The Location Affordability Index is a calculation designed by the Department of Housing and Urban Development (HUD) in order to estimate the costs of housing and transportation across the country. Data is provided on the percentage of household income spent on housing, transportation, and the combination of the two. Separate values are also offered for owner and renter households. Annual cost spent on transportation and annual total public transit trips are also included. HUD’s methodology was significantly updated in Version 3 of the Location Affordability Index Model (LAIM), which was released in March of 2019. The biggest difference between Version 2 and 3 of the LAIM was the reduction in geographies available – Version 3 only modelled results for Census Tracts. HUD uses different calculations for eight different types of households, with different sizes, incomes, and number of commuters. They are defined as follows:
A very thorough explanation of the calculations made by HUD are available here: https://www.hudexchange.info/programs/location-affordability-index/ .