Market rate vs Housing Lottery (Hope: apartments, rent stabilized apartments, insurance)

[BklynHopeful27]

I’m exploring options and I’m wondering on the leasing situation with lottery apartments. Depending on your ami, some lottery apartments aren’t really worth it compared to some market rate ones that you can get for equivalent or cheaper (not luxury). With that said, what really are the benefits for a lottery apartment for those in the higher ami? Besides amenities and the luxury apt. Does the rent increase every 1-2 yrs at the same percentage as market rate? How does a lottery apt. vs a market rate apt benefit the renter?

I’m really trying to learn this because I’m seeing a lot of cheap/affordable market rate apartments (not luxury) that are rent stabilized and I’m wondering if it’s worth pursuing vs waiting on the lottery. Yes, this would be my first time living on my own, so I’m trying to look for the best and most affordable option and based on my income, I fall into the 130%-160% ami for some lotteries. I’m a Brooklyn native and while luxury is great, it’s not a requirement as I just want my own space in an affordable way. Thanks in advance!

[macnyc2003]

Lottery apartments are rent stabilized. That means that the rent can go up by only a certain amount each year. Just as important, you are guaranteed a lease renewal annually.

So that means a landlord can't say, "Hey, I've decided not to renew your lease. Please leave by the end of the month." Or, "I'm raising your rent $500 a month."

Plus, rent stabilization conveys quite a few other rights, too, such as, a landlord has to offer a paint job every three years at no cost to the tenant; a landlord can't decide to reduce the level of services, etc.

So if you can afford a market rate apartment that's rent stabilized, go for it!

[someoneinqueens]

If we exclude those luxurious with amenities buildings, the market rate price shouldn't be far different from the lottery ones especially for 130% to 165% AMI. The difference may be for market rate apartments, they mostly are not rent stabilized so the initial rent may be the same price with the lottery units but after a year or two the landlord can raise whatever they want because it's not regulated. Also, I noticed lottery units are mostly in a brand new or fully renovated building with rent stabilized rate so that can be an additional perk if you win one.

However, as you mentioned, you can also find a rent stabilized apartment in the market out there & if you are lucky, it can also be a fully renovated or new one. So IMO, if you really don't have time to wait, perhaps searching for a rent stabilized apartment in the market rate instead of waiting indefinitely to win a lottery unit can be an option.

[randomperson2]

If you see a non-lottery unit you like and can afford and that's rent-stabilized, you should pursue. The main advantage of lottery units (besides being new) is that they're rent-stabilized, so if you can find one of those on the open market, no reason not to snatch it up.

[someoneinqueens]

This is what I found about rent stabilized apartments on StreetEasy: https://streeteasy.com/for-rent/nyc/...0stabilized%22

[stormgal]

Cheaper non lottery rent stabilized apartments are usually in older buildings where you have to deal with mice, roaches, sagging floors, peeling paint and leaky pipes. I wouldn’t even take the renovated ones.

One of my friends lives in an old pre war building in the west village and to make a long story short, one day he was walking across his living room and fell through partially to the apartment below. His legs were literally hanging at his neighbors apartment below and the rest of his body from the waist up was in his apartment. The fire department had to pry him out!

So no thank you!

[BklynHopeful27]

Thank you all for your inputs. I guess I'm just nervous about moving out on my own for the first time and not being able to afford it, but I'll trust the process.

Does anyone have any budgeting tips or templates that they use?

[AnxietyBiscuits]

Originally Posted by BklynHopeful27

Thank you all for your inputs. I guess I'm just nervous about moving out on my own for the first time and not being able to afford it, but I'll trust the process.

Does anyone have any budgeting tips or templates that they use?

Here's a sample of my redacted budget spreadsheet (I use Google Sheets, because it's free.) It's just basic formulas that automatically recalibrate all of the sections when you change a number in any cell.

Some notes about my situation:

• I have taxes and pension/insurance as expenses because I have to pay those on my own out of my gross monthly income.
• The expenses with little squiggle symbols all get paid on my best rewards credit card which I then pay off in full every month. I prefer this to paying out of my bank account directly because I get a ton of reward points or dollars this way. But it only works if you are militant about paying off the full balance.
• I use a cash flow component because I have to make sure I have enough money in my checking account for the huge tax bill every quarter. I project it out a year in advance.

The key is to be brutally honest and don't lie to yourself about what you spend. You can use Credit Karma or Mint to track your monthly spending categories, or even your bank likely has a monthly spending recap.

If you fudge on your budget it doesn't help you at all and you might as well not bother.

[AnxietyBiscuits]

Oh also, I have a separate worksheet for my savings/investments that tie back to the net worth section on the main sheet.

I also have separate sheets where I track every electric bill, including monthly and rolling average kwh usage; and my monthly phone bill. (Dump Verizon, get Google Fi - I save $40/month now for equal service.)

[macnyc2003]

I love the “jewelry” line. Mine would be “theater.”