The Affordable Housing Lottery

March 29, 2023

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THE BIG SPLASH

The Affordable Housing Lottery

The Lyric, a luxury rental building located at 255 West 94th Street in New York City, is now accepting applications for an “affordable housing lottery”. However, the income and rent requirements may surprise many.

  • The 20-story building has 285 apartments, including five studios for $2,960 and nine one-bedroom units for $3,168 each.

  • The eligibility criteria for applicants depend on the number of occupants and the size of the apartment.

  • For instance, a single applicant should earn between $101,486 and $121,420 to qualify for a studio apartment, and the income range for a one-bedroom unit with up to three occupants is $108,618 – $156,130. Meanwhile, a two-bedroom unit is available for $3,793, and the income range is $130,046 – $187,330.

  • Despite the discounted rates, the building still offers luxury amenities such as a roof deck, gym, doorman, business center, and playroom.

  • The lottery is open until April 13, and the building is expected to receive a tax exemption through the 421a(17) tax incentive program of the New York City Department of Housing Preservations and Development.

A SCOOP OF RENTS

Apartment rent growth slows down

Apartment rents in the US have started to level out and are now slightly below pre-pandemic levels, according to a new report from Apartment List.

  • While rents have grown slightly in recent months, the pace has slowed significantly compared to last year’s record-setting rates.

  • Furthermore, some markets, including San Francisco, have seen declines in rents. Meanwhile, vacancies are rising back to normal levels as supply increases, with 917,000 apartment units under construction across the US, marking the highest number since the early 1970s.

  • Researchers at Apartment List said the “robust supply of new inventory hitting the market this year should keep prices in check,” but warned that while rent growth is slowing for all tracked price tiers, affordability concerns remain for the lowest-cost rentals.

  • CoreLogic data also showed that rents for single-family homes are also easing, but are still significantly higher than apartment rents.

A SCOOP OF MARKET DATA

US Home Prices Drop Again

US home prices fell for the seventh straight month in January, according to the latest S&P CoreLogic Case-Shiller US National Home Price Index.

  • The National Index showed a month-over-month decrease of 0.2% after seasonal adjustment.

  • Although prices are still rising on a year-over-year basis, the amount of that price growth has been decreasing for the past several months. Home prices have been falling as a result of the Federal Reserve’s historic effort to rein in inflation, which caused mortgage rates to spike over the past year, resulting in many home buyers being priced out of purchasing a home.

  • This has been exacerbated by the fact that fewer homes are coming to market for sale because ultra-low interest rates over the past few years are causing many home owners to stay put, keeping the inventory of homes stubbornly low.

  • As a result, the Southeast continues to be the country’s strongest region, while the West remains the weakest. Mortgage rates are expected to be volatile for as long as the Fed has to work to pull back runaway inflation.

A SCOOP OF ANALYSIS

Why It's Tough to Buy a House Right Now

Buying a home in the US is becoming increasingly challenging due to a lack of inventory. While mortgage rates have decreased, homeowners are reluctant to sell because they don't want to give up their low, locked-in mortgage rates.

  • The combination of high demand and limited supply means that homebuying is becoming more competitive, with homes selling quickly and sometimes attracting hundreds of potential buyers.

  • The situation is particularly challenging in hot markets such as Austin, Texas, where there is only 2.6 months of housing supply by month's end, well below the 5 to 6 months of supply that experts consider healthy.

  • Despite the competition, home prices in Austin dropped 12.2% year-over-year in February, although they are still higher than pre-pandemic levels.

  • Experts suggest that buyers have all their paperwork in order and be quick to move on a property when it becomes available.

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