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HOUSING AFFORDABILITY <br />Introduction <br />Affordable housing is a term that has various definitions according to different people and is a <br />product of supply and demand. According to the U.S. Department of Housing and Urban Devel- <br />opment (HUD), the definition of affordability is for a household to pay no more than 30% of its <br />annual income on housing (including utilities). Families who pay more than 30% of their in- <br />come for housing (either rent or mortgage) are considered cost burdened and may have diffi- <br />culty affording necessities such as food, clothing, transportation and medical care. <br />Generally, housing that is income -restricted to households earning at or below 80% of Area Me- <br />dian Income (AMI) is considered affordable. However, many individual properties have income <br />restrictions set anywhere from 30% to 80% of AMI. Rent is not based on income but instead is <br />a contract amount that is affordable to households within the specific income restriction seg- <br />ment. Moderate -income housing, often referred to as "workforce housing," refers to both <br />rental and ownership housing. Hence the definition is broadly defined as housing that is in- <br />come -restricted to households earning between 50% and 120% AMI. Figure 1 below summa- <br />rizes income ranges by definition. <br />FIGURE 1 <br />AREA MEDIAN INCOME (AMI) DEFINITIONS <br />Definition <br />Extremely Low Income <br />Very Low Income <br />Low Income <br />Moderate Income <br />AMI Range <br />Note: Anoka County 4-person AMI = $100,000 (2019) <br />0% - 30% <br />31% - 50% <br />51% - 80% <br />80% - 120% <br />Rent and Income Limits <br />Table HA-1 shows the maximum allowable incomes by household size to qualify for affordable <br />housing and maximum gross rents that can be charged by bedroom size in Anoka County. <br />These incomes are published and revised annually by the Department of Housing and Urban <br />Development (HUD) and also published separately by the Minnesota Housing Finance Agency <br />based on the date the project was placed into service. Fair market rent is the amount needed <br />to pay gross monthly rent at modest rental housing in a given area. This table is used as a basis <br />for determining the payment standard amount used to calculate the maximum monthly subsidy <br />for families at financially assisted housing. <br />MAXFIELD RESEARCH AND CONSULTING 62 <br />