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What Is Considered Low-Income Housing?

Low-income housing exists to ensure that families earning considerably less than an area's median income can afford quality housing as well as other everyday necessities. According to analysis conducted by the National Low Income Housing Coalition, despite existing low-income housing programs, a shortage of units affordable to the nation's neediest renters still exists. The gap between supply and demand, based on 2008 numbers, sits at 3.1 million rental units.

  1. Definition

    • Generally, housing experts agree that housing--rent and utilities--is affordable if a family allocates no more than 30 percent of their income to it. The concern, according to the National Low Income Housing Coalition, is that if a household exceeds this threshold, there will not be enough money left over for other necessities and will opt for substandard housing, overcrowding and other unfavorable scenarios. Low-income housing programs typically aim to keep rents paid by needy families at or below 30 percent of their income.

    Significance

    • Need for low-income housing across the United States exceeds its supply. Based on analysis by the National Low Income Housing Coalition, a renter household must make $38,360 annually to afford the fair market rent--$959--on a two-bedroom apartment, as of 2010. These numbers vary based on how affluent an area is. For example, in Los Angeles County, which include cities such as Los Angeles, Beverly Hills and Santa Monica, the Coalition estimates that a family must make $56,800 to afford the two-bedroom market rate rent of $1,420.

    Types

    • The paramount goal of most low-income housing programs is to provide affordable rentals for families who make considerably less than what is needed to afford market rate rents where they live. HUD generates a bulk of the nation's low-income housing stock through two programs--Section 8 and public housing. Section 8 subsidizes rents by providing eligible families with a "housing choice voucher," equal to the portion of their rent that exceeds, in most cases, 30 percent of their income, they can use in the private market, according to HUD. Local housing authorities generally own and operate public housing units with rents set at affordable levels. Some cities use programs that operate outside of HUD's control. For instance, San Francisco's Below Market Rate program requires for-profit developments of five units or more to contain 15 percent affordable units, notes the San Francisco Mayor's Office of Housing.

    Eligibility

    • Eligibility for low-income housing varies by program. Section 8 accepts families that earn an income equal to or less than 50 percent of their area's median income, according to HUD's Housing Choice Voucher fact sheet. Public housing, meantime, accepts tenants who are at or below 80 percent of their area's median, notes HUD's public housing program website. Local programs, which tend to abide by HUD-generated income limits, often use different percentages. For example, the San Francisco Mayor's Office of Housing points out that most rents in its Below Market Rate program equal 30 percent of the income of families earning either 55 or 60 percent of San Francisco's median income.

    Geography

    • Families may qualify for a low-income housing program in one part of the country, but not another. For example, based on 2010 calculations, HUD considers a family of four residing in the Duluth, Minn./Wisconsin metropolitan area "very low-income," which is equal to 50 percent of an area's median income, if they earn $30,000 or less. In San Francisco, however, the Mayor's Office of Housing states that a family of four can earn up to $54,650--55 percent of San Francisco's 2010 median income--and still qualify for a new rental under the Below Marker Rate initiative.

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