Area Median Income (AMI) is the system used to determine who qualifies for affordable housing. Under AMI, housing is divided into income bands. For example:
One band might be available to households earning $25,000-$45,000 per year.
Another band might be available to households earning $45,001-$65,000 per year.
A higher band might be available to households earning $65,001-$85,000 per year.
The problem is that AMI is calculated over enormous regions that combine wealthy suburbs with working-class cities.
For example, Newark and East Orange are grouped into a region that includes communities such as Glen Ridge and Montclair where Stephen Colbert and other famous and very wealthy people live as well as many other municipalities across Essex, Morris, Sussex, and Union Counties. The result is an AMI of roughly $115,000 for a single-person household. High salaries from Manhattan and other elite job centers are folded into these calculations, inflating what is considered "affordable."
Developers typically choose which affordability bands they build for, and they advertise it as a WIN with an already bought-and-paid-for “area” “grassroots” housing nonprofit. Nonprofits exist, so development can steal from you with the least amount of screaming possible; people spend an awful lot of time looking at politicians and almost ZERO time looking at nonprofits, which I find interesting.
Developers almost always pick the band they know area residents can’t afford, especially if those residents are Black and its the East Coast, West Coast, Chicago….; they KNOW exactly what they are doing. They want Black people to get the hell out.
As a result, housing labeled "affordable" is often targeted toward upper-middle-class households (and just not Black people, Black and middle class, they do not care, because Black is a class) rather than the working people most affected by rising rents.
Women, Black people, and other racialized residents, as well as many other working-class New Jerseyans, earn less than the regional averages used in AMI calculations. They are therefore less likely to qualify for many of the units that are supposedly being built for affordability. New Jersey should replace Area Median Income with Area Median Wage. Housing affordability should be based on what local workers actually earn, not on a regional income figure inflated by wealthy suburbs, dual-income professional households, and high-paying jobs concentrated in New York City. Area Median Wage would create affordability standards that better reflect the reality of life for working-class residents.
People often say that developers would build less housing under such a system. They are right AND, I don’t see that being a problem. Housing shouldn’t be part of capitalism; I literally DO NOT CARE. Do you care? Nosebleed property taxes, sky-high rents- is this working for anyone? I am so tired of the property taxes conversation.
In formerly redlined and hypersegregated areas, developers almost always get public subsidies, tax abatements, density bonuses, low-interest financing, or zoning approvals in exchange for building.
“We all agree this community is a piece of crap, you wrote a 1000 words on your social media page how you community is simply awful filled with incompetent people, so why would I build here without an incentive? We agree, you’re a POS, I’m here to help!”
Developers win even if not every unit is occupied immediately, a luxury apartment that rents a few units at very high rents can sometimes generate more revenue than a fully occupied building renting to working-class households at lower rates.
Five broke white people in the long term are going to be worth more than ten working-class African Americans and then you have 15 broke people in the longest term; see how that works!! When wealth and power become more concentrated, housing, wages, and public goods deteriorate for everyone else. When racism is used to divide the working class, the beneficiaries are rarely ordinary white people. In the end, we all lose together.
So the market is not going to provide for working people; that is NEVER going to happen. YIMBY fall into two camps, ignorant tools or sadistic liars who are insincere, the latter knows exactly how capitalism works— well there is also the person who just needed a job and YIMBY was hiring, we’ll forgive that person.
New Jersey should expand social housing and cooperative housing, like in the Bronx Co-op City, Penn South in Chelsea, and Gemeindebauten (Municipal Housing) in Vienna. We do not rely on private developers alone to provide schools, libraries, parks, or water systems. Housing is just as essential. If the market cannot provide homes that working people can afford, then the state should build, own, and maintain housing as a public good.
The point of housing is to house people, NOT maximize returns and NOT build generational wealth (more on that later) —public, social, and cooperative housing should play a larger role. Social housing does not need to achieve the highest possible rents. It can be designed around local wages and local needs, ensuring that working people can thrive and live where they work.