Why Are Some Apartments Income Restricted?

Income restricted apartments are apartments that are eligible for subsidized or reduced rental rates. These apartments come with income caps that help determine the eligibility of tenants. The rental caps also help the low-income tenants to find affordable housing. Some income restricted apartments are privately owned while others are owned by the local or federal government. The owners of income restricted properties receive a federal tax credit or a subsidy payment from the state. 

Income restricted apartments can also be referred to as income-based apartments, low-income apartments, public housing, affordable housing, and income limited apartments. These are residential units that are available to individuals with low income at a rental price lower than the market price. The rent is usually relative to the area where the apartment building is found. The rent threshold is usually less than 50 percent of the average income of the area.  

How do you find income restricted apartments?

It may not be possible to find an income restricted apartment without help. These apartments look like regular market price apartments. Most people assume that income restricted apartments and other affordable housing developments are only found in unattractive neighborhoods. This could not be farther from the truth. In fact, most income restricted apartments are found in the same building as non-restricted apartments. This makes it close to impossible to differentiate them from market rate apartments. 

How do you find income restricted apartments? To do so, you should first get in touch with the Public Housing Authority (PHA) in your local area. This is a government institution that oversees the local housing programs on behalf of the U.S. Department of Housing and Urban Development (HUD). The HUD is responsible for setting standards for low-income housing. The low-income housing standard is set based on the median income of your area. 

The local PHA will then take your application for housing assistance and provide you with a list of eligible rentals and apartments. Your PHA caseworker will then help you determine the best options for you based on your income, the size of your family, and the urgency of your situation. However, you should remember that you may not be allocated the apartment right away since most of these apartments have waitlists. 

Types of income restricted apartments

There are two main types of income restricted apartments; private and public housing. Public housing is offered by the Public Housing Authority while private housing is offered by landlords or property managers. These housing units also include the Section 8 voucher program.  

Low-income renters are able to find local property for which they qualify through the Section 8 voucher program. The renters are then issued with vouchers that either pay part of or all of the rent each month. There are several types of apartments that are income based. 

Income restricted apartments can come in the form of one, two, and three-bedroom apartments. They can also be park or garden apartments, senior apartments, or townhomes. The average income and cost of living varies depending on where you live. The cost of living in a big city is significantly higher than that of a small town. For this reason, the amount of rent also varies depending on where you live. The number of people in your household could also raise or lower the income threshold. If you live alone, you’ll have a much lower income cap than a family of 5. 

Types of affordable housing

As stated above, the local affordable housing programs are run by the Public Housing Authority. The HUD is the federal government department that oversees the PHA and is responsible for determining the area median income and the poverty line of a particular area. This data is crucial when determining the rent of low-income housing units. The requirements of low-income apartments are based on these standards. The HUD is tasked with finding the average income in an area and to determine when an applicant is eligible for public housing, Section 8, or privately-owned income restricted apartments.  

1. Section 8

Income restricted apartments are either offered by private owners or directly by the local government. Privately-owned income restricted apartments are required to meet specific standards that are in line with the government requirements. With Section 8 housing, landlords and property managers offer their housing units to low-income tenants at affordable rates below the market rate. The landlords are then paid the difference of the total rent cost by the PHA. With Section 8 housing, however, you have to get a voucher to apply for the program and you are responsible for finding your own place to rent. 

The section 8 voucher covers any kind of property. If the landlord accepts the arrangement, you are good to go. The type of properties eligible to be used with this voucher include an apartment, a new home, a cabin, an older rental, a mobile home, etc. 

Private owners may choose to rent income restricted apartments and income-based apartments in the same apartment complexes or even the same building. If a family qualifies for the Low-Income Housing Tax Credit (LIHTC), the family can pay lower rent amounts. Landlords do this to get a federal tax credit or subsidy from the state. The subsidy makes up the difference. When it comes to low-income housing, however, utilities may not be included with the rent of these apartments. 

2. City housing projects

As the name suggests, city housing projects are income restricted apartments owned by the city. These projects are also referred to as public housing. They do not have private landlords and are income based. The city bases the rent of these apartments on the income of the tenants. City housing projects house several low-income families together, providing them with affordable housing.

City housing projects have the lowest housing costs. These housing complexes, however, are not very nice. They are popularly referred to as the projects and are usually poorly maintained due to budget constraints. 

Importance of low-income housing

It is estimated that most people spend about 30 percent of their gross income on rent. Due to the high cost of living, most people end up paying a lot more for their rent. Once they have paid for their rent, there is usually not enough money left to cater for other basic needs. 

Many families in the U.S. make the minimum wage and are considered low-income families. These families need help to pay for housing. With the rising cost of living, many minimum-wage workers are unable to cover the basic costs of living such as rent and food. 

People with larger families experience an even greater challenge to provide the even the basic necessities for their household. Programs such as the LIHTC and departments such as the PHA make it possible for these low-income families to find adequate housing that is affordable, allowing them to afford other basic needs. 

Low-income housing also allows these families to find houses located close to schools and jobs, allowing them to establish a home.  

How to qualify for income restricted apartments

To qualify for an income restricted apartment, you’ll first need to determine whether or not you meet the requirements of a low-income worker. To do this, you’ll have to contact your local Public Housing Agency to find out the amount of money you are allowed to make in a year. Your PHA caseworker will also notify you the apartments that are currently available. 

For you to be eligible for an income restricted apartment, you have to meet one the following requirements. You have to earn low income which is less than 80% of the median income level. You have to earn very low income which is 50% or less of the median poverty level. Finally, you have to earn extremely low income which is 30% of the median poverty level. 

Other factors which are taken into consideration when applying for an income restricted apartment include the number of people in your household, the status of your U.S. citizenship, and your relationship with previous landlords or if you have an eviction history.

In most states, you do not have to be considered to be “extremely low income” or “very low income” to qualify for an income restricted apartment. The number of people in your household could also affect your eligibility. However, this is not always definitive. It is wise to apply anyway. 

If you meet the requirements for affordable housing and the enrollment window is open, you can submit your application for the apartment. If your application is approved, you will be assigned a caseworker. The caseworker will help you through the entire process.

If no apartments are available right away, you will be placed on a waiting list. Another instance where you may be placed on a waiting list is if you submit your application when the enrollment window is already closed. 


Income restricted apartments are a life-line for many low-income households in the U.S. Low-income families are provided with an affordable housing unit. This improves the quality of life of the families since they get decent housing below market price, allowing them to direct their income towards other basic needs.

Melanie Asiba

Melanie is an author, and she enjoys traveling, reading, and trying out new things. In addition to writing for Apartment ABC.

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