Below Market Rate Housing

The City maintains Below Market Rate Housing Standards. Below Market Rate (BMR) refers to the often-misunderstood term "affordable housing," the BMR Program promotes the construction of housing which meets residents' needs and help explain the City's housing requirements.

“Affordable housing” is defined by the State of California as not more than 30 percent of gross household income with some variations (Health and Safety Code Section 50052.5). “BMR housing” means that the affordability level of a dwelling unit is deed-restricted, ensuring that the unit is affordable to acutely low, extremely low-, very low-, low-, or moderate-income households.

The specific income threshold refers to the Household Income based on a percentage of the area median income (AMI), as established by the State Department of Housing and Community Development (HCD).

• 0 – 15% of AMI (Acutely Low Income)
• 15 – 30% of AMI (Extremely Low Income)
• 30 – 50% of AMI (Very Low Income)
• 50 – 80% of AMI (Low Income)
• 80 – 120% of AMI (Moderate Income)

The City's Below Market Rate Housing Standards apply to all development projects within the City.  They set maximum rental costs or sales prices based on income level and dwelling size and are used by developers, citizens, housing groups, City staff and commissions, and housing agencies.

• 2025 Below Market Rate Housing Standards (Effective July 1, 2025)

These Standards are updated annually by the Community Development Director and remain in effect per each corresponding fiscal year (July 1 - June 30).  The Standards show income limits for the City and County of San Luis Obispo, as published by HCD.  

What is RHNA?

The Regional Housing Needs Allocation, or RHNA, is a process in which councils of governments delegate portions of their regional housing needs among its member jurisdictions. Regional housing needs are identified by California’s Department of Housing and Community Development (HCD) and are formulated around the following income groups: extremely low and very low, low, moderate, and above moderate.

The RHNA process ensures that each jurisdiction accepts responsibility, within its physical and financial capability to do so, for the housing needs of its residents and those who might reasonably be expected to move there. However, these allocations are considered goals, rather than production quotas, that are meant to guide local policy decisions and programs that promote housing development where appropriate.

City of SLO’s Regional Housing Needs Allocation Status

The City’s Regional Housing Need Allocation for its 6^th Cycle Housing Element was set at 3,354 units. All issued permits from January 1, 2019, through December 31, 2028, are counted as credit toward the City’s current RHNA. Additionally, HCD has allowed the City to count half the total of newly issued Accessory Dwelling Unit (ADU) permits from each year toward the low-income affordability level. This began in 2020 following a market study conducted by the County of San Luis Obispo.

As of January 2025, the City has issued permits for 2,992 units within this Housing Element cycle. As described in a figure above, the City has exceeded its allocation of above moderate-income units. A total of 1,282 units consisting of extremely low- and very low-, low-, and moderate-income units remain.

Projects in the Pipeline

As of January 2025, the City is expecting up to 474 below market rate units to be constructed/permitted within the near future. For more information on current development in the City of San Luis Obispo, please visit the City’s Current Development Projects page.

Interested in More Housing Info?

For a more in-depth review of the state of housing in the City of San Luis Obispo, please review our current General Plan Annual Report. These reports provide an analysis of the City’s progress toward implementing the goals and policies of the General Plan, including the City’s Housing Element.

To access even more housing data for the City of San Luis Obispo, please visit either the San Luis Obispo Council of Government or the California Department of Housing and Community Development webpages. These interactive webpages allow users to filter by jurisdiction.