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Brigid Bergin: It's The Brian Lehrer Show on WNYC. I'm Brigid Bergin, senior reporter in the WNYC and Gothamist newsroom filling in for Brian today.

Now, we'll dive into the complexities of housing affordability in New York City with two housing policy analysts from the Community Service Society of New York, CSS. They recently published a report on the stark disparities in income across different demographics in the city, and how the widely used metric, Area Media Income, or AMI Median Income, often fails to capture the economic realities many New Yorkers face.

It's an important tool that helps determine what's affordable and to whom, and yet the authors of this new report say it's probably the most hated metric for discussing housing affordability in the United States. The report calls for a more nuanced approach to housing policy that considers the real income levels of city residents.

Joining me now with more of their analysis are Samuel Stein and Oksana Mironova, housing policy analysts at the Community Service Society and the authors of the report AMI in NYC, visualizing inequality and unaffordability with Area Median Income. Samuel and Oksana, welcome to WNYC.

Oksana Mironova: Thank you, Brigid. Thanks

Samuel Stein: Thank you, Brigid. Thanks for having us on.

Brigid Bergin: Samuel, let's just start with the basics. Can you explain the concept of Area Median Income and why it's such a critical metric in discussions about housing affordability?

Samuel Stein: Sure. Area Median Income, or AMI, is the way that we talk about rent setting in New York and the way that we talk about who it's going to be affordable to. I should say it's not just New York. This is a statistic that's set by the federal government, by HUD, Housing and Urban Development agency, for metropolitan areas all over the city. There's a common misconception that when we talk about AMI, the area that we're talking about is the area where a new development might happen, the neighborhood. That's not right. It's not just the neighborhood and it's not just the city. It's actually the entire city, plus three suburban counties, Rockland County, Westchester, and Putnam.

They take the income levels for everybody who lives in those five, plus three, eight counties, and find the median, the middle level. They don't stop there. They add what they call the HUD high housing cost adjustment on top of it which makes it totally out of whack with what people actually earn, even in those eight counties. Because housing is so expensive in our area, they make the AMI artificially higher, which then makes rents even higher once we set them.

Brigid Bergin: We're going to keep digging into some of those terms you included there. Certainly, we'll talk a little bit more about the high housing cost adjustment, and how that impacts AMI.

Listeners, we know everyone has lots of feelings about affordability and housing in New York, and we want to hear them. We can take your calls about AMI, Area Median Income levels, or affordable housing and housing policy here in New York City more broadly as we talk about this new report with the Community Service Society of New York.

The number 212-433-WNYC, 212-433-9692. You can call or text. Have you ever tried to apply for an affordable apartment and found you just couldn't afford what was deemed affordable? Are you struggling now to hold onto an affordable apartment and looking for ways to make ends meet? Is AMI getting in your way of potentially moving to somewhere else? Give us a call, 212-433-WNYC. That's 212-433-9692.

I want to pick up, Samuel, you gave us the broad definition of AMI. To tease out why it might be the most hated metric, but talk about a little bit more, the most hated metric for discussing housing affordability in the United States. Why is that?

Samuel Stein: Because it's just wrong. Because it doesn't reflect the median income in our area. It is the tool that we use to define affordability for housing programs, really all of them, whether it's federal housing programs like public housing and Section 8, the low-income housing tax credit, all the way down to very local programs set by our Housing Preservation and Development Department.

It is often a problem for people who are making a regular income in the city, but then what we call affordable just isn't right. In our report, we found that the real median income for New York City households is just 71% of what the HUD set. AMI is for New York City.

If you look at renters which is most of what our affordable housing policy is targeted to, the median renter household in New York City makes just 59% of the Area Median Income. That means that by our own metrics, most New Yorkers are low income. Most renters are at the bottom of that scale of what's considered low income, but our AMI level is so much higher, and so the normal gets treated as exceptional.

Brigid Bergin: Oksana, as Samuel has explained, your report really gets into the weeds about how this AMI is calculated by HUD. It's not calculated at any local level. It is wildly divergent from actual income levels in New York City. Can you talk about how this discrepancy affects New Yorkers trying to get affordable housing here?

Oksana Mironova: Yes, absolutely. Because of the wild discrepancy that Sam talked about just now, the rent-setting in newly built or newly preserved affordable housing is just completely out of reach for many households, and it's also getting worse, that's the other problem. If you look at the AMI for a three-person household in 2023, it was $127,000. If you move on to 2024, so just a year, it is now 139,800, so basically almost $140,000. A typical household in the city didn't get a $12,000 raise last year. [laughter]

The other side of this is that since AMI is not just income targeting for affordability, but also the key factor in the formula that sets rents, this also means that if you go through the very complicated process of applying for an affordable apartment through Housing Connect and are chosen among hundreds and hundreds of candidates, oftentimes you win the lottery. It's exciting, but then it turns out that the rent in that unit, for a two-bedroom, it would be about $3,000 a month.

Brigid Bergin: Wow.

Oksana Mironova: On one hand, it's a gift, you won. On the other hand, that is probably going to be unaffordable for many people.

Brigid Bergin: Not surprisingly, we have a lot of listeners with a lot of stories about their experiences trying to get affordable housing with affordable housing. We're going to start with Edward in Manhattan. Edward, thanks for calling WNYC.

Edward: Hi. Thanks for taking my call. I won an affordable housing lottery back in 2012, but it took me over 14 different applications to finally find a building. By the way, when we're talking about the AMI, when you apply for a building, [inaudible 00:08:45] on your net income, not your gross, so it drops significantly when you have deductions and stuff like that. That was one of the problems I was having about applying for buildings. They would reject me because they say I didn't make enough money.

Brigid Bergin: Edward, thanks for calling. We're having a little issue with your line there. Samuel, any reaction to Edward's experienced 14 applications, feels like he won the lottery, but all the challenges along the way to get that apartment?

Samuel Stein: Yes. I think a lot of listeners who have been through the housing lottery system probably feel the same way, that you try and you try and you try, and then if you finally get it, you might find that the rent in that so-called affordable apartment is actually far too much, and you earn too little which is not really how we should be thinking about affordable housing. Affordable housing is for people who don't make a lot of money. Why is it that we're setting the rents so high for these affordable apartments? Why is it that we're setting the income targets so much higher than the actual incomes of New Yorkers?

Brigid Bergin: I want to go to Irene in Flushing Queens. Irene, thanks for calling.

Irene: Oh, hi. Yes, affordability. I was just [inaudible 00:10:05] one of the newspaper ads that required to be published. You know the Long Island City development with all those mirrored buildings? They required a minimum income of $60,000 a year for a studio. Now, when people are making $30,000 a year, how many people would be required to live in the studio in order to afford the rent? Question one.

Question two. What is used now when submitting plans to the City Council with regard to the definition of affordable housing? All right? The Willets Point development is starting to be pushed. It's being run by an outfit called the Related Companies who gave us Hudson Yards. Those were the people that wanted to have the poor door and then the rich door for tenants going in. I don't know if anybody remembers that. How did they get away with affordability as a definition when they were doing Hudson Yards?

They've turned their eyes to the Willets Point area, which is part of Corona. It's in between Flushing and Corona. They want to develop casino, affordable housing. They have big, huge plans for what is building, in an environmental consideration, should be an open tidal inlet. Flushing Creek is a stinky smelly little inlet.

Brigid Bergin: Irene, thank you so much for your call and for raising some really important points like, how could you not make enough for affordable housing, and how are some of these developers creating some different rules for different people based on the income levels, and that reminder about Hudson Yards, of course.

You mentioned this high housing cost adjustment as a factor that artificially boosts AMI. Is that part of what Irene was getting at in her concerns?

Oksana Mironova: Yes. Part of the problem is that AMI is trying to balance two things, and it always comes out on one side where there's income targeting. There's the lived experience of people who should be qualifying for affordable housing. Then there's the complex math that goes into building in New York City. HUD or all affordable housing agencies, whether it's the federal, the state, the city, feeling like they need to keep up with the market. As the housing market in New York City becomes more and more expensive, more and more unaffordable, affordable housing counterintuitively tries to keep up and leaves most New Yorkers behind.

Brigid Bergin: We have another listener who texted, "I won a housing lottery 10 years ago, but had to pass on it. The formula takes into account income, but not debt like student loans. I couldn't pay my income-adjusted loan payment and pay the rent on the 'affordable unit.'" Another issue there, Samuel, with some of these affordable housing developments. You've got the AMI piece of it, and then how people are considered to qualify for these units, right?

Samuel Stein: Yes, right. I think this points to the oversimplification we often have in our housing discourse. People's incomes are one thing, but their expenses are another, and debt is ubiquitous in this country. There's going to be a lot of people whose incomes on paper could make an apartment affordable that, as their budgets actually pan out because we have, for example, such unaffordable higher education in this country, it doesn't actually work.

Brigid Bergin: In your report, as you mentioned earlier, you note the significant income disparities between racial groups with Black and Hispanic households earning around 48% to 49% of AMI, Asian households earning 74% of AMI, and white households earning 91%. No racial group making more than 100% of AMI. Oksana, can you put those numbers into perspective? What does that mean for our city and how we live in our city?

Oksana Mironova: Yes, absolutely. Our city, and the US as a whole, carries a legacy and a current lived reality where Black and Hispanic households have been historically excluded from wealth-building opportunities through homeownership. That's where most American families hold their wealth. That is reflected in the difference in AMIs among racial groups. What that looks like when we look at the city on a map is extreme segregation. This is not just the New York problem. This is a legacy of real estate practice and lending practice going back to the founding of this country.

When you take that history and take that reality, lived reality currently, and translate that into AMI, you end up in a situation where people who have been historically excluded from being able to build wealth, being excluded from affordable housing because they make too little in order to qualify for newly-built units that are nice, and relegated to living in buildings that are overleveraged, that have poor living conditions. It's like replication of structural racism within our housing system.

Brigid Bergin: Oksana, just to be clear, what does it mean that no one makes more than 100% of AMI?

Oksana Mironova: That goes back to our key finding that is really simple, but also gets really complicated, that the AMI that New Yorkers make is just wildly divergent from the AMI that HUD calculates for our region.

Brigid Bergin: I should have been clear, no one racial group makes 100% of AMI. Let's go to another caller. Lydia in Manhattan, welcome to WNYC.

Lydia: Hi, how are you? I wanted to ask your guests if they've noticed a phenomena that seems to be going on in my neighborhood of Chelsea, where local politicians want to participate so desperately in building more affordable housing that they're using the RAD-PACT model, which means developers like Related come in and in compensation for rebuilding public housing, they get to develop luxury and affordable housing.

The percentages are, I guess, 20%, maybe 30% of affordable. The luxury housing is meanwhile raising the AMI overall in the community. I'm wondering how your research accounts for that and whether that's part of the pressure we're seeing from AMI going up.

Brigid Bergin: Samuel, you want to take that question?

Samuel Stein: Sure. Thank you for that, Lydia. Yes, this is happening at the Chelsea Fulton Elliott Houses public housing in Chelsea, where there's a proposal by Related and another developer to demolish existing public housing, build new housing, some of which will be public, some of which will be private. The private housing will only have the same affordability levels as the mandatory inclusionary housing program, which is the way that we build affordable housing in new housing that results from a rezoning since the de Blasio administration.

We think that on public land, public housing, we can do a lot better than just the same basic affordability criteria we would use in private land. It should cost a lot less when you take out the entire cost of land in a city as expensive as New York City and in a place as expensive as Manhattan.

In terms of how this affects the AMI overall, we started with, AMI is not really local. It's not like we're looking at Chelsea's AMI. We're looking at the AMI of the entire city plus Rockland, Putnam, and Westchester. There's not going to be a fast correlation between the style of development and the AMI.

As we keep building more expensive housing in the city, that HUD high-income, high housing cost factor is going to keep going up. We're going to see a faster and faster divergence between what New Yorkers actually make and what HUD says our area median income is. Altogether, the high-end development in the city is pushing our AMI categories out of whack with what incomes actually are.

Brigid Bergin: I want to go to a caller who I think wants to push back a little bit on the critique of AMI. Let's go to Michael in Brooklyn. Michael, thanks for calling.

Michael: Hi. I really appreciate the work that you all are doing to bring attention to affordable housing. I work with different nonprofits in New York and nationally on affordable housing. I'm a huge fan of what CSS has done.

I just think that the focus on AMI as a technical detail, I think it's too narrow. What we're really talking about is making sure that we get housing for people who have lower incomes. Given what it costs to build new housing in New York, you use the city's financing that they have, you use low-income housing tax credit, you 100% subsidize the cost of construction of the building, you can only build something that is about what, 45% AMI that pays for the cost of its operations. Any lower than that, you have to have operational subsidy.

If you want to change AMI, you have to change the federal Low-Income Housing Tax Credit program, which is set for 60% AMI. You have to change the high housing costing, which is also set in statute special for New York City. I just think focusing on this technical detail of Area Median Income hides what this means to put more money into building affordable housing and helping provide operating subsidies for affordable housing, which doesn't really exist beyond the voucher programs.

Brigid Bergin: Samuel and Oksana, I want to give you a chance to respond to Michael, but first, if you're just joining us, I'm Brigid Bergin. I'm in for Brian today, and my guests are Samuel Stein and Oksana Mironova, housing policy analysts at the Community Service Society. We're talking about their new report on Area Median Income and housing affordability. Samuel, Oksana, I want to give you a chance to respond to some of the critique raised by Michael.

Oksana Mironova: Absolutely. Thank you. Thank you so much for Michael for bringing that up. It is a totally fair critique.

Getting hyper-focused on the wonkiness of a formula, while we think it's important to bring to light how affordability is set in our affordable housing because we think that this is an issue that comes up over and over again, is part of our job as policy analysts. At the same time, the material reality is there that the actual thing that matters is the way that affordable housing investment happens in New York City, as opposed to the way that math is calculated and how the formulas are set.

At the same time, a lot of our work focuses on advocating for changes to affordable housing programs and new affordable housing programs. Michael brought up the fact that it is very difficult in New York and in other high-cost cities all across the country to meet affordability standards that are below 45% of AMI because of the way that the Low-Income Housing Tax Credit system works, and that's a federal program that is at the base of all new affordable housing that gets created in this country.

We have been, for years, advocating for something called the Housing Access Voucher Program, HAVP, in Albany that would basically create a new voucher system for the state, and that would essentially create a way to support extremely low-income people in affordable housing, and to prevent evictions, and to house formerly homeless people, but without additional investment from the state, which thus far Albany has not passed. We need additional investment to actually house people who live in the city. That is part of what our report gets at.

Samuel Stein: If I can add to it, that is exactly our conclusion, is what Michael said. AMI levels are important, but we need add additional capital and operating subsidies to actually real New Yorkers' income. The median household income in the Bronx is 38% of AMI. If our programs don't reach those kinds of income, then we're just not even reaching most New Yorkers.

Brigid Bergin: The report also looks at the difference between the median renter earning 59% of AMI versus the median homeowner at 109% of AMI. Samuel, can you talk about some of the factors that contribute to this renter-owner divide?

Samuel Stein: Sure. Owning housing in New York City is beyond many New Yorkers' means. We are a city of renters. Two-thirds of New Yorkers are renters. One-third are homeowners. We do have some affordable homeownership programs like Mitchell-Lama Cooperatives and HDFC Cooperatives, but they're a small part of the overall homeownership market.

What we get is a renter household median income that is 59% of AMI versus an owner household median income that is 109% AMI. Basically, the middle of the renter population is the bottom 25% of the owner population. The top 75% of the renter population is the middle of the owner population. It's a huge economic difference.

Brigid Bergin: I want to go to Max in Brooklyn, who I think wants to raise some of the issues even connected to ownership here in the city.

Max: Hey. Thanks so much for taking my call and for this great work. I called actually to ask about the HDFC cooperatives that your guests just mentioned. Among my friends who are aware of this and people I work with, and correct me if I'm wrong here, basically the way it works is it's ownership with an income restriction, but you're still required to come up with a downpayment.

It's people who don't make that much money but still have tens or $100,000 that they can spend on a downpayment. A lot of people assume, and anecdotally, that these people are independently wealthy, family money. They're able to come up with a downpayment, but they don't make a lot in their day job.

Is that what you found this program also targets? Do you have any suggestions, or is that outside the scope of the research that you guys did? Thanks so much.

Samuel Stein: Sure. I can take Max's question because I actually am an HDFC cooperator. There's a range. There are HDFCs that are scams that sell at just about market rate but have low-income targets. That means that you're really only going to people who are getting money from someplace other than wage income.

Most HDFCs really aren't like that. They are low cost and for low incomes and groups, like you have the-- Sorry, the acronym is escaping me right now, but they help create and preserve truly affordable HDFCs that are for low-income populations and are actually affordable to them. The ones that you see advertised in The New York Times tend to be of the scammy variety, but the ones that you find on, for example, UHAB's website are more genuine.

I'll say that Community Service Society and many other groups are pushing the City to get back in the business of building limited equity cooperatives. We have a program called Open Door, but it's very underfinanced, and so we build very few of these. Through a campaign that's called Homes Now, Homes for Generations., we're calling on the City to scale up the financing of permanently affordable limited equity cooperatives so that we have an affordable homeownership opportunity in the future.

We also want to see funding for a program called Neighborhood Pillars that would allow nonprofits to buy distressed rental housing and keep it affordable, so again, meeting the needs that are not being met by our affordable housing system right now.

Brigid Bergin: Samuel, I think you mentioned the acronym UHAB, which my producer very wisely told me was Urban Homesteading Assistance Board, so for our listeners who may have not known what that was.

Oksana, I'm wondering, we know this is an issue that has an impact on all across the city, but are there any specific neighborhoods or community districts that really stand out as being particularly unaffordable or an urgent need of affordable housing investment?

Oksana Mironova: The way that we look at this from this research is that this is really a citywide problem. The way it plays out in specific neighborhoods is we end up in situations where lower-income neighborhoods, so if you look at developments in the South Bronx or in Crown Heights, end up with new affordable housing developments where the incomes are set much higher than what the actual median rents are. That could have long-term effects on the rents in that neighborhood.

I'd like to point to my colleague, Sam Stein, and our other colleagues at [unintelligible 00:30:24] case report on the 421-a program that we published a couple of years ago, where we found that there was just a massive mismatch between affordable rents in 421-a developments and in their surrounding neighborhoods.

Brigid Bergin: As we look ahead, Samuel, what are your biggest concerns regarding the real trajectory of housing affordability in New York City if the status quo persists?

Samuel Stein: Yes. The status quo cannot be allowed to persist. We are turning our city into a place that's not affordable for the people who live and work here, and we'll end up with a gilded city, where people have to commute for longer and longer distances to get in. We'll see a continued exodus of Black low-income working-class New Yorkers out of New York City, out of New York State toward places where housing is more affordable, and it will be to the detriment of our city.

We really need to reorient our housing programs toward the actual incomes of our residents. We need to invest deeply in housing of all kinds, and especially in what we call social housing, which is housing that is permanently affordable, where residents have a say in the operation of the housing, and where it's truly equal. It's open to all and it's high-quality, beautiful social housing.

Brigid Bergin: We're going to have to leave it there for now. My guests have been Samuel Stein and Oksana Mironova, housing policy analysts at the Community Services Society. Samuel and Oksana, thank you both so much for joining me.

Oksana Mironova: Thank you.

Samuel Stein: Thank you.

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