One of HUD’s key tools in ensuring affordable housing options for low-income individuals and families is the establishment of income limits. In years past, HUD has released income limits sometime between late March and early April with the stated goal of having them published by April 1st of each year. However, this year, we had to be patient and wait until May 15, 2023, for new program limits to be published.

When determining area median income levels and thus the income limits for affordable housing programs, HUD utilizes data from the American Consumer Survey (ACS) and the Consumer Price Index (CPI). The formula relies on past data to create current limits: ACS Data x CPI Factor = Median Income

American Community Survey (ACS) – Conducted by the United States Census Bureau

  • “Helps local officials, community leaders, and businesses understand the changes taking place in their communities.”
  • This survey provides vital social, economic, housing, and demographic information on a yearly basis, generating data used to determine how federal and state funds are distributed.

Consumer Price Index (CPI) – Published by the U.S. Bureau of Labor Statistics

  • “A measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.”

For example, to formulate the 2022 area median income, and thus the income limits, HUD used the 2019 ACS Data x the CPI Factor. Therefore, to determine the 2023 median income, HUD would use the 2020 ACS Data, but on July 29, 2021, the Census Bureau announced that it would not release standard 1-year estimates from the 2020 American Community Survey (ACS) because of the impacts of the COVID–19 pandemic on data collection, which resulted in the 1-year estimates not meeting the Census Bureau’s Statistical Data Quality Standards. A decision was made late in 2022 to instead use the 2021 ACS Data in place of the 2020 ACS Data to formulate 2023 income limits. Accounting for all of this and applying a somewhat atypical methodology did require additional time, but those hotly anticipated limits are now available on HUD’s website:

This was a wise choice knowing what we do about 2020 and the effects that the onset of the pandemic had on income levels and employment that year. Thousands of people lost their jobs – either temporarily or permanently – and many of those did not return to work in the same field, at the same rate of pay, or at all. Additionally, since 2020, the US has seen sweeping increases in minimum wage and those employers that had offered minimum wage pre-pandemic found a need to increase the wages offered to entice employees into the workplace.

Owners of Low-Income Housing Tax Credit properties must implement new income limits by the later of the published effective date or 45 days from publication per Rev. Ruling 94-57, or June 29, 2023.

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