Projected Portland Metro HUD Median Family Increase of 4.8% Would Increase 2 Bedroom Affordable Rent at 100% MFI by $95 Monthly.

I project that the Portland metro HUD median income will increase for fiscal year 2020 by 4.8% or $4,200 to $92,100.

For a three person 2 Bedroom family this would mean that an affordable rent, at 100% median income, would jump by $95 a month to $2,072 from the current $1,978.

Caution: HUD sometimes makes median income adjustments at lower income levels, so do NOT assume that an affordable rent at 30%, 50%, 60% of median income is a straight line mathematical calculation from 100% median income.

The table below shows my calculations; I explain my calculations below the table.

How I calculated the projected Portland Metro FY 2020 median income limits:

CBO published in January 2020 new 10 year economic projections which are used by HUD to factor in inflation as part of the annual HUD median income limit publication, usually done in April.

Following past practice, I divided the CBO projected FY 2020 CPI by the 2019 annual CPI--this results in a projected NATIONWIDE inflation rate of 6.2%. [260.3/245.12=6.2%].

This inflation rate is then multiplied by the relevant 2017 American community survey median family income selected by HUD for each area to arrive at the projected FY 2020 median family income for that area.  

In the case of Portland metro the 1 year 2017 ACS was used [$86,771]. However the ACS median income used by HUD varies by area based on sample size, margins of error etc. 
Once the inflation factor is applied to the 2017 ACS median income  [106.7% x $86,771=$92,147] it is the rounded to the closest $100--$92,100.

(NOTE: The FY 2020 HUD Portland metro MFI  of $92,100 I project is actually LESS than the $92,703 1 Year ACS Median Family Income for the Portland metro area for 2018; this suggests that the FY 2021 HUD Portland metro MFI increase is likely to be as high, if not higher, than the increase this year so long as HUD follows the same steps in calculating median incomes).

Comparing my projected FY 2020 HUD MFI of $92,100 with the current HUD FY 2019 MFI of $87,900 the projected annual net increase would be 4.8%/$4,200.  This rate of increase is less than the greater of 5% or double the national median income percentage, so it does no appear that this would be subject to a a cap imposed by HUD. 

Calculating FY 2020 projected affordable rent for a 2 Bedroom Unit
I then calculated 90% of the median family income to arrive at the median income limit attributable to a three person household (which is the household size that used to calculate the two bedroom income unit).  I then multiplied that income by 30% to arrive at the 2 BR affordable rent standard of $2,072 and compared it to the current FY 2019 2 Bedroom affordable rent of $1,978--an increase of $95 (rounded).

It's possible that the HUD published median will vary slightly from my projection if they choose to use other than the January 2020 CBO 10 year economic forecast in their calculations. Rounding may also impact the calculations from my projections but that change would be minor. 


Originally created and posted on the Oregon Housing Blog.