The lexicon used today to describe housing pricing can be confusing. Here are some clarifications:
Affordable housing is not a vague adjective. It refers to homes, either for rent or for purchase, priced for households whose income does not exceed certain levels, usually based on the Area Median Income (see below) for the county.
Area Median Income, or AMI, is the midpoint income for a specific county, published annually in the spring by the U.S. Department of Housing and Urban Development. AMI determines eligibility for affordable housing programs, with different income levels that can range from 30% to 120%. The number varies by project, and takes into account the number of residents per household. AMIs by county can be found on the MaineHousing website.
Workforce or “missing middle” housing are terms that refer loosely to properties designed for households whose income levels fall within the 80% to 120% range, which varies by project.
Income restricted is a general term meaning the apartment, condominium or home is only available to residents who earn below specific incomes.
Subsidized housing, often referred to as public housing or Section 8, describes rental properties where the approved tenant will pay no more than 30% of their household income; the additional rent will be paid for through state and federal funding programs.
Equity restricted housing describes affordably priced homes where resale prices are capped to keep them accessible for future lower-income buyers. Owners do not profit from market appreciation when they sell their home, usually a condominium.
Market rate properties refers to homes or apartments that do not factor household income into the pricing formula, but are offered at prices that reflect current area sales or rental prices, which are set solely by the developer or sales agent.
