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Below Market Value: Magic Formula Revealed!

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Yesterday's post on 270 Valencia Street prompted schooling from the Mayor's Office, served up in a friendly note from Myrna Melgar, Director of Homeownership Programs. Here's the deal:

I wanted to explain that, rather than an incomprehensible formula, the
price of a BMR unit is set by what is affordable to a household at 100% or
the area median income. We figure about 38% of a household's income is
what should go towards their monthly housing payment and that is how we set
the price (this includes mortgage, taxes and HOA dues). The thing with the
parking is this: In 2002 the Planning Commission adopted a transit first
policy, which unbundled parking from housing units. What we do with the
BMRs is that we reduce the (already below market) price of the unit by the
cost of the parking, and then the seller or developer can sell the unit
separately by what the market will bear. In the case of 270 Valencia, the

price of that unit reflects a reduction in the price already. Are you feeling as enlightened as we are?
· Below Market at 270 Valencia Street [Curbed SF]