Bay Area Affordable Housing Income Limits: Who Gets to Stay

A four-person household in Santa Clara County can earn $162,400 this year and still be classified as low income. No typo, and no loophole. It is the published 2026 limit from the California Department of Housing and Community Development, effective June 23, and the county’s $205,500 area median income for a family of four is the highest county figure in the state.

The Mercury News ran a piece this month about a Bay Area household earning around $300,000 that pays roughly $1,800 a month in a below-market apartment, and the reaction wrote itself. Here is the part the outrage skips. Bay Area affordable housing income limits screen people on the way in, and California built almost nothing to move them along afterward. That was a design choice, and reversing it would not free up enough homes to matter.

What low income means in a county with a $205,500 median

HCD publishes a separate set of limits for every California county, and the Bay Area numbers lead the country. These are the 2026 State Income Limits for a four-person household in the four counties this story runs through, published by HCD and effective June 23, 2026.

The tier names are nominal. Low income is usually described as 80 percent of median, but San Francisco’s $168,100 is about 84 percent of that county’s $200,800 median, because HUD applies a high housing cost adjustment before the state adopts the figures. Santa Clara County’s four-person median rose from $195,200 in 2025 to $205,500 in 2026, a jump of $10,300 in one year.

Set against the rest of the country the absurdity resolves. A San Mateo County household at the low-income line out-earns the typical American household about two to one, which is a fact about local housing costs.

Qualifying once is not the same as qualifying forever

Every one of these programs verifies income before the lease is signed. What happens afterward is decided by whichever program paid for the unit, and the programs flatly disagree with each other. Most coverage collapses that distinction, and the whole story lives inside it.

Three regimes cover nearly every below-market rental here: federal Low Income Housing Tax Credit units, older HUD project-based rental assistance, and local inclusionary units set aside inside market-rate buildings. Ask each what happens when the tenant gets a raise and you get three different answers.

The 140 percent rule is about the landlord, not the tenant

In tax credit housing, passing 140 percent of the applicable income limit does not put a household on the street. It puts a duty on the owner.

Under Treasury Regulation 1.42-15, once a recertified household goes over that line the unit keeps its low-income status only if the owner leases the next available comparable unit in the building to an income-qualified household. Miss that and every over-income unit of comparable size loses its low-income status. The tenant is not the party being punished here.

The National Housing Law Project’s tenant guide puts it flatly. Nothing in the tax credit rules requires an eviction on this basis, and good cause is required to evict from a tax credit unit at all.

A second wrinkle almost nobody reports: in buildings where every unit is income restricted, federal law has let owners skip annual income recertification since 2008. A rising income there is not merely tolerated. It is never measured.

What happens to the rent when the paycheck goes up

In a tax credit unit, nothing happens. The rent is set by bedroom count and the AMI schedule, not by what the tenant earns.

Santa Clara County’s 2026 rent limits cap a 50 percent AMI two-bedroom at $2,312 a month including the utility allowance, effective May 29, 2026. A tenant who doubles their salary pays $2,312. A tenant who loses a job pays $2,312 too, which is the half of this design people forget to be angry about.

One program does tie rent to income. Under HUD project-based Section 8, the household pays 30 percent of adjusted monthly income and the owner recomputes whenever income rises by $200 a month or more. A raise there raises the rent right away.

That gap is what people are really reacting to, and it is wildly uneven across the region.

Oakland is the honest counterexample. A 50 percent AMI two-bedroom there is capped at $1,910 against a $2,697 market median in September 2026, a gap of $787. In San Francisco the same comparison runs $2,363 against $6,160. Identical rules, one state, and a benefit worth nearly five times as much in one city as the other. The only variable is what market housing costs on the same block.

San Francisco does show people the door

The blanket claim that nobody can ever be made to leave is wrong, at least for inclusionary units in San Francisco.

The city’s below-market-rate rental program recertifies every household annually, starting 120 days before the lease expires. At or below 120 percent of AMI, the household clears the income portion outright. Above 175 percent of AMI, the file goes to the Mayor’s Office of Housing and Community Development for review. A disqualified household gets five calendar days to appeal, then a 90-day notice of non-renewal, and has to be out when it runs.

So whether a high-earning household can stay indefinitely depends on the funding stack behind the unit, not on the city on the envelope. Unsatisfying if you are trying to write one clean rule, and it is why this story gets reported two opposite ways depending on which building the reporter found.

Ownership BMR units run on completely different wiring

Deed-restricted below-market ownership homes are income-certified once, at purchase, and never again.

Marin Housing Authority states it plainly. Income is certified at purchase with no annual recertification, though owners must certify owner occupancy every year and cannot rent the home out. Resale price is capped at the original price plus the smallest of three measures: county median income growth, Bay Area inflation, or fair market value.

A below-market owner whose income triples keeps the home and keeps the price cap. That is the deal, not a defect in it. The restriction rides with the deed, so the next buyer gets the same discount. Give up the appreciation, keep the home.

What this does and does not mean

It does mean a household well above the qualifying line can legally occupy a below-market unit for years, and in San Francisco that seat is worth close to $3,800 a month. It does not mean anyone committed fraud. These households qualified honestly, then did the thing everyone says they want people in subsidized housing to do.

It also does not mean the unit stopped being affordable. The rent cap belongs to the unit, not the tenant, so whenever that household moves the next one pays the same restricted rent.

And the trade-off deserves a fair hearing. Aggressive recertification with an eviction at the end sounds efficient until you price it out. Income in a tech-adjacent economy is lumpy. A household pushed out on a bonus year is back in the queue when the bonus year ends, this time without stable housing, and moving costs and broken tenancies land on the public too.

The number that settles the argument

Here is the math that ends this conversation. San Francisco’s affordable portfolio holds 36,301 deed-restricted units, about 8.6 percent of the city’s 422,958 homes as of February 2026, and the city’s Budget and Legislative Analyst puts the average cost of building one at $954,127 as of 2024.

Reclaiming an over-income unit costs the public almost nothing and produces zero net homes. It moves one household to the front of the line and one household out of it. Building a unit costs $954,127 and produces one.

The size of the line is the real story. The Bay Area’s regional housing allocation for 2023 through 2031 calls for 114,442 very-low-income and 65,892 low-income homes, and across 2023 and 2024 the region permitted roughly 5 percent of the very-low-income goal and 10 percent of the low-income goal. Emptying every over-income unit tomorrow would not register against that.

Run the same comparison for buying and it gets worse.

At the August 2026 median on our San Jose city page, $1.63M, a buyer needs about $425,600 a year at 20 percent down and the 6.76 percent 30-year rate Freddie Mac reported on September 10, 2026, holding housing cost to 30 percent of gross income. The Santa Clara County low-income limit is $162,400. San Francisco needs about $574,400, roughly 3.4 times its local line. Oakland is the closest of the four to reachable and still takes 1.9 times the limit.

How we would actually read this

If you are comparing places to live right now, the useful takeaway has nothing to do with that one household. A below-market unit is a deed restriction attached to a specific building, and the discount it carries depends almost entirely on what market housing costs nearby. Oakland and San Francisco are not the same asset.

That is the habit Houseberry is built around, looking hard at the area before the address, which is why our most affordable Silicon Valley neighborhoods list sits beside the overall Silicon Valley rankings rather than under them. Price is one score out of six for a reason.

The fix for a $162,400 low-income line is not a better eviction rule. It is enough housing that $162,400 stops counting as low.

Sources

• California HCD, Official State Income Limits for 2026, effective June 23, 2026
• City of Santa Clara, 2026 Area Median Income and Maximum Rent Limits, effective May 29, 2026
• Novogradac on the LIHTC available unit rule and Treasury Regulation 1.42-15
• National Housing Law Project, An Advocate’s Guide to Tenants’ Rights in the LIHTC Program
• San Francisco MOHCD, Inclusionary Below Market Rate renter recertification
• HUD, Fact Sheet for Project-Based Section 8 residents
• Marin Housing Authority, BMR program FAQs
• San Francisco Budget and Legislative Analyst, Financing Affordable Housing, June 2026
• ABAG, Regional Housing Needs Allocation 2023 to 2031
• Bay Area Equity Atlas, Bay Area Housing Readiness Report
• Freddie Mac Primary Mortgage Market Survey, September 10, 2026
• Market rent medians from Zumper city rent research, September 2026. Home price medians from houseberry.com city pages, August 2026.