On July 6, The Redress Movement released its most recent Policy Research Brief, Area Median Income and Racial Redress: How Racial Inequalities are Built Into Federal Housing Affordability Measures, detailing how the rents set by the federal government for affordable housing are unaffordable to most renter households, especially in Black and Latine neighborhoods. 

 

The brief was inspired by a policy in Omaha that dedicated $40M in bond funds to affordable rental housing developments near a new streetcar line where gentrification risk is increasing. The policy could be incredibly helpful in mitigating displacement, but the Redress research team found that the city could use the money to fund two-bedroom units with rents as high as $3,072/month. Not only is that more expensive than most market-rate apartments in the area, it’s also nearly three times what a typical Omaha renter household can afford. The majority of units, including the first two-bedroom units coming online, are more likely to have rents set at $1,536/month, even though the typical renter household in a Black neighborhood can only afford $717/month.

 

This huge racial rent gap is often obscured by the fact that most conversations about affordable housing never refer to the actual rents and instead focus on a relatively obscure acronym the federal government uses to measure the affordability of unit: AMI or Area Median Income. The brief uses recent data from Charlotte and Denver to show that a declining number of affordable units are being built at AMIs that most renters can actually afford, like 30% AMI or 50% AMI. Instead, most units in the past five years are being built at 60% AMI and 80% AMI, which are largely out of reach to most renters in all four Redress partner communities.

 

AMI calculations bake-in racial income inequality and legacies of segregation by using the median income of renter AND homeowner households, despite the fact that homeowner households are disproportionately white and have nearly twice the income of renter households in all our partner communities. The calculations are also skewed in significantly segregated metro areas because they include suburban and often exurban communities as well. 

 

The brief concludes by recommending that housing justice organizers demand transparency around rents in proposed affordable housing policies and developments, as well as push for units that actually meet the needs of renters of color. According to the brief’s author and Redress Research Director, Maxwell Ciardullo, “to be good stewards of public dollars, local elected officials must ensure renters of color can access affordable housing or we’ll continue to see our most impacted community members pushed out onto the street.” 

 

Find the full brief on our Redress Policy Brief page.