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Who needs affordable Housing?

 What is “Low Income,” “Very Low Income” and “Extremely Low Income”?

Housing is affordable when households can pay for it out of their monthly income and still have enough money left over for food, transportation, clothes, and health care.  According to the Federal Government, housing is considered affordable if it consumes no more that 30% of a household’s income.   Using this standard, a family of four with two working parents each earning minimum wage could only afford to pay approximately $650 in rent or a mortgage payment and utilities without cutting into other basic necessities. The 2005 Fair Market Rent for a three bedroom is $1, 469*, which is why the development, operation, and preservation of affordable housing important. 

Affordable housing multi-family rental communities and single-family homes result from partnerships between private and nonprofit organizations, corporate investors, commercial lenders, and government agencies.  Affordable housing is developed using a combination of rental incomes, private funding, and government subsidies.  These multiple funding sources allow the construction of quality units with many amenities at an affordable rental rate.  Government funding generally ensures rents will remain affordable for at least 5 to 55 years and require regular maintenance and quality inspections.

*Source: 2005 Out of Reach, National Low Income Housing Coalition (NLIHC)

 Income Categories, Sacramento County, 2006

Source: State Department of Housing and Community Development, 1/06

 

One Person

Household

Three Person

Household

Four Person

Household

Income level

Income Amount

Affordable Rent

Income Amount

Affordable Rent

Income Amount

Affordable Rent

 

 

 

 

 

 

 

Area Median Income

$45,800

$1,145

$58,900

 $1,472

$65,400

 $1,635

Low Income (80% AMI)

$36,600

 $915

$47,050

 $1,176

$52,300

 $1,307

Very Low income (50% AMI)

$22,900

$573

$29,450

 $736

$32,700

$818

Extremely Low Income (30% AMI)

$13,700

$342

$17,650

$441

$19,600

$490

Under the federal government’s definitions, a family is considered “low income” if the household income is below 80% of an area’s median income (AMI), after adjustment for family size.  Very long income is calculated at 50% AMI and extremely low at 30% AMI.

Most residents of affordable housing work.  The following are examples of jobs in Sacramento County that pay salaries that qualify as low income very low and extremely low income.  These workers struggle to find housing they can afford.  “Out of Reach” 2005 documents that in Sacramento, a minimum wage earner would need to work 115 hours per week to afford a two-bedroom market rate apartment.

Income Category, Family of 3

Job Title

Annual Salary

Low Income, 80% AMI

Environmental Engineering Technician

School Counselor

Medical Records Technician

Entry Firefighter

$40,660

$47,590

$27,660

$24,742

Very Low Income, 50% AMI

Receptionist

Preschool Teacher

Veterinary Technician

$22,690

$23,940

$19,640

Extremely Low Income, 30% AMI

 

 

Sales Person, Retail

Cashier

Minimum Wages

$22,930

$17,250

$14,040

 Source: Employment Development Department, March 2004