Rental Unit Affordability

BMR Rent Existing Calculation: 77.3% of Median Income* x 25%/12 mos.

BMR Rent Proposed Calculation: 65% of Median Income x 30%/12 mos.

* HUD uses 77.3% as Low Income Limit in San Jose PMSA

Example.

For 3 persons in 2002, using the HUD guideline of 30% gross income for rent affordability.

% Income for Rent

3-person Income

Affordable Rent (30% x Income/12 mos.)

2 Bedroom Rent (Sunnyvale Survey)

BMR Rent Existing Calculation

BMR Rent Proposed Calculation

Market

BMR Existing Calculation

BMR Proposed Calculation

30% Median

$25,911

$648

$1,533

$1,392

$1,404

71%

64%

65%

50% Median

$43,185

$1,080

$1,533

$1,392

$1,404

43%

39%

39%

75% Median*

$64,778

$1,619

$1,533

$1,392

$1,404

28%

26%

26%

80% Median

$69,096

$1,727

$1,533

$1,392

$1,404

27%

24%

24%

Median

$86,370

$2,159

$1,533

$1,392

$1,404

21%

19%

20%

* Proposed Benefited Households qualifying for Rental Units are at 70% of median income or less.

Comparison of Rent Increase Methods

Existing Method:  Percentage change in median income as published by HUD

Proposed Method: Lesser of 5% or percentage increase in Sunnyvale market rent as published in the Sunnyvale Vacancy and Rent Survey.

Existing Method

Proposed Method

Year

Median Income

% Change in Median Income

2 Bedroom Rent (Sunnyvale Survey)

% Change in Sunnyvale Survey Rent

Increase with 5% Cap

1997

$70,200

--

$1,339

--

--

1998

$77,200

10.0%

$1,425

6.4%

5%

1999

$82,600

7.0%

$1,522

6.8%

5%

2000

$87,000

5.3%

$1,983

30.3%

5%

2001

$87,300

0.3%

$2,043

3.0%

3%

2002

$96,000

10.0%

$1,533

-25.0%

0%