05 Staff Report.BMP Administrator
PREPARED BY: Jocelyn Shoopman
Associate Planner
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 11/17/2020 ITEM NO: 5
DATE: November 12, 2020
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute an Agreement with Hello Housing
for Administration of the Town’s Below Market Price Affordable Housing
Program.
RECOMMENDATION:
Authorize the Town Manager to execute an agreement with Hello Housing for administration of
the Town’s Below Market Price Affordable Housing Program (BMP Program).
BACKGROUND:
The BMP Program was initiated in 1976 as a mechanism to increase the supply of housing in Los
Gatos that is affordable to low- or moderate-income households. The BMP Program requires
developers, when they obtain entitlements, to provide a percentage of the total number of
market rate units in a development as affordable housing units. Deed restrictions are recorded
on the title of each property to ensure the long-term affordability of the rental and for sale
units and to maintain the Town’s repurchase option. When new units are made available by a
developer or via a resale by an existing owner, the Town or its administrator solicits
applications from income qualified households and then selects buyers using the Town’s
adopted preference scoring criteria. Approximately 55 for-sale and 119 rental BMP units are in
the Town’s current BMP Program inventory.
The Town has used an administrator for the BMP Program since July 1999. The Administrator’s
expertise and knowledge of the United States Department of Housing and Urban Development
(HUD) requirements and affordable housing program administration is more extensive than
that of Town staff. Additionally, the Town does not have the resources to dedicate the time
needed to administer the BMP Program.
PAGE 2 OF 3 SUBJECT: Below Market Price Affordable Housing Program DATE: November 12, 2020
BACKGROUND (continued):
Since November 2015, Hello Housing has administered the Town’s BMP Program under the
direction of the Community Development Department. They have monitored the Town’s BMP
Program rentals and owner-occupied homes and made sure they were following BMP Program
requirements. Hello Housing has also worked with the Town on the sale of homes to BMP
qualified applicants, held meetings to inform interested persons, and made sure they were
qualified for the BMP Program.
DISCUSSION:
Staff prepared a request for proposals (RFP), distributed it to housing organizations, posted it
under the “What’s New” page on the Town’s website, and posted it on the Town’s social media
accounts to encourage additional submittals.
Staff identified that foreclosure prevention, homebuyer education, and buyer financial pre-
qualification experience would also be requisite areas of expertise of the successful
administrator of the BMP Program. Two organizations submitted proposals and Hello Housing
was selected by staff as the most qualified because of its experience with administration of the
Town’s BMP Program, affordable for-sale housing and rentals, and affordable housing loans.
Hello Housing is a 501(c) 3 nonprofit organization which began in 2005 and has been
administering affordable housing programs since 2009. They currently administer the BMP
Program for the Cities of Alameda, Concord, Cupertino, Emeryville, Livermore, Menlo Park,
Novato, and Pleasanton.
Staff recommends that the Town contract with Hello Housing for a five-year period for an initial
fixed base annual cost of approximately $96,000 per year and increasing annually up to
approximately $125,000 from December 1, 2020 to October 31, 2025 (see Attachment 1).
Projected transactional costs would also be provided at an additional cost depending on the
volume of those transactions.
CONCLUSION:
Staff recommends that the Town Council authorize the Town Manager to execute an
agreement with Hello Housing for administration of the Town’s BMP Program under the
direction of the Community Development Director.
COORDINATION:
This report has been coordinated with the Town Manager’s Office, Town Attorney’s Office, and
the Finance Department.
PAGE 3 OF 3 SUBJECT: Below Market Price Affordable Housing Program DATE: November 12, 2020
FISCAL IMPACT:
Sufficient funds are available in the Housing In-Lieu Fee Deposit Account to cover the costs of
the services for the Town. The current balance in the deposit account is approximately $2.3
million.
ENVIRONMENTAL REVIEW:
Environmental review is not required as this is not a project defined by the California
Environmental Quality Act.
Attachment:
1. Draft Agreement with Hello Housing