What makes an apartment “affordable”
In housing policy, an affordable apartment is usually one with a legal restriction on who can rent it and how much rent can be charged. The most common source of these restrictions is the federal Low-Income Housing Tax Credit (LIHTC), created in 1986. Developers receive tax credits in exchange for keeping a share of the homes — often all of them — available to lower-income households at capped rents for decades.
In California, tax credits are awarded by the California Tax Credit Allocation Committee (CTCAC), which also monitors compliance. California properties typically sign regulatory agreements lasting 55 years.
How income limits work
Eligibility is based on the household's gross annual income compared with the Area Median Income (AMI) for the county, adjusted for household size. Units are designated at levels such as 30%, 50%, 60% or 80% of AMI. Federal limits are published each year by HUD, and CTCAC publishes the limits that apply to tax-credit properties.
| Term | What it means |
|---|---|
| AMI | Area Median Income for the county or metro area, set annually. |
| Set-aside | The share of units restricted to households at or below a given AMI level. |
| Income averaging | An option that lets a property serve households up to 80% of AMI as long as the designated levels average 60% or less. |
| Utility allowance | An estimate of tenant-paid utilities that is subtracted from the maximum rent. |
How rents are set
The maximum rent for a tax-credit unit is based on 30% of the income limit for the unit's designated AMI level, assuming a household size tied to the number of bedrooms, minus the utility allowance. Rents are set by the unit, not by your actual income — unlike Section 8 voucher assistance, where your share of rent is based on what you earn.
The income certification process
- ApplicationYou complete a questionnaire listing every household member, all income sources and assets.
- VerificationThe management office verifies income and assets with third parties such as employers and banks.
- Tenant Income CertificationBefore move-in, the household signs a certification confirming the information is complete and accurate.
- RecertificationMost properties re-certify income and household composition each year, usually starting 90–120 days before the lease anniversary.
Tips for applicants
- Ask each property for its current income limits and which unit types have openings or waitlists.
- Report all income sources, including irregular work, child support and benefits — missing items are the most common cause of delays.
- Households made up entirely of full-time students are generally ineligible, with specific exceptions; ask the office before applying.
- Keep copies of everything you submit and respond quickly to verification requests.
- Join several waitlists; turnover in affordable communities is often low.
Looking for affordable housing in California? Your city or county housing department and the local public housing authority keep lists of income-restricted properties and voucher programs.