We had Christmas Eve dinner this year in a beautiful brownstone in the Harlem neighborhood of New York City. My old college roommate and his wife bought the place years ago as beneficiaries of the New York City Housing Lottery.
Let me explain.
Though it’s quite expensive to live in New York, the city takes its affordable-housing obligations seriously. The lottery was created to make sure that investors don’t further drive up the price of rentals and real estate, giving regular people chances to buy land at affordable prices. It also ensures that people with more modest incomes can still afford to live in the city.
In the case of my friend’s house, at some point the city had acquired the place, probably as a blighted property through eminent domain. The city straightened out the plumbing and electricity and shored up any structural issues before selling it — unfinished and at cost — to the winner of the lottery, in this case my friend, who then had to invest enough to finish the place off. In the end, he got the four-floor duplex for about $1 million, a bargain by Manhattan standards.
But don’t get hung up on the million-dollar figure — this could work here, too. Our cities are full of blighted properties and others that have already been seized. At a minimal cost, the cities could bring some of these houses up to a standard of livability and open them up for the lottery, creating a marketplace for these homes to be sold at cost — whatever money the city put into them, which should be well below market value. I’m thinking maybe $25,000 or so.
To enter the lottery, contestants must demonstrate financial hardship — easier to do in NYC, where parking spots go for more than apartments do here — steady income, and must match the sale price to invest in finishing the house.
New York’s program covers apartments and small buildings, with layers of subsidies and cheap public loans built in. But we could start more simply just by fixing up some of the housing stock and helping people to become homeowners.
That’s the American Dream, right?