Press Release
New CSS Report Offers First Analysis of “AMI” and Its Impact on Affordable Housing Policy
Illustrates deep mismatch between what we define as “affordable housing” and what many New Yorkers can actually afford
A new Community Service Society of New York (CSS) report seeks to offer a fuller picture of incomes and housing in New York City by examining a model used by state and local housing agencies across the country to guide decisions about who will move into government-assisted housing and how much they will pay for it.
The report, “AMI: Visualizing Inequality and Unaffordability with Area Median Income,” provides an explanation and critique of AMI, including the way it has escalated so dramatically in the last few years – far faster than New Yorkers’ actual incomes. The term “affordable housing” has come to be synonymous with “income targeted” housing. And those income targets are almost always expressed through AMI. Using statistics and data from the New York City Housing Vacancy Survey (HVS), authors of the CSS report show how the distorted application of AMI in housing production creates mismatches between much of the affordable housing offered and what many New Yorkers in search of affordable housing actually earn.
Earlier this month Albany lawmakers reached agreement on a housing deal, the centerpiece of which is a revamped tax exemption program for housing construction known as 485x. Critics of the new tax exemption say it fails to account for the astonishing growth in AMI over the past few years due to inflation and other factors. The CSS report offers a timely evaluation of AMI, presenting it as an imperfect measure driving housing affordability levels for a myriad of housing programs in New York.
A few key findings from the report include:
- The HUD-calculated Area Median Income for the New York City metropolitan area (New York City plus Westchester, Rockland and Putnam Counties, plus a “high housing cost” adjustment) is wildly divergent from actual income levels in New York City.
- At 71 percent of AMI, most New York City residents would be classified as "low income" according to local and national government standards. In the Bronx, the median household earns just 38 percent of AMI, meaning most Bronx residents qualify as "very low income." Meanwhile, the top one percent of Manhattanites earn an absurd 1,397 percent of AMI.
- Renters earn far less than owners, with median renters earning 59 percent of AMI while median owners earn 109 percent of AMI. Among both renters and owners, people who moved more recently tend to earn significantly more than those who stayed in their homes for decades.
- Significant economic disparities persist between racial groups, with Black and Hispanic households earning 48 percent and 49 percent of AMI respectively, compared with Asian households (74 percent of AMI) and White households (91 percent of AMI). No racial group, however, makes more than 100 percent of AMI, underscoring how far that metric is from our economic realities.
- Educational attainment and wages remain closely linked, with those who did not complete high school earning 39 percent of AMI while those who completed college earning 107 percent of AMI.
“Most New Yorkers have no idea what Area Median Income means or its connection to the production of critical affordable housing. CSS policy analysts Oksana Mironova and Samuel Stein have produced a timely report that explains and critiques AMI, a little-known calculation outside the housing business that plays a huge role in the way American housing programs are targeted, “said David R. Jones, CSS President and CEO. “What they found is that AMI levels have little to do with most New Yorkers’ actual income. Yet, they continue to serve as a primary tool for housing development, perpetuating deep racial and economic inequalities and failing to serve those most in need.”
“For a long time, we and others have warned that HUD’s ‘Area Median Income’ for the New York City area had little to do with what New Yorkers actually earned,” said CSS analyst and report co-author Samuel Stein. “Now, we’ve got the numbers to prove it. With this report, CSS is the first organization to present the real household median incomes for all kinds of New Yorkers as an expression of AMI. This should serve as a guide for policymakers to evaluate what ‘affordable housing’ really means.”
“AMI thresholds help set rents in most affordable housing in the U.S.,” said CSS analyst and report co-author Oksana Mironova. “Unfortunately, New York City is stuck in a spiral: rent inflation in market rate apartments pushes up AMI thresholds. As a result, rents in new government-subsidized apartments are becoming less and less affordable each year. We hope that our report helps demystify AMI for both policymakers and everyday New Yorkers.”
According to the report, the HUD-calculated Area Median Income (AMI) threshold is wildly divergent from actual incomes that New Yorkers earn. The median income in New York City is just 71 percent of AMI, below the income threshold for many affordable housing developments. Further, there are significant AMI disparities by geography, race, housing tenure, immigration status, and educational attainment. The result is that income-targeting in affordable housing fails to serve New Yorkers most in need, by design.
The report draws from data in the 2021 New York City Housing and Vacancy Survey (HVS), the most comprehensive source available on New York City residents and the housing they live in. From that data the report authors assign an AMI level to every household in the survey, and assign a percent of AMI to all different kinds of New Yorkers: residents of each borough, renters and owners, the year people moved to their current home, whether or not homeowners claimed the mortgage interest tax deduction, race, immigration status, education level, and even pet ownership.
Authors of the report hope the report serves as a reference and a resource to housing activists, journalists, researchers and elected officials who are interested in both a deeper understanding of contemporary housing dynamics and a way to compare housing policies and proposals with the incomes of various types of New Yorkers living in the city today.
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The Community Service Society of New York (CSS) has worked with and for New Yorkers since 1843 to promote economic opportunity and champion an equitable city and state. We power change through a strategic combination of research, services, and advocacy to make New York more livable for people facing economic insecurity. By expanding access to health care, affordable housing, employment opportunities, debt assistance, and more, we make a tangible difference in the lives of millions. Join us at www.cssny.org.