Below Market Price Affordable Housing ProgramtaWN OF MEETING DATE: 9/17/12
= ITEM NO. 3
��s Gpjpg COUNCIL AGENDA REPORT
DATE: SEPTEMBER 11, 2012
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: BELOW MARKET PRICE AFFORDABLE HOUSING PROGRAM
A. ADOPT A RESOLUTION AUTHORIZING THE TOWN MANAGER
TO EXECUTE AN AGREEMENT WITH NEIGHBORHOOD
HOUSING SERVICES SILICON VALLEY FOR
ADMINISTRATION OF THE TOWN'S BELOW MARKET PRICE
AFFORDABLE HOUSING PROGRAM (BMP) IN AN AMOUNTNOT TO
EXCEED $55,000.
B. AUTHORIZE GENERAL FUND BUDGET ADJUSTMENTS FOR
REVENUE (3501- 44441) AND EXPENDITURES (3501- 63373) IN THE
AMOUNT OF $55,000.
RECOMMENDATION:
Adopt a resolution authorizing the Town Manager to execute an agreement with Neighborhood
Housing Services Silicon Valley for administration of the Town's Below Market Price
Affordable Housing Program (BMP) in an amount not to exceed $55,000.
Authorize General Fund Budget Adjustments for Revenue (3501- 44441) and Expenditures
(3501- 63373) in the amount of $55,000.
BACKGROUND:
One of the most significant housing programs adopted by the Town Council is the Below Market
Price (BMP) Program. The BMP program was initiated in 1979 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 minimum of 10- percent of
the total units in a development as designated affordable housing units. Deed restrictions are
recorded on the title of each property to ensure the long term affordability of the 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 solicits applications from income qualified households and
PREPARED BY: Todd Capurso, Acting Director of Community Development 16 C
Reviewed by: Assistant Town Manager iM.Town Attorney fZ� Finance
N: \DEV \TC REPORTS\2012 \Neighborhood Housing Services Staff Report 9- 17- 12.doc Revised: 9/11/12 11:37 AM
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: BELOW MARKET RATE AFFORDABLE HOUSING CONTRACT
SEPTEMBER 11, 2012
then selects buyers using the Town's adopted preference scoring criteria. Approximately 40 for -sale
and 90 rental BMP units are in the Town's BMP program inventory. The Housing Authority has
administered the BMP Program since 1999.
DISCUSSION:
Given the dramatic systemic changes to the housing and lending markets as a result of the "Great
Recession," the Town's BMP Program has not been immune to potential foreclosures or the impact
of tightened lending requirements. When the existing contract with the Housing Authority expired,
staff identified that in the future foreclosure prevention, homebuyer education and buyer financial
pre - qualification experience would also be necessary areas of expertise to administer the BMP
Program. Staff prepared a Request for Proposal (RFP) for Program services in June 2012. The RFP
was sent out to five (5) housing agencies. Only Neighborhood Housing Services Silicon Valley
(NHSSV) submitted a proposal.
Neighborhood Housing Services has been administering affordable housing programs since its
founding in 1995 and as an affiliate of the National Neighborhood Works Organization has extensive
experience in foreclosure prevention, homebuyer education and buyer financial pre - qualification.
They currently administer the BMP Program for the Cities of Burlingame, Los Altos, Morgan Hill,
and Santa Clara.
Staff recommends that the Town contract with Neighborhood Housing Services Silicon Valley and
enter into a contract with Neighborhood Housing Services Silicon Valley in the amount of $55,000
from September 18, 2012 to September 17, 2013, with a provision for five (5) one -year extensions.
FISCAL IMPACT:
Sufficient funds are available in the Below Market Price Program Deposit Account to cover the
$55,000 increase in budgeted expenditures for the Community Development Department and
transfer from the Housing In -lieu Fee deposit account. The current balance in the deposit account is
approximately $1.7 million.
CONCLUSION:
Staff recommends that the Town Council adopt a resolution (Attachment 1) authorizing the Town
Manager to execute an agreement with Neighborhood Housing Services Silicon Valley to
administer the Town's Below Market Price Affordable Housing Program in an amount not to exceed
$55,000 under the supervision of the Acting Director of Community Development.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: BELOW MARKET RATE AFFORDABLE HOUSING CONTRACT
SEPTEMBER 11, 2012
Attachments:
1. Resolution
Distribution:
Matt Huerta, Executive Director of Neighborhood Housing Services Silicon Valley, 1156 North
Fourth Street, San Jose, CA 95112
TC:EO:Imi
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RESOLUTION 2012-
RESOLUTION OF THE TOWN COUNCIL
OF THE TOWN OF LOS GATOS
AUTHORIZING THE TOWN MANAGER TO EXECUTE AN AGREEMENT WITH
NEIGHBORHOOD HOUSING SERVICES SILICON VALLEY FOR BELOW MARKET
PRICE AFFORDABLE HOUSING PROGRAM SERVICES
WHEREAS, Town Code Section 29.10.3005 established the Below Market Price
Affordable Housing Program; and
WHEREAS, the Town's Below Market Price Affordable Housing Program is a primary
component of the Town's affordable housing strategy; and
WHEREAS, the Town desires to continue the Below Market Price Affordable Housing
Program; and
WHEREAS, the Town of Los Gatos solicited competitive proposals from qualified
agencies providing Below Market Price Affordable Housing Program services; and
WHEREAS, Neighborhood Housing Services Silicon Valley is fully qualified to provide
Below Market Price Affordable Housing Services; and
WHEREAS, the Town finds the Neighborhood Housing Services Silicon Valley proposal
best meets the Town's needs:
NOW, THEREFORE, BE IT RESOLVED by the Town Council that the Town of Los
Gatos enters into an agreement with the above mentioned firm for Below Market Price Affordable
Housing services.
BE IT FURTHER RESOLVED by the Town Council that the Town Manager is
authorized and directed to execute the agreement for services as the Below Market Price
Affordable Housing Program consultant on behalf of the Town of Los Gatos.
ATTACHMENT 1
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los
Gatos, California, held on the 17th day of September 2012, by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
ATTEST:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
NADEW2ESOS12012\Housing services Resolution 2012.docx