[defen]

> She paid approximately $330k with almost no money down for a 2 bedroom, 2 bath condo in the center of Hayes Valley. Today, equivalent market rate units in her building sell for $1.5k to $2m.

How does that work if/when she wants to sell the place? Is there some sort of cap on what she can sell it for?

[malandrew]

She can only sell it for the purchase price adjusted for changes in the median income. If the median income in the city goes up (which it does over time because lower income renters are eventually forced out of the city), then she can sell it for more. It obviously won't increase as fast as market rates, but it will go for more than she purchased it. The house needs to be sold back through the BMR program. It can only be willed if her heir(s) also qualify for the BMR program at the time of death.

At the end of the day, she gets the benefit of not having to tie up cash in home equity. While other people are paying $6000 or more a month in a lease, she's paying a little over $2000 a month in a lease and gets to put all the excess she has into more liquid assets like an index fund.

[jefftk]

There are several ways to handle this, but a common one is to have a deed restriction that sets a maximum resale price and requires the buyer to meet income eligibility criteria.

I wrote some about this, and about how I'm worried that wealthy people could abuse this, in https://www.jefftk.com/p/affordable-housing-workarounds