1985-032-Resolution Specifying Rules, Procedures And Criteria For The Town's Below Market Price ProgramRESOLUTION
TOWN COUNCIL RESOLUTION SPECIFYING RULES, PROCEDURES
AND CRITERIA FOR THE TOWN'S BELOW MARKET PRICE PROGRAM
This resolution effects the provisions of Zoning Ordinance Sections
3.90.100 through 3.90.135, regarding the Below Market Price Program. This
supersedes Resolution 1984 -136. Resolved:
A. Buyer Qualification
1. Priority of eligibility at the time of purchase:
a. First priority -
(1) Senior citizens who have lived in the Town for at least two
years. A senior citizen is defined as any person 60 years of age
or older, or married couples living together when at least one
spouse is 60 years of age or older.
(2) Salaried Town employees as defined in the Town's Personnel
Rules, who have been employed by the Town for a period of no less
than 12 months.
(3) Senior Citizens who have lived in the Town and have moved out
of the Town within the previous five years at time of
application.
b. Second priority - Persons who live and work in the Town of Los
Gatos and have lived and worked in the Town for at least two
years.
C. Third priority - Single heads of households with dependent
children who have lived in the Town for at least two years.
d. Fourth priority - Persons who live or work in the Town of Los
Gatos and have lived or worked in the Town for at least two
years.
e. Fifth priority - All other applicants who live or work within
Santa Clara County and are eligible according to family size and
income criteria.
All persons must qualify for 'their own mortgage without assistance from the
Town. Qualifications must include the ability to pay taxes, insurance, and
any homeowner association fees in addition to the mortgage.
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A. Buyer Qualification (cont.)
2. Household Size /Unit Size.
The size of the family will be considered when a home is sold. The
number of bedrooms that a family qualifies for is based on the house-
hold size according to the following schedule:
1 -2
Family
Members .....................I
36,264
Bedroom and Studio
2 -4
Family
Members .....................2
32,183
Bedrooms
3 -6
Family
Members .....................3
Bedrooms
No distinction is made between adults and children. For example, a
husband and wife are eligible for a 2- bedroom unit, as well as a par-
ent and child.
3. Income limits by household size (80 0/0 - 120% of Santa Clara County Me-
dian Income, June 25, 1984).
n Hous
1 21,152
31,731
24,176
36,264
27,198
40,797
30,220
45,330
32,183
48,275
3,967
50,951_
4. A buyer's qualification is determined by the family ability to make the
monthly payments for the unit.
The monthly housing cost shall include the following factors:
a. BMP Price.
b. Current Lending Rates.
C. Estimated Taxes.
d. Estimated Insurance.
e. Homeowners' Fees.
f. Other expenses as determined necessary by the lender.
Closing costs for the unit shall include a fee to cover the administration
of the BMP Program.
B. Buyer Selection
1. Applications will be prioritized in accordance with the established place
of employment and income requirements.
2. A lottery will be used to rank each qualified applicant within each of five
priorities.
3. Applicants who qualify for a project will be drawn from the eligible appli-
cant pool as units become available for sale.
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B. Buyer Selection (cost.)
4. An applicant has two opportunities to refuse a unit before being removed
from the current applicant pool..
5. Applicants who do not qualify for a particular project shall retain their
eligibility,
C. Determination of Initial Sellin Price
1. The initial sales price of the unit will be determined by consultation be-
tween the Town Manager or delegate and the builder. The Manager is author-
ized to approve changes in specifications to lower the price of the BMP
units which do not affect any Town code or ordinance requirements, such as
changes in carpeting, lighting fixtures, etc. The initial price will be
set by a BMP agreement. This agreement will be signed by the Town Manager
and the builder. The price agreement shall be reached prior to Planning
Commission review of the project.
2. The initial price may include direct construction cost and may include a
proportionate share of the costs of providing utility services, required
on -site improvements, financing and premium points, loan standby fees,
landscaping and parking, provided, that the price shall not exceed an a-
mount which will allow a range of qualified buyers to purchase (as defined
above).
3. The initial price shall not include cost of land, builder's profit, market-
ing costs, planning, promotional or advocacy expenses, options, preliminary
drawings, preparing working drawings and specifications, off site
improvements, public agency fees, bonds, insurance, recreational facilities
and engineering and architectural fees related to construction.
D. Deed Restrictions
1. All Below Market Price dwelling units must be owner - occupied except as
noted in (2) below.
2. As owner of a Below Market Price dwelling unit is not permitted to lease,
rent, sublet, or otherwise assign his interests in the property, except
that the property may be leased for limited periods of time when the owner
is required to live elsewhere and expects to return. Tenants will be lim-
ited to persons qualified under the Section 8 income limits. All leases
must be arranged through the Community Housing Developers Corporation and
the owner must accept tenants qualified by the Community Housing
Developers,
3. In order to lease a unit under the terms of (2) above, the owner must still
be qualified within the income limits of the Below Market Price Program in
effect at the time of the lease, otherwise the owner must sell the unit.
4. The Town has the right of first refusal on the sale of the BMP units. The
Town must exercise its right of refusal within six months from notice of
availability of a unit. The developer has second right of refusal on first
sale of all new units if the Town is unable to find a buyer.
5, Resale provisions are provided in Section E below,
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E, Resale of Units
1. If the owner elects to sell his unit, the Town and /or CHO must be notified,
2. When a Below Market Price dwelling unit becomes available for resale, the
owner must allow the Town to set the resale price and make the unit avail-
able to other program applicants,
3. The Town, after receiving a recommendation from the CHD, will determine the
resale price by adding to the original price.
a. The percentage increase in the median income index for Santa Clara
County as published by the United States Department of Housing and
Urban Development for the years the owner has lived in the units
b. The value of any substantial improvements the owner has made on the
property, and will deduct from the price of the unit any costs in-
curred to repair damages to the Below Market Price dwelling unit.
4. The repair of any damage to the unit will be done prior to resale. The CHD
will arrange for the repairs. Money to cover the costs of repair may be
loaned to the CHD by the Town if there is a delay of close of escrow and
the CHD will reimburse the Town after the sale.
5. CHD notifies the next qualified buyer in the application pool.
PASSED AND ADOPTED at a re ular meeting of the Town Council of the Town
of Los Gatos held on 4th day of March , 1985 by the fol-
lowing vote:
;AYES: COUNCIL MEMBERS Terrence J. Daily, Thomas J. Ferrito.
Brent N. Ventura, and Mayor Joanne Ben'amin
NOES: COUNCIL MEMBERS None
ABSTAIN: COUNCIL MEMBERS None
ABSENT: COUNCIL MEMBERS Eric D. Carlson
SIGNED:
ATTEST:
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