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Methodology & Sources

How NexusEngine produces defensible housing nexus studies using federal data

NexusEngine automates the production of housing nexus studies — the empirical analysis that connects new development to affordable housing demand. Our methodology follows the standard nexus framework used by leading consulting firms (BAE Urban Economics, Keyser Marston Associates, Strategic Economics) and has been upheld in California, Colorado, and other state courts. Every data point is sourced from federal agencies and stamped with full provenance.

Federal Data Sources

HUD Income Limits

Annual (typically April)

Area Median Income (AMI) thresholds by household size. The foundation of every affordability calculation — defines "low", "very low", and "extremely low" income categories.

U.S. Department of Housing and Urban DevelopmentSource

HUD Fair Market Rents

Annual (typically October)

Fair Market Rents (FMR) by bedroom count for metropolitan and non-metropolitan areas. Used as the baseline for affordable rent thresholds.

U.S. Department of Housing and Urban DevelopmentSource

Census PUMS Microdata

Annual (5-year rolling)

American Community Survey 5-Year Public Use Microdata Sample. Provides industry × income cross-tabulations and workers-per-household ratios — the methodological core of the nexus calculation.

U.S. Census BureauSource

BLS Employment Data (QCEW)

Quarterly

Quarterly Census of Employment and Wages. County-level employment counts and average wages by NAICS industry sector.

U.S. Bureau of Labor StatisticsSource

FRED Mortgage Rates

Weekly

Current 30-year and 15-year fixed mortgage rates from the Primary Mortgage Market Survey. Used to calculate affordable purchase prices.

Federal Reserve Bank of St. LouisSource

HUD CHAS Data

Periodic (ACS-based)

Comprehensive Housing Affordability Strategy data. Income × cost burden cross-tabulations showing the housing affordability gap by tenure and income level.

U.S. Department of Housing and Urban DevelopmentSource

Census LODES/LEHD

Annual

Longitudinal Employer-Household Dynamics. Workplace-level job counts by wage category and commute flows, derived from administrative records.

U.S. Census BureauSource

ACS Summary Tables

Annual

American Community Survey summary-level tables. Median gross rent, vacancy rates, cost burden rates, and income distributions at the county level.

U.S. Census BureauSource

Methodology Pipeline

1

Define Study Geography & Parameters

Select the target county, study year, and configure assumptions (mortgage rate, housing cost ratio, down payment percentage, HOA costs, AMI ceiling). Every assumption is transparent and adjustable.

NCHMA Practitioner's Guide to Housing Needs Assessments
California Government Code §65008 et seq.
2

Collect Federal Data

Pull live data from 8 federal sources simultaneously. Each data point is stamped with its source URL, vintage date, and retrieval timestamp for full provenance.

hud income limitshud fmrpumsbls qcewfredchaslodesacs summary
3

Calculate Affordable Rents & Prices

Derive maximum affordable rents and purchase prices at each AMI tier (30%, 50%, 60%, 80%, 100%, 120% AMI) using HUD income limits, FMR baselines, and the configured cost-ratio assumptions.

hud income limitshud fmrfred
24 CFR §5.609 (Annual Income)
HUD Handbook 4350.3 (Occupancy Requirements)
4

Build Industry × Income Cross-Tabs

Cross-tabulate PUMS microdata to determine workers-per-household ratios and income distributions by industry sector. This is the empirical core of the nexus methodology — it connects new development to housing demand by occupation.

pumsbls qcew
Keyser Marston Associates nexus methodology (2008–present)
BAE Urban Economics nexus methodology
5

Compute Nexus (Housing Demand by Income)

For each industry sector, calculate how many worker households would be induced by new development and what share of those households earn below each AMI threshold. This yields the total affordable housing demand that justifies an inclusionary requirement.

pumsbls qcewhud income limits
California Building Industry Association v. City of San Jose, 61 Cal.4th 435 (2015)
Home Builders Association of Northern California v. City of Napa (2001)
6

Generate Report & Audit Pack

Produce a publication-ready Word report following the Bloomington template format, a methodology appendix with full source citations, and a sealed audit pack (ZIP) with SHA-256 integrity verification for litigation readiness.

Bloomington, IL Housing Nexus Study (2019) — template format

Legal & Regulatory Foundation

Housing nexus studies provide the "reasonable relationship" or "rational nexus" between new development and the need for affordable housing, as required by the U.S. Supreme Court's Nollan/Dolan tests and state-specific enabling legislation. NexusEngine produces the same empirical analysis that consulting firms deliver in 40–80 hours, but in minutes — with transparent assumptions, per-cell provenance, and litigation-ready documentation.

Download a Sample Nexus Study

See what a complete NexusEngine report looks like — 40+ pages with full provenance and methodology appendix.

See It in Action

Walk through a complete nexus study using real federal data in our interactive demo — no sign-up required.

Try the DemoGet Started Free
NexusEngine

Automated housing nexus studies powered by live federal data. A Daedalus Advisory Services product.

© 2026 Daedalus Capital, LLC d/b/a Daedalus Advisory Services. All Rights Reserved.

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