1979-087-Specifying Rules, Procedures And Criteria For The Town's Below Market Price ProgramRESOLUTION 1979 -87
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.
Resolved:
A. Buyer QuaZification
1. Priority of eligibility at the time of purchase:
a. First priority - 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.
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 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.
2. Family Size/Unit Size.
The size of the family will be considered when a home is sold. The
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number of bedrooms that a family qualifies for is based on the family size
according to the following schedule:
1 -2 Family members ............... 1 Bedroom and Studio
2 -4 Family members ............... 2 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 parent and child.
3. Income limits by household size (80% - 120% of Santa Clara County Median
Income, 1978).
of ;Median 80 90 100 110 120
Persons in
Household
1 11,100 12,500 13,900 15,300 16,700
2 12,700 14,300 15,900 17,500 19,100
=18,500 6,100 17,900 19,700 21,500
7,900 19,900 21,900 23,900
,300 21,500 23,700 25,800
,800 23,100 25,400 27,700
,200 24,700 27,200 29,600
,700 26,300 28,900 31,600
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 Zender.
Closing costs for the unit shall include a fee to cover the administration
of the BMP Program.
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B. Buyer SeZecticn
Z. Applications wiZZ be prioritized in accordance with the estabZished
pZace of employment and income requirements on a first -come, first -
serve basis.
2. Applicants who qualify for a project wiZZ be drawn from the eligible
appZicant pooZ as units become available for saZe.
3. An applicant has two opportunities to refuse a unit before being
removed from the current appZicant pool.
4. Applicants who do not quaZify for a particular project shaZZ 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 requirements, such
as changes in carpeting, lighting fixtures, etc.
2. The initial price is limited to direct construction cost and a propor-
tionate share of the costs of preparing working drawings and specifications,
providing utility services, required off -site and on -site improvements,
public agency fees, bonds, insurance, financing and premium points, loan
stancby fees, landscajJ�g parking, recreational facilties, engineering and
architectural fees related to construction,
3. The initial price shall not include cost of land, builder's profit,
marketing costs, planning, promotional or advocacy expenses, options, or
preliminary drawings.
D. Deed Restrictions
1. All Below Market Price dwelling units must be owner - occupied except
as noted in (b) below.
Z. 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 be limited to persons qualified under the Section 8 lower income
limits rental assistance grogram: All leases must be arranged through the
Santa Clara County Housing Authority and the owner must accept tenants
qualified by the Housing Authority.
3. In order to lease a unit under the terms of (b) 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 Torn has the right of first refusal on the sale of the BMP units,
The Torn must exercise its right of refusal within four months from notice
of availability of a unit. The deveZoper has second right of refusal on
first sale of all new units if the T6wn is unable to find a buyer,
E. Resale of Units
Z. If the owner elects to sell his unit, the Town and /or Housing Authority
must be notified.
t. 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 will determine the resale price by adding to the original
price :
a. the percentage increase in the cost of living index for the San Francisco
Bay Area for the years the owner has lived in the unit;
b. the value of any substantial improvements the owner has made on the
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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
Housing Authority will arrange for the repairs. Money to cover the costs
of repair will be loaned to the Housing Authority by the Town and the
Housing Authority will reimburse the Town after the sale.
5. Housing Authority notifies the next qualified buyer in the application
Pool.
PASSED AND ADOPTED at a regular meeting of the Town Council of the
Town of Los Gatos held on the 4th day of June 1979, by the
following vote:
AYES: COUNCIL MEMBERS: Ruth Cannon, Thomas J. Ferrito,
ATTEST:
Mardi Gualtieri, Peter W. Siemens
John B. Lochner
NOES: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
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