On January 10, 2024, the U.S. Department of Housing and Urban Development (HUD) published a notice with the intent to change the way income limits for Section 8 and various other programs are calculated. The National Apartment Association (NAA) and our real estate coalition partners provided comments to HUD, cautioning them that the proposed changes would cause several unintended consequences for housing providers and residents across the country.
Eligibility for many federal housing programs, including the Housing Choice Voucher program, is limited to households with incomes at 80 percent or 50 percent of the area median income (AMI). The dollar amount of these figures might change each year when the local population’s income increases or decreases. When this happens, HUD limits how much the Section 8 income limits can change at one time.
Currently, the income limits can only decrease by a maximum of five percent each year. They can increase by the higher of five percent or twice the percent change in the national median family income. HUD’s new proposal would implement an absolute cap of 10 percent on the income limit increases. This would mean that income limits could be lower during some years than if this rule hadn’t gone into effect. Practically, it means that some families who would be eligible for housing assistance under the old rules may not be under this proposal. It also impacts programs like the Low-Income Housing Tax Credit, where the Section 8 income limits are used for rent-setting. In this case, restricting the increase of income limits could reduce the operational income of these dedicated affordable housing units.
The proposal also changes how national family median income is calculated by using more recent data sources but removing inflation adjustments. The culmination of these changes would create uncertainty for housing providers and residents, both of whom rely on federal funding to be stable and to reflect accurate economic conditions to meet their financial obligations.
NAA continues to meet with federal policymakers and educate them on the rental housing market to ensure that affordable housing programs are implemented efficiently and effectively for the most benefit to America’s housing providers and renters.
For more information about HUD programs and affordable housing policy, please contact Ben Harrold, Manager of Public Policy.