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Atlantic Yards/Pacific Park infographics: what's built/what's coming/what's missing, who's responsible, + project FAQ/timeline (pinned post)

Housing advocates: dramatically rising AMI puts "affordable" out of sync with New Yorkers. Call for new focus on lower-income units. But where's the money?

Last April, I noted the 2022 Area Median Income (AMI) figures, the baseline for calculating affordability, had risen 11.8%, and that the maximum rent levels for "affordable" units had increased well beyond that, apparently due to various recalculations.

Now housing advocates are blowing the whistle, as first noted in an 11/7/22 article from Politico.

NEW YORK’S RISING AREA MEDIAN INCOME: A GROWING CONCERN FOR NYC’S LOWEST INCOME RENTERS is the title of a policy brief (also at bottom) from the New York Housing Conference, noting that the federal Department of Housing and Urban Development (HUD) has set AMI for the New York Metro area "wildly out of sync with the modest income increases experienced by renters, increasing by 16 percent year-over-year and 34 percent over the past four years."

(Note: their math and my math on the increase differ somewhat.)

So now low-income (80% AMI) limits for a family of three are $96,080, while very low-income (50% AMI) is $60,050, and extremely low-income (30% AMI) is $36,030. That means $144,120 is now considered moderate-income while $198,165 is middle-income. 

But developers aren't crazy, so, in practice, as I've written, they've lowered the rents well below the potential limit, which likely would not get any takeup.

At the current extremely low-income standard – $36,030 for a family of three – New York City’s Department of Housing Preservation and Development (HPD) programs would not cover anyone earning minimum wage and working 40 hours per week, earning $31,200 a year, according to the issue brief.


The Atlantic Yards perspective

Note that "low-income," at least as described in the May 2005 Affordable Housing Memorandum of Understanding signed by original developer Forest City Ratner and housing advocacy group ACORN, was defined as between 30% of AMI and 50% of AMI.

Back then 80% of AMI was squarely within moderate-income territory, even under the most generous of the three scenarios, as shown above right.

But that was non-binding, and the project's guiding Development Agreement allows for a much looser definition of affordable housing--anything that participates in a city, state, or federal government program.

Note that 100% of AMI for a family of four was then $62,800. This years it's $133,400, well more than double, and up from $119,300 in 2021.

Out of sync

AMIs have little to do with local reality. According to the New York City Housing and Vacancy Survey of 2021, the median income in New York City is $60,550 and the median income of New York City renters is only about $50,000. 

That means that, for a three-person household, the very low-income (50% of AMI) threshold of $60,500 is $10,000 more than renters' median income, according to the issue brief.

The NY Housing Conference's recommendation: key calcuations to either the city's median income, or the median income of renters.

That means that a $2,300 "affordable" rent at the HUD median income would become a $1,500 rent at the NYC median income, or a $1,250 rent at the NYC renters' median income.

What to do

While affordable housing that gets federal funds must be set to meet HUD standards, local agencies can do better, according to the brief, otherwise the people most squeezed in the housing crisis will be ignored.

The brief notes that AMI is calculated by using census figures, plus an inflation figure--which added nearly $10,000 to New York’s AMI.

About the calculation

The metro area includes wealthy suburbs on Long Island, three Hudson Valley counties, 12 counties in northern New Jersey and one county in northeastern Pennsylvania.

But there's a NYC-only factor, the High Housing Cost Adjustment, which inflates AMI in areas where rental housing costs are unusually high compared to median income. "In 2022, this calculation increased the Very Low-income AMI by 44% from the original calculation," according to the brief, but then it was adjusted down by 2% thanks to a ceiling adjustment.

Beyond that, unmentioned in the brief, there's apparently an adjustment by unit size. 

As I wrote in April, analyzing units aimed at households earning 40% of AMI, maximum rent for 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.

A coalition adds its voice

United for Housing, a coalition of more than 90 organizations (mostly nonprofit housing groups, but also some developers and even the Real Estate Board of New York), offered new recommendations for affordability, echoing the call for a focus on lower-income households.

The coalition noted that Mayor Eric Adams's housing blueprint neither specifies which household income levels the plan will serve, nor did it set production targets But " a plan without any income targeting or production goals makes it impossible to hold the administration accountablem" the coalition said.

"Until the City updates housing finance term sheets, affordability levels will follow the programs established under former Mayor de Blasio’s housing plan, which did not target enough deeply affordable housing," the coalition said. Rising construction costs and inflation add new pressures.

While the city typically uses the federal AMI levels to set affordability, it can set its own levels. 

Recommendations

From the document:
  • Target the plan where the need is greatest – with most rental housing for households earning under $50,000... [with] rents under $1,250.
  • Adopt minimum deep affordability production targets – 8,000 deeply affordable units per year... maximize project-based Section 8 vouchers... expand on efforts to use HRA Master Lease Contracts to build affordable housing... incorporate and expand tenant-based rental assistance in affordable housing buildings... for tenants who can afford rents that are less than what it costs to operate a unit of housing.
  • Finance projects quickly to maintain affordability commitments. In recent years, affordable housing projects that received support from the community based on rent and income levels saw those rent and income levels increase dramatically over several years...
  • Expand affordable homeownership to lower income households. Currently, the city’s homeownership programs support incomes between 80% and 120% of AMI....Targeting homeownership at lower incomes can also help reverse decades of housing discrimination that have led to a racial homeownership and wealth gap. City homeownership programs should include households earning as low as $60,000 for a family of three.
The upshot, though, is that this will all cost the city money, so there needs to be a commitment from city government, and/or new funding streams.

The Atlantic Yards angle

The third point above is important regarding Atlantic Yards. Delay means AMI rises and a $1,500 rent goes from moderate-income to low-income, and those who once hoped for low-income units are no longer even eligible.

As to affordable homeownership, the same is true. But the promised 200 condos on-site at Atlantic Yards/Pacific Park are not guaranteed; the purported 400 off-site condos are even farther away. The former, if ever built, were supposed to go to households at 150% of AMI, with some to those at 100% of AMI.

But it's all dependent on financing, which is of course fuzzy.

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