Household Income Categories
UPDATED! 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 2022 figures for the Eugene-Springfield Metropolitan Area (includes Lane County).
Median Family Income is $84,000
|Category / Household Size||1||2||3||4|
|Middle Income (MI) 120% AMI (“Workforce” Income)||$75,600||$86,400||$97,200||$108,000|
|Low Income (LI) 80% AMI||$44,600||$51,000||$57,350||$63,700|
|Very Low Income (VLI) |
|Extremely Low Income (ELI)|
The HUD calculations start with an estimate of $84,00 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 Size||1||2||3||4|
|Middle Income (MI)||$1,890||$2,160||$2,430||$2,700|
|Low Income (LI)||$1,115||$1,275||$1,434||$1,593|
|Very Low Income (VLI)||$698||$796||$896||$995|
|Extremely Low Income (ELI)||$419||$479||$576||$694|
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 (*)
|Min||Max||Fair Market |
|0 (“Studio”)||1||2||$902||$1,115 to $1,275||$1,395|
|1||1||2||$958||$1,115 to $1,275||$1,593|
|2||2||4||$1,249||$1,275 to $1,593||$1,793|
|3||3||6||$1,917||$1,434 to $1,847||$1,990|
|4||5||8||$2,298||$1,719 to $2,102||$2,150|
The maximum “affordable” rent for Low Income households is a range, depending on how many occupants are. Since rents are typically fixed for each apartment configuration (e.g., number of bedrooms, size, amenities, etc.), affordable housing programs set some number based on an estimate of the different household sizes that will occupy a rental unit with a certain number of bedrooms.
The top numbers in the rightmost column shows the maximum rents to qualify as “affordable” housing under the Multiple-Unit Property Tax Exemption (MUPTE) program, which uses HUD Income Limits for 100% of MFI and then makes adjustments based on number of bedrooms. What’s clear is that Eugene’s MUPTE program is providing substantial financial incentives (through ten-year tax exemptions) for housing that will be affordable to middle-income households, but not to low-income households.
The bottom numbers (in parentheses) in the same column show what the qualifying rent would be if the MUPTE threshold were 80% of MFI, instead of 100%. This would at least make the rents affordable to some of the lower-income households.
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 lower “Middle Income” ability to pay is above the “Low Income” upper limit, which implies that, with a possible few exceptions for Middle Income households larger the four individuals, Middle Income households can afford the Fair Market value in Eugene.
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. The MUPTE data demonstrates that the community is spending its limited resources to produce more inventory at rent levels that add to the surplus of dwellings affordable to middle-income and above households.
An important fact that must also be determined is how the inventory of available housing matches levels of household’s ability to pay. That determines the nature and scale of “housing-cost-burdened” households. Click here for information on housing cost burden. (Hint: A now out-of-date analysis of Eugene inventory showed there was a deficit of dwellings that were affordable only at the lowest levels of household income.)
In addition, 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 analyze 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?
For additional reference, here’s another set of data from the
HUD “2022 Home Program Rent Limits”:
|Home Rent||Efficiency||1 BR||2 BR||3 BR||4 BR||5BR||6BR|
|Fair Market Rent||$833||$958||$1,254||$1,781||$2,146||$2,468||%2,790|