lower-income, predominantly Black and Latino
neighborhoods — and the need to build more housing in wealthier, whiter,
lower-density areas.

“If there’s a concern about neighborhood integration or segregation, community
preference alone isn’t going to change that,” Morse said. “So, to me, focusing
on community preference feels like tinkering at the margins.”

In late April, Judge Laura Swain ruled that a jury should decide whether the
community preference policy perpetuates segregation, and qualifies as
intentionally discriminatory.

She, however, rejected the plaintiffs’ claim that the policy has a disparate
racial impact. She said they failed to show that a particular group was
negatively affected.

The plaintiffs have filed a motion asking Swain to reconsider her ruling. They
have previously argued that the policy also gives a leg up to the majority group
— white, Black, Asian or Hispanic — in the community district of the housing
development, based on Beveridge’s report.

Both sides also agree that community preference disadvantages applicants who
aren’t part of the majority racial or ethnicity group in the community district
where a housing lottery is being conducted, per court documents.



The city, however, disagrees that Beveridge’s finding means the policy unfairly
advantages any one race over the other. Gurian has called their argument a
“modern version of separate but equal,” where discrimination against a group in
one place can be “offset” by preference for that group in another.

“That is, don’t worry, Black Central Harlemite that you’re being discriminated
against when you apply for housing on the Upper East Side,” Gurian said. “You
can just continue to seek housing in Central Harlem, and you’ll be discriminated
for in those lotteries.”

While both sides will meet soon to discuss the possibility of a settlement,
Gurian said he expects to go to trial early next year.

Correction: This story previously misstated Vicki Been's role in the housing
lottery litigation. She is not named as a defendant.

--------------------------------------------------------------------------------

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estate industry reeling

Lawmakers Seek To Ban "Poor Doors" & Other Forms Of Housing Discrimination

The African American exodus from New York City


Tagged

Race And Justice Unit
gentrification
displacement
new york city
fair housing act
housing lottery

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Arya Sundaram
Twitter

Arya is a reporter covering race and justice. Got a tip? Email:
asundaram@nypublicradio.org or reach Arya on Signal at 512-650-8767.

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