What is Affordable Housing?
As with any issue, the affordable housing field is filled with jargon. Here are some key terms and concepts to help
when entering into a conversation about the need for affordable housing.
Affordable: Housing is considered “affordable” when the household renting or buying it pays no more than 30%
of its income for housing costs.
Area Median Income (AMI): This is the income amount at which half of the population of a given area (usually a
city or county) earns more than the amount and the other half of the population earns less. AMI varies for
different household sizes. Sacramento County: Four-person household: $76,100; One-person household: $53,200.
Extremely Low Income (ELI): Generally, a household whose income is below 30% of the area median income,
adjusted for family size. Sacramento County: Four person household $22,850; One person household: $16,000.
Housing Costs: The total cost of rent plus utilities; or mortgage, property tax and insurance plus utilities.
Housing Unit: A dwelling space intended for occupancy by an individual or household, including one or more
bedrooms depending on family size and characteristics.
Inclusionary Housing: Programs requiring market rate developments to include affordable housing with the
goal of establishing a relatively permanent stock of affordable housing; may be either rental or ownership.
Low Income Housing Tax Credit Program: Federal or State housing subsidy program that gives tax credits or
reductions in income tax liability as incentives for investments in affordable housing developments. The federal
government allocates tax credit amounts to states based on population. This is a leading source of affordable
housing subsidy.
Low Income Household (LI): Generally, a household whose income does not exceed 80 % of the area median
income, adjusted for family size. Sacramento County: Four-person household: $60,900; One-person household:
$42,650.
Market Rate: The highest amount that a property will bring in for sale or rent in a given area without
affordability restrictions.
Moderate Income Household: Generally, a household whose income is between 80% and 120% of the area
median income, adjusted for family size.
Very Low Income Household (VLI): Generally, a household whose income does not exceed 50% of the area
median income, adjusted for family size. Sacramento County: Four-person household: $34,250; One-person
household: $26,650.
WHO NEEDS AFFORDABLE HOUSING?
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 2012 Fair Market Rent for a
three bedroom is $1,515, 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. www.huduser.com
Income Categories Sacramento County 2012
Source: State Department of Housing and Community Development
One Person
Two Person
Four Person
Household
Household
Household
Income
Affordable
Income
Affordable
Income
Affordable
Amount
Rent
Amount
Rent
Amount
Rent
Area Median Income (AMI)
$53,200
$1333
$60,900
$1523
$76,100
$1903
Low Income (80% AMI)
$42,650
$1066
$48,750
$1219
$60,900
$1523
Very Low Income (50% AMI)
$26,650
$665
$30,450
$761
$34,250
$856
Extremely Low Income (30%)
$16,000
$400
$18,300
$458
$22,850
$571
Income Level
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.
Job Classification
Annual Income
Job Classification
Annual Income
Teacher’s Assistant
$30,130
Housekeeper
$22,630
Library Technician
$38,670
Childcare worker
$23,010
Pharmacy Aide
$22,390
Bank Teller
$27,040
Crossing Guards
$33,190
Restaurant Cook
$23,660
Restaurant hostess
$20,200
Physical Therapist Aide $ 24,790
*Source: Bureau of Labor Statistics 2010
The Sacramento Housing Alliance (SHA) is a non-profit coalition of organizations and individuals that has promoted safe,
decent, affordable housing and enhanced opportunities for lower-income families and people that are homeless people
in the greater Sacramento region for more than 22 years. For more information visit: www.sachousingalliance.org.
1800 21st Street, Suite 100 ● Sacramento, CA 95811 ● PH (916) 455-4900 ● FAX (916) 455-4917