What is “affordable” housing?

By definition, housing is considered “affordable” when total housing cost, including utilities, is no more than 30% of a family’s gross income. State law describes five income categories, which are based on county median income as shown in Table 1.

Table 1. Household Income Categories

Income Category

% of county median income

Extremely low

Up to 30%

Very low

31-50%

Low

51-80%

Moderate

81-120%

Above moderate

Over 120%

Source: California Government Code Sec. 65584(f)


Affordable housing costs for all jurisdictions in Los Angeles County are determined based on these income categories as shown in Table 2. These incomes, rents and housing prices are based on a 4-person family and are adjusted for different family sizes.

Table 2. Income Categories and Affordable Housing Costs – Los Angeles County

Income Category

Maximum

Income

Maximum

Affordable

Rent

Maximum

Affordable Price (est.)

Extremely low

$33,800

$845

*

Very low

$56,300

$1,407

*

Low

$90,100

$2,252

*

Moderate

$92,750

$2,319

$375,000

Above moderate

Over $123,600

Over $3,090

Over $375,000

Assumptions:

-Based on a family of 4 and 2020 State income limits

-30% of gross income for rent or principal, interest, taxes & insurance plus utility allowance

-10% down payment, 3.75% interest, 1.25% taxes & insurance, $300 HOA dues

* For-sale affordable housing is typically at the moderate-income level

Source: Cal. HCD; JHD Planning LLC

Show All Answers

1. What is a Housing Element?
2. What is Housing Element “certification” and why is it important?
3. What are the most important issues that must be addressed in the Housing Element?
4. What is “affordable” housing?
5. What is the “RHNA” why is it important?
6. Is the RHNA a construction mandate?
7. What must cities do to comply with the RHNA?
8. Why are cities in high-cost areas expected to have affordable housing? Low-cost housing is not economically feasible here due to high land prices.
9. There is very little vacant land suitable for housing development left in Diamond Bar. Why is the RHNA allocation so high?