"Instead of simply allowing enough apartment construction to keep up with employment and population growth, New York, Boston, San Francisco, Los Angeles, and many other cities have restricted housing development but simultaneously offered developers tax credits, zoning changes, and other incentives to include below-market-rate units in their projects, which have in many cases been made available to the public via lottery."
"Last year, New York City's Department of Housing Preservation & Development oversaw drawings for 10,000 such affordable apartments, whose rents are capped so that tenants spend no more than 30 percent of their income on housing. For these units, the city received 6 million applications. In other words, households had a one-in-600 chance of winning each lottery they entered. Boston similarly receives hundreds of applications for many of its available affordable rentals."
"Although an open market for housing reflects the economic inequalities that exist within the country's most prosperous cities, efforts to circumvent it produce what we might call "hidden markets": mechanisms, such as lotteries and waiting lists, that allocate the necessities of life without meeting demand. Hidden markets-the subject of my research and my new book-can be cruel in their own way."
Major liberal cities often allocate officially designated affordable apartments by lottery rather than through open-market mechanisms. Many cities restrict overall housing development while offering developers incentives to include below-market-rate units, which are frequently assigned via lotteries. New York ran lotteries for 10,000 capped-rent units last year and received six million applications, yielding roughly a one-in-600 chance for applicants; Boston similarly faces heavy demand. These lotteries create hidden markets that allocate necessities without meeting demand, rewarding those who can navigate bureaucracy and wait while leaving the majority of applicants without housing.
Read at The Atlantic
Unable to calculate read time
Collection
[
|
...
]