In big cities where housing is prohibitively expensive, would-be-residents can find refuge from high prices through income restricted apartments. But, the process to land one can be difficult, as income limits vary based on region and location. Learn how you can qualify by reading our complete guide below.
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What Are Income Restricted Apartments?
Income restricted apartments are also called low income apartments, income-based apartments, affordable housing, public housing, and income-limited apartments. These are small living spaces that are available to renters with low income relative to their area.
Apartments that offer housing options for people with low income are considered income restricted apartments. This threshold is usually less than 50% of the area’s average income.
Public vs Private Housing
There are two types of income restricted apartments: Those offered by the Public Housing Authority (PHA) and privately owned apartments. In addition to these 2 types of apartments, the Section 8 voucher program allows low-income renters to find local property for which they quality. They then issue vouchers that pay part or all of each month’s rent.
You may find several apartment types that are income-based: One, two, and three-bedroom apartments, garden or park apartments, townhomes, and senior apartments are examples.
Average income and cost of living varies by area, so someone living in San Francisco may meet the low income requirement by making $62,000/year. Conversely, someone in Nashville would be considered low income by making $30,000/year.
The number of people living with the family also raises or lowers this income threshold. Someone living alone will have a much lower income cap than a family of 6.
Types of Affordable Housing
The Public Housing Authority (PHA) runs your local affordable housing programs under the U.S. Department of Housing and Urban Development (HUD). HUD is responsible for finding area median income and where the poverty line is in a region.
These are the standards on which low-income apartment requirements are based. It’s up to HUD to find a fair average amount of income and determine the point at which an applicant qualifies Section 8, public housing, or privately owned low-income apartments.
Affordable housing is offered either directly by the city or private owners that meet government requirements. With Section 8 housing, private landlords offer their rental property to low-income tenants and the PHA will pay 30% of the total rent cost for the low-income renter.
To put things in perspective, that’s like a $900/month home going down to $630/month. You have to get a voucher to apply for Section 8 housing and you are responsible for finding your own place to rent.
Section 8 vouchers can cover all types of property, as long as the landlord accepts it. Eligible properties may include a new home, older rental, apartment, cabin, mobile home, etc. Private owners may rent both income-based and non-income-based apartments in the same buildings or apartment complexes.
They accept a lower rent amount from qualified low-income families because they get a federal tax credit (also know as a subsidy) from the state to make up the difference. Utilities may or may not be included with the rent in these apartments.
City Housing Projects
City-owned income restricted apartment complexes (public housing) do not have private landlords or non-income tenants at all. Instead, the city bases the rent amount on the tenant’s income and houses several low-income families together in one apartment building.
Housing costs are usually lowest in these complexes, though these are typically not very nice. In pop culture, these are know as “projects” and are often poorly maintained due to budget constraints.
Qualifying for Income Restricted Apartments
To know whether or not you quality, you’ll need to determine whether or not you meet the low-income requirements. Contact your local PHA to find out exactly how much you are allowed to make per year. Also learn what apartments are currently available.
In most states, the requirements and information a renter must give to qualify are as follows:
- Low income: 80% of the median income level
- Very low income: 50% of the median poverty level
- Extremely low income: 30% of the median poverty level
Other factors include:
- How many household/family members
- U.S. citizenship status
- Eviction history
You don’t have to be considered “very low income” or “extremely low income” to qualify in most states. The number of people living in your household also makes a difference. Although you may doubt whether or not you qualify, it’s wise to apply anyway.
If you do meet the requirements and enrollment is open at the time, you will be able to apply for an income-restricted apartment. If you are approved, you will be assigned a PHA caseworker. Once approved, they’ll help you every step of the way. You may be put on a waiting list if no eligible apartments are available right away.
You may also be placed on a waiting list if enrollment is closed when you apply. Enrollment opens and closes on a case-by-case basis as housing becomes available. So there isn’t always much notice given.
It’s wise to submit an application, even if it can’t be processed yet due to closed enrollment. You application will be processed ahead of the pack the next time enrollment opens up.
The application process varies by state, but one great example is New York’s Affordable Housing Lottery. The process is complicated, but the folks at NYC Housing made a great video to help walk you through the process.
This process is pretty standard regardless of location, so make sure to watch this video from start to finish to ensure you know the ins and outs of what low-income housing landlords will likely need.
The Importance of Low Income Housing
The Office of Policy Development and Research (PD&R) found that people spend about 30% of their gross income to pay rent. Even if you’re making close to the average income in expensive areas–and many people aren’t–there isn’t much money left over after paying rent because of the high cost of living.
Millions of families across the U.S. are considered low income and need help paying for housing. As rent costs keep rising, many workers are unable able to cover basic living costs like rent and groceries. Those with larger families have an even harder time providing these basic necessities for their household.
Programs and departments like the Public Housing Authority make it possible for low-income families to find budget-friendly housing that is safe, located close to jobs and schools, and a place they can be proud to call home. To learn more about income based housing and how you can qualify, check out HUD.gov.