Loading...
HomeMy WebLinkAboutReso 73-10 Below Market Rate PolicyRESOLUTION NO. 73- 10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ************* EXTENDING A TEMPORARY POLICY FOR THE RENTAL OF BELOW MARKET RATE OWNERSHIP UNITS BY OWNERS UNABLE TO SELL THEIR UNITS AT THE RESTRICTED RESALE PRICE WHEREAS, the City of Dublin's ("City") Inclusionary Housing Program requires purchasers of Below Market Rate ("BMR") for-sale units ("Unit") to execute and record a Resale Restriction Agreement with Option to Purchase ("Resale Restriction Agreement"); and WHEREAS, the Resale Restriction Agreement prohibits BMR owners from selling their BMR Units at more than a restricted price; and WHEREAS, due to the recent slow down in the housing market, BMR owners are having difficulty finding qualified buyers willing to purchase their BMR units at the restricted resale price because such prices are so close to market prices that qualified buyers would rather purchase Market Rate homes free of resale restrictions; and WHEREAS, BMR owners who are unable to sell their BMR units would like to rent their BMR units; and WHEREAS, the Resale Restrfction Agreement prohibits the rental of the BMR units without the consent of the City; and WHEREAS, although the City does have a policy authorizing rental of BMR units when the owner has a hardship, the City does not currently have a permanent policy regarding the rental of BMR units by BMR owners who are unable to sell their units at the restricted price; and WHEREAS, the City does have a policy in place through August 19, 2010 (Temporary Policy for the Rental of be%w Market Rate Ownership Units by Owners Unable to SeII Their Units at the Restricted Resa/e Price) that allows for the rental of BMR units by BMR owners who are unable to sell their units at the restricted price; and WHEREAS, to assist BMR owners with the difficulty of finding qualified buyers, this Resolution is to extend a temporary policy for additional two years from the date of expiration of the original policy which is August 19, 2012 for the rental of BMR units by BMR owners who are unable to sell their units. NOW, THEREFORE, the City Council of the City of Dublin does hereby resolve as follows: Policy. During the Policy Term, the owner of a BMR unit who is unable to find a qualified buyer to purchase his or her unit at the Adjusted Resale Price may rent his or her unit provided that the following requirements are satisfied: Page 1 of 3 (a) The BMR unit has been on the market for at least six (6) months and the Owner has made commercially reasonable efforts to sell the BMR unit, as determined by the City. Such efforts shall include, but shall not be limited to, listing the unit with a Real Estate Broker, ensuring the unit is listed in the Multiple Listing Service, and making the unit reasonably available for viewing by Brokers and potential purchasers and their agents; (b) The BMR owner enters into a regulatory agreement with the City; (c) The future Tenant is an Eligible Household in the same income category as the BMR unit; (d) The lease contains the provisions set forth in Section 4 below; (e) The monthly renta~ payment does not exceed the amount set forth in Section 3 below; (f) A copy of the lease is submitted to the City within five (5) days following execution of the agreement by the Owner and Tenant; (g) The BMR owner does not live in the BMR unit during the term of the lease; and (h) The lease shall terminate no later than the Authorized Lease Termination Date. 2. Definitions. The following definitions shall apply to this Policy: (a) "Authorized Lease Termination Date" means August 19, 2012. (b) "Policy Term" means up to four years, from August 19, 2008 until August 19, 2012. (c) Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Resale Restriction Agreement. (d) Total Monthly Household Cost of the Unit means mortgage payment, taxes, homeowners association fees and insurance (does not include utilities). 3. Rent. The monthly rental payment for the BMR unit shall not exceed either the maximum rent, as calculated per Chapter 4.11.3 of the Guidetine to the Inclusionary Zoning Ordinance Regulations, for the applicable income category and household size, or the total monthly household cost of the unit, whichever is less. If the Tenant pays utilities or Homeowners' Association dues, maximum rent must be decreased pursuant to the City's utility allowance schedule. Household size wifl be assumed based on the number of bedrooms in the unit as follows: studio, 1 person; 1 bedroom, 2 persons; 2 bedroom, 3 persons; 3 bedrooms, 4 persons; 4 bedrooms, 5 persons; and 5 bedrooms, 6 persons. Page 2 of 3 4. Lease. The lease agreement shall clearly state: (1) the term of the lease; (2) the monthly rental payment; (3) that the BMR unit is an affordable unit subject to certain restrictions imposed by the City; (4) that the Tenant may be required to submit income documentation to the City upon request; (5) that the lease term will expire no later than the Authorized Lease Termination Date; and (6) that the City is a third party beneficiary to the lease. 5. Authority of City Manager. The City Manager or his or her designee shall have the authority and responsibility for the implementation of this Policy, including the authority to enter into Regulatory Agreements with the BMR owners in a form approved by the City Manager and the City Attorney. 6. Effect of Violation. Any lease that violates the provisions of this Policy is prohibited, and any owner who violates this Policy shall be deemed to be in default under his or her Resale Restriction Agreement. 7. Severability Clause. The provisions of this Resolution are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words, or parts thereof of this Resolution or their applicability to other persons or circumstances. ~ 8. Effective Date. This Resolution shall take effect immediately. PASSED, APPROVED, AND ADOPTED BY this 18th day of May, 2010, by the following vote: AYES: Councilmembers Biddle, Hildenbrand, Scholz, and Mayor Sbranti NOES: None ABSENT: Councilmember Hart ABSTAIN: None ATTEST: N ~ ~--, Mayor ~ ~-~- ~ ' ~'~-C/ City Clerk Reso No. 73-10, Adopted 5-18-10, Item 4.10 Page 3 of 3