NEW: I Project that Portland Metro HUD FY 2023 Median Family Income Limits Will Go Up by $7,900 to $114,400 and LIHTC 2BR Max Rents Will Go Up $90-$108 Per Month.

In prior years, I have tried to estimate, in advance of HUD's official publication, the Portland metro HUD median family income and related affordable rent limits.

It’s a complicated multi stage process and HUD occasionally changes the inputs into that process.

This year HUD has said that the FY 2023 publication will not occur until mid May and that the 2021 ACS one year median family income [Table B19113] will be used because the 2020 ACS one year median income is not available from Census.

Last week CBO published economic assumptions, including CPI projections, that have been previously used in the HUD formula. 

Using CPI data from the CBO publication I just completed MY projection for Portland metro FY 2023 income limits and max rents at 50% MFI and 60% MFI.

The first table shows the method i used to do the MFI calculation and the Portland metro difference in income limits and affordable rent limits at the 4 person 100% MFI level. 

Note that the CPI ratio I calculate is 1.1217 (last FY HUD used 1.1116)--this factor should remain consistent for ALL areas and is multiplied by the 1 year 2021 ACS median family income for the HUD defined area to arrive at the unrounded FY 2023 median family income.  (NOT all areas have a 1 year 2021 ACS median family income and this makes calculations for those areas more complex).

The second table shows the  FY 2023 Portland metro rents I calculated at 50% and 60% MFI for multiple bedroom sizes and and their differences from the current FY 2022 rents. 

FY 2023 Portland Metro Median Family Income and LIHTC Max Rent Observations

• The HUD median income for a family of 4 is projected to increase 7.4%/$7,900 to $114,400. 
• The maximum rent for a 2 BR LIHTC unit at 50% MFI increases by $90/7.5%  to $1,288. (Not shown, I project the FY 2023 3 person income limit will be $51,550; the 3 person income limit is used to set maximum  2 BR rents).
• The maximum rent for a 2 BR LIHTC unit at 60% MFI increases by $108/7.5% to $1,546. (Not shown, I project the FY 2023 3 person income limit will be $61,860; the 3 person income limit is used to set maximum  2 BR rents).
• The 2BR LIHTC maximum rents at 50% and 60% of MFI are still below the HUD Fy 2023 2 Bedroom FMR of $1,839.  (Housing authority payment standards may be higher or lower than the FMR). 
• Higher max rents could improve the feasibility of some projects in development by increasing potential project income IF the maximum rents are achievable in the marketplace when compared to street rents.

Caveats: 

• The rent differences in the second table are between the MAX FY 2022 and the MAX FY 2023 rents. LIHTC project rents vary so the rent increase permissible for any one project is likely different than the MAX comparisons show.
• Pre 2008 LIHTC projects may use different income and rent limits. 
• These are my projections and are not official. ALWAYS rely on the official HUD and OHCS publication. 
• HUD could change its methodology, geographic definitions, or adopt caps to limit increases.
• OHCS or local government policies could restrict rent increases or maximum rents.
• Minor rounding and calculation differences could mean the rents I calculated are  different from the official publication in May by minor amounts--I anticipate this will be less than $5. 
• Feel free to bookmark this and come back in May to see how accurate my projections are. 
• JUST because the Portland metro HUD MFI is projected to increase does NOT mean that ALL HUD areas in Oregon will see increases. While the national inflation factor  is constant at 1.1217, a low 2021 1 year ACS B 19113 MFI value compared to the HUD published FY 2022 MFI could mean that the FY 2023 HUD MFI is the same or LOWER than the HUD FY 2022 MFI. If that happens HUD may (or may not) allow decreases in MFI, or capped decreases, both which could translate into lower maximum affordable rents. 

Originally created and posted on the Oregon Housing Blog.