Income levels: nomenclature
Federal policy currently recognizes five levels of income, typically adjusted for family size, as follows:
· Extremely Low Income (ELI). Households below 30% of area median income (AMI), adjusted for family size. (For reference, a family of four, one worker with a full-time job at the minimum wage, yields about 22% of AMI.) ELI households fall below property sustainability levels; their needs are driven not just by housing supply, but also by their household poverty. Many forms of Section 8 and public housing assistance target
· Very Low Income (VLI). Below 50% of AMI. The current ceiling on Section 8 eligibility. Affordable rents are below market virtually everywhere in the
· LIHTC credit-cap income. (No shorthand term exists.) Below 60% of AMI. Ceiling on eligibility for LIHTC properties. Also drives LIHTC maximum rents.
· Low Income (LI). Below 80% of AMI. Ceiling for Section 236 budget-based properties. Original ceiling for Section 8. In practice, most low-income households above LIHTC credit cap can afford market rentals, except in supply-constrained markets.
· Moderate income. Below 95% of AMI. The original income ceiling for Section 221d3.
We can graphically display the income limits, and their relationship to housing consumption, as follows:
Income to housing cost to tenure options, a graphic illustration
