NASHVILLE, Tenn. (WTVF) — Skyrocketing prices in Nashville are making homes too expensive for the average family. City leaders talk a lot about affordable housing and they are promising hundreds of affordable units in the new East Bank development.
It begs the question: What is considered affordable?
The answer begins with a national standard called the Area Median Income. Critics hate it, saying it leaves out people who need help the most.
Diamond Bell was embarrassed whenever her school bus dropped her off in front of a motel off Trinity Lane where her family lived.
"We were put out of our home, and we had to live here, and it wasn't nice," Bell said.
Her mom was forced out of their rental home, and a motel was all they could afford.
"We only had friends that lived here because we felt like we could relate," Bell remembered.
Her mom desperately looked for affordable housing but could not find any.
"That's the thing with affordable housing. The 'affordable' word keeps getting thrown around, with no real results," Bell said.
Bell remembers thinking, "affordable houses" were not really affordable. So what qualifies as affordable housing?
Understanding that starts with three letters: A.M.I., or Area Median Income.
The U.S. Department of Housing and Urban Development looks at salaries in the 10 counties around Nashville and calculates the Area Median Income.
"Affordable" rents are set below that.
The current AMI for the Nashville region is $114,800 a year for a family of four.
Odessa Kelly with Stand Up Nashville says the AMI is unfairly high.
"What do you think of that salary?" I asked.
"I think it's ridiculous," Kelly said. "What we consider the measurement for affordable housing is not authentic to what people need."
She said the problem is that Nashville is lumped in with wealthier surrounding counties, including Williamson County with a $131,202 median income.
Davidson County's median income is much lower at $75,197.
"Williamson County is considered one of the richest counties in the country, so it's just pushing our AMI through the roof," Kelly said.
The AMI matters because many affordable units are priced at 80 percent of the AMI.
So take 80 percent of the current AMI ($114,800), and that comes to more than $90,000.
Rent for so-called affordable units would be $2,296.25 for a family of four.
Incredibly, that's higher than what Zillow says the average rent for a 2-bedroom apartment is in Nashville at $2,215 per month.
"It's not truly affordable for the majority of people who need affordable housing," Kelly said.
Tennessee State University Professor Ken Chilton said the federal government requires communities to use the Area Median Income in order to get tax credits.
"Housing advocates have complained about using AMI, but that's just what the federal equation is," Chilton said. "If you're going to get this money, well these credits, you've got to follow the formula."
That leads us to the East Bank — where city leaders are making affordable housing a centerpiece of the development — with nearly 700 affordable rental units in the first phase of construction.
Chief Development Officer Bob Mendes said affordable units will stay affordable for 99 years.
"We want a livable neighborhood for Nashvillians and that means having homes for all sorts of people, all sorts of income levels," Mendes said.
Affordability will be based on the AMI.
"Are we hurt by using Area Median Income to determine affordable housing?" we asked.
"So we've taken that into account in the deal. We don't have any housing that is say 100% of AMI," Mendes said.
Mendes said some deeply affordable units with be priced as low as 30 percent of AMI. Currently, that would be an income of $34,000 a year.
But the AMI can increase quickly.
Last year it was $102,500 for the Nashville area, but this year it jumped to $114,800.
Kelly said the AMI punishes minority communities who have lower incomes.
"When we start talking about AMI, we get into a conversation that a lot of people want to avoid," Kelly said.
According to a Metro social services report, the median household income for white families in Nashville is $30,000 a year higher than it is for Black families ($83,642 vs. $52,066).
"Nashville claims to be a diverse city. We are at a precipice right now, where we really have to define what our identity is and who we are as a city," Kelly said.
She said the AMI is a reason why "Nashville is getting whiter and whiter in the urban core."
Bell believes there are families in the motel where she used to live going through what her family went through.
"I think there's definitely kids there now of all ages, teenagers, kids, toddlers," Bell said.
She believes their parents are going through what her mom did as they look for "affordable" housing.
"She felt like she failed us, and failed herself, just again and again and time after time," Bell said.
If Davidson County could leave out the surrounding counties and calculate affordable housing based on its median income, the affordable rent would be just over $1,500 a month.
That's about $800 cheaper than the current affordable rent for a family of four.
But this is a federal calculation that is not likely to change.
