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City of Orange
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Overview
On May 10, 2023, the City of Orange reached out to Michael Baker International to resolve a question about the Low-to-Moderate Income (LMI) Map presented in the City’s 2020- 2024 Consolidated Plan (ConPlan), and second map that was used in early 2021 for the Notice of Funding Availability (NOFA) for Community Development Block Grant Funds.
Working with City staff and associated departments, the team at Michael Baker International were able to identify the discrepancies between the two maps. This report will:
Determine how the Department of Housing and Urban Development (HUD) qualifies LMI Census Tracts
Show progression of changes in Census Tract 219.14 from 2000, 2010, 2015, and 2020 Census Years via US Census and ACS data
Report on how external influences in the housing market and factors such as home value and tenure are indicators of areas that may be considered LMI-qualifying, especially for Census Tract 219.14 (see Fig 1).
The finding of this report is that Census Tract 219.14 has not qualified for LMI status per HUD’s definition since 2000. The outlier year of 2010 where the area did qualify did so because HUD had uncapped the Income Limits for Orange County to address the subprime mortgage crisis. The sources that were used to research and make this determination are:
US Census/ACS (https://data.census.gov/)
State of California Income Limits (https://www.hcd.ca.gov/grants-and- funding/income-limits)
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The initial map in question was generated from Census Data from 2010. The second map that contradicted the 2010 map was generated from Census Data from 2015. For consistency, this report will focus on three years, 2010, 2015, and 2020. We used 2020 Census Data to show the current status of Census Tract 219.14. In the map below, the yellow area is the part of Census Tract 219.14 that is within the city limits of the City of Orange.
Figure 1 Census Tract Map Detail, 2023 ACS
Determination of an LMI area and Map Creation
Creation of an LMI map involves an overview of the Low to Moderate Income Population at the city level, and at the block group level. The data utilized in these maps are sourced from HUD, incorporating special tabulations and the American Community Survey data.
The areas identified as LMI are based on the thresholds established by HUD. The Community Development Block Grant (CDBG) program requires that each CDBG funded activity must either principally benefit low- and moderate-income (LMI) persons, aid in the prevention or elimination of slums or blight or meet a community development need having a particular urgency. Most activities funded by the Community Development Block Grant (CDBG) program are designed to benefit low- and moderate-income (LMI) persons.
This benefit may take the form of housing, jobs, and services. Additionally, activities may qualify for CDBG assistance if the activity will benefit all the residents of a primarily
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residential area where at least 50 percent of households are low- and moderate-income.
LMI households are those with incomes below 60% of the Area Median Income (AMI)1.
Research
Maps
In researching the history of the map that was included in the 2020-2024 City of Orange Consolidated Plan (Fig. 2), Michael Baker relied on the City’s GIS department who created the map using the data set from 2010 Census and 2014 Low- and Moderate- Income Summary Data per the ACS. It is important to note that 2020 Census information was not fully released until early 2021, and unavailable at the time the Consolidated Plan was created in 2020. However, 2015 ACS estimates were available, which was the source of the second map that accompanied the NOFA (Fig. 3). Michael Baker staff has created a 2020 Map using the 2020 Decennial 2020 Census Data to identify whether a LMI qualified for the El Modena Neighborhood (CT 219.14), the Census Tract did not qualify (Fig. 4).
Figure 2 2020-2024 ConPlan Map (2010 Census Data)
1 Hud Exchange, CDBG Low- and Moderate-Income Data (https://www.hudexchange.info/programs/cdbg/cdbg- low-moderate-income-data/)
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Figure 3 2015 ACS Data LMI Map
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Figure 4 2020 ACS LMI Map
Data trends
Income
Household Income is the most impactful data to determine if a Census Tract area is eligible for CDBG funding. In examining trends from 2000, 2010, 2015 and 2020, we can determine what changes could have occurred that may make a Census Tract ineligible.
The data pulled included information provided by the US Census Website (https://data.census.gov/), and information for the City of Orange as well as for Census Tract (219.14). As shown in the figure below, to pull relevant income four (4) filters were used as follows:
Income (Households, Families, Individuals)
Poverty
Year (2000, 2010, 2015, 2020)
Location (City of Orange and Census Tract 219.14)
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Figure 5 Screenshot from US Census Data website - Income Income Data Results by Year
2000
FY 2000 Income Limits were not located for Orange County. Micheal Baker staff was able to locate FY 1999 Income Limits and FY 2005 Income Limits. To more accurately calculate FY 2000 data, Michael Baker Staff used FY 1999 Income Limits and increased it by the Cost of Living Adjustment (COLA) for FY 2000 (3.5%2) (see Fig. 6).
For the 2000 Census year, the City of Orange had a total of 41,030 Households. The Median Income (dollars) was $58,994. The Income Limits to qualify as a LMI area for 2000 (60% or below Income Level) was $54,444 or less per household Income (see Fig. 6). In 2010 46% of households in the City qualified as LMI. 22 https://www.ssa.gov/oact/cola/colaseries.html
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Income Limits - Orange County, CA FY 2000
Household
Size 1 2 3 4 5 6 7 8 9
1999 Income
Limits 20,249 31,345 41,811 52,603 64,611 78,110 94,231 115,492 156,882 CPI
Increase* 709 1,097 1,463 1,841 2,261 2,734 3,298 4,042 5,491 FY 2000
adjusted 20,958 32,442 43,274 54,444 66,872 80,844 97,529 119,534 162,373 * CPI increase based on cost-of-living increase
for FY 2000 which was 3.4%
Figure 6 2000 State of California Income Limits, Orange County Census Tract 219.14 had 1,305 total households. This is roughly 3% of the total households for the City of Orange. The median household income of this Census Tract was 14% higher than the average of the City of Orange at $68,255 Median Household Income. Given the Income Limits illustrated in Fig. 6, the total percent of qualified households in the Census Tract that fell below 60% of the Income Level Limits was 39%.
In 2000, Census Tract 219.14 did not qualify as an LMI area.
US Census Data Census Tract 219.14 2010
Total households 1,305
Less than $10,000 44 3.4%
$10,000 to $14,999 1.78 1.8%
$15,000 to $24,999 39 3.0%
$25,000 to $34,999 148 11.3%
$35,000 to $49,999 189 14.5%
$50,000 to $74,999 322 24.7%
$75,000 to $99,999 150 11.5%
$100,000 to $149,999 213 16.3%
$150,000 to $199,999 124 9.5%
$200,000 or more 52 4.0%
Median household income (dollars) 68,255
Table 1 US Census Income 2000 Census Tract 219.14
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2010
2010 was an outlier year for HUD Income Limits qualification. The subprime mortgage crisis of 2007-10 stemmed from an earlier expansion of mortgage credit, including to borrowers who previously would have had difficulty getting mortgages, which both contributed to and was facilitated by rapidly rising home prices 3. HUD released a memo in June of 2010 permitting selected Counties to use “uncapped” income limits to determine LMI (see attached HUD memo). The percentage went from 60% of AMI to 80%. For the 2010 Census year, the City of Orange had a total of 41,986 Households.
The Median Income (dollars) was $72,784. The Income Limits to qualify as an LMI area for 2010 (80% or below Income Level) was $63,800 or less per household Income (see Fig. 7). In 2010 67% of households in the City qualified as LMI.
FY 2010 Uncapped Low Income Limits
Uncapped FY 2010 Low Income Limits
County State 1-Person 2-Persons 3-Persons 4-Persons 5-Persons 6-Persons 7-Persons 8-Persons Orange
County CA $48,800 $55,800 $62,800 $69,800 $75,300 $80,900 $86,500 $92,100 Figure 7 2010 State of California Income Limits, Orange County Census Tract 219.14 had 1,365 total households. This is roughly 3% of the total households for the City of Orange. The median household income of this Census Tract was 21% higher than the average of the City of Orange at $92,056 Median Household Income. Given the Income Limits illustrated in Fig. 7, the total percent of qualified households in the Census Tract that fell below 60% of the Income Level Limits was 35%.
In 2010, Census Tract 219.14 did not qualify as an LMI given HUD’s exception of “uncapped” income limits.
US Census Data Census Tract 219.14 2010
Total households 1,365
Less than $10,000 32 2%
$10,000 to $14,999 39 3%
$15,000 to $24,999 33 2%
$25,000 to $34,999 54 4%
$35,000 to $49,999 220 16%
$50,000 to $74,999 122 9%
$75,000 to $99,999 239 18%
$100,000 to $149,999 317 23%
$150,000 to $199,999 123 9%
$200,000 or more 186 14%
Median household income (dollars) 92,056
Table 2 US Census Income 2010 Census Tract 219.14
3 FederalReserveHistory.org; “Subprime Mortgage Crisis” City of Orange
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2015
For the 2015 Census year, the City of Orange had a total of 42,686 Households. The Median Income (dollars) was $83,429. The Income Limits to qualify as an LMI area for 2015 (60% or below Income Level) was $56,220 or less per household Income (see Fig. 8).
Figure 8 2015 State of California Income Limits, Orange County Census Tract 219.14 had 1,306 total households. This is roughly 3% of the total households for the City of Orange. The median household income of this Census Tract was 1% higher than the average of the City of Orange at $84,524 Median Household Income. Given the Income Limits illustrated in Fig. 7, the total percent of qualified households in the Census Tract that fell below 60% of the Income Level Limits was 32%.
In 2015, Census Tract 219.14 did not qualify for LMI.
US Census Data Census Tract 219.14 2015
Total households 1,306
Less than $10,000 61 5%
$10,000 to $14,999 0 0%
$15,000 to $24,999 58 4%
$25,000 to $34,999 102 8%
$35,000 to $49,999 149 11%
$50,000 to $74,999 210 16%
$75,000 to $99,999 113 9%
$100,000 to $149,999 336 26%
$150,000 to $199,999 117 9%
$200,000 or more 160 12%
Median household income (dollars) 84,524
Table 3 US Census Income 2015 Census Tract 219.14
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2020
For the 2020 Census year, the City of Orange had a total of 43,327 Households. The Median Income (dollars) was $96,605. The Income Limits to qualify as an LMI area for 2020 (60% or below Income Level) was $102,450 or less per household Income (see Fig. 8). In 2020 52% of households in the City qualified as LMI.
Figure 9 2020 State of California Income Limits, Orange County Census Tract 219.14 had 1,268 total households. This is roughly 3% of the total households for the City of Orange. The median household income of this Census Tract was 138% higher than the average of the City of Orange at $133,750 Median Household Income. Given the Income Limits illustrated in Fig. 9, the total percent of qualified households in the Census Tract that fell below 60% of the Income Level Limits was 45%.
In 2020, Census Tract 219.14 did not qualify for LMI.
US Census Data Census Tract 219.14 2020
Total households 1,268
Less than $10,000 38 3%
$10,000 to $14,999 63 5%
$15,000 to $24,999 28 2%
$25,000 to $34,999 73 6%
$35,000 to $49,999 90 7%
$50,000 to $74,999 113 9%
$75,000 to $99,999 161 13%
$100,000 to $149,999 126 10%
$150,000 to $199,999 242 19%
$200,000 or more 334 26%
Median household income (dollars) 133,750
Table 4 US Census Income 2020 Census Tract 219.14
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Summary
US Census Data
Census Tract 219.14 2000 2010 %
Change 2015 %
Change 2020
%
Change
2000 to
2020
Total households 1305 1,365 5% 1,306 -4% 1,268 -3%
Less than $10,000 44 3% 32 2% -27% 61 5% 91% 38 3% -14% $10,000 to $14,999 24 2% 39 3% 63% 0 0% -100% 63 5% 163% $15,000 to $24,999 39 3% 33 2% -15% 58 4% 76% 28 2% -28% $25,000 to $34,999 148 11% 54 4% -64% 102 8% 89% 73 6% -51% $35,000 to $49,999 189 15% 220 16% 16% 149 11% -32% 90 7% -52% $50,000 to $74,999 322 25% 122 9% -62% 210 16% 72% 113 9% -65% $75,000 to $99,999 150 12% 239 18% 59% 113 9% -53% 161 13% 7% $100,000 to $149,999 213 16% 317 23% 49% 336 26% 6% 126 10% -41% $150,000 to $199,999 124 10% 123 9% -1% 117 9% -5% 242 19% 95% $200,000 or more 52 4% 186 14% 258% 160 12% -14% 334 26% 542% Median household
income (dollars) 68255 92,056 35% 84,524 -8% 133,750 45% Table 5 2000-2010-2015-2020 HH Income Table (ACS)
In examining trends in total household income for Census Tract 219.14, we can see in Table 5 that the total household incomes that increased the most significantly were those households that were $150,000+. This increase in household income indicates that the neighborhood has grown in affluence since 2000, where $150,000K+ household incomes made up 14% of the Census Tract, but by 2020 accounted for 45% of households. The outlier of a decrease in lower household income in 2010 is most likely due to the subprime lending crisis. Conversely, looking at percent changes in 2015, there are less households that reported low-moderate incomes. The shift from lower income households located in Census Tract 219.14 is illustrated in Chart 1 (below).
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Household Income Trends
Chart 1 HH Income Trend ACS 2000, 2010, 2015, 2020
This chart clearly illustrates the downward trend of lower-income households occurring in Census Tract 219.14. While the increase of $100,000+ income households are on the rise within the Census Tract.
0%
10%
20%
30%
40%
50%
60%
70%
2000 2010 2015 2020
Less than $10,000 to $74,999 $75,000 to $99,999 $100,000+ City of Orange
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Home Value and Tenure
The value of a home helps identifies trends in the prosperity of a neighborhood. Areas with higher-valued homes are generally areas with higher household incomes.
Additionally, occupancy is also a determinant of qualifying LMI as thresholds for qualifications are based on number of people living in the home. Finally, tenure (owner- occupied vs. renter-occupied) could indicate if a Census Tract area could be identified as LMI-qualifying.
Home Value
For this report, Michael Baker staff focused on owner-occupied units within Census Tract 219.14. The housing values within this Census Tract have historically tracked higher than the City of Orange’s overall home values (see Chart 2). Additionally, homes with values of $500K and more have made up the dominant percentage of housing in Census Tract 219.14 (see Table 6).
Median Home Value
Chart 2 Median Home Value; ACS 2000, 2010, 2015, 2020
0 100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2000 2010 2015 2020
Census Tract 219.14 City of Orange
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Year 2000 2010 2015 2020
Total owner-occupied units 891 958 1,267 921
Value Units % Units % Units % Units %
Less than $50,000 16 2% 10 1% 22 1% 0 0%
$50,000 to $99,999 44 5% 12 1% 7 0% 9 1%
$100,000 to $149,999 38 4% 0 0% 18 0% 0 0%
$150,000 to $199,999 95 11% 48 5% 32 2% 0 0%
$200,000 to $299,999 300 34% 52 5% 69 6% 0 0%
$300,000 to $499,999 289 32% 214 22% 532 32% 108 12%
$500,000 to $999,999 104 12% 517 54% 535 45% 653 71%
$1,000,000 or more 5 1% 105 11% 52 14% 151 16%
Median Value (dollars) $288,400 $591,400 $573,900 $731,500 Homes $500K+ 13% 65% 59% 87%
Table 6 Census Tract 219.14 Owner Occupied Housing Value, ACS 2000, 2010, 2015, 2020 City of Orange
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Tenure
Renter-occupied households historically have lower household incomes than owner- occupied households and may be more affected by changes in household income and rental prices 4. Therefore, if a Census Tract has a higher percentage of renters vs. homeowners, it could be an indication of an LMI qualified area. Census Tract 219.14 has always had higher owner-occupied homes vs. renter-occupied homes (see Chart 3) . This neighborhood has a higher rate of single-family units that multi-family units; with single- family units representing 73% of all housing units in 2000, 52% of all housing units in 2010, 64% of all housing units in 2015, and 70% of all housing units in 20205.
Housing Status for Census Tract 219.14
Chart 3 Stats for housing Census Tract 219.14; ACS 2000, 2010, 2015, 2020 4 https://www.census.gov/library/stories/2023/03/low-income-renters-spent-larger-share-of-income-on-rent.html 5 US Census Data 2000, 2010, 2015, 2020
960 958
1,042
921
354 407
264
347
0 200
400
600
800
1000
1200
2000 2010 2015 2020
Owner-Occupied Renter-Occupied
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Conclusion
In conducting historical research of Census Tract 219.14, it has been determined that this tract has not qualified as a LMI Census Tract from FY 2000 to the present6.
The discrepancies noted in the 2020-2024 Consolidated Plan arose from an exception that was made for the Decennial Census for 2010 where HUD had uncapped the income limits for certain counties to allow for households whose incomes were 80% or lower of the AMI to qualify was low- and moderate-income. Traditionally, HUD’s cap to determine LMI is 60% or lower than AMI 7. Note – while HCD (The State Housing and Community Development Department California) releases Income Limits yearly, all State statutory limits are based on federal limits set and periodically revised by the U.S. Department of Housing and Urban Development (HUD) for the Section 8 Housing Choice Voucher Program. HUD’s limits are based on surveys of local area median income (AMI).
Chart 4 Census Tract 219.14 Qualification for LMI
The subprime mortgage crisis that affected the United States from 2008-2010 prompted HUD to increase the percentage of household income cap to 80% instead of 60% AMI to assist citizens during the financial downturn. This uncapped percentage contributed to the isolated event of the inclusion of Census Tract 219.14 in the LMI map generated from 2010 Census Data and used for the Consolidated Plan.
While there are multiple factors that can affect if a Census Tract qualified for CDBG funding, HUD is clear that the Community Development Block Grant (CDBG) program requires that each CDBG funded activity must either principally benefit low- and moderate-income (LMI) persons, aid in the prevention or elimination of slums or blight or meet a community development need having a particular urgency. Most activities funded 6 US Census and ACS data 2000, 2010, 2015, and 2020
7 https://www.hcd.ca.gov/grants-and-funding/income-limits
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by the Community Development Block Grant (CDBG) program are designed to benefit low- and moderate-income (LMI) persons. Additionally, activities may qualify for CDBG assistance if the activity will benefit all the residents of a primarily residential area where at least 51 percent of the residents are low- and moderate-income persons, i.e., area- benefit (LMA).