How is rent calculated?

In our subsidized housing programs, rent is usually based on what the U.S. Department of Housing and Urban Development (HUD) calls “adjusted income.”  Adjusted income is the income remaining after you subtract most medical expenses (such as Medicare, Blue Cross or other health insurance premiums, and medicines) from your annual income and take a $400 “elderly household deduction,” if applicable.  Divide that amount by 12 to determine your monthly adjusted income.  The rent you pay each month is 30% of that adjusted income.



Mr. and Mrs. X. have an annual income of $8,000.  Here’s how their adjusted income is calculated:


Annual Income                                        $8,000

Less medical allowance                        -    $760

Less household allowance                    -    $400


Equals Annual Adjusted Income              $6,840


When they divide $6,840 by 12, their adjusted monthly income is $570.  Their monthly rent, then, is 30% of $570, which is $171.


In our conventional housing programs, rents are based on current competitive market rates.