If you have ever applied to affordable housing in San Francisco, you may have come across a term called Area Median Income (AMI). What is AMI and why should you know about it?
First things first: When I say “affordable housing” the term itself is very subjective and can have different meanings for various households. If you make less than $90,000 per year, then the average $3,000 per month rent for a one-bedroom in San Francisco probably does not cut it for you. However, if you make less than $40,000, then that $3,000 rent just seems impossible. So to put us all on the same page, let’s just say that affordable housing should be when a tenant pays only 30% of their household income as their monthly rent. Meaning, if you are making $1,000 per month, your rent and utilities should be $300 or less.
There are different kinds of affordable housing in San Francisco such as public housing, nonprofit, private, etc. Each type of affordable housing has maximum and sometimes minimum income requirements. This is where Area Media Income comes in. Each year, the federal government calculates the median income for cities to use as guidelines for federal housing programs. AMI is based on family size and varies region by region. In San Francisco, the median income for a family of four is $101,900 (100% AMI). At 55% AMI, the maximum income for a family of four would be $56,050. This income level is based on your gross (before taxes) household income. See chart below:
Well then what is the minimum income? The minimum gross monthly income for various affordable housing is usually 2.5 times the rent. So if you were a single adult applying for a studio through the Mayor’s Office of Housing and Community Development’s Below Market Rate Rental Program, at 55% AMI, the rent for the studio would be $941 per month without utilities. The minimum monthly income is $941 x 2.5 = $2352.50 (annual would be $28,230). The maximum gross annual income would be $39,250.
How do they determine which AMI an affordable housing development will serve? It really depends on the funding a developer has. More subsidies equals more units. The lower the AMI, the less number of below market rate units. Most BMR rental units serve 55%-60% AMI. Unfortunately there isn’t enough affordable housing being built for various AMIs such as 30% and below. And in some cases, a tenant is paying more than 30% of their income for rent.
For a complete list of Maximum Income Levels and Rents federally catered for San Francisco, please visit: 2015 SF AMI Maximum Income Levels.
If you have any questions, please feel free to email firstname.lastname@example.org.
Caroline Calderon is the Outreach Coordinator and Program Assistant for the Bill Sorro Housing Program of the Veterans Equity Center.