notice

U.S. Department of Housing and Urban Development
PDR-99-01
Special Attention of:
Secretary's Representatives, Community Builders, Economists, Public @amp; Indian Housing Division Directors, Multifamily Hub and Program Center Directors

Issued: January 27, 1999
Expires: Effective until superseded

Cross References:


Subject: Estimated Median Family Incomes for Fiscal Year 1999

This memorandum transmits median family income (MFI) and income distribution estimates for Fiscal Year 1999 (FY 1999). They are calculated for each metropolitan and nonmetropolitan area using the Fair Market Rent (FMR) area definitions applied in the Section 8 Housing Assistance Payments program. The estimated median family income for the United States for FY 1999 is $47,800.

The FY 1999 MFI estimates are based on 1990 Census median family income estimates updated to 1999 using a combination of Bureau of Labor Statistics earnings and employment data and Census Divisional P-60 median family income data. Attachment 1 provides an explanation of the methodology used to develop these estimates. Attachment 2 provides median income estimates for States, and Attachment 3 provides local estimates of median family incomes. Attachment 4 provides the area definitions used for income limits.

Please note that the use of the HUD median family income estimates and income limits is subject to individual program guidelines covering definitions of income and family, family size, effective dates, and other factors. If your have any questions concerning these matters, please refer them to your Office's economist. Public inquiries may be referred to the HUD USER reference service, whose toll-free number is 1-800-245-2691. HUD median family income estimates are also available at the Department's World Wide Web site, which provides a menu from which you may select the year and type of data of interest.

Xavier de Souza Briggs
Deputy Assistant Secretary for Research, Evaluation and Monitoring, RR

Previous Editions are Obsolete
Distribution: W-3-1
HUD 21B (3-80)
GPO 871 902


Attachments

Attachment 1

HUD METHODOLOGY FOR ESTIMATING FY 1999
MEDIAN FAMILY INCOMES
(ECONOMIC AND MARKET ANALYSIS DIVISION,
OFFICE OF ECONOMIC AFFAIRS, PD&R)

FY 1999 HUD estimates of median family income are based on 1990 Census data estimates updated with a combination of local Bureau of Labor Statistics data and Census Divisional data. Separate median family income estimates (MFIs) are calculated for all Metropolitan Statistical Areas (MSAs), Primary Metropolitan Statistical Areas (PMSAs), and nonmetropolitan counties.

The income adjustment factors used to update the 1990 Census-based estimates of MFIs are developed in several steps. Average wage data from the Bureau of Labor Statistics (BLS) were available for 1989 through the end of 1996 at a county level, and were aggregated to the metropolitan area level for multi-county metropolitan areas. Census Divisional level median family and household income estimates were available from the Current Population Report (CPS) March 1990-98 surveys, which measure incomes from mid-1989 through mid-1997. These data were then used to update mid-1989 income estimates from the 1990 Census to the middle of 1997. The mid-1997 estimates were trended forward to mid-FY 1999 using a factor based on past P-60 Series trends. The step-by-step normal procedures as well as the exception procedures used are as follows:

1. Estimate mid-1989 local median family incomes using 1990 Census data. (Current HUD Section 8 Fair Market Rent (FMR) program definitions are used to define metropolitan areas, which are normally the same as Office of Management and Budget metropolitan area definitions.)

2. Calculate the BLS wage change factors for each Census Division for the 1989-96 period as follows:

Census Division BLS Wages (1996)
Census Division BLS Employees (1996)
Census Division BLS Wages (1989)
Census Division BLS Employees (1989)
   =     7-year BLS wage increase
factor for Census
Division

3. Calculate the change in median family and household incomes for the nine Census Divisions for the 1989-1997 period using Census P-60 series data, as follows:

Census Division P-60 MFI (1997)
Census Division P-60 MFI (1989)
   =   8-year increase factor for Census
Division P-60 Median Family Income

4. Compare the BLS and P-60 series Census Divisional factors calculated in steps 2 and 3 to provide a means of adjusting local BLS wage factor changes so that they aggregate to the same change factor as P-60 changes in family incomes plus contain an added year of CPS trending.

8-year increase factor for
Census Division P-60 MFI
7-year increase factor for
Census Division BLS Wages
   =    Ratio of Census Division P-60
MFI to ratio of Census
Division BLS wage changes

5. Calculate the 1989-97 increase factors for the individual metropolitan areas and nonmetropolitan counties by applying the Census Divisional index factors from step 4 to local BLS data.

Local BLS Wages (1996)
Local BLS Employees (1996)

Local BLS Wages (1989)
Local BLS Employees (1989)
    *     Ratio of Census
Division P-60
MFI to Census
Division BLS wages
    =     8-year income
adjustment
factor for
MSA or County
       =    1989 to mid-
1997 MFI
adj. factor

6. Convert 1989-97 step 5 change factor to a 1989-1999 change factor by applying an annual trending figure of 4.0percent to update the mid-1997 estimate to mid-1998, and applying a 3.0 percent factor (3/4ths of 4.0 percent) to the mid-1998 to April 1, 1999 period. (Use of a trending factor is necessary because of lags in Bureau of Labor Statistics and P-60 Series data availability; the 4.0 percent factor is based on national income change patterns in recent years.)

(Step 5 adj. factor) * 1.04 * 1.03 = 1989 to mid-FY 99 adjustment factor

7. Calculate median family incomes for FY 1999 by multiplying the step 1 Census estimate of median family income by the income adjustment factor derived in Step 6.

1990 Census Median Family Income * Step 6 factor = FY 1999 MFI est.

8. For American Housing Survey areas, compare the MFI estimates from step 7 with median family income estimates based on post-1989 American Housing Survey (AHS) estimates of median family income updated to 1999. Past analysis shows that there is 95 percent likelihood that the true local median family income is within 6 percent of the AHS-based estimate. For areas where an AHS-based estimate differs by more than 6 percent from the Census-based estimate, local MFI estimates are increased or decreased so that they are within 6 percent of the AHS-based estimate.

9. Compare the 1999 MFI estimate with the 1998 MFI estimate. If the 1998 estimate is higher, set the 1999 estimate at the 1998 level. (This policy is applied except when estimates are revised with decennial Census data, and serves to minimize disruption in program activities due to temporary decreases in income estimates.)

In addition to the above procedures, constraints are placed on annual changes in the Census Divisional and BLS change factors based on past experience. These guidelines constrain increases for a small number of areas with unusually high increases.

Attachment 2

FY 1999 MEDIAN FAMILY INCOMES FOR STATES,
METROPOLITAN AND NONMETROPOLITAN PORTIONS OF STATES

 --------FY 1999---------- ---------1989---------- TOTAL METRO NONMETRO TOTAL METRO NONMETRO ALABAMA 41500 44900 35100 28688 30966 24500 ALASKA 53900 59200 50100 46580 50109 44045 ARIZONA 45300 47300 32300 32177 33536 23997 ARKANSAS 36500 42300 31800 25395 29425 22208 CALIFORNIA 54100 54800 36700 40558 40969 29946 COLORADO 51800 54300 40400 35929 37461 28257 CONNECTICUT 62800 63700 53500 49198 49512 43591 DELAWARE 58900 62400 43400 40251 42237 31112 DIST. OF COLUMBIA 56000 56000 0 36255 36255 0 FLORIDA 45700 46500 36100 32211 32761 25874 GEORGIA 48300 54200 37500 33529 37551 26690 HAWAII 57300 60100 50900 43176 45313 37990 IDAHO 42100 47800 38200 29472 32220 27799 ILLINOIS 56700 60300 41500 38663 40964 29693 INDIANA 48900 51500 43600 34082 35664 30800 IOWA 45500 51100 42100 31658 35618 29303 KANSAS 46700 54900 38700 32965 38356 28067 KENTUCKY 39300 47700 32200 27028 32411 22542 LOUISIANA 36900 39700 29500 26313 28246 21177 MAINE 38500 43600 36400 32421 36629 30719 MARYLAND 64300 65700 47800 45033 45988 33695 MASSACHUSETTS 56200 56900 46400 44366 44728 37765 MICHIGAN 52900 56700 39400 36651 39033 27893 MINNESOTA 53800 60700 41600 36915 41398 28933 MISSISSIPPI 35500 42200 32100 24447 29496 21994 MISSOURI 45200 51700 34900 31837 36252 24324 MONTANA 38300 42100 36300 28042 30207 26977 NEBRASKA 46600 54500 39800 31634 36639 27623 NEVADA 51700 51700 51900 35837 35891 35577 NEW HAMPSHIRE 50900 55700 44600 41628 45429 36623 NEW JERSEY 63800 63800 0 47589 47589 0 NEW MEXICO 39000 45200 31400 27623 31550 23165 NEW YORK 53600 55000 39300 39740 40635 31472 NORTH CAROLINA 46000 49900 38800 31548 34083 27206 NORTH DAKOTA 40300 45600 36900 28707 32677 26194 OHIO 49200 50800 43200 34350 35392 30562 OKLAHOMA 38400 42500 32700 28553 31805 24139 OREGON 45100 48800 37500 32336 34610 28125 PENNSYLVANIA 45200 47000 36700 34856 36147 28934 RHODE ISLAND 47800 48000 47700 39172 39078 40639 SOUTH CAROLINA 43600 45400 38800 30797 32349 26904 SOUTH DAKOTA 40400 46700 37800 27601 32338 25547 TENNESSEE 44200 47800 37500 29546 32092 24937 TEXAS 45800 48400 33900 31553 33231 24585 UTAH 46900 49200 39200 33245 34322 30183 VERMONT 41700 50600 38800 34779 41968 32453 VIRGINIA 54200 59900 38300 38208 42000 28301 WASHINGTON 51600 54500 38400 36794 38495 29671 WEST VIRGINIA 34400 40800 30000 25602 29882 22654 WISCONSIN 51200 55100 44400 35081 37659 30290 WYOMING 42600 42600 42800 32215 32529 32096 UNITED STATES 47800 51300 35900 35224 37621 27270  

NOTE: DEFINITIONS OF METROPOLITAN AREAS ARE CURRENT AS OF OCTOBER 1998

Revised Fiscal Year 1999 Income Limits