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Yeah the 40x the rent thing is not a law and I’ve spoken brokers advertising for market rate units that don’t care if you make 40x the rent they mainly care about you having a decent credit score which is crazy to me.
I’m thinking things might change with this new proposed affordable housing tax credit they are working on. The AMI ranges are changing and I have a feeling so will the rents. I’ve run into a lot of articles of people speaking out and seriously upset with how affordable housing has been run these past few years. The pressure is on.
Market rate LLs largely always haven't been very strict on 40x rule. They don't have to; if a tenant chronically pays rent late they can just not offer to renew lease.
OTOH RS tenants pretty much cannot be touched. Nonpayment proceedings can drag out months (or years) and at end of day if tenant comes up with back rent, a judge will force LL to accept. Even if a tenant is in housing court for nonpayment, LL still must offer a renewal lease by law.
Market rate LLs can always raise rent on a new tenant or others to recoup losses from those who don't pay. This cannot obviously be done with RS tenants.
[quote=Gilmoregal;63328287]Yeah the 40x the rent thing is not a law and I’ve spoken brokers advertising for market rate units that don’t care if you make 40x the rent they mainly care about you having a decent credit score which is crazy to me.
I’m thinking things might change with this new proposed affordable housing tax credit they are working on. The AMI ranges are changing and I have a feeling so will the rents. I’ve run into a lot of articles of people speaking out and seriously upset with how affordable housing has been run these past few years. The pressure is on.[/QUOTE]
People are "upset" because they heard "affordable" housing and automatically made leap it would be "low income", which just isn't true, at least not yet.
Lower down AMI bands city forces developers to offer units means such apartments require deeper subsidies. There's no free lunch here; someone, some how and some way must make up difference between what true rent/sales per square foot is, versus discounted rent offered to "affordable" or whatever tenants.
City knew from get go going back years, and BdeB was informed of same; it isn't possible to subsidize city's lack of low income housing by putting it all on developers/private landlords.
For better or worse city's plans for low income/affordable housing rests largely upon others paying more, so others will pay less. Current zoning changes and tax breaks help, but they don't bring numbers down dramatically.
Worse for city and developers those at higher AMI bands largely don't want to be bothered with affordable housing lotteries. It takes more effort to fill 135% and 165% units than those in lower AMI bands. What's more many of those higher income tenants just like market rate pack up and move often enough. So building has to go through process again of finding yet another new tenant.
Market rate LLs largely always haven't been very strict on 40x rule. They don't have to; if a tenant chronically pays rent late they can just not offer to renew lease.
OTOH RS tenants pretty much cannot be touched. Nonpayment proceedings can drag out months (or years) and at end of day if tenant comes up with back rent, a judge will force LL to accept. Even if a tenant is in housing court for nonpayment, LL still must offer a renewal lease by law.
Market rate LLs can always raise rent on a new tenant or others to recoup losses from those who don't pay. This cannot obviously be done with RS tenants.
Some will allow some wiggle room on it (based on having good credit etc) but not all. We had one place refuse to even talk to us further unless we confirmed we made 40x the rent. We have great credit and made only a bit under, but no, didn't want to hear. Funnily enough, that apartment seems to be struggling even now to find tenants (in a pretty quiet and not so convenient bit of Brooklyn that few on the salary they were asking for would choose to live in).
I've even had some others say "oh, in that case we will accept a guarantor, but the guarantor has to be earning 80x the rent" (which is like $250,000 on a $3k two-bed). So, unless you have rich parents you're bang outta luck with that one!
I just don't see how anyone could make $3903 a month work even at the upper limit of the AMI band. assuming last year's limit was $3300 (as that is the max I have seen among lotteries in the 130% AMIs...could be wrong) that's a rent increase of 20% when the AMI went up by 8-9%.
Using the 40x thing so often used to determine minimum salary to be able to rent in NYC (and I know it is not an official law, but I come across it all the time) you'd need to be earning $156k to afford a $3900 apartment. Totally bonkers! Even the current rents are a stretch for most AMIs presently.
I suspect you are right on the Brooklyn Towers thing. Will be interesting to see how it plays out.
Isn't one individual, but total annual household income. If apartment in question was a one or two bedroom a married couple (both working) easily could earn north of $160k per year. That number encompasses quite few middle class couples; professional nurse and FDNY, professional nurse and NYPD, NYPD and teacher, etc...
Also keep in mind gross household income used here, not net. NYC and NYS for that matter are high tax areas. Add on federal income, FICA, employer deductions (health, IRA, etc..), and net income will be lower by about 1/3 or 1/4 more or less. Then comes debt such as student loans, credit cards, and so forth.
Income levels given are meant to provide a wide enough cushion so even after taxes and other deductions from paycheck, net income still falls comfortably in range so rent is paid on time each month.
Isn't one individual, but total annual household income. If apartment in question was a one or two bedroom a married couple (both working) easily could earn north of $160k per year. That number encompasses quite few middle class couples; professional nurse and FDNY, professional nurse and NYPD, NYPD and teacher, etc...
Also keep in mind gross household income used here, not net. NYC and NYS for that matter are high tax areas. Add on federal income, FICA, employer deductions (health, IRA, etc..), and net income will be lower by about 1/3 or 1/4 more or less. Then comes debt such as student loans, credit cards, and so forth.
Income levels given are meant to provide a wide enough cushion so even after taxes and other deductions from paycheck, net income still falls comfortably in range so rent is paid on time each month.
Oh, I know - it isn't that the salaries aren't realistic, I know plenty can earn that - it is just in the context of the AMI requirements. 130% caps out at $138k for a couple, and I $3900 is a lot on that salary (at least for anyone with student loans to pay off!) - nearly $47,000 a year!
I already can't afford most of the 130 AMI rent. If the rent goes up due to this, I won't be able to afford the affordable housing. and I'm not sure who these apartments are for anymore..
I already can't afford most of the 130 AMI rent. If the rent goes up due to this, I won't be able to afford the affordable housing. and I'm not sure who these apartments are for anymore..
Yeah, this is what I mean.
The current 130% AMI rents are at the very tip of our budget, and we fall towards the higher end of the scale. If they increased $1-200 more? Yeah, we miiiiiight be able stretch to that. If it increased 6-800? No way!
I’m actually interested in how they calculate rent based on these AMI incomes . I posted about how the AMIs are selected & I’m wondering if the rent is in the same document I read. I pulled the information from the developers handbook. Will look into it and see if rent is mentioned & how it’s calculated. Don’t see how they could possibly raise it any higher than it is now. If they want to be “affordable” wouldn’t make sense for them to do so.
I’m actually interested in how they calculate rent based on these AMI incomes . I posted about how the AMIs are selected & I’m wondering if the rent is in the same document I read. I pulled the information from the developers handbook. Will look into it and see if rent is mentioned & how it’s calculated. Don’t see how they could possibly raise it any higher than it is now. If they want to be “affordable” wouldn’t make sense for them to do so.
So the previous 130 ami was at 108,000. which they used as the max cap for income. If you do 40x rule the rent comes out to be 2700, and we've seen a lot of 2700 rent (1 bed) recently. I believe that's how they do it so I'm afraid they'll now set the 130 rent to 40x max which is now $3035.. for 1 bed??
So the previous 130 ami was at 108,000. which they used as the max cap for income. If you do 40x rule the rent comes out to be 2700, and we've seen a lot of 2700 rent (1 bed) recently. I believe that's how they do it so I'm afraid they'll now set the 130 rent to 40x max which is now $3035.. for 1 bed??
So far I’ve read that HPD decides how much the rent is based on the developments budget needs. Still wana do some more digging.
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