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Home My WebLink AboutORD 3336' ... • • ORIG~NAL ORDINANCE NO. 3336 ORDINANCE OF THE COUNCIL Of THE CITY OF PALO ALTO ADDING CHAPTF,R 9.70 TO THE PALO ALTO MUNICIPAL CODE TO ESTABLISH RESALE CONTROLS FOR UNITS ()R!GINALLY fiNANCED WITH MORTGAGE REVENUE BOND PROCEEDS WHEREAS, the City Council of the City of Palo Alto finds that the City of Palo Alto is experiencing a shorta<)e of housing for low and moderate income households~ and, increasingly persons with low and moderate incomes who '-'OL"lc; or live in Palo Alto aL·e unable to locate housing within the City at prices they can afford: and WHEREAS, the City of Palo Alto has decided to participate in a County-wide Mortgage Revenue Bond Program which was authorized by the Legislature in order to rernedy the adverse effects of the shortage of decent, safe, sanitary and affordable housing, rising interest rates and diminishing numbers of credit-worthy buyers at the lower end of the purchasing spectrum qualifying for private sector mortgage capital; and HlH~'R8ASr said Progrdm provides below market inter-est rate financ ing fOl' qua 1 if ied 1 ow a no mt,de rate income horne bnyer s; and WHERE:AS, resale controls on housing units fi11anced with Mortga<Je Revenue Bonds will ensun~ that the purposes of the Program will be con tinu~j and that such units remai11 affordable to low and moderate income home buyers; and WHEREAS, the Coui'\Cil finds tha.t said housing shortage for persons of low and moderate income is detrimental to the public heallh, safety and welfare and that not only deV'elopers 0-nd o"'nE>rs of housing in Pale Alto who are selected to participate in the Program by the Ci~y of Palo Alto and the County of Santa Clara bLtt also Sllbsenuen•· purchaser's should continue units financed with mortgage reven~e bonds as ~fford able in order to make a~ailable an adequate supply of housing to all economic segments of the community; NOW, Tf1ERBFORE, the Council of the City of Palo Alto does ORDAIN as fo:lows: SECTIOtot i. Chapter 9. 70 i.s hereby added to the Palo Alto Munic ipal Code to read as follows: USALB COirl'ROU3 POR UIU1'S ClRIG!IIAL~Y FI~!D ~TB RO~GB P~~~= 809DS Sections: 9.70.010 9.70.020 9.70.030 9~70.040 Put:pose. Definitions. Resale controls for units originally financed with mo~tgage revenue bonds. Exceptions to resale control requirements. 9.70.0~0 Purpoae. The purpose of this chapter is to enhance the public welfare by ensuring that housing financed with mortgagE: revenue bond proceeds contributes to attaining the hous::.ng goals set forth i ·ne Comprehenslve Plan of the City of Palo Alto by increasing the sup~ of residential housing affordable to low and moderate income household;:,. 9. 70.020 O.fini tiona. The following words and ph rases, when ever used in this chapter shall be construed as defined in this sec tion: (1) 'Average area purchase ~rice' means th~ most current average purchase price safe harbor limitations from time to time published by the United States Department of the Treasury for the San Jose Standard .. '.' • • Metropolitan Statistical Area with respect to residences which have been previously occupied ('Average Area Purchase Price-Existing'). (2) 'Qualified buyer' means a person or persons whose income does not exceed the maximum income established for a person or persons who qualify to obtain a housing unit in the City of Pa~~ Alto Below Market Rate Program and is otherwise eligible under said Pro~ram. (3) rsubstantial capital improvement' means those improvements as defined in the City of Palo Alto's Below Market Rate program, the value of which shall be calculated by the City Manager whose decision shall be final. 9.70.030 Resale Controls fo. units originally financed with .ortgage revenue bonds. (a) l n order to accomplish the pur.poses of this chapter: ( 1) The price received by any seller of a housing unit originally financed with mortgage revenue bonds shall be limited to an amount equal to the original purchase price plus the percentage in crease therein equal to the increase in the average area purchase price plus the adjusted amount of any substantial capital improvement expen ditures gr-eater than one pet·cent (1%) of thE' original pu-rchase price, minus any costs necessary to bring the UGiL into conformity with Title 16 oE this Code. \iowe'ler, in no event shall the resale price be lower than the pur:cbase price paid by the selling owner. (2) To the extent provided herein, such units shall be sold and resold from the date of t.he o-riginal sale financed with Mortgage Revenue Rond proceeds or.ly to qualified buyers determined to be eligi ble for said un.its according to the terms of this ocdinance. Such units originally financed through the Mortgage i:.,;:venue Bond Progra.!ll offered for sale or sold by the original purchase~ and all subsequent purchasers shall be offered fo~ sale first to the City or its designee. Whenevei; an owner of said unit desires to nell such unit, he or she shall notify City in writing to that effect. Such notice shall be personally deliver.ed or deposited in the United States Mail, postage prepaid, first class, certified, c":ldres~ed to City Manager, City of Palo Alto, 2:,0 ~amilton Avenue, P. 0. Sox 10250, Palo Alto, California 94303 with a copy to t.he Palo Alto Housing Corporation, 467 Hamilton Avenue, Suite 24, Palo Alto, California 94301~ (3} In the event that an offer of sale of any such unit is not accepted by the City or i.ts rlesignee within ninety days after tender, or once accepteo, if an escrow ac·count contemplating sale of such unit shall not have been opene:i by a qualified buyer under the terms of this chapter, the City or its designee, h'ithin ninety daya after acceptance, the offer shall terminate, and all -restril.:.:tions, resale controls, and other t~rms of this chapter shall cease and become null and of no further effect as to such unit. (b) '!'he owners of any such unit shal! incorporate as a part of the grant deed conveying title of any such unit a declaration of re strictions, stating each of the resal..a controls imposed pursuant to this chapter. The grant deed shall afford the grantor and the City the right to enforce said resale controls in the manner provided by law. All such controls and rest=ictions shall run ~ith the land for a period not to exceod thirty yeacs from the date of recordation of the deed of the original purchaser who financed his or her unit through the Mort gage Reve~we Bond Program and shall be recorded as part of any grant deed with the County Recorder of Santa Clara County. Proof of s.uch recordation shall be de~med a condition precedent to occupancy of any such unit. 9. 70.040 Bxcept iui'iii to resale control requireaents. The resale controls established by Section 9. 70.030 shall not apply to units designated as BMR units under the City of Falo Alto's Below Market nate pt·ogram or to any other units for which resale controls have been established if they are as restrictive or more restrictive than those established by this chapter. -2- . . , " . • • SECTION 2. Severability. If any section, subsection, sentence, cla~se or phrase of this chapter is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this chapter. The Council hereby declares that it would have passed this chapter, and each section, subsection, sen tence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases had been declared invalid or unconstitutional. SECTION 3. The Council finds that this project will have no sig nifica~envlronmentul impact. SECTION 4. This ordinance shall becom€ effective upon the com mencement of the thirty-first day after t~e day of its adoption. INTRODUCED: february 22, 1982 P .~s s B D : 1•1 a t c h 3 , 1 9 8 2 AYES: Bechtel, Cobb, E}'\?.l·1y, Fazzi:10, Flctch0r, Klein, Levy, Renzel, Withcl'spoon NOES: None ABSTENTIP~S: None ABSENT: None ATTE. S~-!~ O_-L / . ~~v--lA. ~-Lt.-lkA&t.~ =c"T"i ~t ..... f....,>~c -:-1 e r k I APPROVED~ l&l_~ lkdtl1 ----Vice~yor APPROVED A~iTO F'O.RM: ~,tmr;;2ii · .;4ec"""'--- -3- I