1985-051-Specifying Rules, Procedures And Criteria For The Town's Below Market Price ProgramRESOLUTION-1985-51
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 1985 -32. 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 - Single heads of households with
dependent children who have lived in the Town for
at least two years.
c. Third priority - Persons who live in the 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.
All persons must qualify for their own mortgage without assist-
ance from the Town. Qualifications must include the ability
to pay taxes, insurance and any homeowner association fees in
addition to the mortgage.
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 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.
3. Income limits by household size (800 - 1200 of Santa
Clara County Median Income, June 25, 1984)
of Median 80 120
Persons in Household
21,152
31,731
24,176
36,264
27,198
40,797
30,220
45,330
32,183
48,275
33,967
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.
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B. Buyer Selection (cont.)
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 Selling Price
1. The initial sales price of the unit will be determined by
consultation between the Town Manager or delegate and the
builder. The Manager is authorized to approve changes in
specifications to lower the price of the BMP units which do
not affect any Town code or ordinance requirments, such
as changes in carpeting, lighting fixtures, etc. The
initial price will be set by a BMP agreements. This agree-
ment 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 improvement,
financing and premium points, loan standby fees, land-
scaping 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, off site improvements, public
agency fees, bonds, insurance, recreational facilities
and engineering and architectural fees related to constuct-
ion.
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 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.
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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.
E. Resale of Units
1. If the owner elects to sell his 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 re-
sale 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.
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 rpn,elar meeting of the Town
Council of the Town of Los Gatos held on 8th day of April ,
1985 by the following vote:
AYES: COUNCIL MEMBERS Eric D. Carlson, Terrence J.
Daily, Thomas J. Ferrito, Brent N. Ventura, and
Mayor Joanne Benjamin
NOES: COUNCIL MEMBERS None
ABSTAIN: COUNCIL MEMBERS None
ABSENT: COUNCIL MEMBERS
r °°1
SIGNED:
/,—MAYOR OF`THE TPWN OF LOS GATOS
I
ATTEST:
CLERK OF THE TOWN OF LOSTOS
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