Below market rate housing is rental or ownership housing priced below what a landlord or developer could charge on the open market
Below market rate (BMR) housing costs less than comparable units in the same neighborhood because the owner has agreed to a price cap, usually in exchange for tax breaks, public land, or development funding. The difference between what you pay and what similar housing costs nearby is the subsidy — but that subsidy goes to the owner, not to you as a check. You see it as a lower rent or purchase price.
BMR programs are run by cities and counties, not federal agencies. San Francisco, Los Angeles, New York, and Washington DC all have them, but the rules, income limits, and how many units exist vary sharply by location. Some programs last 30 years; others expire after 10. Some are for renters; some are for people buying a home. Some require you to work in that city; others do not.
The key difference from a voucher or subsidy you receive directly: you do not get money in your pocket. Instead, you live in a unit where the owner has agreed not to charge market rent. If you move out, the next tenant pays the same reduced rate — the affordability stays with the building, not with you.
Key Takeaways
- Below market rate housing is owned by a private landlord or developer who has agreed to cap the rent or sale price, usually because they received public funding or tax benefits to build or operate it.
- Income limits vary by program and location, but most BMR programs serve households earning 50 to 120 percent of the area median income — higher than public housing but lower than market-rate apartments.
- You typically find BMR units through your city or county housing department, not through regular rental websites, because they are not listed on the open market.
- BMR rent is locked for a set period — often 5 to 30 years — but can increase slightly each year, usually tied to inflation or a percentage cap set by the program.
- If your income rises above the program's limit, you may have to move out or pay market rate, depending on the program rules.
How below market rate pricing actually works
A developer builds a 100-unit apartment building. The city gives them a tax credit or sells them the land at a discount, worth $5 million. In return, the developer agrees to rent 20 of those units at 60 percent of market rate for 30 years. Market rent in that building might be $2,000; BMR rent is $1,200. The developer still owns the building and collects rent from all 100 units — they just collect less from the 20 BMR units and make up the difference through the tax credit or land savings.
Alternatively, a city buys an existing building and rents units directly at below-market rates. Or a nonprofit developer builds housing with public grants and operates it at reduced rent. The structure changes, but the outcome is the same: you pay less than market rent because someone — the city, a nonprofit, or a for-profit owner receiving a subsidy — has agreed to absorb the difference.
The rent you pay is still a real rent. You sign a lease, you can be evicted for non-payment, and you are responsible for utilities unless the lease says otherwise. BMR is not free housing; it is housing at a negotiated price below what the market would bear.
Income limits and who can live in BMR housing
Most BMR programs set income limits based on area median income (AMI) — the middle income in your county. A program might serve households earning up to 80 percent of AMI, or up to 120 percent. The higher the percentage, the higher your income can be and still may have access to.
In a high-cost area like the San Francisco Bay Area, 80 percent AMI for a family of four might be around $85,000 per year. In a lower-cost area, it might be $50,000. The same percentage produces different dollar amounts depending on where you live. Some programs also have minimum income requirements — you must earn at least a certain amount to show you can pay rent consistently.
A few programs prioritize people who work in that city, people experiencing homelessness, or people with disabilities. Others are first-come, first-served. When a BMR unit becomes available, the city or property manager posts it, and you submit income documentation, proof of employment (if required), and references. The process is similar to explore for market-rate housing, except you must also prove your income falls within the program's range.
How to find below market rate housing in your area
BMR units are not listed on Craigslist, Zillow, or Apartments.com. You find them through your city or county housing department, which maintains a list of available units and the programs that operate them. Some cities have a dedicated BMR website; others post listings on their main housing page. A few use a lottery system when demand is high.
Start by contacting your city or county housing authority or planning department and asking for their BMR program information. They can tell you whether BMR housing exists in your area, what the income limits are, what units are currently available, and how the process works. If your city does not have a BMR program, ask whether they have other affordable housing programs — some use different names but operate similarly.
Nonprofits that develop affordable housing sometimes manage BMR units. If you know of a nonprofit housing developer in your area, call them and ask whether they operate BMR programs. Community land trusts, which hold land and lease it to residents at below-market rates, are another source — they work similarly to BMR but own the land rather than the building.
What happens to your rent over time
BMR rent is not frozen. Most programs allow annual increases, usually capped at 3 to 5 percent per year or tied to inflation. Your lease will specify the increase formula. After 10 or 30 years — depending on the program — the affordability requirement may expire, and the owner can raise rent to market rate or sell the building. When that happens, you may have to move or pay significantly more.
Some programs require the owner to renew the affordability agreement before it expires. Others do not. Before you move into a BMR unit, ask how long the affordability is may provide and what happens when it ends. If the program expires in five years and you plan to stay longer, you need to know that rent will likely jump.
If your income rises above the program's limit, the rules depend on the specific program. Some allow you to stay and pay market rate. Others require you to move. Ask before you sign the lease what the income recertification process is and what happens if you exceed the limit.
The difference between BMR and other affordable housing programs
BMR is different from a housing voucher, which gives you money to use toward rent anywhere. With a voucher, you choose the unit and the landlord; the voucher follows you if you move. With BMR, the affordability is built into the specific unit — if you move, the next tenant gets the reduced rent, not you.
BMR is also different from public housing, which is owned and operated by a housing authority. Public housing has its own process process, income limits, and waiting lists. BMR is owned by a private landlord or nonprofit who has agreed to price below market.
Some programs blend these approaches. A city might offer vouchers to help you pay for BMR housing, or a nonprofit might operate both public housing and BMR units. The key is to ask your housing authority what programs exist in your area and how each one works.
Income recertification and what happens if circumstances change
Most BMR programs require you to recertify your income every year or every few years. You submit recent pay stubs, tax returns, or a letter from your employer showing your current income. If your income has risen above the program limit, you may have to move, pay market rate, or move to a different BMR program with a higher income limit.
If your income falls, you usually stay in the unit at the same BMR rent. The program does not raise your rent if you lose a job or have a reduction in hours. However, if you gain significant income — a promotion, a second job, or a spouse's income — you may lose BMR status. The exact rules vary by program, so ask when you explore.
Some programs have income limits for entry only — you must may have access to when you move in, but if your income rises later, you can stay. Others have ongoing income limits — if you exceed them, you must leave. Knowing which applies to you matters for long-term planning.
Frequently Asked Questions
Can I buy a below market rate home, or is it only for renters?
Some BMR programs include homeownership. A city might sell you a condo or house at below market price with restrictions on how much you can sell it for later. Ownership BMR programs are less common than rental programs and often require a down payment and mortgage qualification. Ask your city housing department whether they offer BMR purchase programs.
What if I find a below market rate unit listed on a regular rental website?
It is likely not actually a BMR unit. Scammers sometimes list fake units at low prices to collect deposits. Real BMR units are listed only through official city or county housing departments or the property owner directly. If you find a unit on a commercial site, verify it by calling the property manager or your city housing authority before sending money.
Do I need a credit check or rental history to get into BMR housing?
Most BMR programs do require a credit check and rental or employment history, similar to market-rate housing. Some programs are more flexible with people who have poor credit or no rental history, especially if they prioritize people experiencing homelessness or those with barriers to housing. Ask the program what their screening criteria are.
Can my landlord evict me from a BMR unit?
Yes. BMR is a lease like any other. If you do not pay rent, violate the lease terms, or your income exceeds the program limit and the program requires you to leave, you can be evicted. The affordability protection does not protect you from eviction for cause.
What if there are no BMR units available in my city?
Many cities have no BMR programs or have long waiting lists. Ask your housing authority about other affordable housing options: public housing, housing vouchers, emergency rental information, or nonprofit housing programs. Some areas also have inclusionary zoning, which requires new developments to include affordable units.