Above market rate housing
The term "Above market rate housing" describes housing that is apparently priced too high to rent or sell, and therefore remains vacant or used for other purposes. It references the more widely used term, Below market rate (BMR) housing, which is housing rented or sold at a below-market rate, typically to households that qualify based on limited income.
It was used in a September 21, 2017 press release by homelessness advocacy group The Village in Oakland:
"Organizers of the protest assert that market rate development and above market rate development are the number one causes of displacement and homelessness in Oakland."
This usage may have been suggested by a September 18 blog article by Lisa Schweitzer, Associate Professor of Urban Planning at the USC Sol Price School of Public Policy, "Why rents are sticky downward even if there is some slack in the rental market":
"Now, up at the top of the story, they claimed all this slack occurred because of “market-rate housing construction.
"No. If your units are sitting empty, you aren’t building or offering at market-rates. You are at a price point above market-clearing rates, even in your segment of the market. And while they may be offering breaks on parking and rent, it’s a long ways down from $2500 to 'affordability.'
Subsequently in a Twitter thread with YIMBYwiki [Schweitzer & YIMBYwiki 2017], Schweitzer offered these clarifications:
"It just means that supply has potentially hit a point where a particular segment of the market clears and suppliers haven't adjusted yet"
I was referring to moments where information lags and other problems can lead landlords to be offering units at rents that are above what new groups of renters are willing to pay for specific unit types. "We may just be seeing a temporary vacancy rate simply because *so many* similar units opened at one time." "It's a common concept among economists. Durable goods markets have all sorts of lags that prompts this problem."
- Schweitzer, Lisa. "Why rents are sticky downward even if there is some slack in the rental market." Lisaschweitzer.com, 09/18/2017. https://lisaschweitzer.com/2017/09/18/why-rents-are-sticky-downward-even-if-there-is-some-slack-in-the-rental-market/.
- Schweitzer, Lisa, and Tim McCormick [YIMBYwiki]. Twitter thread discussing the term. https://twitter.com/YIMBYwiki/status/911051751607775233.
- The Village in Oakland. (Press Release, September 21, 2017). "Homeless Encampment Descends Upon Developers’ Market Rate Conference Featuring Oakland Mayor Libby Schaaf."