How housing subsidies work in New York City
They're inequitable and don't address the housing market's fundamental issues, but they also provide a lot of support for low-income New Yorkers
Over the past month, New York’s city council and mayor have been fighting about housing. On May 25th the council passed a package of laws (1, 2, 3, 4) that greatly expand eligibility for certain rent subsidies for low-income New Yorkers. Mayor Eric Adams vetoed these law changes on June 23rd, describing the expansion of CityFHEPS vouchers as too costly. A two-thirds supermajority of city council members had originally voted for these bills, which means that the city council can override the mayor’s veto, if the Speaker Adrienne Adams puts the laws back up for a vote.
The political drama is interesting on its own terms, but this tussle over CityFHEPS vouchers made me curious about the broader topic of how New York’s governments assist low-income New Yorkers with housing costs.
Here’s what I found:
6% of New Yorkers live in housing that is directly subsidized by the government. That’s around 500,000 people.
Housing subsidies in New York City are limited to around $3.5 billion per year, which is allocated to low-income New Yorkers through a confusing system of waitlists and lotteries.
Successful applicants receive benefits valued between $11k and $16k per household per year. They typically receive these benefits for decades. Applicants who aren’t selected receive no direct assistance with their housing costs.
Overall, my three takeaways are:
There’s fundamental unfairness in the way that our government allocates its billions of dollars of housing assistance. Some low-income New Yorkers are given hundreds of thousands of dollars worth of housing assistance over their lifetimes, while other low-income New Yorkers who might have the exact same household income receive nothing.
New York’s housing assistance programs subsidize demand for housing while doing little to address the underlying supply-side reasons why housing is so expensive in New York.
New York’s housing assistance programs redistribute money from the wealthy to benefit recipients. Redistributing wealth is a perfectly legitimate progressive policy goal, but its implementation through housing subsidies strikes me as opaque and inefficient.
If that’s piqued your interest, then let’s dive into the details.
New York’s housing subsidies
There are two main ways that New Yorkers can receive subsidies for rental housing:
Living in public housing
Being the recipient of a housing subsidy voucher
In addition, 1 million of New York’s rental apartments are rent stabilized. These apartments are subject to legal limits on how much landlords can increase the rent each year. There’s also a small pool of ~12 thousand rental apartments that are discounted far below market rates because the property developer accepted certain tax incentives. I plan to cover these in a future post.
Public housing refers to government-owned residential buildings, rented out to tenants at prices lower than the market rate. As of early 2023, nearly 361,000 New Yorkers live in public housing. The New York City Housing Authority (NYCHA) owns and maintains these 178,000 apartments that are spread across 335 housing developments.1
These public housing developments were built between 1936 and 1997. Federal law caps the number of public housing apartments that the federal government will subsidize at the number that existed in 1999, so New York’s public housing stock has been stagnant since then.2
Each year, between 2% and 3% of New York’s public housing apartments become available (typically as a result of the previous occupant dying).3 These apartments are allocated to eligible New Yorkers who are at the top of the prioritized waitlist.
Any family containing at least one US citizen, US permanent resident, or person with refugee or asylum status where the family’s combined gross income is less than 80% of New York City’s median income for the family size may apply to join the city’s public housing waitlist. As of 2023, those annual income limits are $79,200 for a single person, $90,500 for a two-person family, $101,800 for three, $113,100 for four, and $122,150 for a five-person family.4
Eligible families just need to fill out the paperwork, and then wait. There are currently 250,000 families on the waitlist, so at current turnover rates it will take over 60 years for all of today’s waiting families to be assigned an apartment.5 However, the waitlist is prioritized based on need-related factors including referrals from agencies for homelessness or children’s services, being a domestic violence victim, being an intimidated witness, currently paying more than 50% of household gross income for rent, and other factors.
Tenants in NYCHA’s public housing are required to pay 30% of their household income to the government as a rent contribution. The federal government subsidizes the remaining $1.9 billion of annual costs to operate and maintain these public housing residences, with a small contribution from the city’s budget.6 This equates to a subsidy of around $11,000 per public housing apartment per year.
The average family in NYCHA public housing contains 2.1 people and earns $25,700 per year. In 42% of families there is at least one person employed. 43% of NYCHA families have their “head of household” as over 62 years or older (and presumably being paid social security retirement benefits). 15% of families are dependent on welfare benefits.7
Once a family is assigned a place in public housing they can remain there for life. The average New York City public housing resident has lived there for 25.7 years.8 If their household income ever exceeds 120% of New York’s Area Median Income for more than 24 consecutive months their rent will be adjusted up to federally-determined fair market rent for the area, but they get to continue living in their home.9
Housing subsidy vouchers
There are several programs that provide government subsidies for families to pay rent to live in privately-owned housing. The largest is the Housing Choice Voucher Program (also known as “Section 8”), which subsidizes the housing of 199,440 New Yorkers across 94,259 homes.10 The Family Homelessness & Eviction Prevention Supplement (“CityFHEPS”) is a similar (but much smaller) program that the city council is currently trying to expand.
Any family containing at least one US citizen or permanent resident where the family’s combined gross income is less than 50% of New York City’s median income for the family size may apply for a Housing Choice Voucher. As of 2023, those annual income limits are $49,450 for a single person, $56,500 for a two-person family, $63,550 for three, $70,600 for four, and $76,250 for a five-person family.11
After receiving a voucher, the recipient can use it to have NYCHA support their rent in any privately-owned rental property in New York. The recipient pays the landlord 30% of their income as rent, and NYCHA covers the rest up to the federally-determined Fair Market Rent for the property, which considers its size and ZIP code. In 2022, NYCHA gave $1.3 billion in federal subsidies to landlords through the Housing Choice Voucher program, averaging about $15,700 per household with a voucher each year.12
While anyone who fits the income requirements is supposed to be given a voucher, demand for vouchers exceeds the funds that Congress sets for the program. Vouchers are allocated based on a waitlist. Families at the top of the list get vouchers when current holders no longer need them (usually due to death) or when Congress decides to throw some more money towards the program.
Once a family starts receiving Housing Choice Voucher program assistance they tend to remain in the program for a long time. As of 2023, the average New York family that benefits from a Housing Choice Voucher has been receiving the subsidy for 15.5 years.13 The overall number of families in the program has remained relatively steady over the past decade, which has only granted new vouchers to 23,956 families since 2012.14
As of 2023 NYCHA’s waitlist for Housing Choice Vouchers is officially only 17,000 families long.15 However, this waitlist is artificially kept short by NYCHA first running a lottery to decide which families can be appended to the waitlist. This lottery to join the waitlist is run every few years, but people who are referred from city agencies (especially homeless shelters) are able to bypass the lottery and get a higher spot on the waitlist.
These housing assistance programs provide vital support to hundreds of thousands of New Yorkers. I’m grateful these programs exist. At the same time, these programs are complicated and inequitable. I can see three opportunities for improvement to ensure that the limited funding has as much impact as possible.
Simplify the programs and processes
New York’s housing assistance programs are really complicated, and this hinders their ability to serve New Yorkers.
There are completely separate eligibility criteria, application processes, and prioritization systems for each of New York’s public housing, Housing Choice Vouchers, and CityFHEPS vouchers systems.
Details of these programs are buried inside PDFs and web pages across multiple government websites.
Public housing applicants are required to re-apply every two years or they lose their spot on the waiting list.
As much as federal funding restrictions allow, the city should streamline housing assistance application processes and prioritization systems across all of its programs. Ideally this would involve a unified application and waiting list system (and no silly lotteries to be allowed to join a waitlist). The city should publicly document the expected wait time for families in each prioritization category.
Examine the depth vs. breadth of support
New York’s public housing and housing vouchers currently provide greatly discounted housing to around 250,000 families at a public cost of around $14,000 per household per year. At the same time, there are hundreds of thousands of low-income families languishing on waiting lists or trying their luck in the NYCHA’s lotteries who receive no housing assistance. I think this is unfair.
We could offer benefits that are half as generous to twice as many families for the same total cost. That would obviously harm existing beneficiaries, but would be a huge gain to many families who currently are offered no support. I don’t personally know where the perfect trade-off is, but I think it’s worth investigating this balance.
Periodically reassess who’s getting assistance
Currently, an family must be very needy to initially gain one of the few spots each year in public housing or on voucher programs. However, once the benefits are granted, the beneficiary retains these benefit for the rest of their life, so long as their income remains under 80% AMI for public housing or 50% AMI for Housing Choice Vouchers. This system prioritizes the stability of the lives of existing benefit recipients over ensuring New York’s housing subsidies flow to the lowest-income New Yorkers.
Instead, I think that every five years NYCHA should reassess the situations of families that are currently receiving housing subsidies compared to the situations of families on the waitlist. The families with the most need should then be given support (regardless of their current benefit status).
The real problem is housing supply
Even with these improvements, New York’s housing assistance programs have a fundamental flaw: they don’t actually address the core supply-side reasons why New York’s housing costs are so expensive in the first place.
Public housing and the voucher programs are effectively consumer-side housing subsidies. They’re a laudable but convoluted form of wealth redistribution that genuinely do help half a million people to afford to live in New York. But they don’t fix the core problem that there are far more people want to live in New York than we currently have housing to accommodate.
It’s like we’re in a famine and the government is giving out subsidized grain to a somewhat arbitrary subset of low-income families, rather than just allowing farmers to grow more food.
New York Lawmakers Embrace New Funding Plan to Rescue Public Housing, New York Times (archive). This 60 year projection is based on 2.3% of NYCHA’s 177,569 public housing apartments turning over each year and a current waitlist of 250,000 public housing applications.
Report on the Fiscal 2023 Preliminary Plan for the New York City Housing Authority (archive), and the NYCHA Resident Data Book