Estimating the Number of Low Income Homeowners

I work at Rebuilding Together, a nonprofit which specializes in providing repairs and renovations to low income homeowners. For a while, we've been working with an internal fact sheet which depicts the estimated growth in the number of low income homeowners from 22.9 million in 2008 to 25.8 million in 2010. However, the person who worked out this estimate is no longer working with us and left no instructions or methodology behind how they found this number. They only wrote that they used ACS data based on an average household size of 2.68 people with a combined income below $44,700 as qualifying as low income. Does anyone have an idea of how I could work out the calculation that would yield this estimate? Beyond wanting to figure out if this number has any mathematical validity, we would like a reliable formula to use for making estimates about the change in number of low income households for administrative purposes. 

  • Well, here is a rough estimate.
    Table S2503, FINANCIAL CHARACTERISTICS. 2010-2014 American Community Survey 5-Year Estimates
    shows there were 74,787,460 owner occupied housing units. 35.6% of these had incomes under $50,000. 35.6% of all owner occupied housing units = 26.6 million owner occupied low income housing units.

    That help?
  • Hi Alex -
    Table B25118 in the ACS shows the number of households (which is the same thing as the number of house-holders) by income level for both owner and renter householders. In short, the top part of the table, "owner-occupied" is a fairly good approximation of the number of "home owners" by income level.*

    My understanding, from your question, is that you'd just add up all of the households (householders) in that owner-occupied category under a given income threshold. (Doing that, I get about 26.7 million home owners with income $49,999 or lower in the 2014 5-year survey.)

    factfinder.census.gov/.../B25118

    You do not need to (and should not!) adjust for household size. These counts are per household, not per person.

    *Owner occupied is not EXACTLY the same thing as home ownership. Someone could own a home, but be living/renting somewhere else at the time of the survey... but owner-occupied is about as good an approximation as you'll get to ownership in a survey. So that's probably a finer point than you need to worry about for this project!

  • One more thing to consider...
    Your inquiry was for "low income" home owners, and you mentioned the $44,700 dollar-value threshold. If what you're looking for is the number of households with income below a certain threshold, the table I mentioned (B25118) should work.

    According to HUD, the "low income" threshold in 2008 for a family* of 3 was 44,300 and in 2014 was 46,000. (See: www.huduser.gov/.../FY08_StateIncomeLimits.pdf for 2008 thresholds and www.huduser.gov/.../State_Incomelimits_Report.pdf for 2014 thresholds. The US values are at the bottom of each report.)

    If, instead, you are looking for "low income" defined by ratio of income to poverty level, then you will need to use the ACS microdata. The easiest way to do that is to use the IPUMS system usa.ipums.org/.../index.shtml. You will need a log-in, but it's free. The IPUMS "Analyze Data Online" tool you to query the microdata to create any crosstabulation you might need.

    Feel free to send me a direct message if you want to discuss this further.
    Good luck!

    *HUD thresholds are for family income, while ACS published tables are for household income. It sounds like your predecessor used household income, but that might not be the most precise option. You may want to use the IPUMS system to get family data -- again, send me a direct message and we can discuss the nuances further.
  • In reply to Beth Jarosz:

    Just to repeat. HUD uses a concept called Area Median Income (which is household based). The income limits are by hh size. The data are available in HUDuser.org. Low income is 80% or less of AMI, Very Low income is 50% of AMI, and Extremely Low Income is 30% of AMI. They are here:
    www.huduser.gov/.../il.html

    The CHAS Tables which tabulate the number of households by a variety of categories are here:
    www.huduser.gov/.../data_querytool_chas.html

    They are special tabulations done by the Census Bureau for HUD and based upon ACS.

    This is the "official definition" of low income.

    Andy
  • In reply to Beth Jarosz:

    This is definitely helpful for our work, thanks!. However, what my manager is primarily interested in is how someone took data from 2008 and used it to estimate the low income homeowner rate in 2010. I was thinking they used some form of linear extrapolation using the rate of change over previous years, or something along those lines. Do you know if there's a way to do that that's professionally supported? If not, we'll probably just abandon that notion and use either your methodology or switch to using an AMI measurement.
  • In reply to Andrew Beveridge:

    Thanks Andrew! The CHAS tables look especially helpful. However, I would like to find information similar to those tables, with the breakdowns of 30%, 50%, and 80% of AMI, but over just a 1 year time frame instead of 4 years. Do you know of any cite I could find that data at?
  • In reply to Alex Habbart:

    Alex

    I used the IPUMS web site cited by Beth to try to generate your 2010 figure.

    Using the 2010 ACS data set (ie 1 year data), I recoded the household income variable (hhincome) into two categories, one less than $44,700 and one $44,700 or greater. I than ran a frequency analysis for the nation limited to owner occupied units (ownershp=1), excluding all group quarters (gptype = 0) and counting only the first household member (pernum = 1). The result is 25,747,355 households who live in owner occupied housing units and whose annual income is less than $44,700, which rounds up 25.8 million owner occupied households in 2010 with an income below $44,700.

    I have not tried the analysis for 2008 but I'll bet you will get a match.

    Cliff Cook