What is Mixed Income

At the National Initiative on Mixed-Income Communities we refer to mixed-income in two ways, “mixed-income housing” and “mixed-income communities” both meaning the mixing of people of different incomes living in the same geographic area.

At the core of the “mixed-income housing” definition is the intentionality of accommodating residents with a range of income levels in the housing. The general definition is “a mix of subsidized and market-rate housing” in a defined geographic area. Where information on development plans are available, “mixed-income housing means a deliberate effort to construct and/or own a multifamily development that has the mixing of income groups as a fundamental part of its financial and operating plans” (Brophy and Smith 1997).

As the U.S. Department of Housing and Urban Development (HUD) advances its mission to create strong, sustainable, inclusive communities and quality, affordable homes for all, the promotion of mixed-income communities has become a core strategy. Across the U.S., local governments and private developers are increasingly turning to mixed-income development as an approach to deconcentrate poverty and revitalize urban neighborhoods (Brophy and Smith, 1997; Cisneros and Engdahl, 2009; Joseph, 2006, 2013; Joseph, Chaskin, and Webber, 2007; Khadduri, 2001; Kleit, 2005; Popkin et al., 2004). With the Choice Neighborhoods Initiative, launched in 2010, the federal government has extended its commitment to supporting the mixed-income approach to public housing transformation first implemented through the HOPE VI initiative in the mid-1990s.

The two rationales for mixed-income development established by Joseph, Chaskin and Webber in 2010 are:

A strategy for addressing urban poverty that will help counteract the negative effects associated with highly concentrated inner-city poverty and promote upward mobility among low-income families.

A general strategy for urban redevelopment that can unite otherwise divided political constituencies and generate the financing necessary to secure and redevelop prime inner-city land. In this line of thinking, mixed-income development is less about poverty alleviation and much more about an approach to inner-city redevelopment that is economically lucrative and politically viable.

Mixed-Income can also refer to “Economic Diversity” including household income distribution, area median income, entropy index and income diversity.

Household Income Distribution

Household income distribution refers to income Quintiles 1-5

  • Quintile 1=Very Low Income (VLI), < $20,000*
  • Quintile 2=Low Income (LI), $20,000 – $35,000
  • Quintile 3=Moderate Income (ModI), $35,000 – $60,000
  • Quintile 4=Middle Income (MidI), $60,000 – $100,000
  • Quintile 5=High Income (HI), > $100,000

*The actual quintile cut-off points are $19,800, $35,600, $60,600 and $98,200 The ceilings for each range reported by the census are actually a dollar short of the subsequent range, i.e. $34,999 instead of $35,000.

Turner and Fenderson (2006).

Area Median Income

Area Median Income refers to the median income of a particular geographic area in these categories:

  1. Very low-income (VLI) group: families earning 50 percent or less of AMI
  2. Low-income (LI) group: families earning 51 to 80 percent of AMI
  3. Moderate-income (MI) group: families earning 81 to 100 percent of AMI
  4. High-moderate-income (HMI) group: families earning 101 to 120 percent of AMI
  5. High-income (HI) group: families earning 121 to 150 percent of AMI
  6. Very high-income (VHI) group: families earning more than 150 percent of AMI

Galster, G. C., Booza, J. C., & Cutsinger, J. M. (2008, 264).

Entropy Index

The Entropy index “provides a measure of how evenly families are distributed across the various income groups within a neighborhood. It assumes its maximum value of 1.0 when each of the aforementioned six income groups is equally represented in the neighborhood. It assumes its minimum value of zero when only one of the groups is represented in the neighborhood. Many scholars have confirmed the usefulness of the entropy index and its numerous desirable technical qualities, such as handling multiple groups readily, easy calculation, and decomposability.”

Galster, G. C., Booza, J. C., & Cutsinger, J. M. (2008, 265).

Income Diversity

Income diversity refers to the minimum threshold of any one group and ranges from high diversity to not diverse:

  • High diversity= 1 group= 33%, 4 groups= 16.7%, 1 group= 0%, Entropy Range .87≤H
  • Moderate diversity= 1 group= 50%, 3 groups= 16.7%, 2 groups 0%, Entropy Range .69≤H​
  • Low diversity =1 group= 66.7%, 2 groups= 16.7%, 3 group= 0%, Entropy Range .48≤H<.69
  • Not diverse=NA, Entropy Range H<,48

Galster, G. C., Booza, J. C., & Cutsinger, J. M. (2008, 266).