News: September 14, 2007

MFI: How 'Affordable' Is Your Rent?

By Wells Dunbar

Austin generally calculates residential expenses in terms of median family income, adjustable to family size; the median lies statistically in the center, with half of Austin families (of varying unit size, see right) earning more than that amount annually and the other half making less. Eighty percent MFI – one common standard for "affordable" – clocks in for a one-person "family" at a healthy $39,850 yet is still considered "low income" by the standards of U.S. Housing and Urban Development. The standard has inevitably led to some steep rents, which are still technically "affordable." For example, HUD defines "affordable" rent as not consuming more than one-third of a person's income; by that reading, rent for a single person earning 80% MFI could top out at $996 a month and still technically be considered "affordable" from a developer-incentives standpoint. If Austin is serious about preserving its affordable rental stock, a fairer measure of affordability than 80% MFI – or commitment to deeper affordability – is likely needed.

  Household Size
Income 1 2 3 4
30% Median Income 14,950 17,100 19,200 21,350
40% Median Income 19,900 22,750 25,600 28,450
50% Median Income 24,900 28,450 32,000 35,550
60% Median Income 29,850 34,150 38,400 42,650
65% Median Income 32,350 36,950 41,600 46,200
80% Median Income 39,850 45,500 51,200 56,900

"HUD Income Limits by Household Size," effective March 20, 2007,
from the city of Austin's Neighborhood Housing and Community Development Office

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