New York City’s practice of giving neighborhood residents priority for affordable housing built in their vicinity will be dramatically reduced under a settlement of a landmark lawsuit that charged this so-called community preference aggravated racial segregation.
Currently 50% of any affordable units offered through the city’s housing lotteries must go to residents of the neighborhoods where the development is going up. Under the settlement approved by Manhattan Federal Judge Laura Taylor Swain Monday, that preference for units will soon drop to 20%, then dip further to 15% in five years.
That will mean the vast majority of new apartments, 80% and ultimately 85%, will become available for applicants who live outside the neighborhood.
The lawsuit was filed in 2015 by the non-profit Anti-Discrimination Center and attorney Craig Gurian, taking aim at the 50% policy enacted during Mayor Michael Bloomberg’s tenure. Bloomberg increased the community preference level from 30% to 50% in his effort to expand the development of new affordable housing citywide.
Many city officials supported this approach, testifying in depositions taken in the case that ending the set-aside would make getting community sign-off on projects more difficult. It also allowed them to promise their constituents housing would be set aside for them and limited to those outside the community.
Yet survey data cited by the plaintiffs showed that the vast majority of housing applicants didn’t care which neighborhood they wound up in, as long as the apartments offered affordable rent.
The suit alleged that setting aside half of apartments for existing neighborhood residents had a collateral effect — frustrating New Yorkers from obtaining affordable apartments outside their own neighborhoods. The preference for existing neighborhood residents, the suit argued, helped prevent the racial makeup of neighborhoods — be they Black, Hispanic, Asian or white — from changing, effectively obstructing integration.
Mayor Bill de Blasio rejected that argument and his law department did little to work out a way to settle the case, instead spending significant resources filing unsuccessful legal motions to kill the lawsuit.
Until recently, Mayor Eric Adams, who spoke out against using community preference in all neighborhoods when he was running for City Hall in 2021, continued to resist a settlement. But in August both sides began a rapprochement that resulted in Monday’s ruling.
In her order approving the settlement, Judge Swain signed off on the terms of the arrangement and made no comment on the arguments in the case.
Starting March 1, the city will add new language to its housing lottery application portal and advertisements spelling out the less restrictive equation as a means of addressing one of the city’s most vexing problems: a severe lack of affordable housing: “New York City is committed to the principle of inclusivity in all of its neighborhoods, including supporting New Yorkers to reside in neighborhoods of their choice, regardless of their neighborhood of origin and regardless of the neighborhood into which they want to move.”
‘Con Job’
On Monday, Gurian criticized the Bloomberg and de Blasio administrations for not settling the case earlier. The settlement spells out that the city has agreed to pay the Anti-Discrimination Center $5.1 million and co-counsel Cuti Hecker Wang $1.1 million for the legal skirmishing that took place over the last eight years.
“The policy has been a con job,” Gurian said. “New Yorkers do not see residential segregation as a natural state of being. It is deeply unnatural. It is the key outcome of what white supremacy literally created in this city. So you look at the lottery data and you see that people want to move.”
Gurian also noted that the 50% set-aside for local residents had the added effect of encouraging developers to continue concentrating new affordable developments in lower-income neighborhoods where they already exist and avoid the contentious process of trying to build in more affluent, predominantly white neighborhoods of Brooklyn, Queens and Staten Island.
“It does get to this other question of who builds what where. And one thing the neighborhoods of white Brooklyn and white Queens have been alarmed about is the prospect of building deeply affordable housing.” He also noted elected officials in heavily Black and Hispanic neighborhoods encouraged adding more developments in those areas to “match the existing income profile.”
Shortly after the city and Gurian filed the settlement in Manhattan federal court, Adams released a statement touting his “City of Yes” campaign to encourage new affordable housing in all city neighborhoods, including more affluent locales with little public housing.
“This agreement, which allows the city to maintain the community preference policy, preserves a critical tool that lets us build on this progress and continue creating new affordable housing in partnership with communities across the city,” he stated.
Under the terms of the settlement, the city has made no admission of liability but agreed to oppose any subsequent legal efforts to return to the 50% level ended by the settlement. The court will retain oversight through April 2036 and the 20% will go into effect in late April.
The city will also pay $100,000 each to Shauna Noel and Emmanuella Senat, the two renters who served as the lawsuit’s plaintiffs after being denied housing in neighborhoods where they didn’t reside.