For years, Pattern has heard from partners across the Hudson Valley and across sectors that the region does not have enough housing that low and moderate income households can afford. A recurring concern is that the primary metric used to determine affordability—Area Median Income (AMI)—does not accurately represent the economic realities of most tenants. It follows that the widespread reliance on AMI fails to facilitate the production of housing that is appropriately and affordably priced for those tenants.

As part of Pattern’s mission to study the structural challenges that impact our region’s housing affordability, this paper investigates these concerns by evaluating how AMI is calculated and applied, drawing on data analysis, policy review, and interviews with governmental and organizational representatives. Through our analysis, our goal was to understand the ways that AMI-based tools succeed, where they fall short, and what lessons can be drawn for future policy design.

As shown in this chart – Countywide Median Income by Tenure, homeowners typically have higher incomes, assets, and long-term financial stability, while tenants earn less on average. When incomes of both tenants and homeowners are combined into a single AMI calculation, the result is a metric that skews upward and obscures economic realities of renting households.

Measuring Affordability: The History, Applications, and Shortcomings of Area Median Income (AMI) in Affordable Housing was made possible by the support of nearly 200 Pattern members, whose annual contributions fund the time and talent for our independent research.