PRESENTING: The Only 4 Ways To Get A Cheap Apartment In New York City (2023)

Normal, market-rate apartments in New York are incredibly expensive, and I’ve explained why.

But only 38% of rental apartments in New York are actually priced at the normal market rate.

The city has about 1.3 million rental units that are subject, one way or another, to regulation or subsidy.

There are lots of cheap apartments out there. The problem is it's difficult to get one.

This is the key problem with New York’s approach to affordable housing: It focuses on protecting incumbent residents, in some cases giving them huge discounts to market rents, while restricting supply and making it more difficult for new people to form households in New York.

But occasionally, new tenants do get into subsidized or regulated housing in New York and achieve real savings. Here’s the guide for how you can try.

1. Apply for inclusionary housing lotteries and cross your fingers

New York City's "inclusionary housing" program gives developers of new buildings an incentive to set aside a percentage of new apartments as affordable housing with restricted rents.The development with the “poor door” that I wrote about on Monday is an example of this: 20% of its apartments will be set aside for people with low incomes.

These apartments can be deeply discounted: behind the poor door you'll find one bedroom apartments renting for about $1,000, less than a third of the going rate on the Upper West Side.

Lots of people want these apartments, but there aren’t very many of them: only 2,800 have been built since the program started in 2005. To get one, you have to win a housing lottery.To see a list of lotteries currently accepting applications, you can go here.

The lotteries are income-restricted, but unless you’re making far into the six figures, you can probably find one that you qualify to enter. Some apartments are available to two-person households making as much as $180,000 a year. (So much for "middle-income housing.") But the biggest rent discounts apply to apartments with low income caps. To rent in the “poor door” building, you won’t be able make more than about $50,000 a year.

Here’s the bad news: like the regular lottery, you're highly unlikely to win. The Real Dealreported in 2011 that “many developments in the outer boroughs receive 15,000 applications for about 200 affordable housing units.” You can just imagine the competition in Manhattan.

But here’s the good news: once you’re in, you’re in. So long as you met the income requirements when you moved in, you can stay in your inclusionary housing apartment as long as the building is regulated, even if you later become filthy rich. Typically, those regulations run for at least 20 years.

2. Find a rent-regulated apartment and hope market rents go up

Rent regulation is by far the largest affordable housing program in New York, covering most of the rental apartments in the city that were built before 1974. Of the 3.1 million homes in New York City as of 2010, almost 1.1 million are subject to rent regulation.

That doesn’t mean you can find a three-bedroom apartment in the West Village for $400 if only you look hard enough.

First, a note on program names. Most people refer to rent regulation as “rent control.” But confusingly, Rent Control is the name of a specific program that covers only about 50,000 very old apartments. In most cases, if a New Yorker says he has a “rent controlled apartment,” he’s probably referring to rent stabilization, which covers about a million apartments in the city.

Under rent stabilization, your rent can only go up by a fixed percentage each year, which is set annually by the Rent Guidelines Board to reflect rises in operating costs. This year, the allowable rise is 4%.And your landlord has to offer you a renewal lease every year, until you move out voluntarily or die. If your relative has lived with you for two years upon your death, you can even pass the apartment to him or her.

In a small fraction of cases, rent regulation means getting a big discount to market. Often, these cases are fictional. On Friends, rent regulation was how Rachel and Monica were able to afford their fabulous apartment while being marginally employed. But you, personally, are very unlikely to find a deal like this.

More often, rent regulation leads only to a small discount to market rent or no discount at all. I currently live in a rent stabilized apartment where the legally allowable rent far exceeds the market rent. As a result, my lease reflects a “rent preference” of several hundred dollars a month and I’m getting no savings from regulation.

This happens for a few reasons. Most of the time in most neighborhoods, the legally allowable rent increase isn’t that different from the rise in market rents. It’s only in highly desirable neighborhoods, particularly in Manhattan below 96^th street, that rent regulation has tended to mean big discounts to market rent.

And when an apartment becomes vacant, landlords have lots of options to raise the rent back to market for the new tenant. Right off the bat, they get to raise the rent by 17%. Then, for every $40 they spend on capital improvements to the vacated apartment, they can raise the rent by $1, which means they can recoup the cost of renovation in less than four years.

Smart landlords will use these options to make sure the legal maximum rent for a vacant apartment isn’t any lower than market rent. And if they get the rent up to $2,500, they can remove the apartment from regulation altogether.

In the rare event that a landlord decides to rent out a vacant apartment at a substantially below-market rent, he’ll be flooded with applications. His incentive is to choose the applicant with the highest income and best credit, and therefore least likelihood of defaulting—and the least need for help with housing affordability.

In other words, you’re very unlikely to find an actually available rent-stabilized apartment with a way below market rent. In order to get one of those, you have to move in when market rents are low and stick around while rents rise around you.

A lot of New Yorkers are doing just this: according to the Furman Center at New York University, 35% of rent-stabilized tenants have lived in the same apartment for more than 20 years, compared to just 3% of market-rate tenants.

And it’s not hard to stick around, since there is almost no means test on rent stabilization: your landlord can only raise your rent to market if you make more than $175,000 a year for two consecutive years.

3. Get on waiting lists for middle-income “Mitchell-Lama” housing

Starting in the 1950s, New York state implemented a program that made a deal with developers: We’ll give you big breaks on property taxes and mortgage rates if you provide affordable housing to residents.

The “Mitchell-Lama” developments built under this program (named after the state lawmakers who conceived it) are either rentals with restricted rents or “limited-equity co-ops,” where you can buy an apartment for a song and have to sell it back to management at a fixed price when you move out. There are about 110,000 such apartments in New York City, about 3% of the city’s housing stock.

One of the largest of these developments is Penn South, occupying six city blocks in Chelsea, from 23^rd Street to 29^th Street and from 8^th to 9^th Avenue. As of 2011, a one-bedroom limited equity co-op at Penn South started around $40,000, with monthly maintenance charges of $400. That’s roughly an 85% discount compared to going rates for similar rental apartments.

Mitchell-Lama housing sounds like a great deal, and it can be. But there’s a catch. The most desirable developments (the ones in the best neighborhoods where the prices are farthest below market) have years-long waiting lists. The waiting list for Penn South is so long they’re not accepting new registrants.But if you’re willing to live far into the outer boroughs, you can find a Mitchell-Lama development with no waiting list or one that will only take a few months to get in.

You can find a list of developments with availability here. At Rochdale Village, you can buy a one-bedroom co-op for $7,200 with about $700 in monthly charges, and you’ll only have to wait on a list for about six months to get one. The drawback is, Rochdale Village is so far east in Queens the subway doesn’t go there.

Mitchell-Lama developments are income restricted, but the restrictions are pretty lax. In general, the “maximum” monthly income is seven times your rent, or seven times an estimated cost of ownership in the case of a limited-equity co-op.

At Rochdale Village, the maximum income for that one-bedroom apartment is about $66,000. But you’re still eligible even if you make up to 150% of the “maximum,” you just have to pay a surcharge.

Once you’re living in Mitchell-Lama housing, if you start earning more than 150% of the maximum income, you can theoretically be evicted. But in practice, this rule is rarely enforced, according to a 2007 inspector general’s report.

It’s not hard to understand why. Tenants with high incomes are highly likely to pay their rent and common charges, plus they are subject to extra surcharges which generate more revenue. Management companies are not eager to evict them and replace them with tenants who pay less and have worse credit.

4. Try to move into a housing project or get Section 8 housing vouchers

The first three options I discussed are available to people with moderate or even pretty high incomes. These two options are strictly for the poor. And they’re both so oversubscribed that, even if you are poor, they almost certainly still won’t help you.

Section 8 housing vouchers are a federal subsidy for people who make less than 50% of the area median income. If you live in Manhattan, that’s a limit of $34,400 for a two-person household. Under the program, you get a voucher that helps you pay for a private apartment, generally limiting your effective rent to 30% of your income.

You can’t get Section 8. All the vouchers are taken. There are over 120,000 people on the Section 8 waiting list in New York City. The New York City Housing Authority has not accepted new registrants on to the Section 8 waiting list since 2009.

And then there are housing projects. These contain 179,000 apartments, and 227,000 families are on the waiting list to get one. As The New York Times reported last month, the waiting list is not first-in-first-out, as with Mitchell-Lama; it’s something of a black box and certain applicants can get in quickly while others wait forever.

Project housing isn’t desirable, but it is cheap, if you can get it. As with Section 8, tenants must be poor, and rent is limited to 30% of income. The average rent for an apartment is $436.