Understanding Market Rate Building Rights Vs. Affordable Building Rights
I know building in the Florida Keys is complicated! Often you will see real estate listings that say, “Market Rate Building Right or Affordable Building Right.” So what are they and what’s the difference?
If you know nothing about the Florida Keys and building down here. Please read this blog first, “What Does Rogo Stand For? – All the Essential you need.”
So a real simple explanation of the differences is that market rate building rights, do not have any restrictions on them in terms, of income, sale price and rent.
Affordable Building Rights have a whole set of rules, on how much the house can be sold for, how much income a person can make that occupies them, and how much rent can be charged.
Both Affordable Rights and Market Rate Rights are obtained the same way, through the ROGO Process.
Now here is where it can get a little crazy. Sometimes in Marathon there are smaller properties that can only charge so much rent because they are just small, for an example a 1 bedroom 1 bath home or a small efficiency. On these types of properties where owners have felt that they would always be able to charge a rent rate in the range of the affordable limits, owners have swap out the market rate building rate and replaced it with an affordable building right. The extra, market rate building right can be sold off and transferred to a receiving site.
The cost of a Market Rate Building in the City of Marathon right now is around $200,000. The transfer fee in the City of Marathon is currently at $40,000. The transfers of the allocations must all be done simultaneously. You can’t just have a building right sitting around with no place to go.
Tip – For Sellers of an Affordable Deed Restricted Property
If you are a seller and own a house with an affordable deed restriction on it, you are only able to sell the home at the set price. See the table below.
If you, the seller, wants to work with a highly qualified real estate agent like myself to get your home sold, one of the things you can do is ask that the buyer pays for all the closing costs and commissions. This way you can walk away with the maximum amount of money. Now you can only do this if the market will allow it. Meaning housing values are high enough and if it justifies the costs.
Tip – For Buyers of an Affordable Deed Restricted Property
Check the length of time left on the deed restriction. I have seen some homes only have deed restrictions for 20 years and when it expires; it will make the home worth a lot more money!
