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What Is the Difference Between Market Rate Unit and Below Market Rate (BMR)?
Both Market-Rate (MR) and Below Market-Rate (BMR) housing benefit homeowners by providing accessible housing options. Market-Rate units allow homeowners to choose properties based on current market conditions while BMR units help by ensuring affordable housing options through government or non-profit initiatives. These initiatives often include long-term affordability measures to keep housing within budget over time.
A Comparative Analysis of MR and BMR Units
Market-Rate Housing
Market-rate housing, or market-rate units (MR), includes properties priced according to current market conditions without government support. Rental prices for these units depend on location, demand, amenities, size, and condition. Properties with less appealing features might have lower rents. These units are often priced based on the Area Median Income (AMI), which shows how much of a person's income goes towards housing. The AMI, updated yearly by the Federal Department of Housing & Urban Development (HUD), helps determine market rates, but prices can also be set based on local averages. Landlords use these rates to set competitive rents and attract tenants while aiming for a good return on their investment.
Below Market-Rate Housing
Below Market-Rate (BMR) units are designed to be affordable for people with moderate or low incomes. They are usually built by local government agencies, non-profits, or required by developers under affordable housing laws. BMR units have deed restrictions to keep them affordable for future residents, even if market conditions change.
Find out FREE the market value of your property if improved.
Contributing Factors to Real Estate Pricing
Market-Rate Housing
Several factors determine the price of market-rate housing. Location is key; properties in desirable areas with good amenities, schools, and job access generally cost more. The type of property—whether an apartment, house, or condo—also affects pricing due to local supply and demand. Larger or better-kept properties usually have higher prices. Additionally, amenities like swimming pools or gyms can increase property values.
Below Market-Rate Housing
For Below Market Rate (BMR) housing, factors include local regulations, such as Inclusionary Affordable Housing Ordinances, which require developers to include affordable units. Government funding and subsidies help make these projects feasible. Success often depends on collaboration between developers, nonprofits, and government agencies. BMR housing targets lower- and moderate-income households, with deed restrictions to keep properties affordable over time. Market conditions, such as housing demand and construction costs, also impact BMR programs.
Standard Sizes for Dwelling Units
Understanding standard dwelling unit sizes is important for developers and homeowners alike.
Studio. Market Rate Unit: Usually around 400-600 square feet.
1 Bedroom + 1 Bathroom. Market Rate Unit: Typically around 757 square feet.
2 Bedrooms + 1 Bathroom. Market Rate Unit: Generally around 1,136 square feet.
3 Bedrooms + 1 Bathroom. Market Rate Unit: Typically around 1,054 square feet.
2 Bedrooms + 2 Bathrooms. Market Rate Unit: Usually around 800-1,000 square feet.
3 Bedrooms + 2 Bathrooms. Market Rate Unit: Usually around 800-1,400 square feet.