Backgrounder on Rental Housing Affordability Index: Prototype for Moderate Income
The Housing Affordability Initiative (HAI) at MIT’s Center for Real Estate was launched in 2004.
HAI has spent much of its first year developing an intellectually honest and realistically achievable
definition of “affordable” for the Boston metropolitan area. To date, the result of this effort is a
prototype Rental Housing Affordability Index, a unique rating that combines both availability of
affordable housing and proximity to employment in a single numeric score.
The primary innovations represented by this index are:
1. Regional: it treats the entire Boston metropolitan area as a unified market for both housing and
2. Spatial: it considers the locations of jobs relative to the locations of housing, and therefore
builds the concept of job accessibility into the index.
3. Comprehensive: availability of all affordable housing—both subsidized and private—is
HAI considers the index a prototype and expects that the index values presented in this
discussion will be subject to further refinement. Currently, the index provides information for rental
properties available to households earning between 50 and 80% of the Area Median Income
(AMI). However, HAI is currently constructing a family of indexes. Separate rental indexes are
being prepared for income levels less than 30% AMI, 30–50% AMI, 50–80% AMI, and 80–100%
AMI; for large and small household sizes; and for home ownership.
In the prototype system, the index value—a single number for each town—is the ratio of the
town’s available stock of affordable housing to the town’s accessibility to jobs throughout the
entire metropolitan region (see attached map and table). Thus the prototype index does not rank
a town by just the percentage of its total housing stock that is affordable. Rather, higher index
scores indicate that the town achieves a more optimal provision of affordable housing. In fact, the
index is deliberately designed