American Institute of Certified Planners (AICP) Practice Exam

What defines very low income households?

1. Earn above 80% of Area Median Income

2. Earn no more than 50% of Area Median Income

3. Earn between 50-80% of Area Median Income

4. Earn between 30-50% of Area Median Income

The correct answer is: Earn no more than 50% of Area Median Income

Very low income households are defined as those earning no more than 50% of the Area Median Income (AMI). This definition is important in various contexts, particularly in housing and urban planning, as it helps to identify and address the needs of the most financially vulnerable populations. Understanding income categories in relation to AMI is crucial for policymakers when developing affordable housing strategies, allocating resources, and targeting assistance programs. By focusing on households that are at or below this income threshold, planners can ensure that interventions are aimed effectively at alleviating poverty and supporting those in greatest need of assistance. Other income categories fall outside this specific threshold. For example, households earning above 80% of AMI do not qualify as very low income, but might be considered moderate or upper income. Those earning between 50-80% AMI represent a different economic group that still faces challenges but does not meet the definition of very low income, and the same applies to those earning between 30-50%. Thus, recognizing the correct income bracket is key for understanding the full spectrum of housing needs and socioeconomic planning efforts.