New York City Settles Affordable Housing Lottery Lawsuit

After nearly 10 years of legal fighting, New York City will change its decades-old practice of giving local residents dibs on new affordable apartments.

A group that sued the city over the practice of “community preference” has settled with the Adams administration over how many below-market units are reserved for neighborhood residents.

The longtime policy has been that 50 percent of a project’s apartments offered in a city-run housing lottery must be set aside for residents of the local community district.

Under the settlement terms, that threshold will drop to 20 percent until May 1, 2029, then decrease to 15 percent. Any project that goes to market within the next three months will be grandfathered under the old system.

The settlement ends litigation filed in 2015 by attorney Craig Gurian, executive director of the Anti-Discrimination Center. Gurian filed the complaint on behalf of two Black New Yorkers who were unable to get housing when they entered housing lotteries outside their districts.

The city agreed to pay plaintiffs Shauna Noel and Emmanuella Senat $100,000 each as part of the settlement. It must also pay more than $6 million to cover attorneys’ fees for the plaintiffs, according to the settlement.

In a statement, Mayor Eric Adams cited his administration’s push to create more housing in each neighborhood as part of his City of Yes plan.

“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,” Adams said in a statement. “With this policy in place and local communities at the table, we can and will continue to provide affordable housing and economic opportunities for New Yorkers in every neighborhood.”

The complaint alleged that community preference violates the federal Fair Housing Act because it exacerbates racial segregation: New Yorkers seeking affordable housing have less of a chance to live in a new neighborhood, meaning district demographics are more likely to stay the same.

During the case, the de Blasio administration sought to keep from public view an Andrew Beveridge study that supported the plaintiffs’ claim. But a court ordered its release in July 2019.

Gurian hailed the settlement as a breakthrough in fair housing.

“City officials have turned away from the discredited politics of racial turf and said out loud, in words, that all of our neighborhoods need to belong to all of us,” he said in a statement.

The policy, which dates back to the Koch administration, has made it easier for some developers to secure approval for their projects, because they could ensure community boards and City Council members that local residents would get half of the affordable units. The policy helped alleviate concerns about displacement and outsiders moving in.

“If they fear displacement, they will oppose the housing,” Vicki Been, then a deputy mayor, told the New York Times in 2019, explaining the de Blasio administration’s support for community preference. “And the only way that we get a more integrated city is if we have more affordable housing across a wider range of neighborhoods.”

Community opposition typically only stops developments that require political approval, such as those that need new zoning. Community board votes on rezonings are advisory, but City Council votes are decisive. The Council customarily follows the lead of the local member.