Does Affordable Housing Perpetuate Racial Segregation?

A new lawsuit claims New York's affordable housing program discriminates against blacks and Latinos.

The Anti-Discrimination Center, a Manhattan-based non-profit, filed a lawsuit in federal court this week, claiming that New York City's affordable housing program perpetuates "entrenched segregation."

The lawsuit takes issue with a common policy in which affordable housing developers set aside 50 percent of the apartments in a new development for prospective tenants already living in the community district. This means access is "effectively prioritized for white residents" who already reside in neighborhoods with the best schools and amenities and "limited for African-American and Latino New Yorkers who do not," according to the lawsuit.

The Anti-Discrimination Center hasn't produced any empirical evidence to support this theory, but it's certainly correct on principle: No group has special claim to a neighborhood.

Sometimes politicians and developers are willing to take outrageous measures to preserve existing neighborhood demographics. Consider an affordable housing development on Manhattan's Upper West Side that was sold to the public in part as a way to help upper middle class residents feeling priced out of the neighborhood. To this end, some of the taxpayer-subsidized apartments in the building are targeted at families with annual incomes as high as $193,000. (For more on the project, see my July 2014 article, "New York City's Affordable Housing Bonanza for the Rich.")

In a June 2014 interview with Capital New York, City Council Member Helen Rosenthal (D-6th District), who actually negotiated with the developer to raise the building's income threshold, explained her logic.

"[W]hat makes the Upper West Side the Upper West Side," she told reporter Ryan Hutchins, "is that, 20, 30 years ago, a bunch of sort of lower-middle income families and individuals took a risk on [the neighborhood]…And the city, I think, has an obligation to find a way for these people to stay on the Upper West Side…"

Giving taxpayer-subsidized apartments to families that make four times New York City's household median income is obscene, but so is any policy that seeks to preserve a neighborhood's existing demographics. As the Anti-Discrimination Center lawsuit points out, this has the unintended consequence of making it more difficult for newcomers to move in to the neighborhood—a process that facilitates social mobility.

Take Harlem, which was home to a white community in 1904, when a black real estate entrepreneur named Philip Payton purchased two buildings on West 135th Street. Payton evicted the white tenants and rented the buildings to blacks, who, at the time, were mostly confined to living in a handful of run-down enclaves in Manhattan.

Thankfully, there were no government-subsidized apartments for existing residents to preserve the neighborhood as it was. Payton's gambit led blacks to move into Harlem en mass. By the 1920s, the neighborhood was the cultural capital of the African-American world.

For more on the great Philip Payton and why the government should never be allowed to influence neighborhood demographics, watch "The Tragedy of Urban Renewal," a 2011 Reason TV documentary I wrote and produced, which is narrated by Nick Gillespie: