Below Market Rate Housing


The Below Market Rate (BMR) Housing Purchase Program is a part of the Palo Alto Comprehensive Plan. The purpose of the program is to create and retain a stock of affordable housing in Palo Alto for people of low and moderate income.

What is the BMR Housing Purchase Program?

When development of three or more residential units is built in the City of Palo Alto, the developer is required to contribute at least 15% of those units at below market rates (projects of seven or more units must provide one or more BMR units within the development). The initial BMR sales prices are set by the City's Director of Planning & Development Services, and the buyer selection process is administered by Palo Alto Housing (PAH). PAH is a private, non-profit organization under contract to the City.

How to Apply for a BMR Unit

PAH maintains a waiting list of people interested in purchasing a BMR unit. There is a preference given to those who live or work in Palo Alto. Because the waiting list is so long and the number of units limited, it is unlikely a household without this preference would get an opportunity to purchase a unit.

Each applicant must submit an application to the PAH office to be placed on the waiting list. An applicant does not need to meet income or asset requirements to be on the waiting list. Income and asset eligibility requirements are verified at the time of purchase. However, the applicant must return a new application each July when the waiting list is updated in order to maintain a place on the waiting list.

When a below market rate unit becomes available, PAH prepares a package of detailed information about the unit and applicant eligibility criteria. Family income and asset limitations are derived by a formula for each unit, factoring in the price of the unit, property taxes, cost of insurance, homeowner's association dues when applicable, and current financing rates. The information package is sent to all on the waiting list who have the family size required for the unit available and have requested that size unit.

Those who receive the information package will have an opportunity to view the unit and submit a detailed financial statement to PAH before a designated deadline for applications. The applicant with the lowest number on the waiting list who qualifies within the criteria set forth in the package will be selected to pursue financing to purchase the unit. Should adequate financing not be obtained promptly by that party, the purchase opportunity will be passed to the next qualified applicant on the waiting list.

When a BMR owner wishes to sell the unit, he or she must give the City the right of first refusal to buy it. This helps the City to make even more homes available to those in need.

BMR Standards

The City has established standards for BMR units to ensure that they offer Palo Alto residents a high quality of life. Please contact Planning & Development Services Department for more information.

Want to Learn More?

This information is provided to familiarize you with the BMR Housing Purchase Program.  For more information on how to participate in the BMR Housing Purchase Program visit the Palo Alto Housing website. For more information on development requirements for BMR units, please view the Palo Alto Muncipal Code Chapter 16.65.