When "affordable housing" nearly reaches $200,000: the 38 Sixth income recalculation

My bad. When I wrote three days ago about middle-income two- and three-bedroom apartments at the "100% affordable" 38 Sixth being marketed beyond the lottery to anyone who met the income qualifications, I failed to account for an increased upper limit, a consequence of a recalculation of Area Median Income (AMI).

Most dramatically, a six-person household can now earn nearly $200,000 and still qualify for a three-bedroom below-market unit.

Income eligibility stretches at the top

Since the original marketing last year, the income eligibility has stretched, not the bottom but rather the top. Below are the 2016/2018 income limits, by household size, for two-bedroom units, which have an upper limit of 165% of AMI.

• 2 people: $111,909 - $119,625/$137,775
• 3 people: $111,909 - $134,640/$154,935
• 4 people: $111,909 - $149,490/$172,095

Here are the income limits, by household size, for three-bedroom units:

• 3 people: $129,258 - $134,640/$154,935
• 4 people: $129,258 - $149,490/$172,095
• 5 people: $129,258 - $161,535/$185,955
• 6 people: $129,258 - $173,415/$199,650

Note that, while 38 Sixth began marketing in January 2017, it used the 2016 AMI; that year, 100% of AMI for a four-person household was $90,600. In 2017, it was $95,400. In 2018, it's $104,300. So 165% of that figure--the upper income limit for middle-income units--is calculated from that base.

A bigger range of income burden

I guess there's a logic to keeping the same income floor--they don't want to raise the burden on households--but it does lead to some skewed results, with some households potentially paying well more or less than the targeted 30% of income in rent.

For example, a four-person household paying $3,206/month for a two-bedroom is paying $38,472 a year. That could represent 34.4% of their income, if they meet the minimum income level of $111,909. Or it could represent 22.4% of their income, if they reach the current maximum income level of $172,095.

Previously, with the maximum income level of $149,490, they would have been paying 25.7% of their income.

There's a pretty big range now. Note that the $111,909 income floor represents 123.5% of 2016 AMI for a four-person household, but just 107.3% of 2018 AMI for a four-person household.

AMI complexities

Because AMI is not based on neighborhood, borough, or even city income, but rather includes some wealthy suburbs (see City Limits), it floats ever upward. When the Atlantic Yards Housing Memorandum of Understanding was signed in 2005, 100% of AMI for a four-person household was $62,800. In 2006, 100% of AMI was $70,900.

Affordable housing is then calculated as a percentage of AMI.

When the MOU was signed, up to 50% was low-income, 60-100% of AMI was moderate-income, and 100-160% of AMI was middle-income.

Those categories have changed, with low-income in the project going up to 60% of AMI, and middle-income up to 165% of AMI.

That said, the city now considers up to 80% of AMI to be low-income, as shown in the chart.

Looking at the advertisements

Here's the current advertisement for open marketing--beyond the lottery--for 38 Sixth:

Here's the original advertisement for the 38 Sixth lottery, from January 2017: