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New Bill Seeks To Reform Affordable Housing Eligibility Rules

Zip codes rather than boroughs and counties are being proposed to calculate median income.

By Jeff Vasishta February 24, 2017

New York City’s affordable housing program has had people scratching their heads for a while. The main issue is that eligibility is based on Area Median Income (or AMI as calculated by HUD) of the five boroughs along with the wealthier enclaves of Westchester, Putnam, and Rockland counties. It’s like comparing apples to oranges. South Bronx residents have their incomes measured against those in Putnam County. Now, The Real Deal reports, politicians in Albany are asking for a more realistic formula to be introduced.

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. Their idea is to use zip codes rather than boroughs and counties to base eligibility on.

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

Related: Queens Storms Ahead As NYC’s Number One Neighborhood For Investors

Currently, 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. Although most agree that a zip-code system would be by far the most accurate, it would mean that residents living in wealthier New York neighborhoods like Tribeca and the Upper East Side, where the median income is over $100,000/year, wouldn’t really get affordable housing in the true sense of the word. Either that—or they wouldn’t need it.

Governor Cuomo’s new 421-a proposal (Affordable New York) calls for developers to include a certain number of units for tenants earning anywhere between 40 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.”

Related: Does Affordable Housing Cause Bay Area Rents Skyrocket?

One of the main areas of contention concerns developers getting tax breaks under the 421-a rules for building affordable housing in high income neighborhoods where it is really not needed—such as Tribeca and the Upper West Side—for residents who may be earning six figures.

“We don’t want to create a situation where high-income communities would get out of creating affordable housing,” she was reported as saying in DNAInfo.  “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, echoed those worries.

“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.”

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

An obvious solution would be to restrict 421-a backed affordable housing to neighborhoods where it was most needed, where the AMI was the lowest but getting a broad consensus on that may not be easy.

Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

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