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City updates below-market-rate sales-price guidance to align with state law, urges early developer contact
Summary
City staff described changes to the below-market-rate (BMR) maximum-sales-price guidance to reflect state law requirements for monthly payment calculations and said developers may submit project-specific pricing assumptions for staff review.
San Luis Obispo housing staff told developers the city updated its below-market-rate maximum-sales-price guidance to align with state law and to calculate monthly payment assumptions that include mortgage, homeowners association fees and insurance.
Staff said the city updates the guidance annually because income limits and other assumptions change. The biggest change this year, they said, was ensuring the calculation reflects state law requirements and standard assumptions for interest rate, down payment, HOA fees and insurance.
City housing staff encouraged developers to provide development-specific pricing calculations for units offered as affordable housing (for example under density bonus or inclusionary requirements) and said early contact with the housing team will help speed vetting and avoid delays at point of sale.
A meeting participant, Donna, said some sample assumptions in the guidance are not accurate for all projects — for example, she noted mortgage insurance is not usually required for many below-market-rate units and including mortgage insurance in examples could result in an unnecessarily higher allowable sales price.
Staff response: housing staff said they will work with developers on a case-by-case basis and pointed to sample spreadsheets and the housing web page for additional detail. Staff named housing-team members available for assistance: Teresa, Ethan and David Amini.
What to watch: staff said all website guidance has been updated for the current year and developers should reach out early to the housing team when preparing affordable-unit pricing calculations.
