Rising 2022 AMI means potential (but unlikely?) $3,035-$4,509 "affordable" units, thanks to 421-a. Perplexing leap for low-income units and middle-income studios.

Area median income (AMI), the baseline calculation from which to calculate income and rent levels for "affordable housing," relies not just on New York City but also on suburban counties, no it's no surprise that figure continues to rise.

Well, 2022 AMI statistics recently posted by the New York City Department of Housing Preservation and Development show an 11.8% increase in baseline AMI. For a four-person household, for example, the figure went from $119,300 in 2021 to $133,400 in 2022.

(As of 4/19/22, the HPD page was still showing 2021 statistics, according to the Wayback Machine. Scroll down for screenshots of the past four years.)

2022 rent levels for stu/1-BR/2-BR/3-BR

What's perplexing, however, is a disproportionate increase in rent levels for both middle-income studios and an array of low-income units, which is either a miscalculation (unlikely, right?) or an adjustment in the formula.

The guideline for rent is 30% of income, but has not always been met in the past.

Studio rents leaping, at 130% of AMI

Consider rents for units at 130% of AMI, the middle-income cohort for which the two most recent Atlantic Yards/Pacific Park buildings, 662 Pacific Street and 18 Sixth Avenue, have delivered 30% "affordable housing," thanks to the generous 421-a tax break.

From 2021 to 2022, the guideline rent for a studio went from $2,263 to $3,035, a 34.1% increase. For a one-bedroom, though, it went from $2,838 to $3,253, a 14.6% increase. For two-bedrooms, from $3,397 to $3,903, a 14.9% increase. For three-bedrooms, from $3,918 to $4,509, a 15.1% increase.

That means that for units at 130% of AMI, in 2022, 1-BRs are just 7.2% more costly than studios. In 2021, they were 25.4% more expensive.

That relates, apparently, to a reconfiguration of the formula. In 2021, a single person at 130% of AMI could earn $108,680. At 30% of income, spread over 12 months, rent for a studio could be $2,717, but instead was $2,263. In 2022, a single person at 130% of AMI can earn $121,420. At 30% of income, spread over 12 months, rent could be $3,035--exactly the figure stated.

How meaningful might it be

In the short-term, this may not be too meaningful, because developers of the two aforementioned buildings, as I've written, have offered discounts well below the guideline, recognizing they wouldn't attract tenants: for a studio, 662 Pacific (aka Plank Road) charged $1,547, while 18 Sixth Ave. (aka Brooklyn Crossing), charged $1,905.

But this means that, at least theoretically, "affordable" rents might start at more than $3,000 and well exceed $4,500 at B12/B13 (615 Dean St./595 Dean St.), the two towers under construction on the southeast block of the project, which are expected to open in mid-2023, with 240 (of 800) income-targeted units at 130% of AMI. Moreover, in 2023, AMI presumably will have continued to rise.

It also means that the allowable rents would well exceed those permitted in 2017 for apartments at 165% of AMI, which represented half the units in the "100% affordable" 535 Carlton Ave. and 38 Sixth Ave.

It was so hard to find takers for those units in the city's housing lottery that the developer was forced to market them separately, prompting a scornful headline from a New York Times columnist, At $3,700 a Month, ‘Affordable’ Apartments Go Begging. (Actually, the 3-BR units were $3,716.) For units at 130% of AMI, the guideline for a 3-BR unit is now $4,509.

Note that, at 535 Carlton, the rent levels have not risen in five years, and discounts continued; for example, a one-bedroom listed at $2,680 was, as of February 2022, offered with 1.5 months free, creating a net effective rent of $2,345.

Low-income leap

There's much greater demand for low-income apartments, and those aimed at households earning 40% of AMI have also gotten disproportionately (and perplexingly) expensive, especially for studios.

Studios went from $598 in 2021 to $934 in 2022, a whopping 56.2% increase. One-bedrooms went from $756 to $1,001, a 32.4% increase. Two-bedrooms went from $900 to $1,201, a 33.4% increase. Three-bedrooms went from $1,032 to $1,387, a 34.4% increase.

That means that for units at 40% of AMI, in 2022, 1-BRs are just 7.2% more costly than studios. In 2021, they were 26.4% more expensive.

That relates, apparently, to a reconfiguration of the formula. In 2021, a single person at 40% of AMI could earn $33,440. At 30% of income, spread over 12 months, rent for a studio could be $836, but instead was $598. In 2022, a single person at 40% of AMI can earn $37,360. At 30% of income, spread over 12 months, rent could be $934--exactly the figure stated.

In 2021, a two-person household at 40% of AMI could earn $38,200. At 30% of income, spread over 12 months, rent for a 1-BR could be $955, but instead was $756. In 2022, two people at 40% of AMI can earn $42,720. At 30% of income, spread over 12 months, rent could be $1,068, not far above the $1,001 figure stated.

2022 statistics

The vertical columns are for studios/1-BR/2-BR/3-BR, respectively.

The vertical columns are for households of 1/2/3/4/5/6/7/8 people, respectively. Note that there's no room in the screenshot for those at 40% of AMI, but the income limits, for households of 1/2/3/4 people, are $37,360, $42,720, $48,040, and $53,360.