Bill Introduced to Address Rising LIHTC Rents
Representative Yvette Clarke (D-NY) recently introduced the “Affordable Housing and Area Median Income Fairness Act of 2019” (H.R.4984). The bill attempts to change how HUD calculates the area median income (AMI). For Clarke’s constituency, the AMI calculation incorporates not just mean earnings in Manhattan, Brooklyn, Staten Island, Queens, and the Bronx, but also those of the affluent counties of Westchester and Rockland counties. Her bill would subtract those suburbs from the equation, resulting in a much lower AMI figure.
The bill appears to respond to longstanding activist concerns that the current AMI calculation results in officially “affordable” units being priced for middle- and even upper middle-class earners. Clarke argues her bill would ensure that such programs benefit poorer New Yorkers.
If enacted, the bill would exempt localities from using a high housing cost adjustment to calculate AMI unless the jurisdiction receives HUD approval. Applying a high housing cost adjustment results in higher rent payments for low-income households. The bill would also require a study to determine alternate methods of calculating AMI. The legislation would also impose a new set of transparency obligations upon the operators of affordable sites. The nonprofit builders benefiting from the LIHTC program would have to reveal their costs and their profit projections to HUD, and provide a trajectory of rent rates in new units constructed under the refundable credit.