Expert reports show City's outsider-restriction policy in affordable housing lotteries causes racially disparate impacts and perpetuates segregation

October 29, 2019 (Updated February 7, 2019) – Discovery in the case has concluded, and the next step is for plaintiffs to file their motion for summary judgment on March 6, 2020. This means that plaintiffs will be making a motion to the federal District Court Judge who is presiding over the case to find as a matter of law that the City’s outsider-restriction policy, in violation of the federal Fair Housing Act and the New York City Human Rights Law, illegally causes racially disparate impacts and perpetuates segregation more than an equal-access lottery would. (For non-lawyers, “as a matter of law” means that, based on the uncontested facts, a reasonable jury could only find for the plaintiffs.)

Though the initial report of plaintiffs’ expert (from 2017) was kept secret at the behest of the City for two years, the Magistrate Judge overseeing discovery in the case ruled this past summer that the reports of plaintiffs’ expert could no longer be kept secret. As such, the powerful evidence that the City’s policy is discriminatory is in the public domain. [Scroll to the bottom of the page for links to the full text of the reports.]

Professor Andrew Beveridge, one of the leading demographers in the country, analyzed over 7 million lottery applications and the results of 168 different lotteries.  He examined the impact of the outsider-restriction policy (priority for community district residents for 50 percent of units, even if those insiders represent only 5 or 10 percent of all the City residents who apply to a lottery) at three different stages of the lottery process: all entrants to the lottery; those entrants who were apparently eligible for units; and those entrants who were awarded units.  The law is clear that denying equal opportunity at ANY stage is illegal.

Professor Beveridge found that outsider-restriction resulted in clear racial disparities at EVERY STAGE of the process in EVERY type of community district that had a majority of residents of one race or ethnicity.  It was always the majority group that was helped most by the policy, and always one or more other groups that were hurt significantly.  (Additional impacts were observed in plurality districts as well.)

In other words, New York City persists in 2020 with a policy that advantages Whites and disadvantages African-Americans when it comes to getting affordable housing in majority White community districts. Likewise, Latinos are among those hurt by the policy in majority African-American community districts, and African-Americans are among those hurt by the policy in majority Latino districts.

 “All the African-American plaintiffs in this case want is an equal-access lottery where you are given the same chance regardless of what neighborhood you are coming from and regardless of what neighborhood you wish to move to,” the Anti-Discrimination Center (ADC), co-counsel for plaintiffs wrote in a statement, “but the City prefers to continue to tell African-Americans ‘we’ll boost your odds as long as you want to stay in your own neighborhoods; but we’ll hold you back if it’s your choice to move to a different part of the City.’”

On hearing that Vicki Been, the de Blasio administration’s deputy mayor for housing and economic development, has defended the policy by saying in part that “Segregation is a question of choice,” Craig Gurian, ADC’s executive director stated: “That view is profoundly ahistorical, contradicts every study of African-American residential preferences that has been performed, and makes no sense in a crowded City where any claim that a neighborhood is for ‘our group’ is necessarily a claim that the neighborhood is not for other groups.”

On hearing that the de Blasio administration has now defended the policy by saying in part that “Segregation is a question of choice,” Craig Gurian, ADC’s executive director stated: “That view is profoundly ahistorical, contradicts every study of African-American residential preferences that has been performed, and makes no sense in a crowded City where any claim that a neighborhood is for ‘our group’ is necessarily a claim that the neighborhood is not for other groups.”

As for Been’s comment that “We shouldn’t be telling people you have to move to some other neighborhood,” Gurian noted: “It is ironic that the deputy mayor should say this because plaintiffs’ desire for an equal-access lottery would honor the choices that New Yorkers make in selecting where to apply for affordable housing.  By contrast, it is the City’s outsider-restriction policy that refuses to respect those choices.”

“Even though Professor Beveridge has found that 87 percent of unique lottery applicants apply outside of their community districts at least three-quarters of the time, and even though in a typical lottery only 5 to 10 percent of applicants live in the community district (are insiders), the City insists on overriding the normal application process by engineering a huge bonus of 50 percent of units for insiders.  In other words, it is the City that has decided that a New Yorker’s choice to move to a new neighborhood should be less valued than a New Yorker’s choice to stay in the same neighborhood.”

Since the City’s expert cannot rebut Professor Beveridge’s findings as to how outsider-restriction works in the different community district typologies, the City, remarkably, is also trying to argue that there is nothing wrong with boosting the chances of Whites in White majority districts (and hurting the chances of African-Americans in those districts) because each racial or ethnic group is “helped” in at least some part of the City.  

ADC’s Gurian responded: “The idea that you are supposed to close your eyes to the effects on the community district level of a policy that is designed to work on the community district level (and instead look citywide) is absurd. Helping each racial or ethnic group in the areas where it is dominant does not represent citywide “balance,” it represents the de Blasio administration’s modern-day version of the separate-but-equal doctrine.  That view was appalling a century ago when the Supreme Court outlawed white-block / black-block ordinances; it is appalling today.”

As for perpetuation of segregation, Professor Beveridge has demonstrated that, when the analyses of defendant’s expert (including a simulation) are disaggregated to reveal the differences between insiders and outsiders that defendant’s expert chose not to report, powerful and uncontradicted evidence that outsider moves on net are more integrative than insider moves on net emerges.

“I’m the first to say that Mayor de Blasio should be praised for introducing a variety of progressive policies during his tenure, but his stubborn retention of the outsider-restriction policy of his predecessors could not be more reactionary,” Gurian remarked.

Professor Beveridge’s analysis of lottery applicants also shows that it is false to suggest that insider applicants are any more rent-burdened than outsider applicants.  The same is true when it comes to reasons that applicants gave for moving.  “Rent too high,” for example, is actually cited by a slightly greater percentage of outsider applicants than insider applicants.

Plaintiffs are also represented by ADC’s Roger D. Maldonado, and by Mariann Meier Wang and Heather Gregorio of the firm Cuti Hecker Wang LLP.

The reports are available below.  We suggest that you download the reports; they (and their exhibits) are more easily read in Acrobat.

Read the reports:

Professor Beveridge's principal report for plaintiffs
Report confirms that City policy denies on the basis of race the opportunity to compete for affordable housing opportunities on a level playing field.
Dr. Siskin's opposition report for defendant
Dr. Bernard Siskin, defendant's expert, acknowledges the disparities that Professor Beveridge found, but introduces the City's separate-but-equal defense. This second amendment of the report, from December 2019, corrects a variety of data errors that had been contained in prior versions, but continues to conceal: (a) information distinguishing data on insiders (preference beneficiaries) from data on outsiders (those disadvantaged by the City's policy); and (b) information distinguishing which group is disproportionately helped and which groups are disproportionately hurt by the City's policies depending on the community-district typology (White-majority, African American majority, etc.)
Professor Beveridge's reply report to defendant's opposition report
Report demonstrates methodological, substantive flaws of defendant's expert; cites City's separate-but-equal defense; and explains how City's expert actually confirms that the outsider-restriction policy, on the basis of race, effectively deprives New Yorkers of a level playing field on which to compete for affordable housing. Note: the City's expert amended his opposition report subsequent to this reply. As such, this reply needs to be read in conjunction with Professor Beveridge's January 2020 update, below.
Dr. Siskin's sur-reply report for defendant
This second amended version of the report, from December 2019, doubles down on the City's separate-but-equal posture. Note that Professor Siskin's analysis of who was "considered" -- which started in June with a claim of approximately 1,060,000 apparently-eligible applicants considered and with a claim that apparently-eligible applicants benefitting from outsider-restriction were approximately 592 percent more likely than outsiders to "follow through" (remain interested) and be found qualified by the reviewing developer -- has become, in what Professor Siskin describes as his "sensitive estimate," a revised universe of only approximately 247,000 apparently-eligible applicants and a greater likelihood for insiders of approximately 34 percent (i.e., 558 percent less than the original estimate).
Professor Beveridge's January 2020 update responding to Dr. Siskin's data corrections
In the wake of data corrections made in December by defendant's expert, Dr. Siskin, Professor Beveridge updated his previous analyses to apply them to the corrections both in Dr. Siskin's second amended opposition report and in Dr. Siskin's second amended sur-reply report. These updates show that when Dr. Siskin's data -- including simulations that he ran -- are disaggregated to reveal data that Dr. Siskin chose not to report, the data are confirmatory both of Professor Beveridge's findings of disparate impact and of his findings of perpetuation of segregation.
Professor Goetz's principal report for defendant
Report discusses displacement and gentrification broadly; fails to make link to outsider-restriction policy.
Professor Beveridge's rebuttal to Goetz report
Report points to failure of Professor Goetz to provide evidence that outsider-restriction policy mitigates displacement in any way; demonstrates that New Yorkers who the City treats as "outsiders" are just as rent-burdened as those who the City treats as "insiders"; and shows that an overwhelming majority of unique applicants to lotteries apply outside of their community district most of the time (for example, 87 percent of unique applicants apply outside of their community districts 75 percent of the time or more).