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Lawsuit challenges city policy limiting 50% of affordable housing lottery to residents in local Community District

There are more than a few complexities (and Atlantic Yards echoes) associated with the federal lawsuit (PDF) filed this week by the Anti-Discrimination Center "challenging New York City’s policy of barring City residents who live outside the community district in which affordable housing is being built from competing on an equal basis for all available units."

Under current city policy, 50% of the units are subject to a lottery reserved for those living in the same community district. If successful--and I am making no bets either on success or length of time to resolve it--the lawsuit could throw a wrench in current policies, including those regarding the 2,250 Atlantic Yards/Pacific Park subsidized units.

With Atlantic Yards, which touches on three community districts, the lottery preference was initially for residents served by Community Boards 2, 6, and 8, but was later expanded to encompass Community Board 3, which, though not encompassing the project site, is similarly within its orbit. (How'd that come about?)

Because of engrained patterns of segregation,, the Anti-Discrimination Center states, "the City’s policy in connection with half of the units in a development — favoring existing community district residents and disfavoring New Yorkers who live outside the community district — winds up helping the dominant racial or ethnic group in the community district and hurting those groups who are underrepresented in the community district."

The developments named in the lawsuit are in Manhattan community districts where whites are overrepresented and where African-Americans are underrepresented.

That does not necessarily mean, however, that racial groups are similarly skewed regarding eligibility for affordable housing, which is distributed to low-, moderate-, and middle-income populations. Still, the lawsuit states:
Regardless of whether one examines households earning between 40 to 60 percent of area median income (AMI), 60 to 80 percent of AMI, 80 to 100 percent of AMI, 40 to 80 percent of AMI, 60 to 100 percent of AMI, or 40 to 100 percent of AMI, significant differences exist in most community districts between the percentage of households within the income range in the community district who are African-American and the citywide percentage of households in the income range who are African-American [and Latino]
Defense of policy as response to gentrification

And as defenders of the policy have been quick to say, it helps some minorities in gentrifying neighborhoods.

Reported the Wall Street Journal, in Group Challenges New York City on Housing Allocations:
The policy became standard under Mayor Ed Koch in the 1980s, said Jerilyn Perine, executive director of the housing-research organization Citizens Housing and Planning Council and a former commissioner of the city’s housing-preservation department.
“Community preference was born to make sure that people who were living in not-great conditions, in neighborhoods that were struggling, had an opportunity to take advantage of the improvements that were happening,” she said, likening the practice to insurance against displacement by gentrification.
Affordable-housing developers support the policy because without it, they can’t win neighborhood support for their projects, said Judith Kende, head of the New York market at Enterprise Community Partners Inc., an affordable-housing financing and policy organization.
The lawsuit states that the policy began around 1988 as a 30% preference for local Community Board residents, and was altered around 2002 under the administration of Mayor Mike Bloomberg to a 50% community preference. It also argues that Bloomberg-era downzonings preserved low-density, mostly-white neighborhoods from increased development and the possibility of affordable housing.

Capital New York reported that the suit could snag Mayor de Blasio's efforts to rezoning parts of the city in an effort to create new affordable housing.

Thus, the policy seems most defensible when affordable housing is built in gentrifying or poor neighborhoods, as a way to allay concerns.

Indeed, as part of an agreement to build the Atlantic Yards affordable housing faster than the 25-year "outside date," negotiators last year got the city to agree to consider "former residents of districts 2, 3, 6 and 8 who have been displaced since the time of Atlantic Yards’ 2006 approval as eligible to participate with preference in lotteries for its affordable housing."

The policy seems less defensible when the housing is built in wealthier neighborhoods. The lawsuit charges that the city ignores "the negative impact on families... who live in racially concentrated areas of poverty; ignored the positive effects of residential mobility for families... and paid no heed to the voices of New Yorkers who want to be able to move freely to any City neighborhood and to do so on equal terms with other City residents."

A commenter on Curbed wrote that the Community Board district boundaries are "historical artifacts"--maybe not, though the districts can seem somewhat arbitrary--and that "people living just blocks away from favored applicants (and possibly even closer to the new development) may be residents of the neighboring Community Board district -- and are therefore not favored as applicants."

Questions raised by feds

In February, the Wall Street Journal reported:
Officials with the U.S. Department of Housing and Urban Development said they were reviewing whether the preference violates the 1964 Civil Rights Act, which precludes developments or agencies that receive federal money from discrimination based on race or national origin.
...Experts said that if HUD does deem the preference discriminatory, the city may not have to eliminate it altogether.
Instead, they say, the city may be able to reduce the percentage of local residents given preferences or seek to create more diversity by extending eligibility for to areas covered by multiple community boards.
That might look like the Atlantic Yards resolution.

The issue of affordability

Arguably another problem plaguing the affordable housing enterprise--though not mentioned in the lawsuit--is the mismatch between those needing housing and the actual affordability of the below-market units.

First, affordable housing is linked to Area Median Income (AMI), which is based on regional income figures, not the city, borough, or neighborhood. The 2015 AMI for a four-person household is $86,300.

Thus the need for affordability housing is concentrated in low-income (30% to 80% of AMI) households. But 50% of the two all-affordable Atlantic Yards towers is skewed to households earning 165% of AMI and paying $3,000 for a two-bedroom unit.

The vagueness of the term "affordable housing" helped developer Forest City Ratner and ally ACORN recruit many low-income Brooklynites to march for Atlantic Yards, though most of those marching would be eligible, according to income, for perhaps 40% of the subsidized units.

Also, unless they live in the four community districts, which is unlikely, they'd have less than a 50% chance at the units. Beyond the 50% community preference, according to the lawsuit, another 12% are reserved: 5% for City employees; 5% for mobility impairments; and 2% for auditory or visual impairments.

The Atlantic Yards project is also supposed to have 10% of affordable units for seniors, at least as a goal.

As I reported in July 2006, the announcement of lottery preferences deflated the hopes of some of the people attending an affordable housing information session.

Lander's defense, and a lingering question

Brooklyn Council Member Brad Lander, who formerly ran organizations promoting equitable development, stated that he thinks the 50% community preference "an important tool in our efforts to create diverse affordable housing and fight segregation," since it produces more integrated housing than either market-rate or public housing. It also helps reduce NIMBY opposition to new developments, he added.

The policy "helps long-time residents of gentrifying neighborhoods have a better chance to stay in their communities as rents rise," Lander wrote. That's a different situation than the one named in the lawsuit, which seems to be targeting already-gentrified neighborhoods.

Despite Lander's statement about helping "long-time residents," the lawsuit notes that the "outsider-restriction policy" helps current residents gain an advantage in the lottery even if they're newcomers. I asked Lander on Twitter how those positions could be harmonized, and haven't yet gotten a response.

Lander and the Anti-Discrimination Center did exchange mutually respectful agree-to-disagree tweets.

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