Below market rate housing in Palo Alto

Palo Alto's housing prices put ownership out of reach for most teachers, nurses, service workers and many young professionals. The city's Below Market Rate program is one of the tools it uses to keep some homes within reach. It sells condos and townhouses at prices well below market value to eligible buyers. It also rents apartments at reduced rents in privately owned buildings. The numbers are small compared with demand, so waits can be long, but the program is real and it turns over.

This guide explains how the program works as the city and its administrator publish it. It is general information, not legal or financial advice. For current rules, income limits and openings, rely on the city's BMR page and the administrator directly. For the wider housing picture, start with our real estate overview.

Where BMR homes come from

The program grows out of the city's Comprehensive Plan goal to "create and retain a stock of affordable housing in Palo Alto for people of low and moderate income." Most BMR homes come from inclusionary rules in Chapter 16.65 of the municipal code. According to the city, developers of new housing must provide at least 15 percent of units at below market rates. Projects of seven or more units must include one or more BMR units on site. Some older apartment buildings also have BMR units from earlier agreements.

The city's Director of Planning and Development Services sets initial sales prices. The homes are scattered across the city in ordinary buildings, so a BMR condo usually looks no different from its neighbors.

Who runs it

The city sets the policy. Day-to-day administration belongs to Alta Housing BMR Services, LLC, part of Alta Housing, the Palo Alto nonprofit formerly known as Palo Alto Housing. The city describes it as a private nonprofit organization under contract to the city.

• Office. Sobrato Center for Nonprofits, 3460 West Bayshore Road, Suite 104, Palo Alto.
• Phone. (650) 321-9709.
• Email. [email protected].

Alta Housing also owns and manages its own affordable apartment communities, which have separate applications from the BMR program. Ask which list you are joining.

Buying a BMR home

The purchase program offers mostly condominiums and townhouses at prices significantly below the market. How it works, as the city and Alta Housing describe it:

1. Join the waiting list. Applicants send an application to Alta Housing. There is no income or asset test to join.
2. Renew every July. The list is updated each July. Applicants must return a new application each year to stay on it.
3. Receive an offer package. When a home becomes available, Alta Housing sends information to listed households of the right size that asked for that size.
4. View and apply. Interested households can see the unit and submit a financial statement by a deadline.
5. Selection. The qualifying applicant with the lowest waitlist number is chosen to seek financing. If financing falls through, the next qualified applicant gets the chance.

Alta Housing's page said the purchase waiting list was closed as of June 2026 and posted a waiting list dated August 3, 2026. It also publishes a record of BMR sales from 2023 through May 2026 and slides from a February 2026 workshop on the sales process. Check the page for any reopening.

Living in a BMR home

• BMR homes must be owner-occupied.
• They carry restrictions on renting and resale.
• When an owner wants to sell, the city has a right of first refusal to buy the unit.
• Owners pay association dues and property taxes like any other condo owner. Our condo and townhome guide covers what associations do.

Eligibility as published

Neither the city nor Alta Housing publishes a single income cutoff for the purchase program. Instead, income and asset limits are set for each home using a formula. It considers the unit's price, property taxes, insurance, association dues and current loan rates. Income and assets are verified at the time of purchase, not when you join the list.

Alta Housing links to the county's 2026 income limits, which group households by percentage of area median income for Santa Clara County. Those limits rise with household size. Palo Alto gives a preference to people who live or work in the city. Lenders familiar with BMR loans can explain how the restrictions affect financing. Alta Housing has hosted lender presentations for this reason.

Renting a BMR apartment

The BMR rental program works differently. Rents are below market and increases are limited. There is no central list. Each property manager keeps its own waiting list for its BMR units, so you contact buildings one by one about waiting lists, current rents and vacancies. Alta Housing's page listed these properties in 2026, among others:

Phone numbers for each property are on Alta Housing's page. Expect to prove income and household size when a unit opens. BMR tenants have the same city and state protections as other renters, described in our renting guide.

Setting expectations

A few practical points help applicants plan. Openings depend on turnover and on new buildings, so there is no predictable schedule. A household can wait years. Unit sizes are matched to household size, so a single person and a family of four are effectively on different queues even within one list. A BMR home is also a different kind of asset. Because resale prices are restricted, it builds far less equity than a market-rate home, but it offers stable housing costs in a city where those are rare.

Missing a deadline is the most common way to lose a place. Keep your contact details current with Alta Housing and with every property manager whose list you join. Respond to letters and emails quickly. If your income or household changes, ask how that affects your status rather than guessing.

Other affordable housing routes

The BMR program is one piece of a larger system. Other options to look into:

• Nonprofit-owned apartments. Alta Housing and other nonprofits run affordable communities in and near Palo Alto, each with its own application.
• Housing Choice Vouchers. The Santa Clara County Housing Authority runs the federal voucher program for the county.
• Senior options. Alta Housing lists a Senior Living Entry Program. Our senior resources guide lists other services for older adults.
• Neighboring cities. Mountain View, Menlo Park and East Palo Alto run their own BMR programs with separate lists.

Some residents also rent backyard units, which our ADU guide describes, as a lower-cost way to live in the city.

Why the program exists

Palo Alto's housing history includes deed covenants and steering that kept many families out of the city for decades. Our page on covenants and the fair housing fight tells that story. Today the BMR program sits alongside state laws that require cities to plan for homes at every income level. The stock is small, but each unit stays affordable through resale and rent restrictions, which is the point.

Frequently asked questions