Below Market Rate (BMR) unit capitol improvement approvals

An owner of a below market rate (BMR) unit should contact the City before starting any capital improvement project. Certain capital improvements may increase the value of the home if you decide to sell but only if you have City approval. The information below will help homeowners of BMR units understand what qualifies as an eligible capital improvement and how to get approval from the City.

What is an Eligible Capital Improvement?

An Eligible Capital Improvement is a permanent home improvement that significantly increases the value of your home. Not all home improvements are Eligible Capital Improvements. Anything temporary or removable would not qualify nor would repairs or replacement of existing facilities or improvements in the home. Eligibility is at the discretion of the City and improvements must meet the criteria outlined in your Buyer's Occupancy and Resale Restriction Agreement, with Option to Purchase (the "Resale Restriction Agreement").

Eligibility Criteria

  • Must be a below-market rate unit in the Garden Walk, Crossings at Eden Shores or SoHay developments;
  • Must be a substantial structural or permanent fixed improvement that consists of more than mere repairs or replacement of existing facilities or improvements;
  • Improvement was made to the home after purchase;
  • Made or installed by the owner which conform with applicable building codes;
  • Approved in advance of installaton by the City;
  • Owner submitted two bids from licensed contractors acceptable to the City stating the estimated cost to perform the improvements;
  • Initial costs were Two Thousand Dollars ($2,000) or more; and
  • Useful life of improvement is five (5) years or more

Submitting an Eligible Capital Improvement Request

  1. Contact your HOA. If you have an HOA, contact them to discuss the improvements you plan to make to your home and find out if they are allowed by the HOA.
  2. Get two (2) bids. Get two bids from licensed contractors detailing the estimated cost to perform the improvements. Contractor's license number must be included on the bid.  
  3. Fill out and sign request form. Fill out and sign the Request for City Approval of Improvements to the Property Form. 
  4. E-mail to City. E-mail the bids and request form to housing@hayward-ca.gov and include "Request for Eligible Capital Improvement" and your property address in the subject line. 
  5. City approval. The City will provide a response as to the eligibility of the project and reasonability of the cost estimate.
  6. Obtain building permits if necessary. Visit the City of Hayward Building Division page to find out when a permit is needed.
  7. Save City approval letter and all receipts and invoices. You will be responsible for retaining all copies of City approvals, contracts, invoices, and receipts for completed capital improvements and will need to submit all supporting documentation to the City at the time you decide to sell your home. If your documentation is incomplete, it can affect whether a capital improvement is included in the calculation of the Maximum Restricted Resale Price.
  8. Selling your home. The City will calculate the value of the approved capital improvements at time of sale and will add the amount to the Maximum Restricted Resale Price. The amount added is based on the remaining useful life of the improvement and not the actual cost of the improvement.  

Examples of Eligible Capital Improvements

  • Upgrading from carpet to hardwood or laminate flooring
  • Remodels such as upgrading all appliances, flooring, countertops and cabinetry in the kitchen
  • Installing an air conditioning system that is connected to the home's central air and heating system
  • Installing new windows
  • Installing a new roof

Examples of Ineligible Capital Improvements

  • Replacing existing carpeting with new carpeting
  • Painting
  • Adding an air conditioning window unit
  • Adding closet shelving
  • New curtains
  • Replacing an appliance (oven, dish washer, refridgerator, washing machine, etc.)

Questions about Eligible Capital Improvements

For general questions, please e-mail housing@hayward-ca.gov.