American Institute of Certified Planners (AICP) Practice Exam

What income range defines moderate income households?

1. Beneath 50% of Area Median Income

2. Between 50-80% of Area Median Income

3. Between 80-120% of Area Median Income

4. Above 120% of Area Median Income

The correct answer is: Between 80-120% of Area Median Income

Moderate income households are typically defined as those earning between 80% and 120% of the Area Median Income (AMI). This classification is important for various planning and housing initiatives, as it helps identify the demographic most in need of assistance regarding housing affordability, access, and planning resources. Households within this income range often struggle to afford housing in many markets, particularly in areas with rising costs. Defining moderate income in relation to AMI helps urban planners and policymakers address the housing needs of this segment of the population by tailoring programs and policies to create affordable housing options. Other income brackets, such as those below 50% of AMI and between 50-80% of AMI, typically classify low-income households, while households earning above 120% of AMI are often considered middle or upper-income households. Understanding these distinctions is crucial in effective planning and resource allocation to ensure equitable access to housing.