Our community, like many others around the nation, is currently engaged in difficult conservations about affordable housing. And any time the concept of “affordable housing” comes up, the inevitable question “affordable to whom?” arises. While this is a complex, and also somewhat subjective question, I thought I would throw out, over a few blog posts, some of the hard numbers that the Federal Government uses to determine eligibility for and subsidy of various housing programs.
This post shows the Median Family Income and several income limits for what is known as the Bloomington, IN HUD Metro Fair Market Rent (FMR) Area. This area encompasses Monroe County. Remember that at the median income, half of the households in Monroe County have a higher income and half have a lower income. This number, which is $75,800 for Fiscal Year 2018 (October 2017-September 2018), is often also referred to as the Area Median Income (AMI).
In addition, HUD provides several thresholds — Low Income, Very Low Income, and Extremely Low Income — that are used to determine various subsidies and eligibility for programs. Although nominally Low Income is 80% of AMI, Very Low Income is 50% of AMI, and Extremely Low Income is 30% of AMI, there are several adjustments made.
In particular, these thresholds are not allowed to fluctuate more than a certain amount per year (so-called “hold harmless provisions”), which is why the Very Low Income limit of $34,750 for a family of 4 is actually less than 50% of $75,800. In addition, the Extremely Low Income Limit is the greater of 60% of the Very Low Income Limit (which comes out to 30%) OR the poverty guideline used by the Department of Health and Human Services. In the case of Bloomington/Monroe County, the poverty guideline ($25,100 for a family of 4 for 2018) is used instead of the lower 30% of AMI as a definition of Extremely Low Income. Finally, as these numbers are baselined on a family of 4, adjustments are made for families of different sizes.
This is actually a pretty big simplification of some fairly complex calculations. This data, along with calculation methodologies, can be found here: FY2018 Income Limits Documentation System for Bloomington, IN HUD Metro FMR Area.
Also, note that these aren’t necessarily the thresholds used for all affordable housing programs. For example, 60% of AMI is used for some housing built using the Low Income Housing Tax Credit (LIHTC), which I will talk about in a future post.