An April report from Denton Community Services Director Jesse Kent showed that affordable housing tax credits and tax exemptions were not resulting in lower rent rates for many Denton renters.
The overview
Federal and state agencies use area median income, or AMI, to calculate what rent rates are affordable at different income levels, Kent said.
The United States Department of Housing and Urban Development calculates AMI for Denton with income information from several counties in or near the larger Dallas area, including Dallas, Collin, Hunt, Denton, Rockwall, Kaufman and Ellis counties, according to Kent's report.
As of 2025, HUD data shows the Dallas region’s AMI for a family of four is $117,300 annually, while Denton’s AMI is $80,900, according to city data. When the state and federal agencies set affordable housing prices in Denton, it’s based on what’s affordable for the Dallas area’s median income, not the city of Denton.
“The [Dallas] area median income is significantly higher than Denton’s median income,” Kent said. “When the state, when the federal government is defining affordability in our community, they're using that much higher income to do it. That doesn't translate well to the city of Denton.”
Zooming out
The US Department of Housing and Urban Development calculates AMI with data from the US Census Bureau, Kent said. HUD examines the incomes for families of four and finds the median income, where half of the families earn a higher income, and the other half earn a lower income than the median. HUD then scales that income to family size to determine the AMI for households of different sizes, Kent said.
The goal of affordable housing is to allow tenants to spend no more than 30% of their monthly income on housing. Residents who spend more than 30% of their income on housing are considered cost burdened, and residents who spend more than 50% are considered severely cost-burdened.
Some background
City leaders adopted new affordability criteria for Denton City Council to approve federally funded tax credits at a Nov. 18 work session, according to previous reporting. The new criteria place an emphasis on housing reserved for 50% and 30% Dallas AMI earners, which could result in rent reductions for Denton tenants.
Currently, there are about 200 Denton units in development and 624 completed that are priced for 50% and 30% with the Dallas AMI data, Kent said.
