19 sept 2024
Housing Lotteries: Delivering Equitable Access to Affordable Opportunities
Expanding the ways Bloom Housing can help make affordable housing more accessible
When there is so much demand for comparatively little available affordable housing, how are residents selected? Who decides who gets housing, and when? One major step of the affordable housing placement process is the housing lottery, which happens after applications are received and determines what order prospective residents will be contacted for next steps in the affordable housing placement process. Throughout our partnership with the Bay Area Housing Finance Authority while working on the Doorway regional affordable housing portal, we have learned all the iterations and processes of how lotteries are run. The complexity of the lottery process and the impacts if something goes wrong has led to inconsistency and overall struggles for city or county staff, as well as developers and properties running lotteries. From prior research with our partners, we also learned that some housing seekers distrust the lottery process due to historic inequities, lack of transparency or understanding of the process, and feelings of hopelessness in the search for affordable housing. Asking a home seeker struggling to find affordable housing to navigate an opaque application and lottery process can add to those stresses and burdens.
We wanted to understand these learnings more, so we’ve conducted research into lotteries and how they’re run by cities, counties, developers and property managers. In this article, we’ll outline the key findings that our research uncovered and begin to understand how Bloom Housing’s technology can play a role in solving them.
Background
Recently, we’ve led research with our housing partners — primarily city/county staff and developers/property managers in the Bay Area — to better understand how they are currently running housing lotteries. Through this research, we wanted to understand the answers to crucial questions around process and accessibility, including:
How do property managers place applicants into the limited amount of affordable housing available?
How involved are property managers in the lease up and placement process in cities and counties?
How are local jurisdiction policies and programs — like housing preferences — affecting the lease-up process?
Do housing seekers understand their lottery results?
How does the current system contribute to or detract from an already stressful and inequitable housing search?
Throughout our research on housing lotteries, we focused on the pain points of three groups of housing stakeholders: housing seekers, property managers, and city/county/regional staff.
For a housing-seeker — someone searching for an affordable and safe place to live — the lottery can make them feel powerless in an already stressful system. It can also possibly aid them in finding and being placed in an affordable apartment.
For property managers (and developers) — the stakeholders who are trying to find residents for their affordable and available new units — the lottery process can be confusing, time-intensive, and tedious at a time when a vacant unit is losing them money on a day-to-day basis.
For city, county and regional agencies — the jurisdictional stakeholders who represent the city or county — transparency into the lottery process helps guide them toward their duty of providing housing for citizens and ensures that their subsidy investments are sufficiently addressing the affordable housing crisis. It can also lead to administrative burden.
What is a housing lottery?
The term lottery may evoke images of numbered lotto balls, a raffle ticket, or a scratch-off ticket. The general idea behind any lottery is to randomly select a number from a pool of numbers, resulting in completely randomized “winners” or selections. These operating principles aren’t too far off from what a housing lottery entails; while a bit more complex, housing lotteries also aim to create a randomized list from a pool of housing applicants.
Housing lotteries are a method of randomly ranking applicants from a pool of applicants to prioritize housing placement into available affordable housing units. More simply put, it’s an equitable method of randomly choosing who gets a chance at an affordable housing unit. Most often, lotteries are used to select residents for a newly built affordable housing development — called “initial lease-up” — where there may be many units available at different rent levels and, crucially, more applicants than there are available units.
Lotteries have historically taken place in person, sometimes involving a physical lottery ticket and raffle drum. In San Francisco, for instance, city staff previously hosted housing lotteries in a public space with a large lottery drum, randomly drawing combinations of numbers. Housing seekers could attend these lotteries and understand, on the spot, if their application number was selected. More recently, the lottery process has transitioned to take place digitally for most affordable housing developers. The digital lottery most often occurs in a public virtual meeting room, where a digital “run lottery” button is pressed (most often, the Microsoft Excel RAND function is implemented).
The result of the lottery is a list of applicants whose numbers have been randomly selected. From there, property managers from the open housing development will begin calling applicants in the approved lottery order to get more information on their income, employment, and desired unit size. This process, called 'lease-up', aims to fill all available units in a development with qualified tenants as quickly as possible. At the same time, housing seekers are trying to find safe and affordable housing as soon as they can.
Equitability within a housing lottery
The decision to operate housing lotteries instead of a “first-come first served” approach — which remains common across the U.S. — is based on the belief that housing lotteries are ultimately more equitable for housing seekers. There are four key ways that lotteries can offer more equitable outcomes:
Give each applicant an equal advantage. Applicants aren’t penalized for inequities like access to better housing information, more reliable digital tools (like faster internet or access to a laptop), a strong family or friend network who can support them, or simply more available time to monitor for affordable housing availability. A lottery removes when an applicant applies from the equation, as the open application time period allows applicants an equal opportunity to apply whenever before the deadline, and allows for more time to spend monitoring housing availability and applying to properties.
Counter bias and inequity in the selection process. Bias is a genuine concern as people can, despite their best efforts, unknowingly let bias (called implicit bias) affect the way they may determine a housing application. A randomized process aims to remove the explicit or implicit biases present in human determinations. However, requiring review of the lottery results by staff members is still an important part of the process.
Offer more transparency for applicants, reducing stress. Within a randomized process, applicants can be certain that they don’t need to rush to turn in their application and that their application will have a fair chance at selection.
Set a realistic expectation of selection. The difficult truth is that there currently is not enough affordable housing stock in the United States to match the overall home seeker demand. A lottery process sets an expectation for applicants that matches their chances for obtaining housing. For example, with a first come, first serve process, the applicant first in line may expect to be placed into housing, which is not necessarily the case since eligibility is the prime indicator of placement. The random order of applicants, plus their eligibility, creates an equitable implementation of the lease-up process.
However, even with a housing lottery, the process of selection is complex. While a lottery is mathematically more equitable, there are real concerns, especially from housing seekers, about its function:
The perception of a lottery, especially its randomness, feels unjust for housing seekers. The word “lottery” often refers to a longshot gamble to win Mega Million or Powerball state lotteries, and it can be hard for applicants to imagine a positive outcome;
For housing developers and city staff, the actual implementation of a random selection of applicants is resource intensive, whether it’s city or county staff setting up a BINGO ticket barrel or using the RAND function on Microsoft Excel;
Staff onboarding and technical training around the process is necessary and can be a burden for already overworked housing staff;
Implementing a lottery process needs to account for local needs: different jurisdictions across the country have different needs, including zoning laws, preferences, and populations to consider.
Despite these concerns, once a housing lottery process is in place, its standardization should simplify workstreams for housing staff and streamline the process long-term.
Doorway Housing Portal Case Study
Bloom Housing’s partnership in the San Francisco Bay Area — and the focus of our recent research on housing lotteries — is with our partner, the Bay Area Housing Finance Authority, and the team at Doorway Housing Portal. Doorway (the official name for the Bay Area’s implementation of Bloom Housing) currently serves the entire Bay Area region and provides a one-stop-shop for housing seekers to search and apply for affordable housing.
We partnered with BAHFA to create a standardized lottery function in the portal based on the needs they had observed in the Bay Area. Their observations led us to plan and conduct rigorous research with developers, property managers, and city staff around how they currently think about, plan for, and run housing lotteries.
Research findings
As a technology partner, we understood the need for clear standards around housing lotteries and our research findings only made this need more explicit. We spoke with a variety of property managers, developers, and city staff to understand the intricacies of how they run lotteries for their properties. By speaking with a mix of property management staff, developers, and city staff, we were able to connect an overall picture of the process and its gaps.
We set goals for the research sessions to:
Understand the current landscape of how property managers and developers handle housing lotteries and establish a baseline of knowledge and understanding of how lotteries are implemented
Understand gaps in functionality and pain points within current lottery processes and how might we address them
Illustrate a visual diagram of the current lottery processes across all current stakeholders.
Through these conversations, we discovered that there are anchor points to every application and lottery process, but each developer and jurisdiction runs them a little bit differently. For some, their lottery process works quite well, so we made note of those processes to incorporate into the lottery design in Doorway. Particular issue areas with current lottery processes that came up most often involved compliance, transparency between housing seekers and staff, governance (who does what and when), and staff capacity.
Governance and staff capacity
With high staff turnover, it can be difficult to train staff in the systems and processes required to run a lottery, like complex Excel documents and compliance with fair housing laws.
Alongside that is the reality of understaffed offices and high call volume from housing seekers who are searching for updates or answers about a housing decision.
Each office may have different roles or job titles for staff members, making standardization of a housing lottery difficult or counterintuitive. Almost entirely, the responsibility of overseeing a housing lottery goes to top level managers at a development company, ensuring checks and balances.
Transparency
Due to high call volume and understaffed housing offices, calls from housing seekers often go unanswered despite staff members’ best efforts, as they choose to prioritize moving along processes over individual case work. This can leave housing seekers feeling confused about where they are in the process, adding stress to an already stressful process.
It can be difficult for applicants to understand their lottery results. Results become more complicated when preferences are involved. Due to a number of local factors, preferences change the actual priority of an applicant’s otherwise high-ranking lottery number. Additionally, if English is not an applicants’ first language, they may benefit from translation services or individualized responses.
On the service side, staff members can feel overwhelmed and burned out facing the inextricable problem of housing scarcity on a daily basis.
Compliance
The lottery process currently isn’t standardized with each developer and jurisdiction using slightly different terms and language to deliver and explain lottery results. This can lead to confusion for a housing seeker about what a “lottery number” means, which leads to giving false hope about lottery results.
We’re looking forward to continuing our research with housing seekers to more fully understand how they experience the lottery process and improving upon this for future lotteries run within Bloom Housing in California and nationwide.
Next steps: A lottery pilot
From Fall 2024, Bloom Housing will include lottery functionality, allowing property managers to conduct an online, digital lottery using both digital and paper-based applications received via the portal.
Based on our research findings and collaboration with our partners at BAHFA, we’ve also introduced certain controls for jurisdictions who might be hoping to run the lottery process themselves:
Applicants will be able to see their lottery results within their account;
Applicants will also have access to plenty of explanatory content to help them make sense of the lottery results and what to expect in terms of next steps;
Jurisdictions will have the ability to run a test lottery before releasing results to property managers and developer partners
These controls aid in not only helping housing seekers understand their situation in the present moment, but ideally helping them navigate the complexities of the affordable housing system as a whole.
Lotteries launches with a pilot in the Bay Area this Fall 2024, with a planned round of feedback sessions post-pilot before launching more widely across jurisdictions.
Bloom Housing
Bloom Housing is an open-source portal with a mission to advance equitable, user-friendly access to affordable housing across the United States. Our tool helps home seekers find and apply for affordable housing; by the same token, Bloom allows developers and property managers to post their affordable listings. Bloom Housing currently services over 8 million residents across the Bay Area and Detroit, with additional sites being planned nationwide. Importantly, the platform was built as an open-source portal, so jurisdictions can use it without restrictions (you can access it on our Github here!).
You can see Bloom Housing live in the Bay Area of California as Doorway Housing Portal, and in Detroit as Detroit Home Connect.
Interested in bringing Bloom Housing to your community? Please reach out at https://bloomhousing.com/contact.
19 sept 2024
Housing Lotteries: Delivering Equitable Access to Affordable Opportunities
Expanding the ways Bloom Housing can help make affordable housing more accessible
When there is so much demand for comparatively little available affordable housing, how are residents selected? Who decides who gets housing, and when? One major step of the affordable housing placement process is the housing lottery, which happens after applications are received and determines what order prospective residents will be contacted for next steps in the affordable housing placement process. Throughout our partnership with the Bay Area Housing Finance Authority while working on the Doorway regional affordable housing portal, we have learned all the iterations and processes of how lotteries are run. The complexity of the lottery process and the impacts if something goes wrong has led to inconsistency and overall struggles for city or county staff, as well as developers and properties running lotteries. From prior research with our partners, we also learned that some housing seekers distrust the lottery process due to historic inequities, lack of transparency or understanding of the process, and feelings of hopelessness in the search for affordable housing. Asking a home seeker struggling to find affordable housing to navigate an opaque application and lottery process can add to those stresses and burdens.
We wanted to understand these learnings more, so we’ve conducted research into lotteries and how they’re run by cities, counties, developers and property managers. In this article, we’ll outline the key findings that our research uncovered and begin to understand how Bloom Housing’s technology can play a role in solving them.
Background
Recently, we’ve led research with our housing partners — primarily city/county staff and developers/property managers in the Bay Area — to better understand how they are currently running housing lotteries. Through this research, we wanted to understand the answers to crucial questions around process and accessibility, including:
How do property managers place applicants into the limited amount of affordable housing available?
How involved are property managers in the lease up and placement process in cities and counties?
How are local jurisdiction policies and programs — like housing preferences — affecting the lease-up process?
Do housing seekers understand their lottery results?
How does the current system contribute to or detract from an already stressful and inequitable housing search?
Throughout our research on housing lotteries, we focused on the pain points of three groups of housing stakeholders: housing seekers, property managers, and city/county/regional staff.
For a housing-seeker — someone searching for an affordable and safe place to live — the lottery can make them feel powerless in an already stressful system. It can also possibly aid them in finding and being placed in an affordable apartment.
For property managers (and developers) — the stakeholders who are trying to find residents for their affordable and available new units — the lottery process can be confusing, time-intensive, and tedious at a time when a vacant unit is losing them money on a day-to-day basis.
For city, county and regional agencies — the jurisdictional stakeholders who represent the city or county — transparency into the lottery process helps guide them toward their duty of providing housing for citizens and ensures that their subsidy investments are sufficiently addressing the affordable housing crisis. It can also lead to administrative burden.
What is a housing lottery?
The term lottery may evoke images of numbered lotto balls, a raffle ticket, or a scratch-off ticket. The general idea behind any lottery is to randomly select a number from a pool of numbers, resulting in completely randomized “winners” or selections. These operating principles aren’t too far off from what a housing lottery entails; while a bit more complex, housing lotteries also aim to create a randomized list from a pool of housing applicants.
Housing lotteries are a method of randomly ranking applicants from a pool of applicants to prioritize housing placement into available affordable housing units. More simply put, it’s an equitable method of randomly choosing who gets a chance at an affordable housing unit. Most often, lotteries are used to select residents for a newly built affordable housing development — called “initial lease-up” — where there may be many units available at different rent levels and, crucially, more applicants than there are available units.
Lotteries have historically taken place in person, sometimes involving a physical lottery ticket and raffle drum. In San Francisco, for instance, city staff previously hosted housing lotteries in a public space with a large lottery drum, randomly drawing combinations of numbers. Housing seekers could attend these lotteries and understand, on the spot, if their application number was selected. More recently, the lottery process has transitioned to take place digitally for most affordable housing developers. The digital lottery most often occurs in a public virtual meeting room, where a digital “run lottery” button is pressed (most often, the Microsoft Excel RAND function is implemented).
The result of the lottery is a list of applicants whose numbers have been randomly selected. From there, property managers from the open housing development will begin calling applicants in the approved lottery order to get more information on their income, employment, and desired unit size. This process, called 'lease-up', aims to fill all available units in a development with qualified tenants as quickly as possible. At the same time, housing seekers are trying to find safe and affordable housing as soon as they can.
Equitability within a housing lottery
The decision to operate housing lotteries instead of a “first-come first served” approach — which remains common across the U.S. — is based on the belief that housing lotteries are ultimately more equitable for housing seekers. There are four key ways that lotteries can offer more equitable outcomes:
Give each applicant an equal advantage. Applicants aren’t penalized for inequities like access to better housing information, more reliable digital tools (like faster internet or access to a laptop), a strong family or friend network who can support them, or simply more available time to monitor for affordable housing availability. A lottery removes when an applicant applies from the equation, as the open application time period allows applicants an equal opportunity to apply whenever before the deadline, and allows for more time to spend monitoring housing availability and applying to properties.
Counter bias and inequity in the selection process. Bias is a genuine concern as people can, despite their best efforts, unknowingly let bias (called implicit bias) affect the way they may determine a housing application. A randomized process aims to remove the explicit or implicit biases present in human determinations. However, requiring review of the lottery results by staff members is still an important part of the process.
Offer more transparency for applicants, reducing stress. Within a randomized process, applicants can be certain that they don’t need to rush to turn in their application and that their application will have a fair chance at selection.
Set a realistic expectation of selection. The difficult truth is that there currently is not enough affordable housing stock in the United States to match the overall home seeker demand. A lottery process sets an expectation for applicants that matches their chances for obtaining housing. For example, with a first come, first serve process, the applicant first in line may expect to be placed into housing, which is not necessarily the case since eligibility is the prime indicator of placement. The random order of applicants, plus their eligibility, creates an equitable implementation of the lease-up process.
However, even with a housing lottery, the process of selection is complex. While a lottery is mathematically more equitable, there are real concerns, especially from housing seekers, about its function:
The perception of a lottery, especially its randomness, feels unjust for housing seekers. The word “lottery” often refers to a longshot gamble to win Mega Million or Powerball state lotteries, and it can be hard for applicants to imagine a positive outcome;
For housing developers and city staff, the actual implementation of a random selection of applicants is resource intensive, whether it’s city or county staff setting up a BINGO ticket barrel or using the RAND function on Microsoft Excel;
Staff onboarding and technical training around the process is necessary and can be a burden for already overworked housing staff;
Implementing a lottery process needs to account for local needs: different jurisdictions across the country have different needs, including zoning laws, preferences, and populations to consider.
Despite these concerns, once a housing lottery process is in place, its standardization should simplify workstreams for housing staff and streamline the process long-term.
Doorway Housing Portal Case Study
Bloom Housing’s partnership in the San Francisco Bay Area — and the focus of our recent research on housing lotteries — is with our partner, the Bay Area Housing Finance Authority, and the team at Doorway Housing Portal. Doorway (the official name for the Bay Area’s implementation of Bloom Housing) currently serves the entire Bay Area region and provides a one-stop-shop for housing seekers to search and apply for affordable housing.
We partnered with BAHFA to create a standardized lottery function in the portal based on the needs they had observed in the Bay Area. Their observations led us to plan and conduct rigorous research with developers, property managers, and city staff around how they currently think about, plan for, and run housing lotteries.
Research findings
As a technology partner, we understood the need for clear standards around housing lotteries and our research findings only made this need more explicit. We spoke with a variety of property managers, developers, and city staff to understand the intricacies of how they run lotteries for their properties. By speaking with a mix of property management staff, developers, and city staff, we were able to connect an overall picture of the process and its gaps.
We set goals for the research sessions to:
Understand the current landscape of how property managers and developers handle housing lotteries and establish a baseline of knowledge and understanding of how lotteries are implemented
Understand gaps in functionality and pain points within current lottery processes and how might we address them
Illustrate a visual diagram of the current lottery processes across all current stakeholders.
Through these conversations, we discovered that there are anchor points to every application and lottery process, but each developer and jurisdiction runs them a little bit differently. For some, their lottery process works quite well, so we made note of those processes to incorporate into the lottery design in Doorway. Particular issue areas with current lottery processes that came up most often involved compliance, transparency between housing seekers and staff, governance (who does what and when), and staff capacity.
Governance and staff capacity
With high staff turnover, it can be difficult to train staff in the systems and processes required to run a lottery, like complex Excel documents and compliance with fair housing laws.
Alongside that is the reality of understaffed offices and high call volume from housing seekers who are searching for updates or answers about a housing decision.
Each office may have different roles or job titles for staff members, making standardization of a housing lottery difficult or counterintuitive. Almost entirely, the responsibility of overseeing a housing lottery goes to top level managers at a development company, ensuring checks and balances.
Transparency
Due to high call volume and understaffed housing offices, calls from housing seekers often go unanswered despite staff members’ best efforts, as they choose to prioritize moving along processes over individual case work. This can leave housing seekers feeling confused about where they are in the process, adding stress to an already stressful process.
It can be difficult for applicants to understand their lottery results. Results become more complicated when preferences are involved. Due to a number of local factors, preferences change the actual priority of an applicant’s otherwise high-ranking lottery number. Additionally, if English is not an applicants’ first language, they may benefit from translation services or individualized responses.
On the service side, staff members can feel overwhelmed and burned out facing the inextricable problem of housing scarcity on a daily basis.
Compliance
The lottery process currently isn’t standardized with each developer and jurisdiction using slightly different terms and language to deliver and explain lottery results. This can lead to confusion for a housing seeker about what a “lottery number” means, which leads to giving false hope about lottery results.
We’re looking forward to continuing our research with housing seekers to more fully understand how they experience the lottery process and improving upon this for future lotteries run within Bloom Housing in California and nationwide.
Next steps: A lottery pilot
From Fall 2024, Bloom Housing will include lottery functionality, allowing property managers to conduct an online, digital lottery using both digital and paper-based applications received via the portal.
Based on our research findings and collaboration with our partners at BAHFA, we’ve also introduced certain controls for jurisdictions who might be hoping to run the lottery process themselves:
Applicants will be able to see their lottery results within their account;
Applicants will also have access to plenty of explanatory content to help them make sense of the lottery results and what to expect in terms of next steps;
Jurisdictions will have the ability to run a test lottery before releasing results to property managers and developer partners
These controls aid in not only helping housing seekers understand their situation in the present moment, but ideally helping them navigate the complexities of the affordable housing system as a whole.
Lotteries launches with a pilot in the Bay Area this Fall 2024, with a planned round of feedback sessions post-pilot before launching more widely across jurisdictions.
Bloom Housing
Bloom Housing is an open-source portal with a mission to advance equitable, user-friendly access to affordable housing across the United States. Our tool helps home seekers find and apply for affordable housing; by the same token, Bloom allows developers and property managers to post their affordable listings. Bloom Housing currently services over 8 million residents across the Bay Area and Detroit, with additional sites being planned nationwide. Importantly, the platform was built as an open-source portal, so jurisdictions can use it without restrictions (you can access it on our Github here!).
You can see Bloom Housing live in the Bay Area of California as Doorway Housing Portal, and in Detroit as Detroit Home Connect.
Interested in bringing Bloom Housing to your community? Please reach out at https://bloomhousing.com/contact.
19 sept 2024
Housing Lotteries: Delivering Equitable Access to Affordable Opportunities
Expanding the ways Bloom Housing can help make affordable housing more accessible
When there is so much demand for comparatively little available affordable housing, how are residents selected? Who decides who gets housing, and when? One major step of the affordable housing placement process is the housing lottery, which happens after applications are received and determines what order prospective residents will be contacted for next steps in the affordable housing placement process. Throughout our partnership with the Bay Area Housing Finance Authority while working on the Doorway regional affordable housing portal, we have learned all the iterations and processes of how lotteries are run. The complexity of the lottery process and the impacts if something goes wrong has led to inconsistency and overall struggles for city or county staff, as well as developers and properties running lotteries. From prior research with our partners, we also learned that some housing seekers distrust the lottery process due to historic inequities, lack of transparency or understanding of the process, and feelings of hopelessness in the search for affordable housing. Asking a home seeker struggling to find affordable housing to navigate an opaque application and lottery process can add to those stresses and burdens.
We wanted to understand these learnings more, so we’ve conducted research into lotteries and how they’re run by cities, counties, developers and property managers. In this article, we’ll outline the key findings that our research uncovered and begin to understand how Bloom Housing’s technology can play a role in solving them.
Background
Recently, we’ve led research with our housing partners — primarily city/county staff and developers/property managers in the Bay Area — to better understand how they are currently running housing lotteries. Through this research, we wanted to understand the answers to crucial questions around process and accessibility, including:
How do property managers place applicants into the limited amount of affordable housing available?
How involved are property managers in the lease up and placement process in cities and counties?
How are local jurisdiction policies and programs — like housing preferences — affecting the lease-up process?
Do housing seekers understand their lottery results?
How does the current system contribute to or detract from an already stressful and inequitable housing search?
Throughout our research on housing lotteries, we focused on the pain points of three groups of housing stakeholders: housing seekers, property managers, and city/county/regional staff.
For a housing-seeker — someone searching for an affordable and safe place to live — the lottery can make them feel powerless in an already stressful system. It can also possibly aid them in finding and being placed in an affordable apartment.
For property managers (and developers) — the stakeholders who are trying to find residents for their affordable and available new units — the lottery process can be confusing, time-intensive, and tedious at a time when a vacant unit is losing them money on a day-to-day basis.
For city, county and regional agencies — the jurisdictional stakeholders who represent the city or county — transparency into the lottery process helps guide them toward their duty of providing housing for citizens and ensures that their subsidy investments are sufficiently addressing the affordable housing crisis. It can also lead to administrative burden.
What is a housing lottery?
The term lottery may evoke images of numbered lotto balls, a raffle ticket, or a scratch-off ticket. The general idea behind any lottery is to randomly select a number from a pool of numbers, resulting in completely randomized “winners” or selections. These operating principles aren’t too far off from what a housing lottery entails; while a bit more complex, housing lotteries also aim to create a randomized list from a pool of housing applicants.
Housing lotteries are a method of randomly ranking applicants from a pool of applicants to prioritize housing placement into available affordable housing units. More simply put, it’s an equitable method of randomly choosing who gets a chance at an affordable housing unit. Most often, lotteries are used to select residents for a newly built affordable housing development — called “initial lease-up” — where there may be many units available at different rent levels and, crucially, more applicants than there are available units.
Lotteries have historically taken place in person, sometimes involving a physical lottery ticket and raffle drum. In San Francisco, for instance, city staff previously hosted housing lotteries in a public space with a large lottery drum, randomly drawing combinations of numbers. Housing seekers could attend these lotteries and understand, on the spot, if their application number was selected. More recently, the lottery process has transitioned to take place digitally for most affordable housing developers. The digital lottery most often occurs in a public virtual meeting room, where a digital “run lottery” button is pressed (most often, the Microsoft Excel RAND function is implemented).
The result of the lottery is a list of applicants whose numbers have been randomly selected. From there, property managers from the open housing development will begin calling applicants in the approved lottery order to get more information on their income, employment, and desired unit size. This process, called 'lease-up', aims to fill all available units in a development with qualified tenants as quickly as possible. At the same time, housing seekers are trying to find safe and affordable housing as soon as they can.
Equitability within a housing lottery
The decision to operate housing lotteries instead of a “first-come first served” approach — which remains common across the U.S. — is based on the belief that housing lotteries are ultimately more equitable for housing seekers. There are four key ways that lotteries can offer more equitable outcomes:
Give each applicant an equal advantage. Applicants aren’t penalized for inequities like access to better housing information, more reliable digital tools (like faster internet or access to a laptop), a strong family or friend network who can support them, or simply more available time to monitor for affordable housing availability. A lottery removes when an applicant applies from the equation, as the open application time period allows applicants an equal opportunity to apply whenever before the deadline, and allows for more time to spend monitoring housing availability and applying to properties.
Counter bias and inequity in the selection process. Bias is a genuine concern as people can, despite their best efforts, unknowingly let bias (called implicit bias) affect the way they may determine a housing application. A randomized process aims to remove the explicit or implicit biases present in human determinations. However, requiring review of the lottery results by staff members is still an important part of the process.
Offer more transparency for applicants, reducing stress. Within a randomized process, applicants can be certain that they don’t need to rush to turn in their application and that their application will have a fair chance at selection.
Set a realistic expectation of selection. The difficult truth is that there currently is not enough affordable housing stock in the United States to match the overall home seeker demand. A lottery process sets an expectation for applicants that matches their chances for obtaining housing. For example, with a first come, first serve process, the applicant first in line may expect to be placed into housing, which is not necessarily the case since eligibility is the prime indicator of placement. The random order of applicants, plus their eligibility, creates an equitable implementation of the lease-up process.
However, even with a housing lottery, the process of selection is complex. While a lottery is mathematically more equitable, there are real concerns, especially from housing seekers, about its function:
The perception of a lottery, especially its randomness, feels unjust for housing seekers. The word “lottery” often refers to a longshot gamble to win Mega Million or Powerball state lotteries, and it can be hard for applicants to imagine a positive outcome;
For housing developers and city staff, the actual implementation of a random selection of applicants is resource intensive, whether it’s city or county staff setting up a BINGO ticket barrel or using the RAND function on Microsoft Excel;
Staff onboarding and technical training around the process is necessary and can be a burden for already overworked housing staff;
Implementing a lottery process needs to account for local needs: different jurisdictions across the country have different needs, including zoning laws, preferences, and populations to consider.
Despite these concerns, once a housing lottery process is in place, its standardization should simplify workstreams for housing staff and streamline the process long-term.
Doorway Housing Portal Case Study
Bloom Housing’s partnership in the San Francisco Bay Area — and the focus of our recent research on housing lotteries — is with our partner, the Bay Area Housing Finance Authority, and the team at Doorway Housing Portal. Doorway (the official name for the Bay Area’s implementation of Bloom Housing) currently serves the entire Bay Area region and provides a one-stop-shop for housing seekers to search and apply for affordable housing.
We partnered with BAHFA to create a standardized lottery function in the portal based on the needs they had observed in the Bay Area. Their observations led us to plan and conduct rigorous research with developers, property managers, and city staff around how they currently think about, plan for, and run housing lotteries.
Research findings
As a technology partner, we understood the need for clear standards around housing lotteries and our research findings only made this need more explicit. We spoke with a variety of property managers, developers, and city staff to understand the intricacies of how they run lotteries for their properties. By speaking with a mix of property management staff, developers, and city staff, we were able to connect an overall picture of the process and its gaps.
We set goals for the research sessions to:
Understand the current landscape of how property managers and developers handle housing lotteries and establish a baseline of knowledge and understanding of how lotteries are implemented
Understand gaps in functionality and pain points within current lottery processes and how might we address them
Illustrate a visual diagram of the current lottery processes across all current stakeholders.
Through these conversations, we discovered that there are anchor points to every application and lottery process, but each developer and jurisdiction runs them a little bit differently. For some, their lottery process works quite well, so we made note of those processes to incorporate into the lottery design in Doorway. Particular issue areas with current lottery processes that came up most often involved compliance, transparency between housing seekers and staff, governance (who does what and when), and staff capacity.
Governance and staff capacity
With high staff turnover, it can be difficult to train staff in the systems and processes required to run a lottery, like complex Excel documents and compliance with fair housing laws.
Alongside that is the reality of understaffed offices and high call volume from housing seekers who are searching for updates or answers about a housing decision.
Each office may have different roles or job titles for staff members, making standardization of a housing lottery difficult or counterintuitive. Almost entirely, the responsibility of overseeing a housing lottery goes to top level managers at a development company, ensuring checks and balances.
Transparency
Due to high call volume and understaffed housing offices, calls from housing seekers often go unanswered despite staff members’ best efforts, as they choose to prioritize moving along processes over individual case work. This can leave housing seekers feeling confused about where they are in the process, adding stress to an already stressful process.
It can be difficult for applicants to understand their lottery results. Results become more complicated when preferences are involved. Due to a number of local factors, preferences change the actual priority of an applicant’s otherwise high-ranking lottery number. Additionally, if English is not an applicants’ first language, they may benefit from translation services or individualized responses.
On the service side, staff members can feel overwhelmed and burned out facing the inextricable problem of housing scarcity on a daily basis.
Compliance
The lottery process currently isn’t standardized with each developer and jurisdiction using slightly different terms and language to deliver and explain lottery results. This can lead to confusion for a housing seeker about what a “lottery number” means, which leads to giving false hope about lottery results.
We’re looking forward to continuing our research with housing seekers to more fully understand how they experience the lottery process and improving upon this for future lotteries run within Bloom Housing in California and nationwide.
Next steps: A lottery pilot
From Fall 2024, Bloom Housing will include lottery functionality, allowing property managers to conduct an online, digital lottery using both digital and paper-based applications received via the portal.
Based on our research findings and collaboration with our partners at BAHFA, we’ve also introduced certain controls for jurisdictions who might be hoping to run the lottery process themselves:
Applicants will be able to see their lottery results within their account;
Applicants will also have access to plenty of explanatory content to help them make sense of the lottery results and what to expect in terms of next steps;
Jurisdictions will have the ability to run a test lottery before releasing results to property managers and developer partners
These controls aid in not only helping housing seekers understand their situation in the present moment, but ideally helping them navigate the complexities of the affordable housing system as a whole.
Lotteries launches with a pilot in the Bay Area this Fall 2024, with a planned round of feedback sessions post-pilot before launching more widely across jurisdictions.
Bloom Housing
Bloom Housing is an open-source portal with a mission to advance equitable, user-friendly access to affordable housing across the United States. Our tool helps home seekers find and apply for affordable housing; by the same token, Bloom allows developers and property managers to post their affordable listings. Bloom Housing currently services over 8 million residents across the Bay Area and Detroit, with additional sites being planned nationwide. Importantly, the platform was built as an open-source portal, so jurisdictions can use it without restrictions (you can access it on our Github here!).
You can see Bloom Housing live in the Bay Area of California as Doorway Housing Portal, and in Detroit as Detroit Home Connect.
Interested in bringing Bloom Housing to your community? Please reach out at https://bloomhousing.com/contact.