It’s one thing to misunderstand something. It’s another to misrepresent it.
Julie Won is doing one or the other, if not both.
The Queens City Council member is running for Congress as a champion of affordable housing, which prompted her to tweet a clip from a recent interview saying she would make housing more affordable by reforming AMI.
Won’s tweet identified AMI as “average median income” and “annual median income.” Wrong on both counts.
AMI is area median income. It is used to decide who qualifies for affordable housing and what rents they pay.
The nomenclature, unfortunately, was not the only thing she got wrong about AMI during the interview.
“We have to fix AMI,” she told Errol Louis on NY1. “The average median income in which we peg affordability for the city of New York is determined by Congress, and as we know as New Yorkers, that it is not affordable.”
It’s amazing how many mistakes and misconceptions she crammed into that single sentence.
AMI is not determined by Congress. It is calculated by the Department of Housing and Urban Development based on data provided by the Census Bureau from its American Community Survey.
HUD, not Congress, has tweaked its methodology over the years, but ultimately area median income is determined by how much money people are earning in an area, and the boundaries of that area. Large areas are used because housing markets are large, and using a unique AMI for every enclave would be chaotic.
What Won was trying to say is that the incomes required to qualify for many “affordable” units are too high for a lot of New Yorkers, and that if AMI areas were more local, rents and income eligibility bands would be lower for affordable units in poor neighborhoods.
Advocates like Won at least want Westchester removed from the area that HUD uses to determine the AMI in New York City. But their dream is to use a hyperlocal AMI — for only the neighborhood where the housing is.
If by some miracle Won is elected to Congress and passes a law to do that, it would wreak havoc on existing and future affordable housing and the hundreds of programs that use AMI. That’s because localizing AMI to make it lower in poor areas would not make housing any cheaper to build or operate.
In fact, HUD applies a “high housing cost adjustment” to New York’s AMI to ensure affordable housing programs are usable. Won would do the opposite, making them unusable. Here’s why:
The AMI for a family of three in New York City is $145,800. Let’s assume the median income in Brownsville is half of that and, under Won’s law, all affordable housing in Brownsville had to use it.
Now, for a family of three to get an apartment set aside for households earning 40 percent of AMI, instead of making about $58,000 a year, they would have to earn just $29,000. That’s less than minimum wage for a full-time worker.
The maximum rent for a two-bedroom, 40 percent AMI unit would be $729, and a mother with two kids and a $40,000 salary would be too rich to get it — if the apartment even existed. Which it likely would not.
What Julie Won doesn’t understand, or won’t tell voters, is that housing with two bedrooms at $729 a month doesn’t pencil out. It simply wouldn’t be built.
Even worse, existing affordable housing — which is already struggling to stay above water — would have to fill vacancies at the new ultra-low rents. Buildings would quickly become insolvent.
By the same token, using a local AMI would increase rents and income requirements in wealthy areas. Won’s “fix” would price low-income families out of neighborhoods where poor kids benefit most.
As my former colleague Joe Lovinger wrote in a 2022 article about the myth that changing AMI makes housing affordable, “Numbers are stubborn. Converting the speed limit to kilometers per hour doesn’t get you out of a speeding ticket.”
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