Editor’s Note: The following is an updated version of the News Brief story that appears in our latest print edition.

 

The City of New York has settled a lawsuit with a group after nearly 10 years of legal fighting and will reportedly change its existing practice of giving local residents dibs on new affordable apartments via NYC Department of Housing, Preservation & Development (HPD)’s lottery system.

 

The Real Deal reported on Jan. 22 that a group that sued the city over the practice of “community preference” for housing units made available through HPD’s affordable housing lottery system, recently settled with the Adams administration over how many below-market units will be reserved for neighborhood residents.

 

According to the report by The Real Deal, up until now, the policy had 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, it was reported that, according to HPD, this threshold will drop to 20 percent until May 1, 2029, and then further decrease to 15 percent thereafter. It was also reported that any housing project that goes to market within the next three months [from the date of the settlement, we understand] will be grandfathered under the old system.

 

Norwood News reached out for comment to HPD on the article by The Real Deal, and asked if units would continue to be set aside for those with disabilities. A spokesperson responded, saying, “This has been a long-standing lawsuit, and there was a serious risk of losing the community preference altogether. Although the preference has been reduced, the outcome allows us to preserve it and continue to do our work by advocating for New Yorkers that need more housing at deeply affordable levels.”

 

According to HPD,  the City’s community preference policy, created in 1988, was the subject of a federal lawsuit that started in 2015 and reached a settlement in January 2024. According to the department, only 20% of the income-restricted units in city-financed housing developments that are subject to a housing lottery will be allocated to the residents of the local community board from now until 2029, and after 2029, this will drop to 15%. According to HPD, the change in community preference will not impact preferences set aside for New Yorkers with disabilities.

 

Usually, in accordance with HPD guidelines, prospective renters must meet income and household size requirements to apply for any available apartments via the HPD affordable housing lottery system.

 

According to HPD, the department typically awards tax credits of between $12 million and $14 million per year to “20 or more new construction or substantial rehabilitation projects in New York City” where at least 20% or around 1,000 apartments are reserved for low-income households. HPD’s scope in terms of the awarding of tax credits is negotiated annually with the State out of the State’s federal “Low Income Housing Tax Credit allotment.” According to HPD, the allotment is made up of 9% “competitive tax credits” and 4% “as-of-right” tax credits.

 

According to HPD, the competitive 9% credits are awarded to developers based on selection criteria specified in the City’s Qualified Allocation Plan. Once tax credits are allocated to a project, the developer typically sells the credits to corporate investors who supply private equity to cover a portion of development costs.

 

According to HPD, the investors often participate through pooled equity funds raised by syndicators such as the New York Equity Fund, the Enterprise Social Investment Corporation, and others, and they [the investors] receive credits that reduce their corporate federal income tax bills for ten years.

 

HPD officials say housing is considered affordable if it costs about one-third or less of what the people living in the local area earn. Income eligibility and rent for City-financed affordable housing projects are based on a measure called Area Median Income (AMI).

The AMI for all cities across the country is defined each year by the U.S. Department of Housing and Urban Development (HUD). The 2023 AMI for the New York City region is $127,100 for a three-person family (100% AMI).

Click here for here, here, and here for details of recently announced housing lotteries. Note HPD sometimes extends the deadline for receipt of applications.

 

Affordable Housing Lottery Helpline: 212-863-7990
Email: nychousingconnect@hpd.nyc.gov

 

For information on applying for affordable housing for people with disabilities, please submit accessibility inquiries to:
Phone: 212-863-6486
Email: accessibility@hpd.nyc.gov

 

HPD Housing Ambassadors
Email: ambassadors@hpd.nyc.gov