Quest to Regulate Housing Affordability Will Never End

8 January 2026

Sometimes, winning a housing lottery isn’t what it’s cracked up to be.

A Newsday newsletter on Tuesday caught my attention with this headline: “A lottery could help some Long Islanders buy a condo for less than $300G.”

The story said 16 two-story townhomes in the Beechwood Organization’s 152-home Yaphank development can be purchased at a discount by buyers who meet income guidelines and are selected in the random drawing.

I immediately thought back to a November story in Newsday about a condo lottery in Westhampton Beach. Winners would pay $535,875 for seven of the 45 homes in an Inland Real Estate Capital development where the listed prices were $1.4 million to $1.8 million.

Quite a deal, right?

However, of 136 lottery applicants, only two were eligible. The earnings limit was 130 percent of the area median income, but some applicants didn’t account for common charges, insurance premiums and other ownership expenses (the kind that tenants typically take for granted).

Yaphank isn’t glamorous like Westhampton Beach, and the discounts for Beechwood’s workforce homes don’t sound as sexy either.

Seven homes will be sold for $75,000 less than their $371,875 sticker price, a 20 percent discount. Another seven are just $25,000 off their regular price of $445,250, a savings of just 5.6 percent. The two income tiers are 80 percent and 120 percent of the area median income. (Two of the 16 workforce units will be built later and haven’t been priced yet.)

Newsday graciously put a puffy, e-mailed quote from Beechwood principal Steven Dubb high up in the article. “Offering below market-rate homes through the lottery system helps us to help first-time new home owners, many who are essential workers, to establish themselves and stay on Long Island for years to come.”

Absolutely true. But, reality check: This was a business strategy, not an act of pure altruism.

As the story later noted, Beechwood discounted 10 percent of the development’s homes in return for being allowed to build at a higher density than the site’s zoning.

This was possible under the Long Island Workforce Housing Act, passed in 2008. It applies to Nassau and Suffolk counties and defines “workforce” housing as affordable to households earning up to 130 percent of the area median income. Developers can build the workforce units off-site, or not build them at all and pay into a workforce housing fund instead.

A 2014 audit of 29 developments built under the act flagged several for failing to meet its terms. The developer of a 32-unit project in the Town of Islip forgot to set aside any workforce units — and town officials forgot to check. The villages of Hempstead and Mineola approved three projects without the required workforce units.

One takeaway is that achieving affordability by regulation is possible but far from perfect. The Westhampton Beach lottery where only two applicants were eligible to buy $1.8 million homes discounted 70 percent might be an extreme example, but it shows the difficulty of this process.

In other cases, trust fund kids — just out of college but not earning much money yet — qualify to buy into affordable co-ops intended for working-class New Yorkers. Bloomberg blew the rich kids’ cover with an investigative story in 2021, but gaming the system is still possible.

At one income-restricted co-op in East Harlem, where units are supposed to be owner-occupied, one woman acquired seven apartments and didn’t live in any of them.

New York City in 2017 mandated affordability in rezoned areas, but the law works much better in some neighborhoods (such as Gowanus) than others (East New York). A citywide law cannot account for the city’s vastly different individual markets.

The quest to regulate affordability in high-demand metro areas such as New York and Los Angeles is enormously complex, inherently flawed and will never end. Meanwhile, some cities have achieved affordability without ever requiring it.