In New York City, a six-figure salary can qualify you for affordable housing

Crossing the $100,000 in annual earnings is often held up as a big career milestone in many places across the US. But in New York City, a single person earning up to $121,000 qualifies for affordable housing.

That’s the cutoff to apply to the city’s affordable housing lottery, which offers below-market rental units. For tenants, the program is a chance to bring down their spending on rent closer to a third of their income, a commonly recommended threshold. For example, a selected applicant to rent a one-bedroom apartment in a new high-rise development in Brooklyn’s Greenpoint would pay $2,838 a month, or 28% of their gross income. Rent for similar market listings ranges from $5,490 to $5,750—more than half of the yearly earnings for someone who makes $121,000 a year. 

The lotteries are part of the 421a tax program, which dates back to 1971. In exchange for building new, multi-family-unit dwellings and allotting a certain share to affordable units, the developer gets tax breaks for up to three decades. With rents jumping to record levels as the city comes back from covid lockdowns, lottery units look like a particularly good deal.

Who can participate in the NYC affordable housing lottery?

In an effort to control gentrification, each lottery limit is calculated based off the area’s median income, with priority given to existing residents or people with disabilities. However, any New Yorker who meets the income eligibility requirements can apply. About 258,000 of New York City’s 2.2 million rental units are subsidized, although this also includes other programs such as rent-controlled units and public housing.

In 2019, the odds of winning the housing lottery were one in 592. Lottery winners also get rent stabilization, meaning rents can only rise by small increments, usually a few percentage points at most. And once renters move into a lottery unit, they can outearn the original income threshold requirements without having to leave the rent-stabilized apartment.

Although there have been complaints about the processing times—it takes an average of 371 days for all lottery units in a new development to be rented out—applicants report that going from lottery submission to move-in can take less than two months.

How much money is enough in New York City?

In New York City’s current white hot rental market, a single person earning less than $160,000 a year would find it challenging to be accepted by Manhattan landlords for a one-bedroom apartment, due to the popular 40x rule. Landlords commonly require the renter’s annual salary to be at least 40x the monthly rent.

In June, the average rent for a Manhattan apartment crossed $5,000 a month for the first time, according to the real estate brokerage Douglas Elliman, although that figure is skewed by the ultra luxury properties in the city. A more representative number is median rent, but that too is rising at a record pace, reaching $4,050 in June, almost 25% higher than the year before. (It’s not just New York City either. One recent survey found that more than third of Americans who earn at least $250,000 a year say they spend nearly all of their income on household expenses.)

While the ideal income can vary greatly depending on the individual, Scott Galloway, a New York University professor and author of “The Algebra of Happiness“, puts that figure for New York City at $700,000 to $1 million a year.