NYC thwarted in bid to avoid trial in discrimination case challenging its outsider-restriction policy in affordable-housing lotteries

In a recent Opinion and Order, the Hon. Laura Taylor Swain, Chief Judge of the federal district court for the Southern District of New York, cleared the way for a trial to be held as to whether New York City’s outsider-restriction policy in its affordable housing lotteries violates the federal Fair Housing Act and the New York City Human Rights Law.

A brief discussion of how the policy perpetuates segregation is set out below. Disparate impacts — both the Court’s confirmation that plaintiffs demonstrated the existence of multiple racial disparities and the startling acceptance of the City’s continued reliance on separate-but-equal — are discussed on page 2, along with plaintiffs’ motion to reconsider that aspect of the decision. Materials related to the intentional discrimination claim are found on page 3.

The bottom line is that, in 2023, New York City should not be in the business of overriding the choices that New Yorkers of all races want to make on their own. All of our communities should belong to all of us — regardless of where we are coming from. and regardless of where we want to move. And the policy — denying, based on race, a level playing field — operates squarely against that basic civil rights principle.

Perpetuation of segregation

Without the policy, each New Yorker who applies to a lottery would be treated the same. But the policy divides New Yorker into “insiders” (those who live in the community district where the housing is being built) and “outsiders” (those New Yorkers who don’t). How does that splitting affect segregation?

When segregation is looked at, what is compared are two racial/ethnic groups at a time. The experts from both sides agreed on which moves had or would have an integrative effect, which moves had or would have a segregative effect.

When moves made or sought were tabulated, it was possible to see — separately for outsiders and insiders — what the net result of the integrating and segregating moves were.

This first chart below examines the moves that were sought by apparently eligible applicants. These show raw numbers. As you can see, the net-integrative effect for outsiders absolutely swamps the net-integrative effect for insiders in every case.

It is true that there are many more outsiders than insiders, so we also looked at the percentage of the moves sought by apparently eligible outsiders that were net-integrative and compared that to the percentage of the moves sought by apparently eligible insiders that were net-integrative. That way, we could see how much faster desegregation proceeds with outsiders than with insiders. So, for example, 30 percent net-integrative for outsider moves compared to 10 percent net-integrative for insider moves is, in relative terms, 300 percent higher. This next chart shows those relative percentages. 

So what does the policy do with those moves that outsiders desire to make, moves that are much more desegregating by the choice of where New Yorkers choose to apply? Well, it takes the enormous outsider pool — almost 97 percent of applicants for housing in majority White community districts — and dramatically squeezes down percentage of apartments available to those outsiders (outsiders, just as a reminder, mean New Yorkers outside of the community district who qualify for affordable housing and who have been found, overall, to be just as rent-burdened and extremely-rent-burdened as insiders). See chart below. This is a way that the City’s policy causes there to be more segregation than there would be in the absence of the policy.

>> We have always said that there is a simple solution: the City should take its thumb off the scale and honor the choices that New Yorkers are making via their applications — wherever they are coming from and wherever they wish to move.