The BMR Housing Purchase Program is a part of the Palo Alto Comprehensive Plan. When a development of five 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 5 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 and Community Environment, and the buyer selection process is administered by the Palo Alto Housing Corporation (PAHC). PAHC is a private, non-profit organization under contract to the City. This information is provided to familiarize you with the BMR Housing Purchase Program. For additional information or to complete the waiting list application, please click the link for the PAHC website.
The purpose of the BMR program is to create and retain a stock of affordable housing in Palo Alto for people of low and moderate income. To achieve this goal, certain restrictions are recorded with the grant deed for each BMR unit. Since the BMR housing is intended to be occupied by the low/moderate-income purchaser, the unit may not be rented or leased to others without written permission from the City, which is only granted in situations where the goals of the program will be fulfilled.
When a BMR owner wishes to sell the unit, he or she must give the City the right of first refusal to buy it. The City exercises its option and assigns the right to purchase the unit to a buyer selected by the PAHC. The price at which a unit is resold is calculated based on the increase in the Consumer Price Index--All Urban Consumers for the San Francisco Bay Area during the period of ownership. Currently, one-third of the percentage increase in the Index is applied to the purchase price to determine the resale price. For example, if a unit was purchased for $100,000 and if the Index rose 15% during the period of ownership, then the resale calculation would be $100,000 + (1/3 x 15% x $100,000) = $105,000. Certain substantial improvements and depreciation factors are also taken into consideration in calculating the resale price.
PAHC 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. (The academic and residential areas of Stanford University are not in the City of Palo Alto). Because the waiting list is so long and the number of units limited, it is unlikely a household without the preference would get an opportunity to purchase a unit. Each applicant must submit a waiting list application to the PAHC 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, PAHC prepares a package of detailed information about the unit and applicant eligibility criteria. Family income and asset limitations are derived by 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 PAHC before a designated deadline for application. 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.
