NYC Housing Lotteries Frustrate Apartment Hunters, Landlords

A curious fact about New York City housing: Despite tremendous demand for below-market units, market-rate apartments can be filled a lot faster.

Underpriced rentals typically sit vacant for four or five months. In a housing crisis, that is ridiculous.

The reasons are what you’d expect. Various efforts to make the awarding of below-market units fair and equitable have cluttered the system with bureaucracy and process.

The city uses NYC Housing Connect, a lottery system, to fill income-restricted apartments in for-profit and nonprofit developments. In 2024, the lottery was used to place tenants in about 10,000 units across 300 buildings. Some 6 million applications were filed for them. Six million!

That’s the first problem — 600 applications per unit is overwhelming to the system. If this were cybercrime, we’d call this a denial-of-service attack.

The good news is that progress has been made. Between fiscal years 2022 and 2025, the typical wait for housing lottery approval was shortened by 34 days. The bad news: It was still 142 days.

Fortunately, there are solutions. Former deputy mayor and housing commissioner Vicki Been and five others have just published recommendations, and the Mamdani administration has its own housing lottery task force.

“The most significant problem our analysis reveals is the tremendous number of applicants who drop out of the verification process or are rejected,” Been and her co-authors at NYU Furman Center wrote. “This inefficiency wastes the time and hopes of the ineligible or never-engaged applicant, the eligible applicants next in line, the marketing agents, and the owners with units sitting vacant.”

Mismatches are a problem. Housing lottery winners are often matched with apartments of the wrong size and in the wrong location for them. Three out of four applicants don’t even make it to the end of the verification-and-offer process.

There’s clearly room for improvement, which would benefit not only tenants but developers and operators of affordable units, including in 421a and 485x projects.

These buildings are already coping with the Rent Guidelines Board’s consistently below inflation rent increases for those units, as well as depressed rent collection, housing court backlogs and rising expenses. Months of unnecessary vacancy compound their financial distress.

One of the Furman report’s suggestions seems obvious: People should not be able to apply for apartments for which they are not apparently eligible.

The Furman team advised the Department of Housing Preservation and Development to get more information from applicants about their preferences so they are not offered apartments that they don’t want. This prolongs vacancies because every time a unit is offered, it remains empty while the applicant decides whether to accept.

These breaks in rent collection make affordable housing more financially challenging to build and operate. Delays are often catastrophic for tenants too, as rental vouchers can expire before they land an apartment.

The Furman report also proposed larger, structural reforms, which it called “an enormous undertaking that cannot be accomplished by HPD alone.” The basic idea is that people should be able to upload a single set of documents to determine their eligibility not just for HPD lotteries but for a slew of city, state and federal programs.

The government should also stop disqualifying applicants for not submitting information that it already has in one agency or another.

I have helped friends and family members apply for numerous government programs. It’s a bewildering, confusing, time-intensive process, even if you have an Ivy League degree and strong computer skills. For many people who need these social programs, the applications are next to impossible.

But they are not the only losers in the process. The operators of affordable housing are suffering at a time when they can least afford to.

The Mamdani task force should put the Furman Center report into action before it becomes another stack of paper collecting dust on a shelf. It’s time to close the book on this story of vacant below-market units and uncollected rent.