Loading...
1986-139-Specifying Rules, Procedures And Criteria For The Town's Below Market Price ProgramRESOLUTION NO. 1986-139 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 1986-45. Resolved: I. GENERAL PROVISIONS A. Every residential condominium or Planned development residential subdivision at the time of subdivision, and every community apartment project and every residential stock cooperative apartment or unit project at the time of subdivision if the transaction involves subdivision, or at the time of sale, if it does not, shall contain one or more BMP dwellings according to the following rules: 1. Projects containing five or more but less than twenty units must Provide a number of BMP units equal to ten percent of the number of market rate units. 2. Projects w , five or more but less than te. nits may pay a Yee with this in lieu of building a BMP unit in order to comply requirement- 100 units must provide BMP units as 3. Projects with from 20 to determined by the following formula'. Wumber of BMP units = .225 (total # of Units) - 2.5 4. All projects in excess Of 10() units must provide a number of BMP units equal to 20% of the market rate units. the calculations of below market price units result in a 5 Whenever number of units to be reserved fraction of one-half or more the is increased to the next whole number. B. Applicant Priority at the time of purchase: 1. Priority of eligibility a. First priority: lived in the Town for at least Senior citizens who have n is defined as any Person two years. A senior citizen couples living 60 Years of age or older, 0 r m together when at least one spouse is 60 years of age or older> defined, in the Town's (ii) salaried Town employees as Personnel Rules, who have been employed by the Town for a period of no less than 12 months. Senior Citizens Who have lived in the Town and have hin the previous five years at moved out of the Town wit time of application. with dependent b. Second priority - Single heads of household children who have lived in the Town for at least two years. (2) C. Third iority - Persons who live in t, Town of Los Gatos and have lived in the Town for at least two years. d. Fourth priority - Persons who work in the Town of Los Gatos and have 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. 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 household size according to the following schedule- 1 - 2 Family Members ............. * .... 1 Bedroom and Studio 2 - 4 Family Members ..................2 Bedrooms First priority - 2-4 family members Second priority - single individuals 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 parent and child. II. OWNER OCCUPIED UNITS A. Applicant Eligibility 1. Household Income Income limits are set according to household size and range from 807-1207 of the Santa Clara County Median Income, as determined by the Federal Department of Housing and Urban Development. Current income guidelines are attached as Exhibit A. (3) A C 2. Buyer Qual cation a. A buyer's qualification is determined by the family's ability to make the monthly payments for the unit. The monthly housing cost shall include the following factors: - BMP Price - Current Lending Rates - Estimated Taxes - Estimated Insurance - Homeowner's Fees - Other expenses as determined necessary by the lender. b. 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. C. Closing costs for the unit shall include a fee to cover the administration of the BMP Program. 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. An applicant has two opportunities to refuse a unit before being removed from the current applicant pool. 4. Applicants who do not qualify for a particular project shall retain their eligibility. Determination of Initial Selling Price 1. The initial sales price of the unit will be determined by consultation between the Town Manager or delegate and the developer within the price range outlined in Exhibit B, (4) "Initial S ing Price." The Manager is au rized 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 developer. The price agreement shall be reached prior to Planning Commission review of the project. 2. The initial price nay include direct construction cost and may include a proportionate share of the costs of providing utility services, required on-site improvement, financing and premium points, loan standby fees, landscaping and parking, provided, that the price shall not exceed an amount 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, marketing costs, planning, promotional or advocacy expenses, options, preliminary drawings, Preparing working drawings and specifications, offsite improvements, public agency fees, bonds, insurance, recreational facilities and engineering and architectural fees related to construction. 4. The range in which the initial selling price shall be set will be determined through completion of the following calculation on an annual basis (See Exhibit B): a. Calculation of the Housing Multiplier i. Determination of Total Housing Cost Sales price - 10% down payment = mortgage (5) . ual Debt Service Taxes Homeowners Fees +PMI Total Housing Cost ii. Determination of Minimum Household Income Assume 30% of household income to go towards housing: Total Housing Cost = Minimum household income .03 iii. Determination of Multiplier Sales Price Minimum Household Income = Multiplier b. Initial Sales Price Ranges� Minimum and maximum sales prices are established by completing the following formula for a range of family sizes: Income (80% and 100% and 120% of median income) x multiplier = sales price. D. Deed Restrictions 1. All Below Market Price dwelling units must be owner-occupied except as noted in 2. below. 2. An 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 he limited 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. (6) 3. In order t ease a unit under the terms of 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. E. Resale of Units 1. If the owner elects to sell his/her unit, the Town and/or CHD 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 available 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 unit; 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 incurred to repair damages to the Below Market Price dwelling unit. (7) III. 5. CND notifi the next qualified buyer in th pplication pool. F. In -Lieu Fees M 9 1. Establishment of Fee Projects with five or more but less than ten units may pay a fee equal to the sum of six percent of the building permit valuation for each unit to be built as determined by the building official. 2. Fees will be paid prior to or at close of escrow of each unit. In lieu fees will be deposited into the Town's Affordable Housing Fund. Funds will be used, in part, for administration of the program. Applications/recommendations for use of remaining funds will be reviewed as received. Possible use of fund include, but is not limited to the following: - landbanking - writing down the cost of owner occupied units to make them affordable to low/moderate income households - purchasing rental units for renting to eligible tenants RENTAL UNITS Administration The program shall be administered by an agent of the Town. The agent is responsible for determining applicant eligibility, and reviewing eligibility annually, and tenant selection. Applicant Eligibility 1. Household Income In order to be eligible, applicants must have a household income under eighty percent of the County's median income as defined by the Federal Department of Housing & Urban Development. (See Exhibit A, attached.) (8) 2. Buyer Qual cation A tenant's qualifications are determined by the households ability to pay monthly rent. C. Tenant Selection 1. Applications will be prioritized in accordance with the established place of employment and income requirements. 2. If necessary, a lottery will be used to rank each qualified applicant within each of the five priorities. 3. An applicant has two opportunities to refuse a unit before being removed from the current applicant pool. D. Management BMP rental units shall be managed in the same manner as other units in the development. Tenants are eligible to receive conciliation and mediation services provided through the Town's Rental Mediation Program except as they regard rent increases. E. Unit Rents Rents shall be set at the Fair Market Rents developed by the Federal Department of Housing & Urban Development. Current rents are listed in Exhibit C, Fair Market Rents. F. Annual Review Eligible households will be those whose income is less than or equal to 80% of the County's median income. Rents will be set at Fair Market Rents. Both sets of figures are established by the Federal Department of Housing and Urban Development. Rental applications will be prioritized according to the categories previously established for the Owner-occupied Units. (9) If a tenants in. e increases so that it falls b, een 80 and 100% of the County's Median income, then their rent will be set at 33% of their annual income; and, the unit shall still be considered a BMP Rental Unit. However, if a tenants income exceeds 100% of the median, their rent will be at market rate. In the latter case the unit will no longer be a BMP unit and the next available unit must be rented to an eligible household so that the number of subsidized units remains the same. (10) PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos held on the 4th day of August, 1986, by the following vote: AYES: COUNCIL MEMBERS Thomas J. Ferrito, Brent N. Ventura, and Mayor Terrence J. Daily NOES: COUNCIL MEMBERS None_ ABSTAIN: COUNCIL MEMBERS Joanne Benjamin ABSENT: COUNCIL MEMBERS Eric D. Carl SIGNED: MAYOR OF THE TOW O OS LIV10*10 CLERK OF THE TOWN OF LOS,- ATOS (11) EXHIBIT A CURRENT INCOME GUIDELINES DETERMINED BY FEDERAL DEPARTMENT OF HOUSING & URBAN DEVELOPMENT REVISED 11/85 % OF MEDIAN 20 Persons in Household 1 19,250 27,440 32,928 22,000 31,360 37,632 24,750 35,280 42,336 27,500 39,200 47,040 29,200 41,650 49,980 30,950 44,100 52,920 32,650 46,550 55,860 34,400 49,000 58,800 Revised Guidelines, Incorporated into Resolution: 1986 -45 Dated: 4/7/86 =23= 8 J.ATTIAL SALES PRICE RANGES 1. CaZculation of the Housing MUZtiolier Assumptions: * Loan: 12 %, 30 Year * Private Mortgage _ *nsurance: ,440. of Loan Amount * Underwriting Ratio: TotaZ housing cost no more than 30% of total income a. Determination of TotaZ Housina Cost SaZes Pr» ce $90,000 $60,000 10% doom - 9,000 - 6,000 $82,000 $54,000 AnnuaZ Debt Service $10,056 $ 6,704 (12 %, 30 Years) Tawas 1,125 750 Homeowners Fees ($75 mo.) 900 900 PMI 238 TotaL Housing Cost T22.437 S 8,592 b, Determination of Minimum Household Income TotaL Housina Cost $12,437 $8,592 0.3 0.3 . _ $42,457 0.3 = $28,640 c. Determination of MultivZier SaZes Price Minimum Household Income $90,000 $60,000 41,457 = 2.17 28,840 2.10 Average murtiptier = 2.14 2. Initial Sales Pstice Ranges The foZZowing chart refleata the saZas prices affordcble for famtiliae at 80%, 100 %, and 220% of the County median. ( Income r 2.14 = Sales price), RECOMMENDED SALES PRICE RANGE Unit Size Studio 1 -2 People $41,195 SALES PRICES $80,533 RowahoZd Size 80% 100% 120% 1 41,195 58,721 70,466 , 2 47,080 0 57,110 80,533 3 52,965 75,499 90,599 4 58,850 83,888 100,666 5 62,488 89,131 106,957 6 66,233 94,374 113,249 7 69,872 99,617 119,540 8 73,616 104,860 125,832 RECOMMENDED SALES PRICE RANGE Unit Size Studio 1 -2 People $41,195 to $80,533 1 Bedroom 41,195 to _80,533 2 Bedroom 47,080 to 100,666 3 Bedroom 58,850 to 113,249 4 Bedroom 62,488 to 125,832 Revised Guidelines, Incorporated into Resolution: 1986 -45 Dated: 4/7/86 EXHIBIT C FAIR MARKET RENTS CURRENT FAIR MARKET RENTS AS DETERMINED BY THE FEDERAL DEPARTMENT OF HOUSING & URBAN DEVELOPMENT BEDROOMS RENT Studio $450 1 510 2 595 3 775 4 850 5 978 6 1105 Incorporated by Resolution 3 Dated: August 4, 1986 _.