HomeMy WebLinkAboutStaff Report 350-07City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
ATTN:POLICY AND SERVICES COMMITTEE
FROM:CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY EN~RONMENT
DATE:SEPTEMBER 11, 2007 CMR: 350:07
SUBJECT:RECOMMEND APPROVAL OF BELOW MARKET RATE (BMR)
OWNERSHIP PROGRAM UPDATE RECOMMENDATIONS
RECOMMENDATION
Staff recommends that the Policy and Services Committee review the consultants’ report
(Attachment A) and staff recommendations for policy changes to the Below Market Rate (BMR)
Homeownership Program, H-36 of the Housing Element of the Comprehensive Plan, and direct staff
to incorporate the staff’s recommended changes (under Goal #1 of Attachment B), together with
existing policy, into a new BMR ordinance and to make related changes to Program H-36 for review
and adoption by the City Council. Staff also recommends that a package of implementing legal
documents, including revised deed restrictions and other enforcement and disclosure documents be
prepared and put into use concurrently with the effective date of the ordinance. Attachment B has a
complete list of the policy changes discussed in this report. Additionally, staff is asking for Council
direction to further analyze the program elements identified under Goal #2 of Attachment B as part
of the next Housing Element revision.
BACKGROUND
Council first adopted BMR requirements on housing developments in 1974 as a policy in the
Housing Element. Palo Alto’s program has been a success with 179 owner units and 155 rental units
in the inventory, together with another 145 new owner and rental units under construction or with
approvals. While the BMR program is still operating effectively, enforcement issues have become
more prevalent in recent years and problems linked to the program’s age have become apparent.
Staff and Palo Alto Housing Corporation (PAHC), the program administrator under contract to the
City, have been implementing minor changes in rules and procedures in the BMR sales process to
address specific issues over the last ten years. However, staffreco~onized that there was a need for an
economic and policy analysis to maximize the effectiveness of the BMR program in meeting the
City’s affordable housing needs. This analysis would provide expert advice about improvements in
legal documents, enforcement and methods of increasing the efficiency of routine administrative
procedures.
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For the last 30 years, the BMR program has been governed by a short, two-page description in the
Housing Element of the Comprehensive Plan. It has become increasingly the norm for communities
to adopt an ordinance to govern their inclusionary housing program. In 2003, Planning and legal
staff worked on the preparation of a BMR ordinance intended to codify the current policies in the
Housing Element program. Several drafts of an ordinance were completed and that process helped
delineate issues that needed resolution. The rigorous process of trying to codify the current Housing
Element program made it clear that a number of policy decisions needed to be made before the
ordinance could be finalized. Once Council provides policy direction to staff, new and existing
policy can be incorporated into an ordinance and the BMR program text in the Housing Element
revised to describe the broad policy parameters of the BMR program.
PAHC staffhas been closely involved in the BMR Update since its inception. PAHC staff assisted
Planning staff in developing the scope of services for the KMA/AA contract, met with the
consultants, provided data, and reviewed and commented on drafts throughout the study. On June
26, 2007, the BMR Committee of PAHC’s Board of Directors met with City staff to discuss the final
consultant report. The BMR Committee focused its discussions on the question of changing the
appreciation formula and the overall policy objectives of the program. The BMR Committee
supports the proposal by City staff to change from the current one-third CPI to full CPI. The
Committee also supports using a methodology that: 1) prevents BMR owners from having to sell at a
loss, 2) is easy to administer and explain, and 3) provides greater appreciation that the current
formula. PAHC’s full Board of Directors reviewed the recommendations from the study at their
meeting of July 11th and advised staff that the first priority for the City should be making
improvements to the existing program. PAHC strongly supports the consultants’ recommendations
for the creation of new legal documents to improve enforcement and protect the BMR housing stock.
Funds for consultant and contract staff assistance were approved by Council in the FY 2003-04
budget. In August 2004, after a competitive bidding process, Council approved a $137,085 contract
with the consultant team ofKeyser Marston Associates (KMA) and Anderson & Associates (AA).
In addition, Planning hired a contract planner and an intern to conduct basic research on the BMR
housing stock, to restructure and expand the program inventory and database, and to conduct a
survey of current BMR owners. Council was briefed on the objectives and the work products of the
BMR Update by the consultant team and staff at a study session held on September 27, 2004.
Consultant Work Pro~am: KMA was asked to make recommendations on how the BMR
requirement could be used in more creative and effective ways to help achieve the City’s broader
affordable housing objectives and to increase the production of affordable owner and rental units.
KMA also did an analysis of the adequacy of the BMR in-lieu fee methodology and a comparison
with alternative methods. KMA was asked to recommend policies and fee methods that would
increase revenues for the Residential Fund. Another key task for KMA was to evaluate the adequacy
of the current BMR deed restrictions and to outline the components and content of a best practices
set of legal documents as used by other cities. Finally, KMA reviewed alternatives to strict
inclusionary BMR requirements with the goal of finding ways to increase affordable rental housing
production and support the efforts of non-profit housing developers. Anderson Associates was a
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subcontractor to KMA and provided review and advice on administrative procedures for handling the
waiting list, sales and eligibility rules and methods of handling maintenance standards and capital
repairs. AA also evaluated the City’s special assessment loan program, which was approved by
Council in 2002.
Owner Survey: To obtain an objective and statistically reliable picture of the program from the
perspective of the owners, a comprehensive survey questionnaire was developed. The questionnaire
was sent to all BMR owners in late 2004. The response rate was excellent with 73 percent of all 169
owners completing surveys. [See Sec. 2.3 and Appendix C of the KMA / AA report for a summary
and full analysis of the BMR Homeowner Survey]
Overall, a large majority of the owners are satisfied or very satisfied with their unit, their complex
and the BMR program, with many owners extremely grateful for being able to participate in the
program. These satisfied owners stated that without the program they would have remained a renter
or would have had to leave the Bay Area to buy a home. They place a very high value on living in
Palo Alto to be near their work, family or for their children to attend local schools; and on the
financial stability gained from owning rather than renting. Many of the highly satisfied owners are
involved in local volunteer groups, or work for the city, at Stanford, the medical clinic, in the schools
or for local non-profits.
Ten to fifteen percent of all owners described themselves in the survey as "very dissatisfied" or
"dissatisfied" with their unit, the complex, the neighborhood or with program rules and procedures.
While almost every buyer was very pleased with the original purchase price, about one quarter of the
survey respondents were dissatisfied with their projected resale price. Some owners expressed anger
about being "trapped" in their unit because they cannot sell it at market rates. For various reasons,
they complain that the BMR unit no longer meets their needs, but they cannot afford any other kind
of ownership housing in the Bay Area. These owners often have limited options due to current
income levels.
Even owners who expressed a high level of overall satisfaction with the program had concerns and
suggestions for improvements. The most common concerns of BMR owners are:
¯Limited appreciation under the current formula
¯Rapid escalation of monthly homeowners association dues
¯Fear of major special condominium assessments
¯Poor condition of their unit and its appliances, especially at the time of purchase
¯Issues related to owners aging in place such as reduced income due to retirement and/or the
onset of a disability, or lack of handicapped accessibility
¯ Lack of understanding of program rules governing refinancing, calculation of the resale price,
owner’s maintenance requirements, treatment of capital improvements, guidelines on rental
and refinancing.
¯ Need or desire for a different type of home or !ocation (need for more bedrooms, complaints
about the neighborhood or the project, need for accessibility, desire for a private garden or
yard or places for children to play)
Monthly HOA Dues and Special Assessments: The City does not have control over the rules or the
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budgets of the HOAs in which BMR units are located. Condominium associations are regulated by
State laws and by project-specific recorded conditions, covenants and restrictions. Each association
is governed by its own board of directors elected by the owners. Monthly HOA dues have been
increasing significantly each year due mainly to higher insurance costs, more stringent requirements
for capital reserves and higher maintenance costs of older complexes. Problems occur because BMR
owners are more sensitive to these costs than most market rate owners. There is a bill being
considered in the legislature (AB 952) that would limit the size of certain dues increases and special
assessments in projects with BMR units without approval of 50 percent of the BMR owners. Staff
has not analyzed this bill and does not have a position on its provisions.
BMR Property Research & Enforcement: A product of the BMR Update is an improved database and
better information about the BMR housing stock, such as its physical condition, the extent to which
older units need repairs, the frequency of refinancing and the level and type of debt secured by the
units. The program database, which contains statistics regarding each unit and all owners, current
and past, was expanded and transferred into a different software program that can generate reports
more easily.
Problems with Financing, Excess Debt, Title and Occupancy: The property research revealed that
there were over 20 different versions of the deed restrictions used over the history of the program.
Lack of uniform legal documents is an issue because it complicates enforcement efforts and creates
confusion among owners as to which rules apply. For example, deed restrictions in effect prior to
August 1993 permitted owners to refinance or encumber their units with additional debt without any
notice to, or permission from, the City. Technically, owners that refinanced or took out equity lines
of credit secured by their unit with these older restrictions did not violate the rules, even if the new"
loans far exceeded the unit’s limited BMR value. Fifty percent of owners responding to the survey
stated they had refinanced at least once and 14 percent reported taking out an equity credit line.
Deed restrictions in use since 1993 include a clause requiring City consent to any new financing, yet
lenders continue to make loans on these units without requesting the City’s consent. As long as
owners keep up their loan pa~wnents no harm is done, but when owners owe far more than the BMR
resale value, there is a much greater likelihood of default and eventual foreclosure. There is a greater
risk in these situations that a foreclosure sale could take place without the City’s knowledge resulting
in the loss of the unit from the program. To date, the five BMR units that went into foreclosure were
financed well in excess of their BMR value.
Research of recorded property information revealed over-financing, title transfers, or occupancy
problems affecting almost 30 percent of BMR units (50 units). These problems underscore the
priority of putting in place improved recorded legal documents. The use of a performance deed of
trust, often used with a promissory note, to secure and enforce the provisions of the deed restrictions
is becoming a more common tool to ensure that lenders, title companies and potential purchasers are
fully aware of and respect a locality’s controls over these units. [Sections 4.1 - 4.3 of the
consultants’ report outlines in detail the content of effective deed restrictions and related
enforcement documents.]
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DISCUSSION
The first issue area for Council review and action involves matters which affect the existing program
and current BMR owners. These include recommendations on: the proposed change in the
appreciation rate; establishing a loan program to renovate older units; confirmation of established
practices and clarifications of language currently in Program H-3 6, together with staff’ s proposal to
lower the threshold for the BMR requirement to three units ; and direction to staff for the completion
of the ordinance and new deed restrictions and other legal documents. Secondly, Council is
requested to consider proposals that will strengthen the affordable housing requirements that apply to
developers, including giving direction as to which proposals should be incorporated into the new
ordinance for adoption at this time, which should be studied further as part of the next Housing
Element revision and which do not merit further consideration.
Goal #1: Improve Existing BMR Ownership Prom’am
Staff recommends immediate incorporation of the following eleven policies (1A - 1 K) into the new
BMR ordinance.
Policy #1A: Adopt the Full CPI Appreciation Rate with a Cap on Maximum Resale Value; Continue
to Emphasize the Goal of Permanent Affordability of BMR Units
Adopt Full CPI Appreciation Rate: Staff recommends that Council adopt the full percentage change
in the CPI as the appreciation formula to calculate the resale price to replace the current one-third of
the CPI formula. PAHC concurs with this recommendation. The full CPI fits well with the goal of
the BMR program for permanent affordability, while still providing a reasonable financial return for
owners on their downpayment. Criteria set by staff for selection of an appreciation formula were:
¯Preserve long-term affordability of the BMR units for future buyers
¯Increase appreciation for owners over the current one-third CPI formula
¯Appreciation should be steady and fairly predictable
¯Formula should be easy to explain, calculate and administer
¯Avoid methods that could result in owners to selling at a loss
¯Keep prices for resale BMR units sufficiently below market prices and lower than prices
for new BMR units
The full CPI was used in the early years of the BMR program, but extremely high inflation and
interest rates during those years forced Council to act in 1983 to limit appreciation to one-third of the
CPI. KMA/AA recommended that appreciation be based on the percentage change in the Area
Median Income (AMI), but with floors and caps (described in Section 3.2 of the KMA / AA report
and Attachment D to this staffreport). Staffdoes not support the consultants’ proposal because it is
vulnerable to the vagaries of HUD policy, which can produce extreme fluctuations, both up and
down, in the AMI or lack of change at all (as occurred recently for four years in a row). Furthermore,
it would be far too complicated to explain to owners and lenders and too difficult to administer.
Cities that use AMI-based formulas have had many problems in recent years with owners being
forced to sell at a loss due to a drop in the AMI together with an increase in interest rates.
The other commonly used system for pricing resale units is to set their prices the same way newly
built units are set, using a "mortgage-based" system. This system backs into a price derived from
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what a hypothetical household at the program’s target income level can afford to pay given a
mortgage with then-current interest rates, typical downpayment, property taxes, etc. This method is
required where the housing is created under a redevelopment program and it is also how Palo Alto
has always set prices for newly constructed BMR units. The drawback when it is used to set resale
prices is that it can result in a loss to the selling owner if there is a level or declining AMI, or higher
interest rates or HOA dues, since the calculated resale price would then be lower than the purchase
price. An underlying assumption of this system is that older resale units should resell to the same
general target income level as the new units. In other words, if a new unit was originally priced to be
affordable to households in the 100% to 120% of AMI level, then it should remain priced at that
level forever.
Palo Alto’s program, using the CPI applied to the original purchase, has resulted in BMR units
becoming more affordable over the years. This has been especially tree with the units under the one-
third of CPI formula. This means that very low and low income households in the 40 to 80 percent of
AMI range are able to afford BMR ownership of an older unit. For a four person family, these are
incomes from about $42,000 to $85,000, well below Santa Clara County’s exceedingly high median
income of $105,500. This result is positive in that it has broadened the types of households able to
benefit from the program. The lower prices of resale units also gives the City the flexibility to absorb
special assessments or other costs to preserve units faced with foreclosure in the resale prices and yet
still keep the units affordable. However, to continue this trend indefinitely would eventually bring
the pricing down to income levels where most households do not have sufficient financial capacity to
handle the long-term demands of ownership at any cost. Returning to the full CPI index will
moderate this trend.
Cap on Resale Prices: From 1986 through 2006, the annual increase of the CPI index averaged 3.3
percent and a return to the double-digit inflation and interest rates of the late 1970s and early 1980s
does not seem likely in the foreseeable future. However, some kind of cap on the total rate of
appreciation or on the overall maximum resale price is recommended by staff for assurance that
BMR units will remain affordable. Therefore, staffrecommends capping the maximum resale price
for each unit type at a price that would be affordable for buyers with a 20 percent downpayment at
the top (120 percent of AMI) of the moderate income bracket.
Conversion from Current Formula: If the new appreciation formula is approved by Council, it will be
included in the new legal BMR documents to be prepared by the City Attorney. These documents
will be put into use with new unit sales and resales of existing units as soon as the documents are
ready, which should be when the ordinance is effective. Staff recommends that existing BMR
owners be offered the oppommity to benefit from the new appreciation rate going forward, provided
that the owners consent to the recording of the new BMR legal documents against their unit. Staff
does not recommend, applying the new formula retroactively because it would be unfair to those
owners who sold before the change became effective.
Policy # 1B: Require Essentially Permanent Affordability by Increasing the Term of the BMR Deed
Restrictions and the Term of Rental BMR Regulatory Agreements from 59 Years to 89 Years
Since Palo Alto’s BMR program inception, a 59-year affordability term has been required for owner
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units. The 59-year term is not mentioned in Program H-36 of the Housing Element, but it was
approved for rental BMR units by Council in 1985 when the BMR program was first applied to
rental projects. For owner units, the City’s practice is to place another 59-year term on a unit when a
new buyer takes title, thus essentially achieving permanent affordability in most situations. In
contrast, some communities use 20 or 30 year affordability terms, or even no time restrictions at all,
and then lose substantial numbers of their affordable units. Because BMR homeowners have certain
transfer rights without City approval, such as to a new spouse, a longer affordability term would
provide greater assurance that these units will remain permanently in the City’s affordable housing
stock.
While this matter was not studied by the consultants, staff found that it is becoming more common in
other localities to set extended or even "permanent" affordability terms. Staff recommends that the
affordability term be increased to 89 years for both owner and rental BMR units with the proposed
BMR ordinance stating that the City’s objective for the 89-year term is to achieve the longest
possible length of affordability for both ownership and rental BMR housing.
Policy #1C: Improve the Condition of the Existing, Older BMR Housing Stock with the Provision of
Limited City Financial Assistance to Very Low Income BMR Owners of Such Units
[See Section 3.3 ofKMA/AA report]
Add a New Housing Element Policy: Staff recommends including in the next Housing Element
revision a policy recognizing the need for rehabilitation of the older BMR ownership stock, together
with a program for City financial assistance to very low income owners. With this policy and
program in place, the City will be better qualified to apply for outside grant programs, should such
funding become available.
Continue Pilot Pro~am to Fund Deferred Maintenance and Replacements at Resale on an Interim
Basis: Staff recommends standardizing the current pilot program of funding deferred maintenance
and replacements installed by the buyer with funds from an increase in the resale price and to
continue to utilize this interim strategy until new rules on maintenance, repairs and capital
improvements are in place.
Create a Renovation Loan Pro~am for Very Low Income BMR Owners: Low interest, deferred
payment loans would be offered to interested owners for repairs, accessibility features, improvements
and upgrades to older BMR units (defined as units 20 or more years old). The unit’s value would be
increased by the amount of the loan and as an incentive to participate in the program; any capital
improvements made with the loan funds would not be depreciated. The loans would be repaid at the
time of resale. While information from the BMR owner survey and inspections of older units when
they come up for resale indicates a real need for this type of assistance, this new program would
represent a significant additional work load. Staff would not proceed with this program until after
work on the BMR ordinance, legal documents and revisions to the Policy and Procedures Manual
was concluded. Staff requests Council direction on whether this progam is supported in concept and
should be developed further.
Funding for Loans: Staff recommends funding these loans, and the administrative cost of carrying
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out the loan program, from BMR in-lieu fees deposited to the Residential Housing Fund, which is a
non-General Fund source. CDBG funds could also be considered as a funding source for some of
these loans. A higher level of BMR in-lieu fee revenues is expected if Council adopts the staff
recommendation to lower the threshold of the BMR requirement to three units and if the in-lieu fee
calculation formula is updated to ensure that the fees are equivalent to the cost of the provision of
actual units.
Revise Rules Regarding Maintenance, Repair and Improvement Credits and Approval Process:
Currently, the deed restrictions contain extremely detailed rules and procedures on maintenance,
repair standards and procedures for the verification and depreciation of capital improvements. Staff
has found the existing rules ineffective and the procedures time consuming. These rules have served
as a disincentive for repairs and improvements and have contributed to the gradual decline in the
physical condition of units as they age. The proposed change to the full CPI formula will increase
the rate that owners build equity, which will help owners access financing for repairs and
improvements. Staff proposes that the deed restrictions contain only general language regarding
maintenance, repairs and improvements with more specific details to be contained in the Program
policy and procedures manual.
Require Inspections and Warranty Plans: Staff recommends mandating professional home
inspections (to be paid for by the seller) and home warranty plans (to be paid for by the buyer) at
resale. Currently, virtually no buyers choose to pay for a professional home inspection. Buyers
sometimes mistakenly assume that the review of maintenance, minor repair needs and credits for
capital improvements conducted by the City’s Real Property staff is equivalent to a professional
inspection. Professional inspections will encourage sellers to address repair issues in advance of
putting their unit up for resale, provide better protection for buyers and protect the City from claims
and liability. Home warranty plans will help prevent buyers from having to pay for major
replacements or repairs in the first year of ownership. Staffwould include these requirements in the
new deed restrictions or in sales procedures in the Program manual.
Maintain Existin~ Special Assessment Loan Program: The Special Assessment Loan Program was
authorized by Council in September 2002 in response to major assessments at the Redwoods and
Abitare. It provides deferred payment loans at three percent simple interest to owners who have no
other way to pay for a major special assessment of $10,000 or more. To date, only three loans have
been made under the program. The eligibility criteria for these loans were written to implement
Council direction that assistance be offered on the basis of the owner’s financial need. The
consultants recommended that the City relax the program’s requirements so more owners would be
able to qualify for loans. However, staff does not recommend any changes to this program, but staff
does concur with the consultants that a review of the eligibility criteria and some modifications to
simplify the rules should be done in the event of another major assessment.
[See Section 3.4 of KMA / AA report]
Policy #1D: Increase Efficiency of Program Administration, Clarify Rules & Improve Owner
Understanding
[See Section 5 of the KMA / AA report]
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Revise Resale Process to Expand Buyers’ Financing Options: As the inventory of BMR units
expands, it is important to broaden the pool of lenders willing to finance these units. Buyers would
benefit from the advantageous loan programs available from CalHFA, and more lenders would
participate if the City’s legal documents met Fannie Mae guidelines. These entities are now willing
to accept extended affordability terms, but units still must be resold promptly. One concept is to
establish a "Notice of Contemplated Sale" process so the time needed for review of a unit’s
condition and capital improvements credits does not impact the resale time deadlines in the deed
restrictions. Reselling or transferring a BMR unit would become a two-step process with the
inspections completed, maintenance and improvements evaluated, title issues resolved and the sales
price determined during the first step- after aNotice of Contemplated Sale. Then the selling owner
would give the City the official Notice of Intent to Sell that starts the 90 day time period in which the
buyer is identified, finds financing and closes escrow on the sale. The new Deed Restrictions will
need to describe the revised resale process.
Continue Local Preferences and Waiting List: Since inception, a first preference for households that
live or work in the city limits of Palo Alto has been used for the program. Almost all ownership
units are sold to a buyer that meets this criteria. To apply to purchase a BMR unit, one must first be
on the waiting list maintained by PAHC and, to stay on the list, one must reapply annually.
Presently, there are over 500 households on the waiting list; usually units sell to someone within the
first 200 names on the list. Staff and PAHC concur that the long-standing waiting list process with a
first preference for households who live or work in the city limits of Palo Alto is a fair and
appropriate system for identifying potential buyers and no changes are proposed to this policy.
Revisions to the Policy and Procedures Manual will be made to more clearly describe waiting list
policies.
Improve Disclosure and Continue Education: The City’s consultants strongly recommended that
buyers be required to sign a "plain language" disclosure document explaining the BMR deed
restrictions and procedures prior to purchase. Typically, the legal counsel that prepares the deed
restrictions would work with staff to prepare the disclosure. The City proposes to continue funding
PAHC to conduct regular educational workshops and newsletters for the waiting list and BMR
owners. Once improvements are made to the program, updated informational handouts and
workshops will be needed to inform owners. Staff will work with PAHC to develop these materials.
Authority for Policy and Procedures Manual: Staff recommends that the Council delegate (through a
provision in the proposed BMR ordinance) to the Director of Planning and Community Environment
(Director) the authority to establish, follow and revise as needed a set of standard, written policies
and procedures for program administration, which shall be contained in the revised and updated
Policy and Procedures Manual. The current manual will be expanded to cover both aspects of the
program administered by City staff, such as negotiations with developers; and aspects of the program
managed under the contract with PAHC, such as the waiting list, the sales of new and existing units,
standards for approval of transfers of title, refinancing, temporary rental and similar matters.
Policy # 1 E: Eliminate the "Cost-Based" Pricing Exception Clause for New BMR Units in Program
H-36; Continue to Base Newly Built BMR Prices Only on the Mortgage-Based Affordabitity
Formula
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Program H-36 states that: "In all cases, the sales prices should be sufficient to cover the estimated
costs to the developer of constructing the BMR unit, including financing, but excluding land,
marketing, off-site improvements, and profit. " The consultants advised that they were unaware of
any other cities that permitted developers to sell BMR units at anything other than prices based on
affordable housing costs for the target income level. In practice, it has been rare for developers to
request this provision and, due to the exclusion of land and some other costs, in those few cases
where the calculations have been made, the sales prices have been about the same or lower than the
prices from the affordable housing cost formula. The existing clause in Program H-36 regarding
adjustments, appeals and waivers, which will also be included in the proposed BMR ordinance,
provides sufficient relief for unusual situations where the application of the BMR requirement would
result in severe hardship to a developer. [See Section 3.1.2 and Appendix D ofKMA / AA report]
Policy #1F: Require a Customized Analysis of the BMR Obligation for Unusual Housing Product
Types or Unique Proposals
Staff does not have sufficient expertise to evaluate the many unique ways developers propose to meet
the BMR requirement, for example when rental BMR units are offered for an ownership project. In
addition, special expertise is needed to apply the program to special housing product types such as
senior assisted living or congregate care projects. With the wide gamut of housing products subject
to the BMR program and the broad range of solutions proposed by developers (smaller units, land
dedication, off-site units, rental instead of for-sale, in-lieu fees, etc.), many complexities are
presented that were not envisioned when the program was only being applied to modest stacked
condominium projects. Similar to requiring a developer to prepare a customized traffic study, City
policy should require that the developer pay for an independent analysis to evaluate the developer’s
proposals and help staff and Council determine an acceptable BMR contribution in these situations.
This policy was first used on a trial basis with the Bridge / BUILD project when staff had the
developer prepare an analysis by an independent real estate economist to determine the number of
very low income rental units needed in the Bridge project to satisfy the BMR requirement for the
BUILD townhomes. Staff recommends that this policy be incorporated into the proposed BMR
ordinance. [See Section 6.5.1 and Appendix E of the KMA/AA report]
Policy # 1G: Clarify the City’s Priorities for Satisfaction by Developers of the BMR Requirement
The existing text of Program H-36 lacks clarity about the priority for the alternatives that may be
used to satisfy the BMR requirement. Based on past practice, Council should confirm that the City’s
priorities for compliance with the BMR requirement are listed in order below, with combinations of
the alternatives also permitted at the discretion of the Council:
1) Provide new affordable housing BMR units distributed throughout the development
comparable in size, type and amenities to the market rate units;
2) Dedicate buildable land suitable for affordable housing construction;
3) Provide new affordable housing units, on-site or off-site, that are not comparable to the
market rate units, but are equivalent in value to. the provision of strictly comparable new BMR units;
4) Provide substantially rehabilitated existing affordable housing units, which are equivalent in
value to the provision of strictly comparable new BMR units;
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5) Payment of a one-time, in-lieu fee for ownership projects; for rental housing developments
either a one-time fee or an annual in-lieu fee may be accepted.
Program H-36 states that in-lieu fee payments are to be allowed by the City when no other alternative
is feasible, which is consistent with the priorities listed above. However, staff recommends that the
ordinance should be drafted to allow the Director to propose to Council the payment, or partial
payment, of in-lieu fees in limited instances where there is a specific use for the fees which will
substantially increase the production of affordable housing.
Policy #1H: Lower the Threshold for the BMR Requirement from Five Units to Three Units or
Residential Parcels
Staff recommends that the BMR ordinance establish the threshold of three or more units or parcels
for the BMR requirement, which was in effect prior to 2002. While thresholds of three, five or ten
units are common, many cities now apply inclusionary housing requirements to projects as small as
two units and even to individual single family homes. The consultants recommended broadening the
application of the BMR program by lowering, or eliminating entirely, the current threshold of five or
more units. However, staff does not recommend collecting BMR in-lieu fees on single homes or on
2-unit projects. Staff instead recommends returning to the three or more unit threshold that was in
place from 1990 to 2002. The responsibility and cost of addressing the City’s affordable housing
problems will then be spread more equitably among more land owners, developers and users of the
City’s limited supply of residential land. [See Section 6.6.4 of the KMA / AA report]
Small Rental and Mixed Use Projects: One original purpose of raising the threshold from three to
five units was to encourage small rental and mixed use projects, however in some cases the housing
units produced have been very large, over 3,000 square feet condos. Rather than keeping the current
five unit threshold, Staff recommends that the BMR requirement for rental housing and mixed use
projects with up to six units (six units is just below the level of seven units where, with the basic 15
percent BMR requirement, one BMR unit is needed) could be waived, provided that the units are
rentals and their size is within certain modest standards which would be set in the BMR ordinance.
Difference between Threshold for Lots and Units: With the 2002 Housing Element, the threshold in
Program H-36 for lots was left at three and for units it was increased to five. This change has
resulted in confusion. The present system also motivates developers to split projects into separate
applications to minimize the BMR obligation. Staff also recommends that language be included in
the proposed BMR ordinance to base the threshold and BMR requirement percentage on the ori~nal
size of a site at the time development is initiated, so that the BMR requirement for a large site is not
reduced merely by dividing the site into smaller parcels for development by different entities in cases
when the entitlements are being reviewed and processed concurrently.
Policy # 1I: Conduct Further Technical Study the BMR In-lieu Fee Formula
In-lieu fees are most often used by the City for developments of single family detached and luxury
housing. Fees are also accepted for fractional units and for small projects that do not owe a full
BMR unit. The current fee rate is simply one-half of the BMR percentage requirement times the
CMR: 350:07 Page !1 of 16
sales or appraised value of the market rate units. The consultant advised staff that our present BMR
in-lieu fee methodology results in fees that are considerably lower in cost to the developer than the
delivery of BlvIR units, when applied to projects with higher sales values and to luxury housing.
KMA evaluated the accuracy of this formula compared to the financial benefit to the developer of
not having to provide BMR units for various types and prices of housing, and compared the City’s
system to other common methods used by other localities. Additional analysis could enable the City
to collect higher fees and generate more revenue for developing affordable housing. Staff
recommends that additional consultant analysis be done to exam the fee methodology and
alternatives to ensure that it is fully justifiable and equitable. However, to avoid delay in adoption of
the BMR ordinance the current in-lieu fee methodology should be incorporated into the ordinance at
this time. [See Section 6.2 and 6.46 of the KMA/AA report]
Policy # 1J: Miscellaneous Changes in Program H-36 Provisions for Incorporation into BMR
Ordinance
In-Lieu Fees for Fractional Units: In-lieu fees are currently permitted for very small projects that owe
less than one full BMR unit and for fractional units owed for projects of less than 30 units unless the
developer agrees to an adjustment in the type or size of the BMR units to cover the fractional trait.
Staff recommends that the BMR ordinance clarify that for large projects, a fractional unit of less than
0.5 shall be covered by adjusting the type or size of the BIVIR units to eliminate the need to pay in-
lieu fees.
Subdivisions and Parcel Maps of Three of More Lots Intended for Construction of Single Family
Homes: Program H-36 currently states that the BMR requirement for single family land divisions
must be met with the dedication of buildable parcels to the City or the construction of BMR units
within the subdivision, unless this is infeasible. Also, while past practice has been to require in-lieu
BMR fees on the future homes built on these lots, Program H-36 does not clearly state this is a
requirement. Due to the extremely high values of single family lots and new, detached homes,
requiring BMR in-lieu fees is the most practical alternative for meeting the BMR obligation in most
situations. Staff recommends that the BMR ordinance should state that the preferred alternative for
single family homes and land subdivisions is the payment of in-lieu fees. The in-lieu fees would be
based on the appraised value of the lots as ready to build, fully improved lots and on the value of the
future homes, to be paid when the homes are constructed and sold.
Open Space (OS) District Projects: Staff recommends that the ordinance clarify that affordable
housing construction is not considered feasible in the OS district and thus the payment of in-lieu fees
will be required in all cases for projects located with the OS zoning district, including land
subdivisions subject to the BMR requirement.
Policy # 1K: BMR Rental Program: Establish More Specific Standards for Affordable Rents and
Occupancy in the Proposed BMR Ordinance but Authorize the Director to Determine Initial BMR
Rents Annually
Affordabilitv Standards for BMR Rentals: The consultants’ recommendations focused entirely on the
BMR home ownership program. However, the proposed BMR ordinance will also need to set
CMR: 350:07 Page 12 of 16
overall policy for the BMR rental program. The current text of Program H-36 is not specific about
the affordability of BMR rental units. Due to the volatile nature of the rental market, more flexibility
is needed for the Director to set initial affordability levels for BMR rents. The ordinance should
implement current staff procedures which require all initial BMR rents to be at least 25 percent
below market rents for comparable units and locations and that 20 to 30 percent of total BMR rental
units in a project be at the very low income affordability level.
Goal #2: Policy Changes to Stren~hen the BMR Requirement to Increase Overall Affordable
Housing Production
Staff recommends that Council direct staff to continue to analyze the following policies (2A - 2C)
and return to Council with recommendations or additional policies to either incorporate later into the
proposed BMR ordinance or into the next Housing Element revision.
Policy # 2A: Allow Substitution of Smaller Units Only If More BMR Units Are Provided by the
Developer; Otherwise BMR Units Must Meet City Comparability Standards
Since the program’s inception, there has been a policy that BMR units should be comparable to the
market rate units, but that policy has not been consistently enforced. Written standards for both
owner and rental BMR units were put in place about ten years ago by staff and since then, they have
been more consistently applied. As a result, BMR units in projects presently in the pipeline are
provided in proportion and comparability in type, size, number of bedrooms and location to the
market rate units. The consultants’ report includes a set of formulae to calculate equivalence
between different unit types of for-sale housing. If a developer proposes an alternative for
consideration, then a customized analysis should be required of the developer to determine that at
least an equivalent BMR contribution is obtained by the City. At times, there may be good reasons
for a larger variety of units for the BMR market than are produced by developers in their projects.
Staff recommends that a policy be developed allowing the substitution of different unit types and
sizes for the BMR units, provided adjustments are made in the number of BMR units provided, with
the standards for the equivalence included in the Policies and Procedures Manual.
[See Section 6.3 of the KMA / AA report]
Policy #2B: Require Land Dedication as the Default Option on Larger Sites of Three or More Acres
The purpose of this policy is for the City to obtain land to then provide to non-profit housing
developers willing to build subsidized rental housing. Palo Alto’s BMR program has always allowed
and encouraged voluntary offers of land, instead ofinclusionary, on-site units. However, developers
have only rarely been willing to provide land or even to construct rental units on their own land
either on or off site. Any land dedication to meet the BMR requirements must be provided with
appropriate zoning in place and must be a buildable, legal parcel free of environmental impediments.
All impact fees and other exactions must be paid. The site must be adequate in all respects for, at a
minimum, the construction of the number of rental housing units, equivalent in size to the required
inclusionary BMR units. While land dedication is more likely to be practical on sites of five or more
acres, some sites as small as three acres could provide a half acre parcel, which would be sufficient
for a small rental development. If land dedication was infeasible or undesirable for a particular
project, then the developer could contribute an equivalent piece of land at another location or the
CMR: 350:07 Page 13 of 16
BMR agreement would revert to the standard inclusionary type of agreement. If Council supports
this policy, staff recommends that further refinement and study be completed and the program
framework brought back to Council for approval as part of the next Housing Element revision. This
will avoid delaying the adoption of the BMR ordinance.
[See Section 6.5.3 & 6.6.3 of the KMA/AA report]
Policy #2C: Base the Minimum Number of BMR Units on the Site’s Size and Zoning Capacity
Currently, the number of BMR units provided is a function of the total number of units actually built
by the developer. Almost all residential projects are built at much less than the zoned density of the
land due to the greater profitability of larger homes and the strong market for for-sale homes or
townhomes on separate lots. By fixing the minimum number of BMR units in advance on a parcel
basis using an objective, mathematical calculation, the City could be assured of a more predictable
level of affordable housing production. Land owners, developers, and potential buyers would know
with certainty the affordable housing requirement for any residentially zoned site. Some small
discount could be made from the theoretical maximum density to account for the effect of
development standards on unit yield. Further study would be needed regarding the application of
this policy tomixed use projects and to projects under Planned Community zoning. Since this policy
would encourage development of sites at the high end of the density range, staff recommends that
further analysis and refinement of this concept be included in the work program for the upcoming
Housing Element revision. [See Section 6.4.4 of the KMA / AA report]
BOARD AND COMMISSION REVIEW
Human Relations Commission (HRC): On December 14, 2006, the HRC discussed the
recommendations in the consultants’ report with Plmming staff in a study session format. A
representative of PAHC also attended. The HRC members expressed a broad range of widely
differing opinions about the fundamental objectives of the BMR ownership program. Generally, the
HRC was supportive of the consultants’ recommendations; but did not specifically act on the report
or on any particular policy recommendations. The HRC is primarily concerned about the BMR
ownership program from the standpoint of the individual owner, especially owners who have
financial problems or other unique situations. A few BMR owners have appealed at various times to
the HRC about the hardship of monthly HOA dues and the low level of appreciation under the one-
third of CPI formula.
Planning and Transportation Commission (PTC): The PTC will review any proposed BMR
ordinance and make recommendations to Council on its adoption.
RESOURCE IMPACT
Funds are available and budgeted in FY 2007-08 in the Residential Housing Fund for the cost of
contract legal services to assist staff with the preparation of both a BMR ordinance and with the
development of new BMR ownership deed restrictions and related enforcement documents.
Implementation of the portion of Policy # 1 C: "Create a Renovation Loan Program for Very Low
Income BMR Owners" will require both additional financial and staff resources. The financial
resources could come from a higher and more predictable revenue stream from expanded application
CMR: 350:07 Page !4 of 16
of BMR in-lieu fees and possibly from CDBG funds for the loans. Further analysis of alternatives
for administering the loan program will be conducted during the BMR in-lieu fee analysis, if Council
supports the program in concept.
POLICY IMPLICATIONS
The overall focus of the BMR Study was to identify policies and procedures which would make the
BMR program a more effective and efficient tool to address Palo Alto’s affordable housing needs.
Broad housing policies were examined as well as mundane procedural matters in administration of
BMR unit sales. Several of the new policies from the study are based on two common underlying
principles:
1) New residential expansion and development should contribute at some leve! towards
solutions to the City affordable housing problems; and
2) The BMR program should contribute more effectively to the creation and preservation of
affordable rental housing to a much greater degree than in the past.
A rewrite of the BMR Program sections of the Housing Element as well as adoption of a new BMR
ordinance would more clearly support these two guiding principles of the BMR Program.
TIMEL1NE
The timeline for Council review and action on the policy changes to the BMR Program are
dependent upon the time required to prepare the BMR ordinance following Council direction.
Concurrently with the drafting of a new ordinance, Planning and legal staff will need to work on the
proposed changes to the deed restrictions and Policies and Procedures Manual. The existing
language in the BMR Program H-36 of the Housing Element will also need to be modified and an
amendment to the Housing Element adopted by Council concurrent with the adoption of the BMR
ordinance.
A tentative schedule is
September 11tu
Sept. - Dec. 2007
January 2008
March 2008
May 2008
proposed as follows:
Action by Policy and Services Committee on Proposed Changes
Preparation of Ordinance & Environmental Review Process
PTC Review of the BMR Ordinance and Related Changes to Progam H-36
of the Housing Element
City Council Adopts BMR Ordinance, including policy changes and related
Housing Element Amendments
City Attorney Completes New Legal Documents (deed restrictions, deed of
trust) & Revisions Completed by Planning & PAHC to Policy and
Procedures Manual
ENVIRONMENTAL REVIEW
The administration of the BMR housing program is categorically exempt under Section 15326 of the
California Environmental Quality Act (CEQA). However, the adoption of an ordinance to
implement the BMR program will require CEQA review.
CMR: 350:07 Page 15 of 16
PREPARED BY:
Catherine Siegel
Housing Coordinator / Advance Planning Manager
~STEVE EMSLIE
Director of Planning and Community Environment
CITY MANAGER APPROVAL: ~~’O
Assistant City Manager
ATTACHMENTS
A. Below Market Rate Housing Program Economic / Policy Analysis and Recommendations
Prepared by Keyser Marston Associates, Inc. and Anderson & Associates (includes Appendix C:
Summary and Analysis of Homeowners Survey) [Hard copies to Council and CDs to public]
B. Summary List of Staff Recommended Actions for Council Approval
C. Inventory of BMR Units [Completed and Occupied Units and Pipeline]
D. Description of Appreciation Formula Recommended by KMA
CC:Palo Alto Housing Corporation, Marlene Prendergast, Executive Director
Bonnie Packer, Palo Alto Housing Corporation Board of Directors
Lani Wheeler, Palo Alto Housing Corporation Board of Directors
Silicon Valley Association of Realtors 19400 Stevens Creek Blvd. #100, Cupertino, CA 95014
Home Builders Association of Northern California, Southern Division
Attn: Beverly Bryant 675 North First Street, Suite 620, San Jose, CA 95112-5118
CMR: 350:07 Page 16 of 16
Attachment A
Is in the binder for Council members, booklet for Council candidates, Counci! Appointed
Officers and the libraries and on CD for the public.
ATTACHMENT B
BMR PROGRAM UPDATE
Summary List of Staff Recommended Actions for Council Approval
Goal #1: Improve Existing BMR Ownership Program
Staff recommends immediate incorporation of the following eleven policies (1A - 1K) into the
new BMR ordinance.
Policy #1A: Adopt the Full CPI Appreciation Rate with a Cap on Maximum Resale Value;
Continue to Emphasize the Goal of Permanent Affordability of BMR Units
Policy #1B: Require Essentially Permanent Affordability by Increasing the Term of the BMR
Deed Restrictions and the Term of Rental BMR Regulatory Agreements from 59 Years to 89
Years
Policy # 1C: Improve the Condition of the Existing, Older BMR Housing Stock with the
Provision of Limited City Financial Assistance to Very Low Income BMR Owners of
Such Units
1) Add a New Housing Element Policy
2) Continue Pilot Program to Fund Deferred Maintenance and Replacements at
Resale on an Interim Basis
3)Create a Renovation Loan Program for Very Low Income BMR Owners
4)Funding for Renovation Loans
5)Revise Rules regarding Maintenance, Repairs and Improvement Credits and
Approval Process
6) Require Inspections and Warranty Plans
7) Maintain Existing Special Assessment Loan Program
Policy #1D: Increase Efficiency of Program Administration, Clarify Rules & Improve Owner
Understanding
1)Revise Resale Process to Expand Buyers’ Financing Options
2)Continue Local Preferences and Waiting List
3)Improve Disclosure and Continue Education
4)Authority for Policy and Procedures Manual
Policy #1E: Eliminate the "Cost-Based" Pricing
Program H-36; Continue to Base Newly Built
Affordability Formula
Exception Clause for New BMR Units in
BMR Prices Only on the Mortgage-Based
Policy #1F: Require a Customized Analysis of the BMR Obligation for Unusual Housing
Product Types or Unique Proposals
H:~OCkBMR StudykP & S CMR ATT B Policy List.doc Page 1 of 2
ATTACHMENT B
Policy # 1 G: Clarify the City’s Priorities for Satisfaction by Developers of the BMR
Requirement
Policy #1H: Lower the Threshold for the BMR Requirement from Five Units to Three Units or
Residential Parcels
1) Small Rental and Mixed Use Projects
2) Difference between Threshold for Lots and Units
Policy # 1I: Conduct Further Technical Study the BMR In-lieu Fee Formula
1) In-Lieu Fees for Fractional Units
2) Subdivisions and Parcel Maps of Three of More Lots Intended for Construction
of Single Family Homes
3) Open Space (OS) District Projects
Policy # 1J: Miscellaneous Changes in Program H-36 Provisions for Incorporation into BMR
Ordinance
Policy # 1 K: BMR Renta! Program: Establish More Specific Standards for Affordable Rents and
Occupancy in the Proposed BMR Ordinance but Authorize the Director to Determine
Initial BMR Rents Annually
Goal #2: Policy Changes to Strengthen the BMR Requirement to Increase Overall
Affordable Housing Production
Staff recommends that Council direct staff to continue to analyze the following policies (2A -
2C) and return to Council with recommendations or additional policies to either incorporate later
into the proposed BMR ordinance or into the next Housing Element revision.
Policy # 2A: Allow Substitution of Smaller Units Only If More BMR Units Are Provided by the
Developer; Otherwise BMR Units Must Meet City Comparability Standards
Policy #2B: Require Land Dedication as the Default Option on Larger Sites of Three or More
Acres
Policy #2C: Base the Minimum Number of BMR Units on the Site’s Size and Zoning Capacity
HADOCkBMR StudykP & S CMR ATT B Policy List.doc Page 2 of 2
ATTACHMENT C
CITY OF PALO ALTO
INVENTORY OF BELOW MARKET RATE PROGRAM UNITS (Sept. 2007)
BMR HOMEOWNERSHIP UNITS (Including units in development)
Development Name
Foothill Green
Villas de San Alma
Greenhouse I
Greenhouse II
Channing Place
410 Sheridan
Villas de la Plazas
Vista Townhouses
San Antonio Village
Barron Square
Palo Alto Greens
Colorado Place
Palo Alto Redwoods
Oregon Green (offsite)
Birch Court - BMR Units - 5
Birch Court - Discount Units - 17
Palo Alto Central
Loma Verde Village
Loma Verde Townhornes
Channing Court
Ashby Duplex
Abitare
Ortega Duplex
Talisman Duplex
Bautista Duplex
The Hamlet
Terrace Bay Homes
The Rosewalk
Ramona Courts
Charleston Village
Year First Sold
1975
1975
1983,1987
1976
1976
1977
1978
1979
1979
1979
1981
1981
1983
1984
1984
1984
1985
1985
1985
1985
1985
1986
1987
1987
1988
1988
1988
1989
1990
Number of BMR Units
4
8
14
10
2
5
4
2
2
6
4
2
12
1
22
1975,
7
4
2
1
2
9
2
2
2
6
2
4
1
2
H:kDOCLBMR Stud~MR Inventor3, & Pipeline 09-07 Att C.doc Page 1 of 3
ATTACHMENT C
CITY OF PALO ALTO
INVENTORY OF BELOW MARKET RATE PROGRAM UNITS (Sept. 2007)
BMR HOMEOWNERSHIP UNITS (Including units in development)
Development Name
737 Loma Verde (Christensen Court)
Camino Place
Spanish Villas
Jacobs Court
Promenade
Everett Townhomes
Silverwood - 435 Sheridan Ave.
Classics at Barron Park (Driscoll P1)
Wisteria Townhomes
800 High Condos
SUB-TOTAL (Completed Projects)
Arbor Real- Under Construction
Vantage - Under Construction (East
Meadow area)
Echelon- Under Construction (East
Meadow area)
Classics at Sterling Park- Building
permits in review (West Bayshore area)
899 Charleston - Building permits in
review (CJL -senior congregate care)
SummerHill (Elks) - Planning
entitlements in review (4249 El Camino)
Year First Sold
1992
1992
1993
1993
1994
1997
1999
2000
2000
2006
2007-08
2007-08
2007-08
2008-09
Number of BMR Units
1
4
1
3
7
1
3
4
10
179
34
(plus in-lieu fees)
2009
12
11
10
(plus in-lieu fees)
24
7
(or in-lieu fees)
98
2009
TOTAL UNITS- IN PIPELINE ---
TOTAL OWNERSHIP BMR UNITS
(Completed and Pipeline)277
H:kDOCkBMR StudykBMR Inventory & Pipeline 09-07 Att C.doc Page 2 of 3
ATTACHMENT C
BMR RENTAL HOUSING UNITS
As of September 2007
Development Name Year First Rented Number of BMR Units
Southwood Apartments 1985 102850 Middlefield Rd.
1100 Welch Road Apartments 1987 11
Mayfield Apartments 1987 & 1989 12345 Sheridan Ave.
Montage Apartments 1998 54020 E1 Camino Real
105Stanford West Apartments
700 Clark Way (at Sand Hill Rd.)
- Additional BMR Units to be PhasedIn
SUB-TOTAL - OCCUPIED BMR
RENTAL UNITS
Sunrise Senior Assisted LivhTg - b7 Marketing
2701 El Camino Real
2051 El Camino Real- Under Construction
Park Village Apts- Under Construction
1072 Tanland Dr.
Park Plaza - Subdivision map in review
2901 Park Blvd. / 195 Page Mill Rd
Alma Plaza - 3401 Alma St
- Planning entitlements in review
Total BMR Rental Units
(Occupied & Pipeline)
2000-01: 63
2004-05:42
By Oct. 2009:27
By Oct. 2014:24
As of Sept. 2007
2006-07
2008
2008
Not known
Not known
155
12
3
17
14
253
Total All Below Market Rate Units ---530
H:g3OCkBMR StudykBMR Inventor3, & Pipeline 09-07 Art C.doc Page 3 of 3
ATTACHMENT D
Description of Appreciation Formula Recommended by Keyser Marston Associates
The consultants proposed a resale price formula for BMR units that would be driven by a "base"
appreciation index equal to 80% of the percentage increase in the AMI, with upper and lower
limits on the resale price, as follows:
1) The "Base" appreciation index is equal to 80% of the increase in the AMI
2) Plus: Credits for any capital improvements and special assessments
3) Less: Deductions for the costs of curing deferred maintenance and repairs
Subject to the Following Price Ceiling and Price Floor:
4) Resale Price Ceiling: The resale price cannot exceed the lesser of (a) (1) and (a) (2):
(a) (1) The then-current new sales prices of comparable BMR units
- A resale 3-bedroom townhome’s maximum price would equal that year’s
maximum price for new 3 bedroom BMRs, using then current interest rates
- For units in the lower moderate category that is a price affordable to households
at 90% of AMI and for units in the higher moderate income category that is a price
affordable to households at 110% of the AMI
(a) (2) 80% of the unrestricted market rate value of the unit
AND
5) Resale Price Floor: The resale price will not be less than the greater of(b) (1) and (b) (2):
(b) (1) The original purchase price paid by the seller; and
(b) (2) A price affordable (at time of sale) to households at 75% of AMI (for the low
moderate category units); or at 95% of AMI (for the high moderate category units)
H:kDOCkBMR StudykResale Price Formula by KMA Att D.doc