New 421-a bill would reform how area median income is calculated

Written By David Dam | March 06, 2017 | Published in Neighborhood News, Real Estate Market Trends
2017%2f02%2f27%2f21%2f28%2f17%2f675afec7 e760 40ba af48 2a30409d8c45%2fconstruction 382115 960 720

The 421-a bill expired at the end of 2015 to the dismay of developers and those who viewed the program as an instrumental part of NYC’s residential construction. The decades-old law offered years of tax discounts on properties built under the program, and some sources say it was responsible for a huge portion of affordable housing projects in the city. However, questions remain on its true impact on affordable housing units. That’s why talks about bringing back the program have included ideas to build more affordable housing, and not just predominantly luxury units.

To replace 421-a, New York Governor Andrew Cuomo’s proposed “Affordable New York” program includes a wage minimum for workers on certain projects with 300 or more units in certain parts of the city, which would then be eligible for 35 years of property tax abatement. But a new bill filed this week would change how the city calculates affordability in housing projects under the new proposal.

Currently, affordable housing developers use the area median income (AIM) calculated by the U.S. Department of Housing and Urban Development (HUD) to determine the eligibility of tenants for affordable housing and what their rents should be — the latest proposal requires developers to put aside a certain number of units for tenants earning between four to 130 percent of AMI. But AIM is calculated regionally. The formula groups together five boroughs, along with the counties of Putnam, Rockland, and Westchester, for a regional AIM of $65,200 for 2016.

The region’s area median income does little to determine affordability across New York City. Just take a simple look at data provided by Point2Homes. The median household income in Astoria is far lower, at $51,988, while median household income for Washington Heights is $34,697. Contrast that with Tribeca’s $118,959 and the Upper West Side's median household income of $96,010, and the minimum price of an apartment that qualifies as affordable under HUD’s AMI does little to help alleviate the housing bill on families who need help the most.

The new legislation would require new projects under the proposed program and others to adhere to the local median income. Because of this, areas with lower local AMIs than the regional AMI could see better affordability.While areas with higher local AMIs could become neighborhoods where the “affordability” limit could still be pretty high, shutting out low-income renters.

Blog Archive


This information is not verified for authenticity or accuracy and is not guaranteed and may not reflect all real estate activity in the market. © 2021 REBNY Listing Service, Inc. All rights reserved. RLS IDX Data display by Elegran LLC. IDX information is provided exclusively for consumers’ personal, non- commercial use and that it may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing.

Elegran LLC may or may not be the exclusive listing agent of the properties being displayed on All data displayed on is presented for informational purposes only and should be independently confirmed by all customers. All Information is compiled from both public and private sources including, but not limited to the RLS, MLS and ACRIS; each of which is assumed to be reliable. All information displayed is subject to errors and omissions regarding apartment specifications and final sale prices, and further, any unit listed may have had its listing withdrawn without notice subsequent to such information being compiled. No representation is made as to the accuracy of any description (ie: listing, close sale data, and/or building description) of any building or individual unit. All measurements and square footage are approximate and all information herein should be confirmed by customer and/or their attorney. Elegran LLC, its members, affiliates, and contributors adhere to New Your City, New York State, and United States Fair Housing Laws.