How does the 40% AMI restriction affect rent levels and NOI?

The income restriction requires that 40% of units be rented to households at or below 120% AMI at rents that are affordable to qualifying households, typically defined as 30% of the qualifying income. In the Orlando-Kissimmee MSA in 2026, 120% AMI for a 2-person household is approximately $109,000. At 30% of $109,000 annually, the maximum affordable gross rent is approximately $2,725/month. In most Orlando submarkets, this maximum rent far exceeds what a developer would actually charge for an income-restricted unit. The binding constraint is the market rent comparable, not the statutory maximum. A restricted unit at $1,640-$1,920/month in a corridor where new-construction market rent is $2,050-$2,400/month represents a discount of $410-$480/month per unit, approximately 20% below market. Across 40% of units in a 200-unit project (80 restricted units), the annual NOI impact is approximately $394,000-$461,000 in forgone market-rate rent. Against the property tax exemption benefit of $108,000-$144,000 annually, the net NOI impact of the restriction versus a pure market-rate project is approximately $250,000-$353,000/year. This is the "affordability penalty," and in corridors with deep density unlocks, it is more than offset by the additional units the density unlock provides.