LEARN THE LINGO… What is AMI?
Updated: Jun 6, 2022
In Jeffco, the 2022 AMI for one person is $82,100/year ($39/hour). AMI stands for "area median income” and is determined by the U.S. Department of Housing and Urban Development (HUD) using Census data from the American Community Survey. AMI is calculated annually for various regions around our nation.
Median income is not the same as average income. Median income means that half of the region’s households earn more than the median income and half the region’s households earn less.
AMI is compiled as a function of location and household size for annual incomes. Compilations include the AMI and various percentages of the AMI.
In Jeffco, the 2022 AMI for one person is $82,100/year ($39/hour)
There are two somewhat different HUD compilations of AMI. One compilation is used for HUD programs and the other compilation is used for multifamily tax subsidy projects (for Jeffco see FY 2022 MTSP Income Limits). These income limits are slightly higher than those used for HUD programs.
The 2022 income limits for Jefferson County are listed below.
How does this relate to jobs?
The illustration below shows the salary range for various types of jobs listed on indeed.com for the Golden area.
TAKEAWAY: Most teachers’ salaries, and more than half the salaries of police officers and firefighters, are within the 60% to 100% AMI range.
According to the Jeffco Public Schools website:
Starting salary for a licensed teacher with a Bachelor’s degree is $43,274 (53% AMI)
8 years’ experience licensed teacher with a Bachelor’s degree is $56,943 (69% AMI)
8 years’ experience licensed teacher with a Master’s degree is $64,502 (79% AMI)
Golden’s current job opening salaries are:
Assistant Golf Professional = $31,700 (39% AMI)
Economic Development Specialist = $58,900 - $72,200 (72% AMI to 88% AMI)
Field/Gym Supervisor = $28,600 - $31,200 (35% AMI to 38% AMI)
Code Enforcement Officer = $47,900 - $67,000 (58% AMI to 82% AMI)
How does this relate to housing?
Golden wants to have housing for its workforce, but rent prices are expensive.
According to apartments.com, the average monthly rent in Golden is:
Studio = $1,488
1-bedroom = $2,001
2-bedroom = $2,140
3-bedroom = $2,523
According to rentcafe.com:
Average rent in Golden in May 2022 was $2,048 and the average size of an apartment is 895 sq ft
(Studio apartments are the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.)
What is an affordable rent?
What does “affordable” mean, and who defines affordability?
Affordability might seem subjective, but HUD has a concrete definition:
Housing is considered “affordable” when a household spends no more than 30% of its gross monthly income on housing costs
Example: If an individual earns $65,680 annually (which is 80% AMI in Jeffco), they have a before-tax monthly income of about $5,470. Thirty percent of that is $1,642, which is an affordable rent for 80% AMI in Jeffco.
The table below lists affordable rents for various AMI percentages in Jeffco for 2022.
These maximum rents are compiled by HUD for multifamily tax subsidy projects.
TAKEAWAY: Golden’s average rent of $2,048 is affordable for individuals at and above 100% AMI, but NOT for individuals below 100% AMI.
Households that spend more than 30% of their gross monthly income on housing are considered “cost-burdened” because they likely have less money left over for other necessities like food, transportation, healthcare, medication, childcare, and discretionary spending. Households that spend more than half their income on housing costs are considered “severely cost-burdened.”
The National Low Income Housing Association (NLIHC) lists a Housing Wage by Zip Code (2021):
For 80401: 1-bedroom = $23.65/hr 2-bedroom = $29.23/hr
For 80403: 1-bedroom = $28.08/hr 2-bedroom = $34.62/hr
What is workforce housing?
“Workforce housing” is an imprecise and controversial term that has changed over time. There are various definitions of “workforce housing.” In general, it means housing, both homeownership and rental housing, that is affordable to workers and close to their jobs.
Some interpretations of workforce housing include:
Housing for the occupations needed in every community, including teachers, nurses, police officers, firefighters, and many other critical workers
Housing that is affordable for households whose incomes are too high for subsidized housing but are priced out by market-rate housing prices
Housing for households with incomes between 80% and 120% AMI
Some of these interpretations conflict with each other. For example, the 80% to 120% AMI range is too high to provide housing for occupations needed in every community.
The term “workforce housing” is often intertwined with the terms “missing middle” and “middle income” housing.
HUD defines “moderate income” as 50% to 80% AMI, which is not the same as “middle income.” The term “middle income” is another imprecise term.
“Many people talk about the conditions of the middle class but few define it, and the term upper middle class is equally ambiguous. “Because people tend to live in communities with people with similar incomes, they view themselves as being near the middle because their neighbors’ circumstances are similar to their own even if their incomes are significantly below or above the US median.” (Urban Institute 2016)
“Middle income” usually refers to a household whose income exceeds 80% AMI, but the upper limit varies. Pew has a middle-class calculator:
A preferable general term to refer to housing with AMI limits is “income-restricted” housing. The AMI limits for a particular application can be appended to this term to reduce ambiguity.
TAKEAWAYS FOR GOLDEN
Salaries for Golden’s critical workforce (teachers, nurses, firefighters, police officers, etc.) generally fall within the 60% to 100% AMI range
Salaries for some of Golden’s essential workforce (e.g., grocery store workers) are generally below 60% AMI
The average rent in Golden is NOT affordable to individuals below 100% AMI
The average rent in Golden is affordable to individuals at or above 100% AMI
Income ranges to provide "workforce housing" for Golden's critical and essential workers must include incomes that are less than 80% AMI (which translates to an income of about $66K)
Brookings: Workforce housing and middle-income housing subsidies: A primer (10/29/19)
Colorado Center for Law and Policy: Issue Brief—Colorado is losing low-cost rental housing (4/22/22)
Investopedia: Which Income Class Are You? (10/18/21)
National Low Income Housing Association (NLIHC): Out of Reach 2021
Urban Institute: The Growing Size and Incomes of the Upper Middle Class (6/2016)