Interpreting Affordable Housing

September 9th, 2022
housing
In describing affordable housing you'll often see a project described as "60% AMI", which can be confusing:

how is 60% of median income affordable?NUMTOT comment

If you think that "60% AMI" housing charges 60% of the area median income, I agree that doesn't sound affordable! The problem is, "affordable housing" (and "60% of area median income") as an improper noun, a technical term with a defined meaning that differs from how we normally use the words.

When housing is described as "affordable", that means it costs 30% of some specific income. If it's a "60% AMI" unit, that means it's affordable to someone making 60% of the area median income. For example, a 60% AMI unit in an area with a median income of $100k would be 60% * 30% * $100k/y or $18k/y, which is $1500/month. A 30% AMI unit would be half that, at $750/month. If you don't know about the factor of 30% thing you end up thinking all this housing is ~3x more expensive!

That said, this is a mildly silly way to do it: percentages of a median rarely make sense, and the right way to do this is probably with percentiles. Instead of targeting affordable housing at, say, the 60% of median income, we should target a 30th-percentile income. This is much more robust to changes in the shape of the income distribution, especially in cases where areas get into some sort of bimodal situation where a bit more than half the residents are making a lot and a smaller but significant number are making much less.

Referenced in:

Comment via: facebook, lesswrong

Recent posts on blogs I like:

Effective Altruism: Importance, Tractability, Neglectedness

One of the most distinctive features of effective altruism is the use of the importance, tractability, and neglectedness framework for evaluating charities.

via Thing of Things April 23, 2025

Impact, agency, and taste

understand + work backwards from the root goal • don’t rely too much on permission or encouragement • make success inevitable • find your angle • think real hard • reflect on your thinking

via benkuhn.net April 19, 2025

Which Came First, the Chicken or the Egg?

When I thought about this question it was really hard to figure out because the way it's phrased it's essentially either a chicken just pops into existence, or an egg just pops into existence, without any parent animals involved. I thought about t…

via Lily Wise's Blog Posts April 13, 2025

more     (via openring)