Challenges to Achieving New York City’s Affordable Housing Goals: Reconciling Mandatory Inclusionary Housing, Community Preference Requirements, and Fair Housing Laws

May 26th, 2016

By Professor Andrea McArdle 

I. Introduction

Under the mayoral administration of Bill de Blasio, New York City has embarked on an ambide blasio ten year plantious affordable housing initiative mandating that real estate developers include below-market-rate units in rezoned areas of the city.  Although approved by the New York City Council, the policy faces continuing community opposition, the expiration of a state tax subsidy law that would have attracted developers to participate in the plan, and likely complications as a result of a lawsuit filed last year challenging a community preference provision the City enforces with its affordable housing projects. This series of developments presents a number of challenges to realizing   the City’s affordable housing goals.

These goals include well-publicized plans to build or preserve 200,000 affordable units over a ten-year period.[1]  The recently adopted amendments to the City’s Zoning Text, Mandatory Inclusionary Housing (MIH) and Zoning for Quality and Affordability (ZQA), are cornerstones of that plan, which requires construction of permanently affordable units in rezoned areas.[2]  Specifically, to encourage the construction of affordable housing in New York City, the de Blasio administration has linked the MIH zoning text amendment with upzoning—that is, rezoning that creates new housing capacity by permitting increased density of development.[3] The City has selected fifteen neighborhoods across the City’s five boroughs for rezoning, in conjunction with the MIH initiative.[4]

In what the de Blasio administration hailed as an historic vote, the amendments were approved by New York’s City Council on March 22, 2016, under the City’s Uniform Land Use Review Procedure (ULURP).[5]  Although viewed as a legislative success, the vote was delayed by vocal protests staged by community organizations in the City Council chambers.[6] The protests were linked to ongoing community-based objections that the City’s proposal failed to offer housing options affordable for lower-income families.[7] The amendments, as finally approved, modified the City’s initial proposal responding to objections that the City’s proposed affordability levels were not sufficiently below market rates to benefit the City’s lower-income residents, and to concerns about the likely impact of new development on preserving the affordability of existing neighborhoods.[8]

To signal its commitment to neighborhood preservation over the long term, the City has pledged $1 billion in a neighborhood development fund to support infrastructure and park space improvements in neighborhoods identified for MIH-rezoning.[9] Another component of the City’s neighborhood–stabilizing intentions, one that has received less attention in the debates around MIH/ZQA, is the City’s Community Preference Policy, which gives eligible residents of a community district in which a qualifying affordable housing development is sited, a priority in applying for 50% of the affordable units.[10] That policy is now under challenge in a lawsuit brought on behalf of three African-American City residents who applied via a City-run lottery for affordable units in developments under construction in predominantly white community districts that they do not reside in. (Consequently, they are not eligible to invoke the preference.) [11]

The theory of the suit, Winfield v. City of New York, now sub judice in the U.S. District Court for the Southern District of New York, is that the Community Preference Policy reinforces existing residential segregation[12] and impairs the residents’ mobility to higher-opportunity neighborhoods, resulting in intentional and disparate–impact discrimination on the basis of race under the federal Fair Housing Act and the City’s Human Rights Law.[13] The City has moved to dismiss, asserting that the Winfield plaintiffs lack standing because they cannot trace their alleged injury to the Community Preference Policy and have failed to plead sufficient facts to support disparate-impact or disparate-treatment claims under the Fair Housing Act or under the New York City Human Rights Law.[14]

That the Community Preference provision, which the City describes as promoting neighborhood stability and supporting local residents,[15] might impede the Fair Housing Act’s pro-integrative policy,[16]  and is surely an unwelcome complication to the City’s housing policy agenda. This article will address the apparent tension between, on the one hand, the City’s affordable housing plans and related neighborhood-preserving efforts, and, on the other, the policy goals of fair housing laws. In particular, this article considers how New York City might approach reconciling imperatives that should operate in tandem rather than in opposition. Part II addresses the obstacles the City faced when it introduced and first promoted the zoning amendments, as well as questions that remain as a result of the expiration of a state tax subsidy law that developers of projects with affordable units expected to have available. Part III discusses the City’s efforts to strengthen the neighborhoods that are likely to be rezoned against gentrification and dislocation pressures, including reliance on the Community Preference Policy. This Part also discusses the implications of the claim in Winfield v. City of New York that the Community Preference Policy denies income-eligible City residents equal access to affordable units based on the community district in which they live. The article concludes with reflections on how the City might pursue affordable housing objectives while avoiding the risk of fair housing violations that this legal challenge has raised.

II. The Checkered Path to Mandatory Inclusionary Housing

The City’s adoption of the zoning amendments was not a straightforward story of success for the de Blasio administration. Rather, the City’s initial proposal encountered significant opposition during the public review (ULURP) period. The City’s hoped-for timetable for implementation faces further obstacles based in part on the expiration of the state statute that would have afforded tax subsidies for developers participating in MIH projects. In late 2015, all five of the City’s borough boards,[17] and the majority of the 59 community boards, opposed the initial proposal in advisory votes.[18] The City’s initial plan required developers seeking to build in rezoned areas to include below-market-rate units. The plan originally offered three options for how to accomplish affordable development: (1) at least 25% of the residential floor area would be available to households at an average of 60% of the Area Median Income index (AMI) ($46,620 annual income for a family of three); (2) at least 30% of the residential floor area would be available to households at an average of 80% of AMI ($62,150 annual income for a family of three); (3) in conjunction with either of the preceding two options, a variation allowing at least 30% of housing to be available to households at an average of 120% AMI ($93,240 annual income for a family of three) generally without public subsidy (the “workforce option”), outside Manhattan Community Districts 1 through 8.[19]

After the City Planning Commission, a 13-member appointed body,[20] voted on February 3, 2016, to approve the City’s rezoning plan, hearings held by the City Council on February 9 and 10 saw persistent opposition from housing groups and the local building trades council, among others, to core aspects of the proposals.[21] The concerns addressed included the lack of sufficiently deep affordability options to match the income levels of many neighborhood residents, and the fear that development under the auspices of MIH/ZQA would trigger or accelerate gentrification pressures, as well as objections that upzoning changes would detrimentally alter the character of lower-density neighborhoods.[22] Other objections focused on the central idea of mandating a citywide approach as distinguished from one that would be more reflective of neighborhood priorities and attributes.[23] Reflecting that critique, Bronx Borough President Ruben Diaz, Jr., for example, has argued that MIH does not account for the nuances of local needs, citing the situation of his own borough, which must provide housing affordable for lower-income households as well as for professionals earning higher incomes.[24]

Influenced by these concerns, City Council members negotiated with the de Blasio administration and revised the affordability options as well as local hiring and construction safety initiatives.  The City Council (1) revised the City’s first option by requiring that 10% of floor area be affordable at 40% AMI ($31,080 annual income for family of three); (2) revised the second option to encompass units to be built across a range of 40% of AMI to 130% of AMI, giving flexibility to the local Council member and affected communities; (3) modified the workforce option to an overall average of 115% of AMI, with a set-aside of 5% of floor area at 70% of AMI ($54,500 annual income for family of three) and a set-aside of 5% of floor area at 90% of AMI ($69,930 annual income for family of three); and (4) added a new “deep affordability” option for 20% of floor area at an average of 40% AMI.[25]  In addition to increasing the reach of affordability by including lower income bands, these modifications supply a measure of flexibility and potential for local tailoring, a central concern of the MIH critics.

Although the de Blasio administration lauded the City Council vote as an affirmation of the MIH initiative,[26] as a practical matter, a legislative stalemate and executive/administrative developments at the state government level pose additional obstacles.  First, the construction of affordable housing units under the MIH option contemplates the development of market-rate projects of sufficient scale to incorporate the required below-market-rate units.  All but one of these options assumes the availability of government subsidies to the developers as an incentive to commit to projects that mandate affordable units in projects built in areas rezoned for denser development.  For developers of newly constructed housing, an expected source of tax subsidy is no longer available.  Section 421-a of New York’s Real Property Tax Law,[27] originally set to expire in June 2015, was extended by the State legislature to January 15, 2016, in an evident political compromise intended to enable the City’s real estate sector, construction trades union, and other key stakeholders to agree on wage levels for workers on the affordable projects.[28]  But the law expired in January 2016, without an agreement being reached and there is presently no legislative authorization in place for the City to grant these abatements.[29]  Housing advocates, developers, and local officials cite the failure to re-enact section 421-a as an impediment to implementing MIH.[30]

In addition to the loss of this tax-abatement authorization, a recently announced initiative to expand the role of Governor Cuomo’s administration in sponsoring affordable housing also has implications for the City’s ability to subsidize affordable housing construction.  An apparent consequence of the state initiative would be to limit the share of federal tax-exempt bonds that had previously been available for the City’s affordable housing developments.[31]  These bonds are critical to lowering the cost of borrowing funds and serve as leverage for gaining access to federal tax credits for affordable housing projects.[32]  Thus, although the City ultimately was able to navigate the ULURP process to a favorable vote on MIH, the extent to which developments at the state level will slow down the City’s realization of its affordable housing targets remains in question.

III. Supporting Neighborhoods and Promoting Fair Housing

While these developments threaten to decelerate the City’s construction goals, the City faces persistent community concerns about the adequacy of City support for existing neighborhoods as higher-density development does go forward.  The first application of MIH will be in East New York,[33] recently approved by the New York City Council.[34]   Responding to concerns, the Department of City Planning has promised to invest in affordable-housing strategies to preserve this neighborhood from gentrification pressures.  These efforts include working with the Tenant Harassment Prevention Task Force,[35] providing free legal services to tenants facing harassment,[36] and committing to code enforcement to improve housing quality.[37]  The de Blasio administration points to these benefits, in conjunction with plans to support local economic and community resource development, such as construction of a new school, park enhancements, and street improvements,[38] as evidence of its commitment to neighborhood preservation even with intensified development under rezoning.[39]

As a community-benefit–based approach to the distribution of affordable housing resources, the City’s Community Preference Policy offers another discrete strategy for supporting local neighborhoods.  The City avers that the policy ensures “local residents, many of whom have deep roots in the community and [who] have persevered through years of unfavorable living conditions, are able to remain in neighborhoods as those neighborhoods are revitalized.”[40]  Although the City disavows that the policy applies to the affordable housing projects at issue in the Winfield complaint,[41] the City thus far has framed the policy as one that preserves the community against displacement pressures.[42]

However, the same policy that the City has invoked as a means to neutralize, or at least slow down, displacement pressures for City residents at the community-district level fuels the objection, addressed in the Winfield complaint, that other City residents face unequal access to community preference-affected affordable housing projects.[43]  If, at the pleading stage, the district court accepts the sufficiency of the allegations that the policy impairs residential mobility and reinforces racial segregation, the City will have to consider strategies for providing anti-gentrification benefits for community district residents that do not also impair access to the benefited neighborhoods by eligible persons of color who reside outside the district.

The City’s overriding goal of strengthening access to affordable housing, and the related measures for pushing back against gentrification pressures, are key components of the de Blasio administration’s housing and economic development platform.  Implementing these affordability and anti-gentrification goals supports the value of maintaining income and socioeconomic diversity within city neighborhoods.[44]  Surely these goals are not incompatible with the pro-integrative policy of the federal Fair Housing Act[45]and provisions of the City’s own Human Rights Law. [46]

The City should consider taking steps to avoid presumably unintended, contradictory implications of a multi-pronged set of programs and policies to promote access to housing.  One promising approach to reconciling these ostensibly competing considerations would be for the City to increase neighborhood-stabilizing enhancements.  By committing to anti-displacement investments at the community-district level together with opening up the affordable housing lottery process across the City (that is, suspending the Community Preference Policy), the City could pursue its interrelated goals of strengthening access to housing, shoring up neighborhoods, and promoting integration.  For example, the City could commit to a robust set of anti-displacement protections, such as those reflected in the proposal of the Coalition for Community Advancement: Progress for East New York /Cypress Hills,[47] developed in anticipation of the City’s rezoning initiative.[48]  These measures include anti-displacement policies that use tax law provisions to influence the consequences of property acquisition for investment purposes, such as granting a property tax credit for landlords who offer leases to tenants without rent stabilization protections, raising the transfer tax on all transfers of property to be used as investments rather than for owner occupancy, and increasing the property tax rate on small residential properties acquired for investment purposes.[49]

The Coalition proposal is also directed to actions that New York City’s Department of Housing, Preservation & Development (HPD) can take to protect neighborhoods vulnerable to displacement pressures.  These include identifying developers with a demonstrated connection to communities slated for development, barring City financing of housing projects where developers have violated rent protection laws within a specified period of time, and seeking anti-harassment legislation that would require owners of multi-family buildings to obtain “no harassment” certification before applying for permission to modify the structure of their properties.[50]  Measures of this nature targeted to the potential for abuse that new development brings, together with investments in neighborhood infrastructure and community space, are worth considering as part of a comprehensive, community-district-level strategy for countering the gentrifying pressures of development at the scale contemplated by MIH.  With a slate of robust neighborhood-preserving measures in place, the City would do well to dispense with a preference policy that, at a minimum, does nothing to improve patterns of residential segregation in the City and that, at worst, the district court will find to be reinforcing segregation

IV. Conclusion

As New York City prepares to implement MIH, it is likely to face continuing community-based concerns about affordability and gentrification effects, and some developer reservations to building in the absence of adequate subsidies.  The fair housing implications of the Community Preference Policy, however salutary the policy’s neighborhood-stabilizing goals, further complicate the City’s affordable housing objectives.  These economic, political, and legal challenges call for an approach that places the full force of the City’s authority and supplementary state legislation to address the risks of displacement inherent in new development.  Moreover, the benefits of strengthened neighborhoods where affordable housing is built should be open to all City residents eligible for this housing without local preferences that impair mobility and opportunity.  Under such an inclusive approach, the affordability and anti-gentrification goals of the de Blasio administration would be well served.  The nation’s—and the City’s—fair housing commitments merit nothing less.

Andrea McArdle is Professor of Law at City University of New York (CUNY) School of Law, and addresses affordable housing issues in a New York City-focused seminar she designed, Land Use and Community Lawyering. She thanks Kimberley Kearns, 3L at CUNY School of Law, for her valuable research assistance.


[1] NYC Planning, Housing New York: Mandatory Inclusionary Housing 1 (2015)

[2] Citywide Planning Initiatives, NYC Housing,

[3] Supra note 1, at 11.

[4] Erin Durkin, De Blasio’s East New York Rezoning Proposal Passes City Planning Commission with 12-1 Vote, Advances to City Council, N.Y. Daily News (Feb. 24, 2016),

[5] Housing New York, NYC Housing,

[6] J. David Goodman, New York Passes Rent Rules to Blunt Gentrification, N.Y. Times (Mar. 22, 2016),

[7] Will Bredderman, Protests and Injuries Interrupt Final Vote on de Blasio Housing Plan, N.Y. Observer (Mar. 22, 2016),

[8] Id.

[9] Camille Bautista, East New York Rezoning Plan Passes City Planning Commission, DNAinfo, (Feb. 24, 2016),; see also New York City Department of Community Planning, East New York Community Planning, (describing how, in East New York, the first of the City neighborhoods targeted for MIH rezoning, the City has pledged to build a new school, augment open space, and improve transportation infrastructure).

[10] Winfield v. City of New York, Case 1:15-cv-05236, First Amended Complaint ¶ 7.

[11]  Id., at ¶¶ 7-10, 13-15, 172-82.

[12] The First Amended Complaint alleges that 17 of the City’s 59 community districts have African-American populations of less than 5% and another 11 districts have African-American populations of greater than 50%, including six with greater that 65%. Supra note 10, at ¶¶ 50-51. As another measure of residential segregation, this Complaint notes that half of the City’s African-American residents live in approximately 15% of the City’s community districts.  Id. at ¶ 76.

[13] Supra note 10, at ¶¶ 183-190.

[14] See generally Winfield v. City of New York, Case 1:15-cv-05236, Defendant’s Memorandum of Law in Support of its Motion for Dismissal of the First Amended Complaint.

[15] See, e.g., Sally Goldenberg, De Blasio Defends Housing Lottery Policy Amid Legal Challenge, Politico (July 13, 2015),

[16] See, e.g., Ohana v. 180 Prospect Place Realty Corp., 996 F. Supp. 238 (E.D.N.Y. 1998) citing 42 U.S.C. §3601 (“It is the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States”).

[17] Shane DiMaio, S. I. Borough Board Says “No” to de Blasio’s Housing Plans, S.I. Live (Dec. 10, 2015)

[18]  Christian Zhang, Next Steps for The Mayor’s Controversial Zoning Proposals, Gotham Gazette (Dec. 10, 2015),

[19] Supra note 1, at 8.

[20] Seven members of the Commission, including the Chair, are mayoral appointees, five members are appointed by each of the City’s five Borough Presidents, and one is appointed by the city’s Public Advocate. The Commission approved the city’s initial plan by a vote of 12-3, with one member, Michelle de La Uz, a 2012 appointee of the Public Advocate’s office, abstaining. The three negative votes were cast by appointees of the Bronx, Queens, and Staten Island Borough Presidents.

[21] Sarina Trangle, Unions, Housing Activists Begin Push to Sway New York City Council on Zoning Proposals, N.Y. Yimby (Feb. 17, 2016),

[22] Historic Districts Council Statement to NYC City Council on ZQA/MIH, HDC (Feb. 2, 2106),

[23] Jillian Jorgensen, Bronx BP, a Potential 2017 Challenger, Knocks de Blasio’s Housing Plan, N.Y. Observer (March 29, 2016),

[24] Kathryn Brenzel, L+M’s Ron Moelis says 421a lapse won’t kill all affordable housing, The Real Deal, (April 13, 2016),

[25] N.Y. City Council, MIH and ZQA City Council Modifications 35 (2016),

[26] Sally Goldenberg, De Blasio Heralds Housing Wins, Laments Bloomberg’s Policies, Capital New York (March 24, 2016),

[27] N.Y. Real Prop. Tax §421-a (McKinney’s 2016).

[28] See William Neuman, End of Tax Break Program May Blunt Impact of New York Zoning Change, N.Y. Times (March 16, 2016),

[29] Id.

[30] Id.; Tanay Warerkar, 421-a Expiration Could Mean More Condos, Less Affordable Housing: Experts, Curbed N.Y. (March 30, 2016),

[31] Mireya Navarro & Charles V. Bagli, Cuomo-de Blasio Feud Threatens New York City’s Plans for Affordable Housing, N.Y. Times (Feb 29, 2016),

[32] Id; The Governor’s proposal also entailed additional state oversight for the City’s affordable housing projects, by subjecting their financing to review by the Public Authorities Control Board, a five-member appointed state body in which the Governor and State Senate and Assembly leaders have the controlling vote. N.Y. Pub. Auth. § 50 (McKinney 2016). Stakeholders regarded the added administrative review as a further impediment to the process of producing affordable units in the City. Mireya Navarro, Cuomo’s Plan for Financing Affordable Housing Worries City Officials, N.Y. Times (Jan. 29, 2016), However, the State budget adopted on April 1, 2016, apparently eliminated that oversight requirement. Dusica Sue Malesevic,

The Cuomo Bond-cap Plan That Drew Strong Rebuke From City Leaders Has Been Ditched — For Now, The Real Deal (March 31, 2016), The extent to which that change will affect the flow of tax-exempt bonds to the City, that is, whether the City will still compete with the State for bond financing given the State’s own housing programs, remains to be seen.

[33] Rosa Goldensohn, Community Group Pressures Councilman on East New York Rezoning, Crain’s (March 31, 2016),

[34] Erin Durkin, City Council Passes Mayor de Blasio’s East New York Zoning Plan, N.Y. Daily News (April 20, 2016),

[35] Tenant Harassment, NYC Housing Preservation & Development, (last visited May 8, 2106).

[36] Id. (The Task Force was established to coordinate investigation and enforcement efforts among various state and New York City agencies against landlords who seek to force tenants out of their housing by creating or maintaining unsafe conditions. Cooperating agencies include the New York State Attorney General, the New York State Homes and Community Renewal, and the City’s Department of Housing Preservation and Development, Department of Buildings, Department of Health and Mental Hygiene, and Law Department).

[37] NYC Planning, East New York Community Plan (2016),

[38] Id.

[39] NYC Planning & NYC Department of Housing Preservation & Development, New York City Mandatory Inclusionary Housing: Promoting Economically Diverse Neighborhoods 75-76, (2015)

[40] Supra note 14, at 5.

[41] The City argues that the policy was mandated for the buildings in question by section 421-a of the Real Property Tax Law in effect when the lotteries for the affected projects were held. Id. at 6-7. As noted, section 421-a has expired and Plaintiffs argue that, even if the statute, rather than the Community Preference Policy, were responsible for the preference in the housing projects at issue, the Complaint also alleges future harm under the Fair Housing Act relating to Plaintiffs’ future lottery applications, and for those future applications the Policy, not the expired statute, would mandate the community preference. Winfield v. City of New York, Case 1:15-cv-05236, Memorandum of Law in Opposition to Defendant’s Motion to Dismiss, at 17-19.

[42] Supra note 14, at 3-4.

[43] Supra note 10, at ¶¶ 7-9.

[44] Supra note 39 at 55-73.

[45] 42 U.S.C. §§ 3601, 3604(a), 3604(b).

[46] NYC Admin. Code §§ 8-107(17), 8-107(5)(a)(1), 8- 107(5)(a)(2).

[47] Coalition for Community Advancement, East New York Neighborhood Rezoning Alternative Plan (2016),

[48] Id.

[49] Id., at 4.

[50] Id. at 4-5.