Household Income Categories

The U.S. Department of Housing and Urban Development annually sets thresholds for different ranges of household income (HHI). The following table shows the upper HHI for each category and by household size. These are the 2021 figures for the Eugene-Springfield area.

Category / Household Size1234
Low Income (LI)$39,900$45,600$51,300$56,950
Very Low Income (VLI)$24,950$28,500$32,050$35,600
Extremely Low Income (ELI)$14,950$17,420$21,960$26,500
Upper household income for each category and by household size — Eugene-Springfield 2021

The HUD calculations start with an estimate of $71,200 as the Median Family Income (MFI) for a household of four people in the Eugene-Springfield Metropolitan Statistical Area (MSA). The HUD calculations then go through multiple steps to arrive at the final values in the table above.

Maximum affordable monthly rents
Although it’s a very inexact criterion, a widely-used rule-of-thumb is that to be “affordable,” a housing unit should cost no more than 30% of a household’s income. For lower-income households, this generally applies to their cost to rent (which includes any costs for utilities or other services). The following table calculates the maximum “affordable” rent from the table above. (Each cell is simply: HHI x 30% divided by 12.

Category / Household Size1234
Low Income (LI)$1,000$1,140$1,280$1,430
Very Low Income (VLI)$620$710$800$890
Extremely Low Income (ELI)$370$440$550$660
Upper monthly “affordable” rent for each category and household size — Eugene-Springfield 2021

HUD also provides guidelines for how many bedrooms a dwelling unit should have for each household size. Note that there are various exceptions to the following numbers, in particular if a room that is not a bedroom is suitable for sleeping, the maximum may be increased by 1 or 2. Of particular significance is that a Studio apartment is also appropriate for a couple. The table below shows nominal range of occupants and the HUD “Fair Market Value” for Eugene rentals

Bedrooms / Household size (*)MinMaxFair Market Value
0 (“Studio”)12$792
Min and Max Household Size & Fair Market Value for Number of Bedrooms

Comparing the table of “affordable rents” with the Fair Market Value of adequate number of bedrooms, you can see that households in the upper range of “Low Income” households may be able to afford apartments that rent at or below the “Fair Market Value.” None of the other households that are LI, VLI or ELI would have adequate incomes for the “Fair Market Value” rent to be no more than 30% of their income.

The HUD data reinforces the fact that the “housing crisis” in Eugene is almost entirely among LI, VLI and ELI households, not middle-income and above households.

However, to fully understand the true composition and extent of Eugene’s housing cost-burdened households and the need for different types and sizes of dwelling units, the City needs to analyse for each cell in the table above:
* The number of households in each of the HHI and household size categories (e.g., the number of VLI, two-person households)
* The number of required rental units with adequate bedrooms for each of the categories (e.g., the number of studio, one-bedroom, or two bedroom units for VLI, two-person households)
* The number of available rental units with adequate bedrooms
* The deficit or surplus supply of available rental units with adequate bedrooms

An important “takeaway” — Deregulation of Eugene’s housing standards and leaving it to investors and developers to decide the type, location and cost of new housing is unlikely to produce rental units with a cost and number of bedrooms that are most in need for Eugene’s housing-cost-budened households. For example, the most helpful apartments may be small, studio and one-bedroom apartments with only basic “upgrades” to keep rents low, but the local market demand may provide investors the greatest profits from developing three-bedroom, “luxury” apartments. Guess which type of housing will get built?

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