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What does “Affordable Housing” mean?

Housing is considered “affordable” when it costs 30% or less of a household’s income.

Affordable housing comes in several forms such as subsidized housing, income-restricted housing, and naturally occurring affordable housing:

Copy of Leverage Publicly Owned Land


Rent is based on a percentage of the household’s income.

Examples: Publicly built housing managed by a Housing Authority and housing vouchers.

Vouchers are a government subsidy—like Section 8 Housing Choice Vouchers, managed by the Salem Housing Authority—that covers a set portion of a household’s rental cost.

Copy of Housing Development Incentive Program

Income Restricted

To be qualified, a household cannot earn over a set income limit. Maximum sales price or rental cost is linked to the unit, based on a percentage of the area median income.

Example: A privately built housing unit created to comply with inclusionary zoning.

Copy of Accessory Dwelling Units


Housing units that maintain low rents without a subsidy or income restriction.

Example: A privately owned carriage house rented below typical market rate.

Income limits

Each year, the United States Department of Housing and Urban Development (HUD) publishes “income limits” to define income levels used in several housing and community development programs. The income limits are determined by household size and the area median income (AMI):

Income limits for households at various AMI, with estimated maximum rental and sales prices at various household sizes for illustrative purposes.

Maximum sales price estimate is for a condominium unit with an HOA fee, assuming 3% down payment and 30 year amortization at a 5% interest rate. The number of household members are assumed as number of bedrooms in a unit plus one.


How does income affect housing access?

Area median income (AMI)

To determine housing eligibility for income-restricted Affordable Housing, government programs use AMI.

The 2019 AMI for Salem and surrounding communities is $113,300.

Local Median Household Income

Unlike AMI, the City of Salem’s local median household income doesn’t reflect the incomes of surrounding communities.

Salem’s 2019 Median Household income is $65,528, approximately 60% of the AMI.


Housing is very expensive to produce.

The cost to build an affordable home exceeds the cost the developer is allowed to rent or sell it for.

Per Massachusetts Urban Projects, 2011-2015.

Per Massachusetts Urban Projects, 2011-2015.