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Pols Want New Eligible Income Formula for Affordable Housing

By Amy Zimmer | February 23, 2017 8:36am
 This Bushwick building includes four subsidized apartments for singles and couples making up to $38,100.
This Bushwick building includes four subsidized apartments for singles and couples making up to $38,100.
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DNAinfo/Gwynne Hogan

MANHATTAN — Two Albany lawmakers hope to change the formula determining eligibility for affordable housing.

Astoria and Long Island City’s Sen. Michael Gianaris and Rep. Brian Barnwell want to create income bands for affordable units funded with 421-a tax breaks or other subsidies to be based on the median income from the zip code where a project is based, according to a bill proposed last week, as previously reported by the Real Deal.

Under the current requirements, prospective tenants' eligibility for affordable apartments — and rents that are charged — are based on the Area Median Income, or AMI, calculated by the federal Department of Housing and Urban Development, which uses incomes of residents in the five boroughs, along with the more affluent areas of Westchester, Putnam, and Rockland counties. Many New York City housing advocates and politicians have long said the HUD formula skews what New Yorkers can actually afford.

“It shouldn’t matter what is affordable in Westchester to determine what is affordable in Queens,” Barnwell said in a statement. 

Some advocates, however, raised questions about possible unintended consequences of the bills.

INTERACTIVE: What is AMI?

The AMI calculated by HUD for affordable housing projects in the city is $72,500 for a family of two and $81,600 for a family of three.

However, the median household income in Astoria is $51,988, for instance, based on Census data, according to Point2Poitnhomes.com. (Household size tends to be about two to three people, depending on the neighborhood.)

The median household income in Crown Heights is $42,841 and in the South Bronx’s Morrisania, it’s $22,295.

But on the other end of the spectrum, the median household income in TriBeCa is $118,959 and on the Upper East Side, it’s $105,716.

Because of this, housing advocates are worried that wealthier neighborhoods would see affordable units that still target fairly wealthy families while lower-income neighborhoods would then bear the brunt of units for the lowest income residents rather than seeing more of a mix across the city.  

Under Gov. Andrew Cuomo’s latest 421-a proposal, now called Affordable New York, developers would be required to include a certain number of units for tenants earning anywhere between 4 to 130 percent of AMI.

“We applaud looking more in depth at AMI and how it does and does not meet the needs of New York City residents,” said Barika Williams, of the Association for Neighborhood and Housing Development. “I do think what the bill is starting to do is having a conversation how AMI as defined by the federal government is not working on the ground.”

But she was concerned that a neighborhood with a median income of $120,000 might then create housing for those earning about $90,000 in exchange for a hefty tax break.

“We don’t want to create a situation where high-income communities would get out of creating affordable housing,” she said.  “There are always concerns that low-income and moderate-income communities are mixing up what gets built [in terms of targeted income bands], but there’s not pressure on high-income communities on mixing up incomes.”

Rachel Fee, of the New York Housing Conference, had similar concerns.

“I fear that the unintended consequences of this bill is to create an additional barrier for low-income renters in high-opportunity areas,” she said. “I expect that AMI in many zip codes below 96th St. in Manhattan and the waterfront areas in Brooklyn and Queens where 421-a is likely to be used could be higher than citywide AMI.”

For gentrifying areas, the local median income might be lower than HUD’s AMI, which could potentially help affordability for those communities, she said.

But, she added, “If the tax benefit is not sufficient to offsets lower local rents, it won’t incentivize development.”

Housing experts also noted that affordable housing projects with federal funding would still be required to peg their income requirements to HUD’s AMI calculations.