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HomeMy WebLinkAbout4.02 Tralee Vlg Town Homeor 19 82 /ii � 111 DATE: TO: FROM: SUBJECT STAFF REPORT CITY COUNCIL June 4, 2013 Honorable Mayor and City Councilmembers Joni Pattillo City Manager""' CITY CLERK File #600 -70 Amendment to Tralee Village Town Home Affordable Housing Agreement Prepared by Mamie R. Delgado, Senior Planner EXECUTIVE SUMMARY: Shea Homes is seeking an amendment to their Affordable Housing Agreement with the City of Dublin to satisfy the remaining affordable housing obligation for the Tralee Village Town Home project through the payment of in -lieu fees. The in -lieu fee payment would be deposited into the City's Inclusionary Zoning In -Lieu Fee Fund and used for affordable housing programs which further the goals of the City's Inclusionary Zoning Regulations. FINANCIAL IMPACT: The cost to prepare the proposed Affordable Housing Agreement Amendment is borne by the Applicant. The in -lieu fee payment would be deposited into the City's Inclusionary Zoning In -Lieu Fee Fund and used for affordable housing programs. RECOMMENDATION: Staff recommends that the City Council adopt Resolution Approving an Amended and Restated Affordable Housing Agreement for the Payment of Fees In -Lieu of Constructing Certain Affordable Ownership Units Between the City of Dublin and Shea Homes. Submitted By Reviewed By Director of Community Development Assistant City Manager DESCRIPTION: Tralee is a mixed -use development that includes 233 residential units and approximately 35,000 square feet of retail space located on 10.61 acres at the northwest corner of Dublin Boulevard and Dougherty Road. The original developer of the property, Bancor Properties, proposed the development of 103 for -sale townhome units (Phase 1) and 130 for -sale condominium units with 35,000 square feet of retail (Phase 11) on the project site (Attachment 1). In July 2004, the City Council approved a Planned Development Rezone, Site Development Review and Vesting Tentative Subdivision Map for the Project (collectively, the "Approvals "). Page 1 of 5 ITEM NO. 4.2 At the time of the Project Approvals, the City's Inclusionary Zoning Regulations required that all new developments of 20 or more units provide 12.5% of the units as affordable to households with very low -, low- and moderate - income levels. The City's Inclusionary Zoning Regulations allow the partial satisfaction of the Inclusionary Zoning obligation by the payment of a 5% in -lieu fee and a must -build requirement of 7.5 %. At the time of the Project Approvals by the City Council, Bancor indicated that they would construct the full obligation of 12.5 %, or 29 Inclusionary Units (12.5% of 233 units). Subsequently, Pfeiffer Ranch Investors, Inc. (also known as Pinn Brothers) obtained the Project from Bancor and on October 19, 2005, entered into an Affordable Housing Agreement for the Construction of Inclusionary Units (the "Original Agreement ") with the City, pursuant to the existing Inclusionary Regulations (Attachment 2). Under the Original Agreement, Pfeiffer was to construct 13 for -sale Inclusionary Units during Phase I, and 16 for -sale Inclusionary Units in Phase 11. Pfeiffer did not elect to pay fees in -lieu of the construction of the units, as permitted by the Ordinance. The 29 Inclusionary Units were allocated in the manner described in Table 1 below. However, Pfeiffer was unable to complete the project, and it remained in a state of partial construction for a number of years. Table 1 Original Agreement for Required Inclusionary Units In December 2008, the City Council amended the Inclusionary Zoning Regulations to (1) eliminate the requirement to construct very low- income ownership units; and (2) change the income ratios for Affordable Ownership Units to 40% low- income units and 60% moderate - income units. Subsequently, Dublin Tralee 11, LLC acquired Phase I and on August 16, 2011, entered into an Amended and Restated Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In -Lieu of Constructing Certain Affordable Ownership Units (the "Current Agreement ") with the City (Attachment 3). Under the Current Agreement, Dublin Tralee 11, LLC was to construct 8 for -sale Inclusionary Units (7.5% must - build) and pay fees in -lieu of constructing 5 for -sale Inclusionary Units (5% in- lieu fees). Dublin Tralee 11, LLC paid in -lieu fees for five Inclusionary Units in the amount of $519,440 ($103,888 per unit). The remaining eight Inclusionary Units were to be constructed in the manner described in Table 2 below. On January 23, 2013, the Current Agreement was assigned by Dublin Tralee 11, LLC to Shea Homes. Page 2 of 5 Very Low - Income Units Low - Income Units Moderate - Income Units Total Inclusionary Units Phase 1 4 3 6 13 Phase 11 5 3 8 16 Total 9 6 14 29 In December 2008, the City Council amended the Inclusionary Zoning Regulations to (1) eliminate the requirement to construct very low- income ownership units; and (2) change the income ratios for Affordable Ownership Units to 40% low- income units and 60% moderate - income units. Subsequently, Dublin Tralee 11, LLC acquired Phase I and on August 16, 2011, entered into an Amended and Restated Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In -Lieu of Constructing Certain Affordable Ownership Units (the "Current Agreement ") with the City (Attachment 3). Under the Current Agreement, Dublin Tralee 11, LLC was to construct 8 for -sale Inclusionary Units (7.5% must - build) and pay fees in -lieu of constructing 5 for -sale Inclusionary Units (5% in- lieu fees). Dublin Tralee 11, LLC paid in -lieu fees for five Inclusionary Units in the amount of $519,440 ($103,888 per unit). The remaining eight Inclusionary Units were to be constructed in the manner described in Table 2 below. On January 23, 2013, the Current Agreement was assigned by Dublin Tralee 11, LLC to Shea Homes. Page 2 of 5 Table 2 Current Agreement for Required Inclusionary Units To date, one moderate - income unit has sold and a second moderate - income unit is expected to close escrow in May 2013. The remaining affordable housing obligation is 3 low- income units and 3 moderate - income units. Shea Homes is currently requesting to pay fees in -lieu of constructing the remaining six Inclusionary Units at Tralee Village (Attachment 4). The Inclusionary Zoning Regulations (Section 8.68.040.E, Waiver of Requirements) allow the City Council to waive the requirements of the Inclusionary Zoning Regulations and approve an alternate method of compliance if the Applicant can demonstrate, and the City Council finds, that the alternate method of compliance meets the purposes of the Inclusionary Zoning Regulations. ANALYSIS: Shea Homes is requesting that the City Council approve an alternate method to comply with the requirement to construct the remaining six Inclusionary Units (3 low- income and 3 moderate - income units). Shea Homes is proposing to pay in -lieu fees of $642,030 or $107,005 per unit which is the current in -lieu fee amount. In order to approve the proposed alternate method, the City Council must find that the proposal "meets the purposes" of the Inclusionary Zoning Regulations. Phase I consists of 103 town homes with a density of 17.5 units to the acre and is consistent with the Medium -High Density Residential land use designation. At this density, a town home project is often affordable -by- design and is likely to meet the affordability standards for moderate - income units. Phase I includes 18 units in the 1,300 -1,400 square foot range and, based on comparable projects currently selling in the Tri- Valley, are priced around $485,000 which is below the current maximum prices for moderate - income Inclusionary Units. Six of the 18 units have been sold by previous developers of which two are deed - restricted Inclusionary Units. Because of the specific aspects of this project and the currently prevailing market conditions, staff believes that the City Council can find that Shea's proposed alternate method of complying with the Inclusionary Zoning Regulations "meets the purposes" of the Regulations. Under the proposal, Shea Homes will have constructed 2 moderate - income units and paid in -lieu fees to satisfy the remaining 11 units of the project's Inclusionary Zoning obligation. In addition, Shea Homes will be constructing 12 market -rate units in the 1,300 -1,400 square foot range. Based on market data provided by Shea Homes for comparable projects currently selling in the Tri - Valley, they anticipate that these units will be priced competitively in the $490,000 - $505,000 range (Attachment 4). These prices are less than the current maximum prices for moderate - income affordable units. As a result, Shea Homes has indicated that a deed restricted unit in the same price range will be difficult to sell and is therefore requesting to pay fees in -lieu of constructing the units. It will also be difficult for future owners to resell such units, because the affordable price will be either above or close to the market price Page 3 of 5 Low - Income Moderate - Income Total Inclusionary In -Lieu Units Units Units Fees $519,440 Phase 1 3 5 8 (5 units) To date, one moderate - income unit has sold and a second moderate - income unit is expected to close escrow in May 2013. The remaining affordable housing obligation is 3 low- income units and 3 moderate - income units. Shea Homes is currently requesting to pay fees in -lieu of constructing the remaining six Inclusionary Units at Tralee Village (Attachment 4). The Inclusionary Zoning Regulations (Section 8.68.040.E, Waiver of Requirements) allow the City Council to waive the requirements of the Inclusionary Zoning Regulations and approve an alternate method of compliance if the Applicant can demonstrate, and the City Council finds, that the alternate method of compliance meets the purposes of the Inclusionary Zoning Regulations. ANALYSIS: Shea Homes is requesting that the City Council approve an alternate method to comply with the requirement to construct the remaining six Inclusionary Units (3 low- income and 3 moderate - income units). Shea Homes is proposing to pay in -lieu fees of $642,030 or $107,005 per unit which is the current in -lieu fee amount. In order to approve the proposed alternate method, the City Council must find that the proposal "meets the purposes" of the Inclusionary Zoning Regulations. Phase I consists of 103 town homes with a density of 17.5 units to the acre and is consistent with the Medium -High Density Residential land use designation. At this density, a town home project is often affordable -by- design and is likely to meet the affordability standards for moderate - income units. Phase I includes 18 units in the 1,300 -1,400 square foot range and, based on comparable projects currently selling in the Tri- Valley, are priced around $485,000 which is below the current maximum prices for moderate - income Inclusionary Units. Six of the 18 units have been sold by previous developers of which two are deed - restricted Inclusionary Units. Because of the specific aspects of this project and the currently prevailing market conditions, staff believes that the City Council can find that Shea's proposed alternate method of complying with the Inclusionary Zoning Regulations "meets the purposes" of the Regulations. Under the proposal, Shea Homes will have constructed 2 moderate - income units and paid in -lieu fees to satisfy the remaining 11 units of the project's Inclusionary Zoning obligation. In addition, Shea Homes will be constructing 12 market -rate units in the 1,300 -1,400 square foot range. Based on market data provided by Shea Homes for comparable projects currently selling in the Tri - Valley, they anticipate that these units will be priced competitively in the $490,000 - $505,000 range (Attachment 4). These prices are less than the current maximum prices for moderate - income affordable units. As a result, Shea Homes has indicated that a deed restricted unit in the same price range will be difficult to sell and is therefore requesting to pay fees in -lieu of constructing the units. It will also be difficult for future owners to resell such units, because the affordable price will be either above or close to the market price Page 3 of 5 For the following reasons, staff believes it would be appropriate to find that the project as a whole will meet the purposes of the Regulations: • The in -lieu fees will fully satisfy the remaining requirement, although it will not result in the construction of 7.5% of the units within the project as required by the Regulations; • 12 of the units to be constructed by Shea Homes are expected to be initially affordable to moderate - income buyers, given currently prevailing market conditions, and this will mitigate the reduced number of deed - restricted units in the project; • If the Developer were required to market moderate - income affordable units, it would prove difficult given prevailing market conditions for the Developer to sell the units at anywhere near the maximum affordable price. This places an unfair burden on the Developer that is not consistent with the purposes of the Regulations; • If the Developer were required to market moderate - income affordable units, any buyer purchasing an affordable unit at the affordable price would have difficulty selling the unit in the future because the likely -to -be small difference between the market price of similar units without deed restrictions and the affordable price. This would place an unfair burden on the future buyers which is inconsistent with the program. The proposed Resolution (Attachment 5) approving the amendment includes the required findings. Other Amendments If the City Council approves the amended Affordable Housing Agreement (Attachment 5), other amendments to the Project Approvals will be required to maintain consistency between the Planned Development Zoning, Site Development Review and the amended Agreement. The Dublin Zoning Ordinance allows the Community Development Director to modify these approvals by administrative action if the changes are consistent with the City's Ordinances and the intent of the approved Planned Development Zoning and Site Development Review. The proposed changes are minor and consistent with the intent of the approved Planned Development Zoning and Site Development Review; therefore, an Administrative Amendment to the Planned Development Zoning and a Site Development Review Waiver would be subsequently approved by the Community Development Director. NOTICING REQUIREMENTS /PUBLIC OUTREACH: The request for an amendment to an existing Affordable Housing Agreement is not subject to a public hearing therefore a public hearing notice is not required. A copy of this Staff Report has been provided to the Applicant and posted to the City's website. ATTACHMENTS: 1. Phasing Map 2. Original Affordable Housing Agreement with Pfeiffer Ranch Investors 3. Current Affordable Housing Agreement with Dublin Tralee II, LLC 4. Letters from Shea Homes dated March 4, 2013 and May 3, 2013 requesting an Affordable Housing Agreement Amendment Page 4 of 5 5. Resolution Approving an Amended and Restated Affordable Housing Agreement for the Payment of Fees In -Lieu of Constructing Certain Affordable Ownership Units between the City of Dublin and Shea Homes, with the Amended Agreement attached as Exhibit A Page 5 of 5 iY fi r: vi.%Wolrtvj C4 "' k x 1 i WVA; aA7g v77g.7a zigg - tvpz ijvztj S.VV7d 1,V3N.7AOVdNl 317vu1 NVId 311S iY fi r: COURT 11 01 ;.. 5 COURT 11 01 AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF INCLUSIONARY UNITS PA 02 -062, Pfeiffer Ranch Investors, Inc., a California corporation. eJ THIS AGREEMENT is hereby entered into this eday of ocb 2005 by and between the City of Dublin ( "the City ") and Pfeiffer Ranch Investors, Inc., a California corporation, ( "the Developer "). Recitals 1. Chapter 8.68 of the Dublin Municipal Code contains Inclusionary Zoning Regulations ( "the Regulations "). The Regulations were adopted pursuant to Strategy I.B. of the City's General Plan Housing Element, the purpose of which is to create affordable housing opportunities in the City of Dublin for very low -, low- and moderate - income households. 2. The City of Dublin adopted the Regulations recognizing that the cost of new housing is so high that persons with very low -, low- and moderate - incomes are increasingly unable to locate affordable housing in the City. The purpose of the Regulations is to achieve a balanced community with housing available at all income levels. 3. Accordingly, the Regulations require that residential projects with 20 or more units /lots contain at least 12.5% very low -, low- and moderate - income units /lots. The Regulations require that the units be constructed in the following proportions: 3q% very low - income, 20 % low- income, and 50% moderate income. In lieu of constructing 40% of the Inclusionary Units that the Regulations would otherwise require, the Regulations authorize developers to pay a fee, currently set by the City through June 30, 2006 at $84,198 per unit required but not built. If fees are paid in lieu of construction, developers are still required to construct 60% of the obligation. 4. Developer is the owner of 10.61 acres of real property in the City of Dublin generally located at the northwest corner of Dublin Boulevard and Dougherty Road and more specifically described in Exhibit 1 (the "Property "). 5. Developer desires to construct a residential project on the parcel that consists of 233 for -sale units (collectively "the Project ") and that are subject to the Regulations. 6. Developer's predecessor in interest applied for and, on July 20, 2004, the City Council (CC) approved Site Development Review (PC Reso. No. 04-52) and a tentative subdivision map (CC Reso. No. 143 —04) ( "the Approvals ") for the Project to construct a total of 233 residential units. Based on 233 units, the Approvals for the project set forth the Developer's obligation under the Regulations to construct 29 Inclusionary Units. (12.5% of 233 = 29). 744- 10700 Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee 1 FINAL: September 20, 2005 7. Developer has, consistent with the Regulations, elected to meet its obligation by constructing all 29 of the Inclusionary Units. 8. The remaining 29 units ( "the Inclusionary Units ") will be allocated, consistent with Section 8.68.030.B of the Regulations, in the following manner: (a) 9 very low - income units; (b) 6 low - income units; and (c) 14 moderate - income units. 9. The purpose of this Agreement is to set forth the manner by which Developer satisfies any and all inclusionary housing obligations applicable to the Project under the Regulations. NOW, THEREFORE, in satisfaction of the requirements of Chapter 8.68 of the Dublin Municipal Code, conditions 121 & 122 of CC Resolution No. 143 -04 and in consideration of the City's approval of the Project, Developer and City for themselves and their respective successors and assigns hereby agree as follows: 1. Definitions and Interpretations. Terms used in this Agreement shall be defined as set forth in Chapter 8.68 of the Dublin Municipal Code. 2. Developer's Compliance with Affordable Housing Obligation. Developer intends to complete the Project in two separate phases. Section 8.68.030 of the Regulations requires that all affordable units in a project be constructed concurrently with a project or phase of a project. Developer has proposed, and the City hereby approves, subject to the conditions contained in this paragraph, the following phased scheduled for the construction of the Inclusionary Units: Total units Very -low Low - income Moderate - income units units income units Phase I 103 4 (3- bdrms) 3 (3- bdrms) 6 (3- bdrms) Phase II 130 5 (2 2- bdrms, 3 (1 2 -bdrm, 8 (3 2- bdrms, 31- bdrms) 21- bdrms) 51- bdrms) Totals 233 9 6 14 Consistent with the requirements of Section 8.68.030.D, Developer and City agree that the phasing of construction of the Inclusionary Units shall be regulated as follows: The Building Official or Community Development Director shall withhold occupancy for any multi -unit building until all the Inclusionary Units within the particular multi -unit building are constructed and completed to the satisfaction of the Building Official or Community Development Director. 3. In -Lieu Fees. Developer has elected to provide the full 12.5% of the units as Inclusionary Units. Developer is thus not required to pay in -lieu fees. 4. Inclusionary Unit Design, Location, and Size. 744- 107v10 Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee 2 FINAL: September 20, 2005 a. Exterior Materials and Exterior Architectural Design. The exterior materials and exterior architectural design of the Inclusionary Units shall be consistent with the Project's market -rate units as reviewed and approved through the Site Development Review by the City Council on July 20, 2004; provided, however, that minor changes to unit size may be approved by the Community Development Director through a Site Development Review waiver. b. Unit Location. Consistent with Section 8.68.030 of the Regulations, the Inclusionary Units shall be dispersed throughout the individual phase in which they are constructed. The Diagram and Location of Inclusionary Units, attached hereto as Exhibit 2, shows the location of the Inclusionary Units as proposed by the Developer, and the City hereby finds that the units as shown are reasonably dispersed through the Project as required by Section 8.68.030.E of the Regulations. c. Unit Bedrooms and Size. The size of the inclusionary units shall be consistent with the Site Development Review approvals of the Planning Commission on June 22, 2004, provided however, that minor changes to unit size may be approved by the Community Development Director through a Site Development Review Waiver. The developer proposes to provide 9 very low- income units (4 three- bedroom units, 2 two - bedroom units and 3 one - bedroom units); 6 low- income units (3 three - bedroom units, 1 two - bedroom unit and 2 one - bedroom units); and 14 moderate - income units (6 three- bedroom units, 3 two - bedroom units and 5 one - bedroom units). The City hereby finds this breakdown reflects the range of numbers of bedrooms provided in the project as a whole, as required by Section 8.68.030.E of the Regulations. 5. Ensuring Affordability. a. Sales Price and Marketing. Developer shall sell the Inclusionary Units at sales prices that are affordable, as applicable to the individual buyer, to persons with very low -, low -, or moderate - incomes as defined in the Regulations. The maximum sales price shall be adjusted for household size and income (except that the income for very-low income households shall be assumed to be equal to the maximum income within the very-low income category for the buyer's household size regardless of buyer's actual income). Additional detail on the manner of calculating sales prices for the Inclusionary Units is set forth in the Layperson's Guide to the Inclusionary Zoning Ordinance Regulations, adopted by the City Council on June 1, 2004 and attached hereto as Exhibit 3. All units shall be marketed and sold consistent with the Regulations. b. Marketing Plan. Developer shall prepare and receive City approval of a Marketing Plan as required by Section 3.1 of the Layperson's Guide to the Inclusionary Zoning 744- 107v10 Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee 3 FINAL: September 20, 2005 Ordinance Regulations, adopted by the City Council on June 1, 2004 and attached hereto as Exhibit 3, prior to issuance of the first building permit in the Project (excluding building permits issued for model homes). c. Resale Agreements. Developer shall require the initial buyer of each Inclusionary Unit to execute a Resale Restriction and Option to Purchase Agreement in substantially the form attached hereto as Exhibit 4. This Affordable Housing Agreement shall serve as the agreement required by Section 8.68.030 of the Regulations. 6. Term. This Agreement shall be effective until all Inclusionary Units are constructed, sold, and subjected to resale restrictions approved by the City pursuant to the terms of this Agreement. 7. Memorandum of Agreement to be Recorded. Developer and City shall execute and acknowledge a Memorandum of this Agreement ( "Memorandum ") substantially in the form attached hereto as Exhibit 5, and City shall cause the Memorandum to be recorded in the Official Records of Alameda County upon its execution. 8. Agreement Runs with the Land. All of the provisions, rights, terms, covenants, and obligations contained in this Agreement shall be binding upon the Parties and their respective heirs, successors and assignees, representatives, lessees, and all other persons acquiring the Property, or any portion thereof, or any interest therein, whether by operation of law or in any manner whatsoever. All of the provisions of this Agreement shall be enforceable as equitable servitude and shall constitute covenants running with the land pursuant to applicable laws, including, but not limited to, Section 1468 of the Civil Code of the State of California. Each covenant to do, or refrain from doing, some act on the Property hereunder (a) is for the benefit of the Property and is a burden upon the Property, (b) runs with the Property, and (c) is binding upon each Party and each successive owner during its ownership of the Property or any portion thereof, and shall be a benefit to and a burden upon each Party and the Property hereunder and each other person succeeding to an interest in the Property. 9. Assignments and Transfers. a. Right to Assign. Developer may wish to sell, transfer or assign all or portions of its Property to other developers (each such other developer is referred to as a "Transferee "). In connection with any such sale, transfer or assignment to a Transferee, Developer may sell, transfer or assign to such Transferee any or all rights, interests and obligations of Developer arising hereunder and that pertain to the portion of the Property being sold or transferred, to such Transferee, provided, however, that: no such transfer, sale or assignment of Developer's rights, interests and obligations hereunder shall occur without prior written notice to City and approval by the City Manager, which approval shall not be unreasonably withheld or delayed. b. Approval and Notice of Sale. Transfer or Assignment. The City Manager shall consider and decide on any transfer, sale or assignment within thirty (30) days after Developer's notice thereof, provided all necessary documents, certifications and other information are provided to the City Manager to enable the City Manager to determine whether 744- 107v10 Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee 4 FINAL: September 20, 2005 the proposed Transferee can perform the Developer's obligations hereunder. Notice of any such approved sale, transfer or assignment (which includes a description of all rights, interests and obligations that have been transferred and those which have been retained by Developer) shall be recorded in the official records of Alameda County, in a form acceptable to the City Manager, concurrently with such sale, transfer or assignment. c. Effect of Sale, Transfer or Assignment. Developer shall be released from any obligations hereunder sold, transferred or assigned to a Transferee pursuant to Section 9.a of this Agreement, provided that: a) such sale, transfer or assignment has been approved by the City Manager pursuant to Sections 9.a and 9.b; and b) such obligations are expressly assumed by Transferee and provided that such Transferee shall be subject to all the provisions hereof. 10. Successors. Except as specifically provided in this Agreement, this Agreement shall bind and inure to the benefit of all successors and assigns of the parties and any associates in interest, and their respective directors, officers, agents, servants, and employees, and the successors and assigns of each of them, separately and collectively. Developer shall provide notice to the City of the names and mailing addresses of any such successors or assigns. 11. Hold Harmless. Developer shall hold City, its elective and appointive boards, commission, officers, agents and employees harmless from and against any or all loss, liability, expense, claim, costs, suits, damages of every kind, nature and description directly or indirectly arising from the performance of the obligations or undertakings of Developer pursuant to this Agreement. Developer shall defend City and its elective and appointive boards, commission, officers, agents and employees from any suits or actions at law or in equity for damages caused or alleged to have been caused, by reason of any of the obligations or undertakings of Developer pursuant to this Agreement. It is further provided that this hold harmless agreement shall apply to all damages and claims for damages for every kind suffered, or alleged to have been suffered, by reason of any of the obligations or undertakings of Developer pursuant to this Agreement. 12. Enforcement. If the Developer defaults in the performance or observance of any covenant, condition, restriction or obligation of the Developer as set forth in this Agreement, and such default remains uncured for a period of thirty (30) days after notice thereof is given by the City (or such longer period as may be necessary to cure the default, provided that Developer commence the cure within the thirty (30) day period and diligently prosecutes the cure to completion), the City may take any one or more of the following steps: a. By specific performance or other action or proceeding at law or in equity, require the Developer to perform its obligations under this Agreement or enjoin any acts or things which may be unlawful or in violation of the rights of the City hereunder. b. Take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants, conditions and restrictions of the Developer under this Agreement. If Developer transfers any portion of the project in bulk and a Transferee defaults under this Agreement, the City shall exercise the foregoing remedies only with respect to the defaulting 744- 107v10 Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee 5 FINAL: September 20, 2005 Transferee and its portion of the project; and so long as Developer has not otherwise defaulted hereunder, the City shall not seek to exercise any rights and remedies against Developer. 13. Attorneys' Fees. If legal action is necessary to enforce any provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and legal costs. 14. Amendments. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in interest and duly recorded in the Official Records of the County of Alameda, California. In the event that Developer is unable to perform its obligations under Section 2 of this Agreement due to significant changes in circumstances, such as unanticipated delays in construction within any of the neighborhoods, the City shall confer with Developer in an effort to reach a mutually acceptable resolution, consistent with the terms of the affordable housing conditions in the Approvals. If an agreement is reached, this Agreement shall be amended accordingly. Developer shall pay the City its reasonable costs, including attorneys' fees, incurred in such negotiations and in amending this Agreement, and Developer shall, if requested by the City, provide the City with a reasonable deposit to cover the City's reasonable costs, upon Developer initiating such negotiations. 15. Corporate Authority. If either party is a corporation, each individual signing this Agreement on behalf of that corporation represents and warrants that each of them is duly authorized to execute and deliver this Agreement on behalf of the corporation and that the Agreement is binding on the corporation in accordance with its terms. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written. CITY OF DUBLIN Dated: CC.f. iq,aoor 13y: 1 LkadLAJ- City Manager Attest: 744- 107v10 Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee 6 FINAL: September 20, 2005 City Clerk � PFEIFF AR RANCH INVESTORS, C., a Cal' ornia co oration Dated: 20Q By: Alan R. Pinn Its: President 744- 10700 Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee FINAL: September 20, 2005 STATE OF CALIFORNIA COUNTY OF S ) On cc-&2A/ /s /" Zoos before me, 42yWbItI, �4 a Notary Public in and for said c. uPty an�stat -, personally appeared 4 K /7� '' personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. ROMEO N. CASTRO Commission # 1338296 Z y Notary Public - Calitomia WITNESS my hand and official seal. Santa Clara County My Gomm. Expires Jan 8, 2006 Signatur pKa-� /(-/ (Seal) STATE OF CALIFORNIA COUNTY OF A IC�n'lec�� On CSC+ 19 0 -005 before me, � � ���� , a Notary Public in and �(cM� or un and state personally earreee C,Phk-b roLk - y pp personally known to me (or o sis of ory ) to be the person) whose name( is /a),a subscribed to the within instrument and acknowledged to me that he /84e /thee executed the same in his/herAheir authorized capacity(ie�Q, and that by his /fi r /tire` signatureN on the instrument the personN), or the entity upon behalf of which the persons, acted, executed the instrument. _: _�_.� WITNESS my hand and official seal. Signature /y GAYLENE BURKETT _ Commission #E 1544935 •� Notary Public - CONtaft Alameda County My Comm. Expires Jan 15, 2 (Seal) 709134.2 —1— Form Revised August 17, 2004 EXHIBIT 1. LEGAL DESCRIPTION Real property in.the City of Dublin, County of Alameda, Sate of California, described as follows: Parcel C, Parcel Map No. 756, filed October 8, 1971 in Book 72 of Maps, Page 13, Alameda County Records. Excepting therefrom those portions conveyed to the County of Alameda by Deed recorded June 7, 1972, Reel 3150, Image 608, Official Records; Also excepting therefrom all oil, gas, minerals and-other hydrocarbon substances from a depth below 500 feet, as reserved in the Deed from Angelo Gaspare to Safeway Holdings, Inc., a Delaware corporation, dated January.30, 1985 and recorded January 31, 1985, Series No. 85021089, Official Records; Also excepting therefrom those portions conveyed to the City of Dublin by Deeds recorded November 3, 1986, Series Nos, 66272873 and 86272874, Official Records; Also excepting therefrom that portion set forth In Certificate of Compliance for Lot tine Adjustment, L -86 -3, recorded January 11, 1991, Series No. 91009054, and conveyed to Angelo Gaspare, by Deed recorded January 11, 1991, Series No. 91009055, Official Records, described as follows: 1 Beginning at the southwest comer of Parcel D on said Map, said point being on the northerly line 1 of Dublin Boulevard; thence north 34' 43' 09' west 150.00 feet to the northwest comer of said Parcel D; thence south 55' 16' 51" west 16.00 feet, thence south 34' 43' 09" east 150.00 feet to a point on the northerly line of Dublin Boulevard; thence along said line north 55'16' 51' east 16.00 feet to the point of beginning, APN: 941 -0205- 009 -08 N 744- 107v10 Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee $ ' FINAL: September 20, 2005 EXHIBIT 2-A aq DC .AL TRAME LDW PLAN M LEVEL �c 2 of4 LEGEND ■ Very Low lm,ome Low Income ■ Moderate Income ,a 4 2 BEDROOMS EXHIBIT 2-C 0 0 0-4 C Gn W W LEM Page 3 of 4 LEGEND Very Low Income ■ Low Income ■ Moderate Income EXHIBIT 2-D a0 Lli O s. Oq 5bi v 4.4 X TRALM &XIM PLM 4714 LEVEI Pagc4or4 ii 19 82 li CITY OF DUBLIN a�, H o LAYPERS ON' S GUIDE T O THE INCLUSIONARY 16 ZONING ORDINANCE °° REGULATIONS a° o ®e APPROVED BY DUBLIN CITY COUNCIL ON JUNE 1, 2004 Revised in April 2005 EXHIBIT 3 CITY OF DUBLIN TABLE OF CONTENTS INTRODUCTION 1 1 THE INCLUSIONARY ZONING PROCESS 2 1.1 Determining the Number and Size of Units Required 2 1.2 How to Calculate the Inclusionary Unit Obligation 2 1.3 How to Calculate How Many Units Must Be Constructed and How Many Units Will be Subject to the In -Lieu Fee 3 1.4 How to Calculate the Fee That May Be Paid in -lieu of Unit Construction 3 1.5 How to Calculate How Many Inclusionary Units Must Be Provided at Each of the Three Income Levels 4 1.6 How to Determine the Unit Sizes and bedroom requirements for Inclusionary Units 5 1.7 How to Determine the Location of Inclusionary Units Within the Development 6 2 AFFORDABLE HOUSING AGREEMENT 2.1 What is an Affordable Housing Agreement 7 7 3 FOR SALE PROJECTS 8 3.1 The Marketing Plan 8 3.2 Applications for Ownership Units 8 3.3 Screening Based on Household Size 10 3.4 Screening Based on Priority Preferences 11 3.5 Buyer Selection Process 13 4 ESTABLISHING SALES PRICE AND LOAN REQUIREMENTS FOR OWNERSHIP UNITS 13 4.1 Sales Price of Affordable Units 13 i 4.2 Acceptable Home Loan Products for Inclusionary Zoning Units 16 4.3 Closing of Sale and Escrow 16 5 RENTAL PROJECTS 17 5.1 Preparation and Approval of Management Plan 17 5.2 Establishing Unit Rents for Inclusionary Units 17 5.3 Screening Based on Household Size 17 5.4 Screening Based on Priority Preferences 18 5.5 Occupant Selection for Rental Developments 20 5.6 Calculating Affordable Rents 21 5.7 Monitoring Rents 22 ll LIST OF EXHIBITS Exhibit 1 Resale Restriction Agreement and Option to Purchase Exhibit 2 Sample Inclusionary Unit Application packet Exhibit 3 Sample Application to Purchase Inclusionary Unit Exhibit 4 Selection Preference Verification Letter Exhibit 5 Excel Spreadsheet to Calculate Ownership Sale Prices Exhibit 6 State of California Housing and Community Development Department Income for Guidelines (Example 2004) Exhibit 7 Current Alameda County Housing Authority Utility Allowance Sheet Exhibit 8 Below Market Rate Unit Monitoring Sheet iii LAYPERSON'S GUIDE TO THE INCLUSIONARY ZONING ORDINANCE REGULATIONS (Provision of For -Sale and Rental Inclusionary Units (below market rate units) Introduction This document is the Layperson's Guide to the City's Inclusionary Zoning Ordinance Regulations ( "the Regulations "), which are set forth in the City's Municipal Code at Chapter 8.68. The City Council's purpose in adopting these Regulations is to increase the diversity of housing prices /rents in the community and ensure that the range of prices /rents continue over time. The purpose of this Guide is to assist the layperson in interpreting these Regulations early in the development process so that development projects are sensitively designed from the beginning. Development projects of 20 residential units or more must comply with the Regulations. In general, the Regulations require that 12.5% of the units constructed in a project be restricted in occupancy and in sale price or rent charged. Such restricted units are referred to as Inclusionary Units or Below - Market -Rate (BMR) units. (Section 8.68.030.A) Of these units, 50% must be affordable to moderate - income households, 20% to low - income households and 30% to very low- income households. (Section 8.68.030.B) Moderate - income households, low- income households, and very low- income households are defined as households that have an income level, respectively, of 120% to 80 %, 80% to 50 %, and less than 50% of the median income for the County of Alameda adjusted for household size. (Section 8.68.030.D.) The State of California Housing Community Development Department (HCD) annually publishes income limits, for each County. The City uses the HCD income limits for Alameda County, which are available on the HCD website (www.hcd.ca.gov), for setting income limits for the Inclusionary Zoning Regulations (Section 8.68.030.D). While the Regulations require that 12.5% of the units in the project be Inclusionary Units, they permit the developer to meet 40% of this obligation by paying a fee in -lieu of construction. Thus, there is a "must- build" requirement of 7.5% of the units in the project, and the obligation with respect to the remaining 5% may be satisfied by the payment of a fee in -lieu of construction. Inclusionary Units must remain affordable for a period of 55 years, through affordability restrictions recorded against the property. In addition, the Inclusionary Zoning Regulations require that Inclusionary Units: • Be constructed concurrently with the market -rate units in the project • Have a similar range of bedrooms to the market -rate units in the project • Not be distinguished by design or materials from the market -rate units in the project April 29, 2005 • Be reasonably dispersed throughout the project. The Regulations also contain other means of complying with the obligations it imposes. Those alternatives are set forth in Section 8.68.040 of the Dublin Municipal Code. 1 THE INCLUSIONARY ZONING PROCESS 1.1 Determining the Number and Size of Units Required Prior to submitting a preapplication to the City for projects that include residential units of 20 or more, the developer should begin thinking about how the Inclusionary Units will be built into the design of the project. Housing Staff is available to discuss options for meeting the Inclusionary Requirements with the developer as part of the initial project review. For example, if a Developer intends to build only the minimum number of Inclusionary Units that the Regulations require it to build, Housing Staff can preliminarily indicate for the developer's planning purposes the number of Inclusionary Units the developer is required to build, the income levels and sizes of the required Inclusionary Units, and the amount of the in -lieu fee under the then- current fee schedule. After a project application is submitted to the Community Development Department for review, a Planning Review Committee Meeting is generally held. In this meeting City Staff and interested agencies involved in the development process review the project and give preliminary comments to the developer. Prior to or following the Project Review Committee (PRC) meeting, Housing Staff will send a letter to the developer indicating the Inclusionary Zoning Obligations of the project as preliminarily proposed. A copy of this letter will be directed to the City Planner responsible for the project as well. The purpose of this letter is to provide the developer information on inclusionary obligations as early as possible in the development process. The City recognizes that the project is likely to evolve over time and that the project will likely change prior to obtaining City entitlements. However, this information is provided early in the process as a service to the developer for their planning purposes. The actual Inclusionary Zoning Obligations will be formalized in an Affordable Housing Agreement (AHA) between the City and the Developer, prior to recordation of a final map for the development. 1.2 How to Calculate the Inclusionary Unit Obligation The Regulations state that 12.5% of the total number of units within an applicable development project be Inclusionary Units (Section 8.68.030.A.). In making this calculation, any decimal fraction less than or equal to 0.50 is disregarded, and a decimal fraction greater than 0.50 is construed as a unit. Two examples of how the Inclusionary Unit Obligation for a particular development are shown in Figure 1. April 29, 2005 2 FIGURE 1 Example l: The developer proposes a 224 -unit subdivision. 12.5% percent of 224 is 28. The Inclusionary Obligation is therefore 28 units. Example 2: The developer proposes a 316 -unit subdivision. 12.5% percent of 316 is 39.5. Rounding the decimal fraction down, the Inclusionary Obligation is therefore 39 units. 1.3 How to Calculate How Many Units Must Be Constructed and How Many Units Will be Subject to the In -Lieu Fee The Regulations permit the developer to pay a fee in -lieu of constructing up to 40% of the Inclusionary Unit Obligation. When the calculation of the fee results is a decimal fraction, the rounding rules contained in Section 8.68.030A are used. Using the same examples from Figure 1, Figure 2 illustrates the calculation of the number of Inclusionary Units that will be subject to the fee. Example 1: The developer proposes a 224 -unit subdivision, for which the Inclusionary Obligation is 28 units. 40% of 28 units =11.2 units. Disregarding the fraction, the developer may pay fees in -lieu of construction on the remaining 11 units, and the developer's "must- build" obligation would be 17 units. 11 + 17 = 28 units. Example 2: The developer proposes a 316 -unit subdivision, for which the Inclusionary Obligation is 39 units. 40% of 39 units = 15.6 units. This number is rounded up to 16 and in -lieu fees may be paid for this amount, instead of providing units. The "must - build" obligation would be 23 units. 16 + 23 = 39 units. 1.4 How to Calculate the Fee That May Be Paid in -lieu of Unit Construction The amount of the in -lieu fee is set by resolution of the City Council. Resolution No. 56- 02 establishes that the in -lieu fee per unit is adjusted annually on July 1 to reflect the greater of the percentage change either in a) the Bay Area Urban Consumer Price Index (CPI) as of March of each year, or b) the United States Department of Housing and Urban Development (HUD) Fair Market Rent limits for the Oakland Primary Metropolitan Statistical Area (PMSA) that are in effect at the time. The fee as of July 1, 2004 is $82,466 per Inclusionary Unit. April 29, 2005 3 THE ENTIRE IN -LIEU FEE AMOUNT FOR THE PROJECT IS DUE AND PAYABLE AT ISSUANCE OF FIRST BUILDING PERMIT IN THE PROJECT. Using the examples from Figures 1 and 2, Figure 3 illustrates how to calculate the amount of the in -lieu fee. FIGURE 3 Example 1: The developer proposes a 224 -unit subdivision. Fees may be paid in lieu of construction on 11 units. 11 X $79,754 = $877,294, which is the amount of the in -lieu fee for the project. This entire amount would be due prior to issuance of first building permit. Example 2: The developer proposes a 316-unit. subdivision. Fees may be paid in lieu of construction on 16 units. 16 X $79,754 = $1,276,064, which is the amount of the in -lieu fee for the project. This entire amount would be due prior to issuance of first building permit. 1.5 How to Calculate How Many Inclusionary Units Must Be Provided at Each of the Three Income Levels The Regulations (Section 8.68.030.B) state that the Inclusionary Units included in each development project shall be allocated to households in the following manner. Very low - income households 30% Low - income households 20% Moderate- income households 50% 100% Once again, when the result of the allocation calculations includes a decimal fraction, the rounding rules contained in Section 8.68.030.A are used. The Regulations indicate that, where the allocation results in fewer units than would otherwise be required; one additional unit should be allocated to the lowest income level with the decimal fraction closest to 0.50. (Section 8.68.030.B) Figure 4 illustrates how to calculate the number of units that must be provided at each income level and how the rounding requirement is implemented. April 29, 2005 4 "l ISTMI -9 Wil The project includes 200 units. The Inclusionary Unit obligation is, therefore, 25 units. The developer chooses to pay the in -lieu fee for 40% of the units, which equals 10 units. The developer's must -build requirement (7.5 %) is, therefore, 15 units. 50% of those 15 units would need to be restricted for moderate - income households, 50% of 15 = 7.5 20% of those 15 units would need to be restricted for low - income households, 20% of 15 = 3 30% of those 15 units would need to be restricted for very low - income households, 30% of 15 = 4.5 7.5 +3 +4.5 =15 Since two of these numbers are fractions at exactly .5, the City of Dublin would require that the unit be provided in the lower income category. In this example the income- unit mix would be: • 7 moderate - income units • 3 low - income units 5 very low- income units 1.6 How to Determine the Unit Sizes and bedroom requirements for Inclusionary Units The Regulations require that the same proportion of bedrooms be reflected in the Inclusionary units as are in the market rate units. Once again, the rounding conventions in Section 8.68.030.A are used, if the allocations result in decimal fractions. Figure 5 illustrates how to determine the number of Inclusionary Units that must be provided at each unit size. April 29, 2005 5 FIGURE 5 To determine bedroom requirement. The developer proposes a 200 -unit condominium project and is paying in -lieu fees for 40 %. The must build obligation is 15 units. The project includes: • 50 one - bedroom units (25 % of total) • 100 two - bedroom units (50% of total) • 50 three - bedroom units (25% of total) Therefore: • 25% of the Inclusionary Units are to be one - bedrooms • _ 50% of the Inclusionary Units are to be two- bedrooms • 25% of the Inclusionary Units are to be three - bedrooms To determine bedroom requirement per income category: If 5 of the units are very low - income, using the percentages above the requirement for bedrooms are: • 25% of 5 = 1.25 one - bedroom units • 50% of 5 = 2.5 two - bedroom units • 25% of 5 = 1.25 three - bedroom units Therefore, the development would be required to provide: • 1 one - bedroom unit • 3 two bedroom units • 1 three bedroom unit The same calculation is performed to determine the bedroom sizes of the low - income and moderate - income units. 1.7 How to Determine the Location of Inclusionary Units Within the Development Section 8.68.030.E states that "All affordable units shall be reasonably dispersed throughout the project." The purpose of this provision is to avoid concentration of the Inclusionary Units in a particular location within a development, effectively segregating them from the rest of the development project. There are many ways in which to implement this requirement and consultation with Community Development Department Staff is recommended prior to developing the final site plan. Ultimately, the Planning Commission or City Council will make a determination based on Staff recommendation if this requirement has been met. April 29, 2005 6 2 AFFORDABLE HOUSING AGREEMENT The execution of an Affordable Housing Agreement ( "Agreement") is required under Section 8.68.50 of the Dublin Municipal Code. This requirement is generally repeated in the Conditions of Approval for the Site Development Review or Tentative Map for the development project for the developer's convenience. 2.1 What is an Affordable Housing Agreement This agreement contains the legal requirements of the residential project for compliance with the Inclusionary Zoning Ordinance regulations. This Agreement runs with the land and survives transfer or sale of the land to another developer. The Agreement is for a period of 55 years. If a project is not built and new entitlements are sought for a property, a new Affordable Housing Agreement would be required, which would replace the existing Agreement. Among other things, the Agreement must contain the following items: 1. A description of how the developer will comply with its Inclusionary Obligation (whether through unit construction and/or partial payment); 2. An indication of whether the Inclusionary Units will be for -sale or rental units; 3. A requirement that the developer construct the number of Inclusionary Units required to be constructed in each income category; 4. A requirement that the developer construct Inclusionary Units at particular unit sizes (i.e., number of bedrooms) in each income category; 5. Depending on the nature of the development, requirements regarding the timing of construction of the units to ensure that the units are constructed concurrently with the development of the project as a whole; 6. If the development proposes for -sale units, a requirement that the developer prepare and obtain City approval of a Marketing Plan, prior to issuance of any building permits in the project, indicating efforts to be made by the developer to sell or rent the Inclusionary Units. This requirement is discussed in additional detail in Section 2.2 below; 7. If the development proposes for -sale units, it is required that the developer ensure that the purchaser of an Inclusionary. Unit execute a resale agreement. A copy of the form resale agreement is attached as Exhibit No. 1; and 8. If the development proposes rental units, the owner shall provide a Management Plan and prepare the Annual Report required by Section 8.68.050B. The Management Plan documents how the management firm markets the Inclusionary Units, how the firm maintains a waiting list for the Inclusionary units, how the management firm verifies the household income of applicants for the Inclusionary Units, both initially and annually, provides information on the units to be made available for the City of Dublin to use on the City website, provides a contact telephone number and also identifies those responsible for contact and communication with the City of Dublin. Upon approval of the City Staff, the April 29, 2005 7 Management Plan may be produced and submitted after the Affordable Housing Agreement is executed, but prior to the issuance of building permits. FOR SALE PROJECTS After the Affordable Housing Agreement is executed, and prior to the sale of any affordable units in the project there is a process that must be followed that includes preparation of a Marketing Plan, screening, ranking, qualifying and providing documentation to Housing Staff for final verification of eligibility for an Inclusionary Unit. 3.1 The Marketing Plan Prior to the issuance of building permits for any for -sale Inclusionary Units, the developer shall submit a Marketing Plan for the City's approval. The Marketing Plan must contain the following: 1. A one -page narrative summary suitable for advertising the availability of the Inclusionary Units on the City web page and other locations, including a telephone number for interested applicants to call for additional information; 2. An explanation of the application process to be used. The Regulations require that applicants be ranked based on preferences set forth in the ordinance (Section 8.68.050.D); 3. The developer must indicate the process by which it intends to accept applications and rank applicant households. In order to establish an eligibility list, it will be necessary that application deadlines be established for each phase of a development that includes Inclusionary Units; 4. Timelines for buyer selection. If the development is a phased project, information must be provided on the number of phases and the timelines for those phases; and A requirement that the developer's sales staff meet with the City's Housing Staff to receive training on the sale selection process and application. (See Exhibit No. 2) 3.2 Applications for Ownership Units Each applicant shall be required to complete an application. Exhibit No 3 is a sample application for the purchase of an Inclusionary Unit. An applicant receives: • Explanation of the process used in occupant selection; • Eligibility requirements for interested buyers; April 29, 2005 8 • The income levels for the various units; • The City preferences in occupant selection as established in the Regulations (Section 8.68.050.D); • Any floor plans for the offered units; • The City's "Application for Inclusionary Unit"; and • The Disclosure Statement from the Resale Agreement. It is important that the developer's sales staff be able to understand the application process. Pursuant to the Marketing Plan, the Housing Staff will have provided the developer's sales staff with training so that they understand and can explain the application process. The developer's sales staff should be able to explain the resale restrictions that are contained in the Resale Agreement that each buyer would need to execute. The developer may rank applicants based on the criteria that are set forth in their Marketing Plan. For example, the developer might only accept those applicants that are mortgage pre - qualified by a lender or other methods. Once the applicants are ranked, the developer must use this list and offer the units to the highest ranked household as long as these households are able to verify that they are in the correct income category and are able to obtain a loan for the unit. (Acceptable Home Loan Products are discussed in Section 4.2). The sale prices of'the units will vary depending on the income of each projective household offered a unit. Figure 6 illustrates how the selection process works. (See following page) April 29, 2005 9 FIGURE 6 Step 1. A developer decides to accept Inclusionary Unit applications for a particular period of time and advertises, as set forth in the Marketing Plan. Step 2. The developer makes application packets available to all who request them. The developer will also provide application packets to the City for distribution at City Hall and the Library. Step 3. The applicant response period ends. The developer will sort and establish a list of all qualified applicants within one month following closing of applicant list. This initial screening will qualify applicants based on low, very low or moderate income as the case may be for the particular unit) and whether the household is the appropriate size for the particular unit. If the developer has established in the Marketing Plan that they will accept only mortgage pre - qualified applicants, this will be reflected in the list as well. Step 4. All qualified applicants within each income category will be ranked by the preference categories in the Regulations. Those applicants with the highest number of points are at the top of the list and others follow in descending order based on the number of points given. Step 5. Units are offered to applicants beginning at the top of the list. The developer may not pass over an applicant higher on a list in favor of another because of a higher income. Applicants are to be taken in the order ranked. The developer may only exclude ranked applicants because the applicants were not successful in obtaining financing or were not able to demonstrate their qualifying household income. Step 6. If the applicant accepts the unit, the applicant's file, ready to enter into escrow, is delivered to the City of Dublin Housing Staff for review and confirmation. Step 7. Applicant's files are returned to developer and escrow may begin for each qualified applicant for the unit. 3.3 Screening Based on Household Size For both rental and for -sale units, household size for each Inclusionary Unit may not exceed two people for each bedroom and may not be less than one person per bedroom, unless otherwise prohibited by special financing sources such as the California Multifamily Housing Program. Selection of applicants will be limited to those households that match the number of bedrooms in the units being constructed for sale. The following household sizes for various units sizes are used: April 29, 2005 10 One - bedroom units 1 -2 people households Two - bedroom units 2 -4 people households Three - bedroom units 3 -6 people households Four - bedroom units 4 -8 people households 3.4 Screening Based on Priority Preferences After being screened for initial eligibility based on household income and household size, applicant households shall be ranked and sorted based on the number of points the applicant receives under the priorities set forth in the Regulations at Section 8.68.050.D. If priority categories are checked on the application form, the developer will be required to request verification of that claimed preference from the applicant and the form letter requesting verification attached as Exhibit No 4 may be used for this purpose. This verification may be requested at the initial application or at a later date, after the developer has performed a preliminary review of all applicants. The point system set out in the Regulations (see Table 1) provides preferences to those persons who live in Dublin, work in Dublin, are public - service employees in Dublin, are seniors, are permanently disabled, are an immediate family member of a Dublin resident, and/or are being required to relocate from current Dublin residence due to demolition of dwelling or conversion of dwelling from rental to for -sale (lpoint, one per household). The Regulations provide that even if two persons in the household may be eligible to receive priority points, the points are only awarded for one person. For example, if a husband and wife are both employed in Dublin, the couple receives only 3 points for being employed in Dublin. Similarly, if two seniors make up a household, they would be entitled to only 1 point. Table 1: The Priority Point System Priority Points Employed in Dublin 3 points Public service employee in Dublin 1 additional point Resides in Dublin 3 points Seniors (62 and over) 1 point Permanently disabled 1 point Have an immediate family who is a Dublin resident 1 point & has continuously lived in Dublin the past year Must move because housing is to be demolished or 1 point converted to condo Definitions of the various priority categories are set forth in the Regulations, Section 8.68.050.D as follows: • To qualify as employed in Dublin the person shall have been employed within the City of Dublin for at least six months. • To qualify as a public service employee the person shall be employed by a public agency. • To qualify as a Dublin resident, the person shall have been a resident of the City of Dublin for at least a one -year period prior to the eligibility determination. April 29, 2005 11 • To qualify as a relocated Dublin resident, the person shall have been relocated from the current Dublin residence due to demolition of dwelling or conversion of dwelling from rental to for -sale unit. Where definitions are not explicitly stated in the Regulations, the City has developed definitions: A senior is defined as a person 62 years or older for the purpose of qualifying for preference points. To qualify for the permanently disabled point, the person must be able to provide written verification from a physician or show receipt of SSI. Immediate family is defined as a mother, father, brother, sister, child, grandparent or grandchild. Figure 7 demonstrates how the preference points are calculated. FIGURE 7 Example 1: An applicant for an Inclusionary Unit both lives in Dublin (for at least one year) and works in Dublin (for at least 6 months). This individual will receive the following points: Lives in Dublin 3 points Works in Dublin 3 points Total number of points 6 points Example 2: An applicant for an Inclusionary Unit works in Dublin and is a schoolteacher. This individual will receive the following points: Works in Dublin 3 points Public Service Employee 1 point Total number of points 4 points Example 3: An applicant for an Inclusionary Unit is a senior citizen (62 years old) and lives in the City of Dublin (for at least one year). This individual will receive the following points: Senior citizen 1 point Lives in Dublin 3 points Total number of points 4 points April 29, 2005 12 3.5 Buyer Selection Process The developer locates and finally selects purchasers pursuant to the Inclusionary Zoning Regulations. The restricted units are to be made available to very low, low, and moderate income households. The developer must verify that the prospective occupants' income is /are appropriate for those categories. This verification must consist of evidence based on some third party source such as income tax returns or W -2 statements. Proof that the developer has requested and obtained this verification from prospective occupants will be requested by the City Housing Staff prior to final approval of occupancy in any Inclusionary unit. The selection process requires the developer to use the following process: • Collect applications for a given time period. An initial qualification is made based on household size (See Section 3.1) and household income (see Section 4.1). • Sort and rank the applications based on the Inclusionary Zoning Regulations' preferences for occupant selection. Complete the ranking process and produce a list with those applicants with the most City of Dublin preference points at the top followed by all other applicants in descending order based on number of points received. If more than one applicant receives the same number of City preference points or if some applicants receive no points, the developer shall use other objective criteria in occupant selection. The criteria that the developer proposes to use shall be submitted to City Staff ahead of time in the Marketing Plan. For example, the developer may date stamp all applicant applications and, in the case of a tie, will offer the unit to that applicant that applied first, or the developer may choose to hold a lottery to break ties. • The ranked list must be completed within 30 days of the application deadline. • Offer the units to applicants based on the list established above, offering first to those applicants with the most points, then in descending order. • Provide application with income verification, executed Resale Agreement and final sale price offered as well as loan product to be used to City for final determination of eligibility. If all needed documents are included, the City will return to developer or agent within a week if possible. 4 ESTABLISHING SALES PRICE AND LOAN REOUIREMENTS FOR OWNERSHIP UNITS 4.1 Sales Price of Affordable Units The Inclusionary Ordinance (Section 8.68.020A.2) states that the price at which the Inclusionary Units are to be offered is the price that would allow an applicant in the April 29, 2005 13 pertinent category to pay no more than 35% of their income toward housing expenses. This requires that each and every qualified buyer pay no more than 35% of his or her individual household income toward housing expenses. The only exception is very-low income applicants. Units for very-low income applicants will be priced using the maximum in the low income level adjusted for household size as total housing expenditures. As described below, a number of assumptions are used to calculate the maximum sale price for inclusionary units. An individual homebuyer's actual expenses may differ from the assumptions. For example, the actual interest rate may be lower if the homebuyer obtains a variable interest rate mortgage. In addition, the actual downpayment may be more or less than the assumed 5 %, and the mortgage term may be less than 30 years. The assumptions are used for the purpose of establishing a standardized method of arriving at a sales price, and are not intended to limit the choices that a buyer may utilize or to limit the mortgage products or downpayments that a developer may accept. Following lending industry standards, housing expenses consist of "PITI," or principal, interest, taxes and insurance. The City of Dublin also includes Homeowner Association dues as a housing expense. The maximum sale price is the price that will allow the homebuyer to purchase an inclusionary unit by paying no more than 35% of their household income for PITI and Homeowners Association dues, based upon the following assumptions. The only exception is very -low income applicants. Units for very -low income applicants will be priced using the maximum in the low income level adjusted for household size as total housing expenditures. • Downpayment (For the purpose of calculating the sale price of a home or condominium, it is assumed that the prospective buyer will make a 5% downpayment. The developer may accept alternate amounts for actual downpayments.) • Interest (Based on the weekly 30 -year fixed rate published by the Federal Home Loan Mortgage Corporation, (703) 903 -2446. The actual interest rate may vary.) • Mortgage Term (A 30 -year term is assumed. The actual term may differ.) • Taxes (Calculated using 1.25% of the estimated sale price of the unit.) • Insurance (Includes Private Mortgage Insurance (PMI), if any, and homeowners hazard insurance. PMI - For the purposes of calculating sale price, PMI may be calculated at 2% of the estimated loan, or the amount actually required by a given loan product being offered. o Homeowner's Insurance — The cost of homeowner's insurance may be calculated based on information researched by each developer, as to what an April 29, 2005 14 actual policy may cost a new homeowner. (If the homeowner insurance is covered by a homeowner association structure, homeowners insurance need not be included, but it must be documented that the HOA will provide adequate insurance.) • Homeowners' association dues, if any. The City has an Excel spreadsheet, available for public use, which can assist in the calculation of the final sales price, based on the listed criteria and housing expenses (Exhibit No 5). Each Inclusionary Unit may sell at a different sale price, depending on the household income of the selected household. Figure 8 shows how the sales price is calculated (see following page). FIGURE 8 This example is of a four- person household qualifying to purchase a two - bedroom unit. This household's gross income is $89,000. The maximum income for a four- person $98,650 moderate income household (using State HCD 2004 income limits) Household's annual income (hypothetical) $89,000 Monthly income available for housing $2,595.83 expenses: (35% of $89,000 = $31,150; $31,150 divided by 12 = $2,595.83) Developer wishes to sell home at: $300,000 Down Payment (for calculation of sales price 1$ 5,000 only — 5 %) Mortgage Required $ 285,000 Calculation: Monthly mortgage payment (based on $1,708.72 $285,000, 30 -year fixed at 6% interest) Other Monthly Housing Expenses: • Private Mortgage Insurance $ 191.43 • Property Tax (1.25% of sales price) $ 312.50 • Homeowners Insurance (based on $ 166.67 demonstrated market rates) • Homeowners Association Dues L 200.00 Total monthly expenses: $2,589.75 $2,589.75 is less than the buyer's monthly income available for housing expenses of $2,595.83, therefore. the sales price is in accordance with the Inclusionary Zoning Ordinance requirements. April 29, 2005 15 4.2 Acceptable Home Loan Products for Inclusionary_Zoning Units The City reserves the right to reject certain mortgage products because of the stronger likelihood that some products could result in loss of the Inclusionary Unit due to a foreclosure. The following is a non - exclusive list of the loan products that are acceptable to the City. The list is not intended to be exhaustive and other loan products may be evaluated upon request. 1. 97 -100% Loan to Value Loans 2. 90 -97% Loan to Value Loans 3. Up to 95% Loan to Value Loans 4. Adjustable Rate Mortgages • Two -Step Mortgage (adjusts only once — depends on rate adjustment) • Six Month ARM (Depending on initial interest rate, adjustment caps and lifetime caps) • One Year ARM (Depending on initial interest rate, adjustment caps and lifetime caps) • Fixed -Period Adjustment Rate Mortgages (Depending on adjustment rates, caps and lifetime caps). In evaluating ARMS the City will consider the effect of the mortgage provisions on the ability of the buyer to make payments • Pledged- Assets Mortgages • Virtually all CaIHFA products available to First Time Homebuyers in California 4.3 Closing of Sale and Escrow Once the Inclusionary Unit buyer has been selected and price calculated, the necessary documents must be completed and buyer fully qualified for the mortgage. When the buyer is fully qualified and ready to enter into an agreement to purchase, the qualifying packet is sent to the City of Dublin Housing Staff for review. The documents necessary for Housing Staff review are the following: 1. Completed and Signed Application for Inclusionary Unit; 2. Completed and signed loan application; 3. Completed Truth in Lending Statement; 4. Complete Income Verification information on household; 5. Complete information on unit offered to prospective buyer, including unit size, number of bedrooms and additional amenities; 6. Completed, executed, and notarized City of Dublin Resale Restriction Agreement and Option to Purchase; and 7. If claiming an Inclusionary Preference, verification of that preference (covered in Section 3.0). April 29, 2005 16 City Staff will review the packet for completeness and compliance with the Inclusionary Zoning Ordinance. The Application for Inclusionary Unit will be removed from the packet and retained as part of City records. A copy of the income verification for the household will be made and retained by the City as proof of the buyer's qualification to purchase the Inclusionary Unit. The original signed Resale Agreement will also be retained by the City and a copy returned to the lender. If the City receives a completed packet, the review will be completed and file returned to developer within one week of the submittal if possible. The Resale Agreement along with a Request for Notice of Default will be recorded on closing of each sale. IF THE PACKET IS INCOMPLETE, THE SALE CANNOT PROCEED UNTIL ALL NEEDED DOCUMENTS ARE PROVIDED. The documents will be returned to the lender, with a copy of the City's Escrow Instructions for the recording of the Resale Agreement. City Staff will contact the lender to establish whom the escrow and /or title firm is that will be in charge of closing the sale. City Staff will send the original Resale Agreement to that firm with the Escrow Instructions for.recordation on closing of the sale. 5 RENTAL PROJECTS After the Affordable Housing Agreement is executed, and prior to the rental of any units in the project there is a process that must be followed that includes preparation of a Management Plan, screening, ranking and qualifying of eligible tenants. 5.1 Preparation and Approval of Management Plan The Management Plan will outline for the City how the management entity plans to recruit and maintain occupancy of the Inclusionary Units. The document will also provide a brief history of the management entity and previous experience as well as list other rental complexes that are under their management. 5.2 Establishing Unit Rents for Inclusionary Units The Inclusionary Ordinance (8.68.020A.1) states that rents for Inclusionary Units may not exceed 30% of the maximum income level for very low, low and moderate income. The City of Dublin uses the State of California Housing and Community Development Income Guidelines by County. The Income Guidelines for 2005 are attached as Exhibit No 6. 5.3 Screening Based on Household Size For both rental and for -sale units, household size for each Inclusionary Unit may not exceed two people for each bedroom and may not be less than one person per bedroom, April 29, 2005 17 unless otherwise prohibited by special financing sources such as the California Multifamily Housing Program. Selection of applicants will be limited to those households that match the number of bedrooms in the units being constructed for sale. The following units household sizes for various units sizes are used: One - bedroom units 1 -2 people households Two - bedroom units 2-4 people households Three - bedroom units 3 -6 people households Four - bedroom units 4 -8 people households 5.4 Screening Based on Priority Preferences After being screened for initial eligibility based on household income and household size, applicant households shall be ranked and sorted based on the number of points the applicant receives under the priorities set forth in the Regulations at Section 8.68.050D. If priority categories are checked on the application form, the developer will be required to request verification of that claimed preference from the applicant and the form letter requesting verification attached as Exhibit No. 4 may be used for this purpose. This verification may be requested at the initial application or at a later date, after the developer has performed a preliminary review of all applicants. The point system set out in the Regulations (see Table 1) provides preferences to those that live in Dublin, that work in Dublin, that are public - service employees in Dublin, that are seniors, and that are permanently disabled. The Regulations provide that even if two persons in the household may be eligible to receive priority points, the points are only awarded for one person. For example, if a husband and wife are both employed in Dublin, the couple receives only 3 points for being employed in Dublin. Similarly, if two seniors make up a household, they would be entitled to only 1 point. Table 2: The Priority Point System Priority Points Employed in Dublin 3 points Public service employee in Dublin 1 additional point Resides in Dublin 3 points Seniors (62 and over) 1 point Permanently disabled 1 point Have an immediate family who is a Dublin 1 point resident and has continuously lived in Dublin the past year Must move because housing is to be demolished or 1 point converted to condo Definitions of the various priority categories are set forth in the Regulations, Section 8.68.050.D. • To qualify as employed in Dublin the.person shall have been employed within the City of Dublin for at least six months. • To qualify as a public service employee the person shall be employed by a public agency. April 29, 2005 18 • To qualify as a Dublin resident, the person shall have been a resident of the City of Dublin for at least a one -year period�prior to the eligibility determination. • To qualify as a relocated Dublin resident, the person shall have been relocated from the current Dublin residence due to demolition of dwelling or conversion of dwelling from rental to for -sale unit. Where definitions are not explicitly stated in the Regulations, the City has developed definitions: • A senior is defined as a person 62 years or older for the purpose of qualifying for preference points. • To qualify for the permanently disabled point, the person must be able to provide written verification from a physician or show receipt of SSI. • Immediate family is defined as a mother, father, brother, sister, grandparent or grandchild. Figure 9 demonstrates how the preference points are calculated. FIGURE 9 Example 1: An applicant for an Inclusionary Unit lives in Dublin (for at least one year) and works in Dublin (for at least 6 months). This individual will receive the following points: Lives in Dublin 3 points Works in Dublin 3 points Total number of points 6 points Example 2: An applicant for an Inclusionary Unit works in Dublin and is a schoolteacher. This individual will receive the following points: Works in Dublin 3 points Public Service Employee 1 point Total number of points 4 points Example 3: An applicant for an Inclusionary Unit is a senior citizen (62 years old) and lives in the City of Dublin (for at least one year). This individual will receive the following points: Senior citizen 1 point Lives in Dublin 3 points Total number of points 4 points April 29, 2005 19 5.5 Occupant Selection for Rental Develouments In rental developments, the management firm (which could be the owner or builder) is the entity that will be responsible for occupant selection and documentation. The Management Plan for the development will outline how tenants will be selected and prioritized to comply with the Regulations' preferences. Each applicant shall complete the Application for Inclusionary Unit and return it to the management company. Exhibit No 3 is a copy of the A pplication for Inclusionar� nit. The management company's leasing staff should be trained to understand and explain the Affordable Housing Application and process to applicants. To lease the Inclusionary Units the developer /management company will need to do the following: • Collect applications for a given time period. An initial qualification is made based on household size (See Section 5.3) and household income (see State of California, Housing and Community Development Department website, www.hcd.ca. _ov); • Sort and rank the applications based on the Inclusionary Zoning Regulations' preferences for occupant selection. Complete the ranking process and produce a list with those applicants with the most City of Dublin preference points at the top followed by all other applicants in descending order based on number of points received. If more than one applicant receives the same number of City preference points or if some applicants receive no points the developer shall use other objective criteria in occupant selection. The criteria that the developer will use in the event of a tie shall be submitted to City Staff ahead of time in the Management Plan. For example, the developer may date stamp all applicant applications and, in the event of a tie, will offer the unit to that applicant that applied first, or the developer may choose to hold a lottery to break ties. The ranked list must be completed within 30 days of the application deadline; • Offer the units to applicants based on the list established above, offering first to those applicants with the most points, then in descending order; and • Maintain application with income verification for City to review at onsite monitoring. If a project is financed through a program that has stricter occupant selection or occupant documentation requirements than the City, the City may elect to defer to those requirements and not require additional documentation. The City will require tenant income verification and restriction of the units for 55 years for the three income categories; however, the management firm may send to the City copies of the documentation that is required and produced for other monitoring agencies. April 29, 2005 20 5.6 Calculating Affordable Rents Affordable rents are calculated by multiplying the annual household income of the income- qualifying household by 0.30, then dividing by 12. The result is the maximum monthly rent for the Inclusionary Unit if the tenant pays no utilities. The Inclusionary Zoning Ordinance Regulations state that maximum rents cannot exceed 30% of household income for the maximum income in a given category. Fallowing rental programs such as HUD's Section 8 or the Tax Credit Allocation Committee rental tables, reduction in rental amounts are taken if tenants are required to pay utilities. If tenants pay for utilities, the maximum rent must be reduced to account for the cost of utilities (a utility allowance). Utilities include gas, electric, water, and trash disposal. If tenants are required to provide their own stove, refrigerator, or washer and dryer, those expenses are considered utilities, and the maximum rent is further reduced. If the tenant is responsible for any of the above, an allowance reduces the rent by the amounts listed in Exhibit No. 7 *. Figure 10 illustrates the calculation of maximum rent. FIGURE 10 Example 1: A developer provides 2 bedroom rental units for moderate- income households. The developer establishes a tenant eligibility list and for moderate - income the first household on the list for a two - bedroom unit is a family of four with an annual income of $91,900. Thirty percent of $91,900 is $27,570, and 1/12 of $27,570 is $2297.50. This would be the maximum monthly rent. The maximum rent could be charged to this household if the household were not responsible for any utilities. Example 2: Following on Example 1, the maximum rent for the moderate - income unit for a household of four was $2297.50, but this development requires tenants to pay electric, gas and water and water heating (gas) bills. The heating and cooking are both gas. The management pays for trash, provides the refrigerator and the stove. Using the current Utility .Allowance in Exhibit 7, the following amounts are to be deducted from the maximum monthly rent. $2,297.50 gas heating (2 bdrm) $ 12.00 gas cooking " " $ 2.00 gas water heating " " $ 10.00 water " " 14.00 $2,259.50 The rent that maybe charge to this household could not exceed $2,259.50 monthly. { The Utility Allowances are established by the Housing Authority of Alameda County and revised periodically. The most current Utility allowances for Alameda County may be accessed at the following web site: htip / /www.haca.net., then click on statistics. April 29, 2005 21 5.7 Monitoring Rents The Inclusionary Ordinance (Section 8.68.050.B) states that the management entity for the development will provide the City of Dublin an Annual Report (Exhibit No 8). The annual report will include the following information: 1. Income of BMR tenant households, reviewed annually; 2. Identification of all Inclusionary Units' (very low -, low- and moderate - income units) within the development; 3. Monthly rents charged to all BMR tenant households; and 4. Vacancy of Inclusionary Units during the previous year. This report will be due annually on October 31st. The City of Dublin Housing Staff will send a reminder letter to the management firm, with a copy of the Annual Report form for completion and certification at least three months prior to the anniversary date. This form must be completed and returned to the City by the anniversary date. GAPA#\2001101 -038 Inclusionary ZOAUnclusionary Guidelines\Inclusionary Guidelines - Final on 4- 29 -05.doc April 29, 2005 22 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF DUBLIN, 100 Civic Plaza Dublin, California 94568 Attn: City Clerk To be recorded without fee. (Space Above This Line For Recorder's Use only) (Gov. Code, §§ 6103 and 27383.) RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE Owner: Property Address: Dublin, California Name of Development: This RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE ( "Agreement ") is entered into by and between the CITY OF DUBLIN, a California municipal corporation (the "City") and ( "Owner ") regarding certain improved real property which is more particularly described in Exhibit A attached hereto and incorporated herein and commonly known as , Dublin, CA, (the "Property ") effective as of , 20_ ( "Effective Date "). City and Owner are hereinafter collectively referred to as the "Parties." RECITALS A. The City has Inclusionary Zoning Regulations (Dublin Municipal Code Chapter 8.68) (the "Regulations ") that require developers of rental and ownership housing to construct within their projects units that are affordable to very low -, low -, and moderate - income households ( "the Program "). To further its goal of creating affordable home ownership opportunities for very low -, low -, and moderate - income persons and families, the City has initiated a program for the sale of some home$ at a price below their market rate ( "Program "). Pursuant to the Program, developers of housing developments agree to set aside a certain number of units for purchase or rent, as applicable, by very low -, low -, and moderate- income persons and families, as defined herein. B. Owner is an eligible [very low -, low- or moderate - ]income purchaser under the Program, intends to live in the Property as an owner occupant, and agrees to maintain the Property as Owner's principal residence. 125106 -e =1— Form Revised May 27, 2005 it C. In order to maintain and preserve the Property as housing affordable to eligible [very low -, low -, or moderate - ] income purchasers, it is necessary to restrict the use and resale of the Property through imposition of the occupancy and resale restrictions set forth herein. These restrictions are intended to prevent initial and subsequent purchasers from using the Property for purposes incompatible with the Program and realizing unwarranted gains from sales of the Property at unrestricted prices. The terms and conditions of this Agreement are intended to provide the necessary occupancy and resale restrictions to ensure that the Property is used, maintained, and preserved as housing affordable to eligible [very low -, low -, or moderate - ]income purchasers. To further serve the purposes of the Program, it is necessary that the City be granted an option to purchase the property so that the property may be resold by the City to an eligible household. D. The Property constitutes a valuable community resource by providing decent, safe, and sanitary housing to persons and families of [very low, low, or moderate] income who otherwise would be unable to afford such housing. To protect and preserve this resource it is necessary, proper, and in the public interest for the City to administer occupancy and resale controls consistent with the Program and the Regulations by means of this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the substantial economic benefits inuring to Owner and the public purposes to be achieved under the Program, Owner and City hereby agree as follows: 1. Definitions. a. "Affordable Unit Cost" shall be as defined in the Regulations, as follows: "Owner- occupied units are deemed affordable units if the sales price results in annual housing expenses that do not exceed 35% of income level for very-low -, low -, and moderate- income households, adjusted for household size and as defined below. For a very low- income owner occupied units, the unit shall be deemed an affordable unit if the sales price results in annual housing expenses that do not exceed 35% of the maximum in the very low- income level, adjusted for household size and as defined below." b. "Area [Very Low, Low, or Moderate] Income for Alameda County" means those income and eligibility levels determined, updated, and published each year by the Califomia Department of Housing and Community Development, based on Alameda County median income levels, adjusted for household size. c. "Persons and families of [very low, low, or moderate] income" means persons and families whose income does not exceed [fifty percent (50 %); eighty percent (80 %); or one hundred twenty percent (120 %)] of the Area Median Income for Alameda County, as adjusted for household size. d. Persons and families meeting the definition set forth in Paragraph 1(b) above shall be referred to as "Eligible Households." 125106 -8 —2— Form Revised May 27, 2005 2. Program Requirements. a. Affordability Restrictions. Owner hereby covenants and agrees that during the term of this Agreement all of the requirements and restrictions of this Agreement shall apply, and the Property shall be sold or otherwise transferred only pursuant to the terms and conditions of this Agreement and only to (i) Eligible Households at a price not to exceed the Adjusted Resale Price, as defined in Paragraph 5, (ii) the City pursuant to Paragraph 3, or (iii) a permitted transferee pursuant to Paragraph 9. b. Disclosure. DURING THE TERM OF THIS AGREEMENT THERE SHALL BE NO SALE OR OTHER TRANSFER OF THE PROPERTY WITHOUT THE WRITTEN CERTIFICATION BY THE CITY THAT THE TRANSFEREE QUALIFIES AS AN ELIGIBLE HOUSEHOLD AND THAT THE PROPERTY IS BEING TRANSFERRED AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE, WHICH IS CAPPED AT THE AFFORDABLE UNIT COST AS DEFINED IN PARAGRAPH 1 a. ANY SALE OR OTHER TRANSFER OF THE PROPERTY IN VIOLATION OF THIS COVENANT SHALL BE VOIDABLE BY THE CITY. c. Principal Residence Requirement. OWNER COVENANTS AND AGREES THAT HE /SHE/THEY SHALL OCCUPY THE PROPERTY AS HIS /HER/THEIR PRINCIPAL RESIDENCE FOR THE DURATION OF HIS /HER/THEIR OWNERSHIP AND SHALL NOT RENT OR LEASE THE PROPERTY OR PORTION THEREOF DURING THE TERM OF THIS AGREEMENT WITHOUT PRIOR WRITTEN APPROVAL OF CITY. Without limiting the generality of the foregoing, any absence from the Property by Owner for a period of ninety (90) or more days shall be deemed an abandonment of the Property as the principal residence of Owner in violation of the conditions of this Paragraph. Upon request by the City made from time to time, the Owner of the Property shall submit an affidavit to the City certifying that the Property is the Owner's principal residence and provide such documents and other evidence as may be requested to verify Owner's compliance with this requirement. Abandonment of the Property shall constitute an Option Event (as defined in Paragraph 3.c below) and shall entitle the City to exercise its Option to purchase the Property. 3. Option to Purchase. a. Grant of Option to Purchase. Owner hereby grants to the City an option ("Option") to purchase all of Owner's right, title and interest in and to the Property upon the occurrence of an Option Event (defined in Paragraph 3.c below), subject to the terms and conditions contained herein. b. Assignment of the Option. The City may assign the Option to another government entity, a non - profit affordable housing provider or a person or family that qualifies as an Eligible Household. The City's assignment of the Option shall not extend any time limits contained herein with respect to the exercise period of the Option or the period within which the Property must be purchased. c. Events Giving Rise to Right to Exercise Option. The City shall have the right to exercise its Option upon the occurrence of any of the following events (each, an "Option Event "): 125106 -8 —3— Form Revised May 27, 2005 Receipt of a Notice of Intent to Transfer (defined in Paragraph 3.d.i below); ii. Any actual, attempted or pending sale, conveyance, transfer, lease or other attempted disposition of the Property or of any estate or interest therein, except as provided in Paragraph 10 below; iii. Any actual, attempted or pending encumbrance of the Property, including without limitation by way of mortgage or deed of trust, or by judgment, mechanics, tax or other lien, except as provided in Paragraph 9 below; iv. Recordation of a notice of default and /or notice of sale pursuant to California Civil Code section 2924 (or successor provisions) under any deed of trust or mortgage with a power of sale encumbering the Property; V. Commencement of a judicial foreclosure proceeding regarding the Property; vi. Execution by Owner of any deed in lieu of foreclosure transferring ownership of the Property; Vii. Commencement of a proceeding or action in bankruptcy, whether voluntary or involuntary, pursuant to Title 11 of the United States Code or other bankruptcy statute, or any other insolvency, reorganization, arrangement, assignment for the benefit of creditors, receivership or trusteeship, concerning the Owner; or viii. Any violation by Owner of any provision of this Agreement including, without limitation, the conditions set forth in Paragraph 2 above. d. Method of Exercising the Option. L Notice of Intent to Transfer. If Owner desires to sell, convey, transfer (other than pursuant to Paragraph 9), lease, encumber (other than pursuant to Paragraph 10) or otherwise dispose of the Property or of any estate or interest therein, no less than 45 days prior to the date of such proposed sale, conveyance, transfer, lease, encumbrance or disposition, Owner shall notify City in writing to that effect (the "Notice of Intent to Transfer"). The Notice of Intent to Transfer shall be in substantially the form attached hereto as Exhibit B. In the case of a proposed sale of the Property to an identified prospective purchaser, the Owner shall submit to the City, together with the Notice of Intent to Transfer, a copy of the prospective purchaser's income certification, a list of all assets owned by the prospective purchaser, and other financial information reasonably requested by City, in a form approved by the City, along with the income certification to be provided to any lender making a loan to the prospective purchaser. The City may require documentation evidencing and supporting the income and other financial information contained in the certifications. ii. Notice of Exercise. Upon the occurrence of any Option Event, the City may exercise its Option by delivering notice, pursuant to Paragraph 16 and within the time period specified in Paragraph 3(d)(iv), to Owner of City's intent to exercise such Option pursuant to the terms of this Agreement ( "Notice of Exercise "). The Notice of 125106 -8 —4— Form Revised May 27, 2005 Exercise may be in the form attached hereto and incorporated herein as Exhibit C, or in such other form as the City may from time to time adopt. If the Option Event relates to the potential foreclosure of a mortgage under Paragraphs 3.c.iv, 3.c.v, or 3.c.vi, then the City shall also deliver the Notice of Exercise to the mortgagee or beneficiary under such mortgage, at such mortgagee's or beneficiary's address of record in the Office of the Recorder of Alameda County. iii. Notice of Consent to Transfer. If the City does not exercise the Option, it may give its consent to the occurrence of the Option Event ( "Consent to Transfer"). If the Option Event involves a proposed sale of the Property to a prospective purchaser, the City's consent shall be conditioned upon (i) the proposed purchaser's qualification as an Eligible Household; (ii) the sale of the Property at a price not to exceed the Adjusted Resale Price; (iii) the proposed purchaser's execution of a Disclosure Statement in the form attached hereto as Exhibit F or such other form or forms as may be promulgated by the City; and (iv) the proposed purchaser's assumption of Owner's duties and obligations under this Agreement pursuant to a written assumption agreement in a form acceptable to City, or execution of an agreement substantially similar to this Agreement, within thirty (30) days after the Consent to Transfer has been delivered to Owner and recordation of such assumption agreement or substitute agreement. SELLER SHALL PAY REAL ESTATE COMMISSIONS, IF ANY, WHICH SHALL NOT TO EXCEED 6% OF THE ACTUAL SALES PRICE. If the prospective purchaser (i) fails to qualify as an Eligible Household, (ii) fails to execute and deliver the Disclosure Statement to the City, or (iii) fails to execute and deliver to the City an assumption agreement or an agreement substantially similar to this Agreement within such thirty (30) day period, then the Consent to Transfer shall expire and the City may, at its option, either notify Owner of the disqualification, thereby entitling Owner to locate another purchaser who qualifies as Eligible Household, or exercise the Option, as if no Consent to Transfer had been delivered. iv. Time Period for Notice. The City shall deliver a Consent to Transfer, if applicable, not later than thirty (30) days after the date that it receives notification of an Option Event. The City shall deliver a Notice of Exercise, if applicable, on or before the date which is the later to occur of the following: (i) thirty (30) days after the date that the City receives notification of an Option Event or (ii) fifteen (15) days after a Consent to Transfer has expired. For purposes of computing commencement of the delivery periods, the City shall be deemed to have received notification of an Option Event on the date of delivery of a Notice of Intent to Transfer, pursuant to the terms of Paragraph 16 below or on the date it actually receives notice of default, summons and complaint or other pleading, or other writing specifically stating that an Option Event has occurred. The City shall have no obligation to deliver a Notice of Exercise or Consent to Transfer, and the applicable time period for exercise of the Option shall not commence to run, unless and until the City has received notification of an Option Event in the manner specified in this subparagraph. If there ps a stay or injunction imposed by court order precluding the City from delivering its Consent to Transfer or. Notice of Exercise within the applicable time period, then the running of such period shall cease until such time as the stay is lifted or the injunction is dissolved and the City has been given written notice thereof, at which time the period for delivery of a Consent to Transfer or Notice of Exercise shall again begin to run. V. Notice of Abandonment. If the City fails to deliver a Notice of Exercise or Consent to Transfer within the time periods set forth in paragraph 3.d.iv, upon 125106 -8 —5— Form Revised May 27, 2005 request by Owner, the City shall cause to be filed for recordation in the Office of the Recorder of Alameda County, a notice of abandonment, which shall declare that the provisions of the Option are no longer applicable to the Property. Unless Owner requests recordation of notice of abandonment within 30 days of the City's failure to deliver Notice of Exercise or Consent to Transfer, the City shall have no obligation to record the notice of abandonment. Upon recordation of a notice of abandonment, the Option shall terminate and have no further force and effect. If the City fails to record a notice of abandonment, the sole remedy of Owner shall be to obtain a judicial order instructing prompt recordation of such a notice. Vi. Right to Reinstatement. If the Option Event is the recordation of a notice of default, then the City shall be deemed to be Owner's successor in interest under California Civil Code Section 2924c (or successor section) solely for purposes of reinstatement of any mortgage on the Property that has led to the recordation of the notice of default. As Owner's deemed successor in interest, the City shall be entitled to pay all amounts of principal, interest, taxes, assessments, homeowners' association fees, insurance premiums, advances, costs, attorneys' fees and expenses required to cure the default. If the City exercises the Option, then any and all amounts paid by the City pursuant to this Paragraph shall be treated as Adjustments to the Base Resale Price for the Property, as defined in Paragraph 5 below. A. Inspection of Property. After receiving a Notice of Intent to transfer or delivering a Notice of Exercise, the City shall be entitled to inspect the Property one or more times prior to the close of escrow to determine the amount of any Adjustments to the Base Resale Price. Before inspecting the Property, the City shall give Owner not less than forty -eight (48) hours written notice of the date, time and expected duration of the inspection. The inspection shall be conducted between the hours of 9:00 a.m. and 5:00 p.m., Monday through Friday, excluding court holidays, unless the parties mutually agree in writing to another date and time. Owner shall make the Property available for inspection on the date and at the time specified in the City's request for inspection. viii. Escrow. Promptly after delivering a Notice of Exercise, the City shall open an escrow account for its purchase of the Property. Close of escrow shall take place on such date which is the later to occur of the following, (a) sixty (60) days after a Notice of Exercise has been delivered, or (b) ten (10) days after Owner has performed all acts and executed all documents required for close of escrow. Prior to the close of escrow, the City shall deposit into escrow with a title company of City's choosing, the Adjusted Resale Price as defined in Paragraph 5 below and all escrow fees and closing costs to be paid by City. Commissions (not to exceed 6% of the actual sales price), closing costs and title insurance shall be paid pursuant to the custom and practice in the County of Alameda at the time of the opening of escrow, or as may otherwise be provided by mutual agreement. Owner agrees to perform all acts and execute all documents reasonably necessary to effectuate the close of escrow and transfer of the Property to the City. ix. Proceeds of Escrow; Removal of Exceptions to Title. Prior to close of escrow, Owner shall cause the removal of all exceptions to title to the Property that were recorded after the Effective Date with the exception of (i) taxes for the fiscal year in which the escrow for this transaction closes, which taxes shall be prorated as between Owner and City as of the date of close of escrow; (ii) quasi- public utility, public alley, public street 125106 -8 —6— Form Revised May 27, 2005 easements, and rights of way of record, and (iii) such other liens, encumbrances, reservations and restrictions as may be approved in writing by City ( "Permitted Exceptions "). The purchase price deposited into escrow by the City shall be applied first to the payment of any and all Permitted Encumbrances (as defined in Paragraph 10) recorded against the Property in order of lien priority, and thereafter to the payment of Owner's share of escrow fees and closing costs. Any amounts remaining after the purchase price has been so applied, if any, shall be paid to Owner upon the close of escrow. If the purchase price is insufficient to satisfy all liens and encumbrances recorded against the Property, the Owner shall deposit into escrow such additional sums as may be required to remove said liens and encumbrances. In the event that the City agrees to proceed with close of escrow prior to the date that Owner has caused all exceptions to title recorded after the Effective Date other than Permitted Exceptions to be removed, then Owner shall indemnify, defend and hold City harmless from any and all costs expenses or liabilities (including attorneys' fees) incurred or suffered by City that relate to such exceptions and their removal as exceptions to title to the Property. 4. Base Resale Price. Prior to adjustment pursuant to Paragraph 5 the base resale price ( "Base Resale Price ") of the Property shall be the lowest of. a. Median Income. The original price ( "Base Price ") paid by Owner for acquisition of the Property pursuant to the Program, increased (but not decreased) by an amount, if any, equal to the Base Price multiplied by the percentage increase in the median household income ( "Median Income ") for Alameda County published by the California Department of Housing and Community Development, Division of Housing Policy Development, between the Effective Date and the date that the City receives notification of an Option Event; or b. Fair Market Value. The fair market value of the Property as determined by an appraiser selected and paid for by Owner and approved in writing by the City. To compute the Base Resale Price, the City may use the Base Resale Price Worksheet attached as Exhibit D hereto, or such other form as the City may from time to time adopt. 5. Adjustments to Base Resale Price. Subject to the Affordable Unit Cost restriction described in subparagraph (d) below, the Base Resale Price shall be increased or decreased, as applicable, by the following adjustment factors ( "Adjustment "): a. Capital improvements. An increase for capital improvements made to the Property, but only if the amount of such improvements has been previously approved in writing by the City after Owner has submitted original written documentation of the cost to the City for verification. The amount of the Adjustment shall equal the original cost of any such capital improvements. b. Damages. A decrease by the amount necessary to repair damage to the Property, if any, and to place the Property into saleable condition as reasonably determined by the City upon City's exercise of its Option hereunder, including, without limitation, amounts attributed to cleaning; painting; replacing worn carpeting and draperies; making 125106 -8 —7— Form Revised May 27, 2005 necessary structural, mechanical, electrical and plumbing repairs; and repairing or replacing built -in appliances and fixtures. Owner hereby covenants to, at Owner's expense, maintain the Property in the same condition as in existence on the date of City's Notice of Exercise, reasonable wear and tear excepted. c. Advances by the City. A decrease in an amount equal to the sum of all costs advanced by the City for the payment of mortgages, taxes, assessments, insurance premiums, homeowner's association fees and /or associated late fees, costs, penalties, interest, attomeys' fees, pest inspections, resale inspections and other expenses related to the Property, which Owner has failed to pay or has permitted to become delinquent. d. Adjusted Resale Price Not to Exceed Affordable Unit Cost. The Base Resale Price as adjusted, is hereinafter referred to as the "Adjusted Resale Price." Notwithstanding any other provision hereof to the contrary, in no event shall the Adjusted Resale Price exceed the Affordable Unit Cost. 6. Priority and Effectiveness of the Option. a, Recordation. This Agreement shall be recorded in the Office of the Recorder of the County of Alameda on or as soon as practicable after the Effective Date. The Option shall have priority over any subsequent sale, conveyance, transfer, lease or other disposition or encumbrance of the Property, or of any estate or interest therein, and in the event of exercise of the Option by City, the City shall take the Property subject only to Permitted Exceptions. Except as otherwise provided in Paragraph 7.a, the exercise of the Option by the City at any time and from time to time shall not extinguish the Option or cause a merger of the Option into any estate or other interest in the Property, and the Option shall continue to exist and be effective with respect to the Property against any and all subsequent owners in accordance with the terms and conditions hereof. b. Request for Notice of Default. The City shall file a Request for Notice of Default for recordation in the Office of the Recorder of the County of Alameda promptly upon execution of this Agreement (see Exhibit E). c. Subordination. The City, agrees that in order to assist qualified purchasers to secure purchase money financing for the acquisition of the Property, the City will enter into a subordination agreement with a senior purchase money lender to subordinate this Agreement under such terms as the City and the senior purchase money lender shall negotiate. 7. Survival of Option Upon Transfer. a. In General. The City's right to exercise the Option shall survive any transfer of the Property by Owner. Each transferee, assignee or purchaser of the Property during the term hereof shall be required to execute an agreement substantially in the form of this Agreement, provided that the term of any such agreement shall be for the duration of the term hereof as of the date of any such transfer, assignment or sale. The Option may be exercised against the Property throughout the term hereof, regardless of whether the Property is owned, possessed or occupied by Owner or any successor, transferee, assignee, heir, executor, or administrator of Owner, regardless of household income (if 125106 -8 —8— Form Revised May 27, 2005 applicable) including a debtor -in- possession, debtor or trustee pursuant to Title 11 of the United States Code. Notwithstanding the foregoing, the Option shall not survive (i) the sale and transfer of the Property to a third party purchaser pursuant to a judicial or non judicial foreclosure or a deed -in -lieu of foreclosure under a power of sale contained in a mortgage or deed of trust held by an institutional lender, or (ii) the recording of an instrument conveying Owner's interest in the Property to the-City, or its assignee, provided the conveyance is in accordance with the terms of this Agreement. b. HUD insured Mortgage. If Owner has acquired the Property by a mortgage insured by the Secretary of the United States Department of Housing and Urban Development, and a notice of default has been recorded pursuant to California Civil Code Section 2924 (or successor provisions), then this Option shall automatically terminate if title to the Property is transferred by foreclosure or deed -in -lieu of foreclosure, or if the insured mortgage is assigned to the Secretary. 8. Voidable Transfers. As long as the Option has not been abandoned pursuant to Paragraph 3.d.v, any actual or attempted sale, conveyance, transfer or other disposition of the Property, or of any estate or interest therein, in violation of the terms and conditions of this Agreement, shall be voidable at the election of the City. 9. Permitted Transfers. Provided that the transferee assumes, within 30 days of a written request by the City, all of Owner's duties and obligations under this Agreement pursuant to a written assumption agreement in a form acceptable to City, or at City's election, execution of an agreement substantially similar to this Agreement, the following transfers ( "Permitted Transfers ") of title to the Property, or of any estate or interest therein, shall not be subject to the City's prior approval, shall not trigger the exercise of the Option, and shall not be considered Option Events: (a) a good -faith transfer by gift, devise or inheritance to Owner's spouse or issue; (b) a taking of title by a surviving joint tenant; (c) a court- ordered transfer of title to a spouse as part of a divorce or dissolution proceeding; (d) a transfer by Owner into an inter vivos trust in which the Owner is a beneficiary and the Owner continues to occupy the property as his /her primary residence; (e) an acquisition of title, or of any interest therein, in conjunction with marriage; or (f) any good faith transfer to an Eligible Household. Notwithstanding any Permitted Transfer, the Option shall remain effective with respect to the Property for the duration of the term hereof. 10. Permitted Encumbrances and Refinancing. This Option shall not become exercisable as the result of Owner's encumbering the Property for the purpose of securing financing to purchase the Property pursuant to the Program, to refinance indebtedness incurred to purchase the Property pursuant to the Program, or to make necessary repairs to the Property in an amount approved by City pursuant to Paragraph 5a ( "Permitted Encumbrances "). The maximum aggregate amount of such encumbrances outstanding at any time (the "Permitted Encumbrance Amount ") shall not exceed an amount equal to ninety percent (90 %) of the Base Resale Price calculated as provided in Paragraph 4. The Permitted Encumbrance Amount shall be calculated as if the City had received notification of an Option Event on the earlier of (a) the date on which the deed of trust or mortgage securing the indebtedness is filed for record in the Office of the Recorder of the County of Alameda, or (b) the date the City receives Notice of Intent to Transfer pursuant to Paragraph 3.d.i above. Owner hereby covenants and agrees that he /she /they shall use his /her /their best efforts to ensure that any deed of trust or other agreement encumbering 125106-8 —9— Form Revised May 27, 2005 the property shall include provisions providing for notice to be delivered to City of any default thereunder and for City's right to cure such default at City's election. 11. Obligation of Owner After Option Abandonment. If the City records a notice of abandonment of the Option, then the Property may be sold by Owner to a third party without restriction as to price; however, upon such sale, Owner shall pay to City an amount ( "City's Share ") equal to twenty -five percent (25 %) of the difference between (a) the actual sales price net of reasonable and customary real estate commissions paid (such commissions not to exceed six percent (6 %) of the actual sales price), and (b) the Adjusted Resale Price. The City's Share shall be paid to the City concurrently with close of escrow on the sale of the Property, or upon receipt by Owner of the sale price for the Property , whichever shall first occur. 12. Limits on Liability. In no event shall the City become liable or obligated in any manner to Owner by reason of the assignment of this Agreement or the Option, nor shall City be in any way liable or obligated to Owner for any failure of the City's assignee to consummate a purchase of the Property or to comply with the terms of this Agreement or the Option, or any escrow instructions or agreement for the purchase of the Property. 13. Insurance Proceeds and Condemnation Award. In the event the Property is destroyed and insurance proceeds are distributed to Owner instead of being used to rebuild the Property, or, in the event of condemnation, if the proceeds thereof are distributed to Owner, any surplus of proceeds remaining after payment of the senior liens and encumbrances on the Property shall be distributed as follows: that portion of the surplus up to, but not to exceed, the net amount Owner would have received pursuant to Paragraph 3.d.ix had the City exercised its Option on the date of the destruction of condemnation valuation date shall be distributed to Owner, and the balance of such surplus, if any, shall be distributed to the City. 14. Effective Date. The rights and obligations of the City and Owner set forth in this Agreement shall be effective as of the Effective Date. 15. Term of Agreement and Option. The restrictions contained herein and the City's option to purchase the Property shall continue for a period of fifty -five (55) years commencing on the Effective Date. Notwithstanding anything to the contrary in the foregoing, the Agreement shall remain in effect until the first transfer on or after the termination of the restrictions and option to purchase pursuant to this paragraph. Upon such sale, Owner shall pay to City an amount ( "City's Share ") equal to twenty -five percent (25 %) of the difference between (a) the actual sales price net of reasonable and customary real estate commissions paid (such commissions not to exceed six percent (6 %) of the actual sales price), and (b) the Adjusted Resale Price on the date of the termination of the restrictions and option to purchase pursuant to this paragraph. The City's Share shall be paid to the City concurrently with close of escrow on the sale of the Property, or upon receipt by Owner of the sale price for the Property, whichever shall first occur. Following completion of a sale in compliance with this provision, this Agreement shall terminate. 16. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their 125106 -8 —10— Form Revised May 27, 2005 respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Party in accordance with this Section. All such notices shall be sent by: (a) personal delivery, in which case notice shall be deemed delivered upon receipt; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; (c) nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or (d) facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. City: City of Dublin, 100 Civic Plaza Dublin, California 94568 Attn: City Manager Owner: At the address of the Property 17. Remedies Upon Breach. a. Specific Performance. Owner acknowledges that any breach in the performance of its obligations under this Agreement shall cause irreparable harm to the City. Owner agrees that the City is entitled to equitable relief in the form of specific performance upon its exercise of the Option, and that an award of damages shall not be adequate to compensate the City for Owner's failure to perform according to the terms of this Agreement. b. Other Remedies. City shall have all of the remedies provided for at law or equity. 18. General Provisions. a. Attorneys' Fees. If either party initiates legal proceedings to interpret or enforce its rights under this Agreement, the prevailing party in such action shall be entitled to an award of reasonable attorneys' fees and costs in additions to any other recovery to which it is entitled under this Agreement. b. No Joint Venture; No Third -Party Beneficiary. No joint venture or other partnership exists or is created between the Parties by virtue of this Agreement. Except as expressly stated herein, this Agreement does not benefit any third party. 125106-8 —11— Form Revised May 27, 2005 c. Successors; Assignment. This Agreement shall inure to the benefit of and shall be binding upon the Parties to this Agreement and their respective heirs, executors, administrators, successors and assigns. City shall have the right to assign all of its rights and obligations under this Agreement without the consent of Owner. d. Entire Agreement; Amendment. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof, and supersedes any and all other prior negotiations, correspondence, understandings and agreements with respect thereto. There are no representations, promises, agreements or other understandings between the Parties relating to the subject matter of this Agreement that are not expressed herein. This Agreement may be modified only by an instrument in writing executed by the Parties or their respective successors in interest. e. Survival; No Merger. All of the terms, provisions, representations, warranties and covenants of the Parties under this Agreement shall survive the close of escrow of any sale of the Property and shall not be merged in any deed transferring the Property. f. Authority And Execution. Each Party represents and warrants that it has full power and authority to enter into this Agreement and to undertake all of its obligations hereunder, that each person executing this Agreement on its behalf is duly and validly authorized to do so. g. Severability. The invalidity or unenforceability of any term or provision of this Agreement shall not impair or affect the remainder of this Agreement, and the remaining terms and provisions hereof shall not be invalidated but shall remain in full force and effect. h. Waiver; Modification. No waiver or modification of this Agreement or any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the Party to be charged therewith. No evidence or any waiver or modification shall be offered or received in evidence in any proceeding, arbitration, or litigation between the Parties arising out of or affecting this Agreement or the rights or obligations of any Party hereunder, unless such waiver or modification is in writing and duly executed as aforesaid. The provisions of this section may not be waived except as herein set forth. A waiver or breach of any covenant, condition or provision of this Agreement shall not be deemed a waiver of any other covenant, condition or provision hereof. i. Construction. The section headings and captions used in this Agreement are for convenience of reference only and shall not modify, define, limit or amplify any of the terms or provisions hereof. This Agreement shall not be construed as if it had been prepared by one of the Parties, but rather as if both Parties have prepared it. j. Governing Law, This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of California. k. Time of the Essence. Time is of the essence in this Agreement as to each provision in which time is an element of performance. 12510&8 —12— Form Revised May 27, 2005 I. Further Assurances. Each Party will, upon reasonable request of the other Party, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments and documents as may be reasonably necessary in order to fulfill the intents and purposes of this Agreement. M. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above. OWNER(S): CITY: CITY OF DUBLIN By: Its: ATTEST: City Clerk 'APPROVED AS TO FORM: City Attorney 1251D6 -8 —13— Form Revised May 27, 2005 STATE OF CALIFORNIA ) COUNTY OF ) On before me, a Notary Public in and for said county and state, personally appeared personally known to . me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she/they executed ,the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) STATE OF CALIFORNIA ) COUNTY OF ) On before me, a Notary Public in and for said county and state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that' by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 125106 -8 —1— Form Revised May 27, 2005 STATE OF CALIFORNIA } COUNTY OF ) On before me, , a Notary Public in and for said county and state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose narne(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 125106 -8 —1— Form Revised May 27, 2005 CERTIFICATE OF ACCEPTANCE (Pursuant to Government Code §27281) This is to certify that the interest in real property conveyed by the Resale Restriction Agreement and Option to Purchase dated from to the City of Dublin, a California municipal corporation, is hereby accepted by the undersigned office or agent on behalf of the City of Dublin pursuant to authority conferred by the Resolution No. dated ; and the grantee consents to recordation thereof by its duly authorized officer. Dated: By: Its: Attest: City Clerk 125105 -8 —1— Form Revised May 27, 2005 EXHIBIT A Legal Description [To be inserted] 125106 -e —1— Form Revised May 27, 2005 EXHIBIT B FORM: NOTICE OF INTENT TO TRANSFER VIA CERTIFIED MAIL - RETURN RECEIPT REQUESTED To: City of Dublin 100 Civic Center Dublin, California _ Attn: City Manager Date: Re: Notice of Intent to Transfer Pursuant to the terms of the Resale Restriction Agreement and Option to Purchase, dated , the undersigned Owner(s), , hereby give(s) notice of his /her /their intent to transfer the property located at Dublin, California (the `Property „). Owner may be contacted at the Property or at the following address: Owner's daytime telephone number is (� [If applicable: The proposed transfer of the Property is to the following person(s): Name: Address: Telephone: (_) 1 The proposed transfer is (check one): 0 Sale ❑ Other Specify: Owner(s) signature(s): 125106 -8 —1— Form Revised May 27, 2005 EXHIBIT C FORM: NOTICE OF EXERCISE Date: To: Owner or Transferee Address Re: Notice of Exercise The City of Dublin ( "City ") hereby gives notice that it is exercising its option to purchase the real property located at , Dublin, California. The option has been granted to the City pursuant to the Resale Restriction Agreement and Option to Purchase between Owner and the City dated and recorded on as Instrument No. [The City has assigned its option to purchase the real property to j An escrow for the purchase will be opened with the First American Title Company. City of Dublin By: Its: 12510" -1- 1 Form Revised May 27, 2005 EXHIBIT D INCLUSIONARY ZONING HOMEOWNERSHIP PROGRAM INCLUSIONARY ZONING BASE RESALE PRICE WORKSHEET Date: Owner: Address: Purchase Price: Date of Purchase: Years Owned: years CALCULATION BASED ON INCREASE IN MEDIAN INCOME*** Present Median Income: $ Effective Date: Family of four, County of Alameda (at time of sale of unit) Effective Date: Original Median Income: $ Family of four, County of Alameda (at time of purchase of unit) Amount of Increase: Family of four, County of Alameda (Present median income minus original median income) Increase in Price: Method #1 Resale Price: x x = Based on the above, the base resale price as of this date, is: By: 125106 -8 —1— Form Revised May 27, 2005 EXHIBIT E REQUEST FOR NOTICE OF DEFAULT Order No. Escrow No. Loan No. WHEN RECORDED MAIL TO: CITY OF DUBLIN Dublin, California Attn: (Space Above This Line For Recorder's Use Only) REQUEST FOR NOTICE UNDER SECTION 2924b CIVIL CODE In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No. on , in the Official Records of Alameda County, California, and describing land therein as: executed by , as Trustor, in which is named as Beneficiary, and as Trustee, be mailed to the City of Dublin, Dublin, California , Attn: By: NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORED. STATE OF CALIFORNIA COUNTY OF } On before me, , a Notary Public in and for said county and state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) 125106 -8 —1— Form Revised May 27, 2005 EXHIBIT F DISCLOSURE STATEMENT THERE ARE RESTRICTIONS ON THE SALE OF THE PROPERTY YOU ARE BUYING. EXCEPT FOR A TRANSFER TO THE CITY FOLLOWING CITY'S EXERCISE OF ITS OPTION TO PURCHASE, THIS PROPERTY MAY ONLY BE SOLD TO AN "ELIGIBLE HOUSEHOLD" AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE WHICH IS CAPPED AT AN "AFFORDABLE HOUSING COST." THIS MEANS THAT YOU MAY NOT SELL THE PROPERTY FOR MARKET VALUE TO WHOMEVER YOU LIKE. THESE RESTRICTIONS WILL BE IN EFFECT UNTIL ANY SALE OF THE PROPERTY IN VIOLATION OF THE RESTRICTIONS, SHALL BE VOIDABLE AT THE ELECTION OF THE CITY. TO DETERMINE WHO AN ELIGIBLE HOUSEHOLD IS, AND WHAT THE ADJUSTED RESALE PRICE AND AFFORDABLE HOUSING COST ARE, YOU SHOULD CONTACT THE OF THE CITY OF DUBLIN. YOU SHOULD ALSO READ THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE RECORDED AGAINST THE PROPERTY. YOU MAY OBTAIN A COPY FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY. I HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS. BUYER BUYER 125106 -8 —1— Form Revised May 27, 2005 CITY OF DUBLIN 100 Civic Plaza, Dublin, California 94568 Website: http: / /www.ci.dublin.ca.us min � WKWOM Application and Information Packet John Doe, Inc., Developers of the Leprechaun Homes will be offering the first twenty -five (25) below market rate (BMR) homes to eligible very low -, low - and moderate - income applicants. 8 will be made available to very low - income households, 5 will be made available to low - income households and 12 will be made available to moderate income households. The following income limits are the maximum incomes allowed for each of the three category of restricted sale price homes: No. of people in 1 2 3 4 5 Household Very low - income $28,050 $32,050 $36,050 $40,050 $43,250 Low - income ' $44,850 $51,250 $57,650 $64,100 $69,200 Moderate- income $69,050 $78,900 $88,800 $98,650 $106,550 To qualify for one of these homes you must complete the attached "Application for Inclusionary Unit" and the "Qualification Questionnaire" and deliver to John Doe Inc. at the Sales office located at XXXX Nice Day Drive, Dublin, California 94568. If you have any questions, please contact John Doe, Inc. at (925) 111 -1010. You may contact the City at (925) 833 -6610 for answers to questions, but John Doe, Inc. must receive all completed applications at the above address by Friday, Month, Day, Year. SELECTION PROCESS The following steps will take place for buyer selection: 1. Interested applicants must be income qualified prior to being considered a possible buyer. The application acceptance period will begin on Monday, Month, Dgy, Year. You must complete an "Application for Inclusionary Unit" to be pre - qualified. These forms must EXHIBIT 2 Area Code (925) City Manager 833 -6650 City Council 833 -6650 Personnel 833 -6605 Economic Development 833 -6650 Finance 833 -6640 Public Works/Engineering 833 -6630 Parks & Community Services 833 -6645 Police 833 -6670 Planning/Housing /Code Enforcement 833 -6610 Building Inspection 833 -6620 Fire Prevention Bureau 833 -6606 be returned to John Doe, Inc. for their review, along with a copy of your (latest year) Federal and State Income Tax returns. If you are already pre - approved by a lender, please include, with the above documents, confirmation, in writing, from your chosen lender that you are pre- approved for a loan and the amount of loan for which you are pre - approved. 2. Once all applicants have been reviewed and verified by John Doe, Inc., John Doe, Inc. will begin offering the homes to applicants. The sale price of the home will be based on the applicant's income. When an offer has been made and accepted, the following documents will be submitted to the City of Dublin: a) all household income verification, b) the sale contract, c) the lender "truth in lending statement" d) the Loan Agreement e) the "Application for Inclusionary Unit" f) an executed Resale Agreement; and, g) any verification for a City of Dublin preference The City of Dublin will confirm any applicant claiming one or more of the City established preferences for preference points, review all documents to confirm that the developer is selling the unit to a household of adequate size, that the household is in the correct income category and will review the loan product to assure it is acceptable. If the City of Dublin receives a complete set of documents from the developer, the City of Dublin will complete the review and return all documents to the developer with the exception of the executed Resale Agreement and the "Application for Inclusionary Unit," to the developer within 7 business days. 3. At this point the developer may enter into escrow for sale of the Inclusionary Units with the City approved applicant. 4. The escrow closes and the Applicant becomes the owner of a new home in the City of Dublin. Exhibit 2 2 II. ELIGIBILITY REQUIREMENTS To qualify for the purchase of a home in this project, the applicant must meet the following criteria: The household must be of adequate size. The City of Dublin states that the units be sold to applicants based on the following unit and household size: Studio 1 person household 1 bedroom 1 -2 people household 2 bedroom 2 -4 people household 3 bedroom 3 -6 people household The annual household income may not exceed the appropriate income limit of the Area Median Income (AMI), adjusted for household size, as issued by the State Housing and Community Development Department (HCD). (See page one of this packet) Annual household income includes: a. The income of all household members over the age of 18 years who will be residing in the home. Annual household income includes all income listed in the (most current year) Income Tax Return of all adult members, including all schedules listing interest and dividends. b. The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts, whether or not they are declared on Income Tax Return (most current year). c. Payment in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay, whether or not they are declared on Income Tax Return (most current year) d. Child Support Payments e. Public Assistance payments of any type Owner must occupy the property as the principal place of residence for at least nine (9) months (cannot be absent for a period of ninety [90] days of more) of each calendar year. The property and improvement must be maintained in good condition and repair throughout the period of ownership. Buyer must be willing to enter into a Resale Restriction Agreement with the City of Dublin which establishes, in part, residency requirements, home maintenance standards and restricts the resale price and process for the resale of the homes. Exhibit 2 3 III. GENERAL INFORMATION Homes will be available to eligible purchasers with qualified financing and selected by John Doe, Inc. Pre - qualified applicants will be ranked according to the preferences listed in the Dublin Inclusionary Ordinance Section 8.68.050D. The ordinance specifies points for various preferences in occupant selection ➢ Dublin Resident for over 1 year ➢ Employed in Dublin for at least 6 month a Public service employee working in Dublin ➢ Senior applicant A Disabled ➢ Immediate family member of a Dublin resident ➢ Required to relocated from current Dublin residence due to demolition of dwelling or conversion of dwelling 3 points 3 points 1 additional point 1 point 1 point 1 point 1 point Claiming any of the above preferences in the "Application for Inclusionary Unit" will require verification by applicant. John Doe, Inc. will request the applicant provide proof within a given time period (approximately one week). Failure to do so, within the given time period will disqualify applicant from receiving claimed priority. Exhibit 2 4 AMICATION FOR INCLUSIONARY UNT PLEASE PROVIDE THE FOLLOWING INFORMATION: (Please type or print clearly) To apply for an Inclusionary Unit, you must list all members of your household: No. in household 1. Name: Current Address: City /Zip: Employer. Work Address: City /Zip: 2. Name: Employer: Work Address: City /Zip: 3. Name: Employer: Work Address: City/Zip: (r"u need adMonal space pAme attach a sheet of paper). Social Sec. # Age: Home Phone #: Work Phone #: Social Sec. # Age: _ Work Phone #: Social Sec. # Age: Work Phone #: Tote) Annual Household Income: $ UM 36 of 1040; tine 21 of 1040A; Lie 4 of 1040EZ) To assist us with the process, please check the statement below which applies to at lease one adult that will own the home. Are you over 62 years of age? Yes NO El Are you permanently disabled? El Currently work in Dublin and have continuously for the past 6 months? [] And if so, are you a Public Service employee working in Dublin? [l Currently live in Dublin and have continuously for the past year or longer? [] Have an immediate family who is a Dublin resident & has continuously lived in Dublin the past year? 7 El Must move because housing is to be demolished or converted to condo? 7 7 I/We certify that the information provided in this application is true and correct. Signature /Date Signature /Date Development: G:\PA# 2001 \01 -038 Inclusionary ZOAUnclusionary Guidelines\APPLICATION FOR INCLUSIONARY UNIT- Revised.doc EXHIBIT 3 DEVELOPER LETTERHEAD Date Dear Interested Applicant: You have completed and returned an Application for Inclusionary Unit as the first step to qualify to purchase an Inclusionary or Below Market Rate (BMR) condominium in Your application indicates that you are claiming a City of Dublin Selection Preference /s. We are writing to verify that/those preference /s and allow for your application to continue for further processing. Please provide us with the checked material no later than , 5PM. FAILURE TO PROVIDE THE REQUESTED DOCUMENTS BY THIS DEADLINE WILL NOT DISQUALIFY YOU FROM THE BUYER SELECTION PROCESS, BUT YOU WILL NOT RECEIVE THE POINTS ASSOCIATED WITH THE PREFERENCE CATEGORY/IES YOU SELECTED. If you have any questions please feel free to contact us at (925) XXX-) =. You indicated that you or an adult member who will own and occupy the home: Are 62 years of age or older Please bring a copy of a photo identification card indicating birth date. You may use • A valid California (or other state with photo id) drivers license • A valid California (or other state with photo id) identification card • A valid Passport, in English • Other valid and official photo identification document Are permanently disabled Please provide us with one of the following: ■ A note from your doctor confirming that one adult applicant is permanently disabled ■ Other verification from a State Agency establishing permanent disability status ■ Verification of receipt of SSI EXHIBIT 4 INCLUSIONARY ORDINANCE PREFERENCE POINT VERIFICATION LETTER Project: Page 2 Currently work in Dublin and have continuously for the past six (6) months. Please bring a copy of both, a first and most recent paycheck stub establishing length of employment Letter from Employer, on company letterhead, indicating continuous employment for the past six month. W2 for the last two years * *If you are a newly hired teacher to be working in Dublin, please bring in a copy of your employment contract, to waive the 6 month employment requirement* Are a Public Service Employee working in Dublin In addition to the above needed proof of employment please provide a letter from your employer indicating your job title and a telephone contact, of an individual who would be authorized to verify your job title * * *Newly hired teachers in Dublin to bring in a copy of employment contract* Currently live in Dublin and have continuously for the past year Please bring us a copy of one of the following: • Copy of two utility bills (PG &E or water), one from at least one year ago and the most recent utility bill both showing the applicant with a Dublin address • A copy of a current apartment or house lease for a residence in Dublin, indicating when you moved in to the apartment or house, and proof that you are still residing there. Have an immediate family who is a Dublin resident and has continuously lived in Dublin the past year Please bring us a copy of one of the following: • Copy of birth certificate for self and immediate family member (mother, father, brother, sister, child, grandparent or grandchild) • Other legal document establishing relation Must move because housing is to be demolished or converted to condo Please bring us a copy of one of the following: • Letter from Apartment owner requiring vacating of unit Thank you for working with us on this process. We request that you respond as quick as possible and make sure that the requested documents are at our office by the date indicated on the first page so that you may take advantage of the preference category/ies that apply to your situation. Sincerely, Josephine Smith Developer TABULATION OF MAXIMUM SALE PRICE FOR BMR UNITS Address of Unit Name of household Soc. Sec. # head of hshold 60/2002 I *AC11li at 35% w/ net deductions Household size Max. allowable annual income Annual household income Gross monthly income $ - % paid toward housing 35% Gross monthly housing expense $ - Minus insurance (Interior home ins_) $ - Prop. Tax Homeowners Assoc dues Net mo hsg. expense - HOA $ - PMI . Max monthly housing expense $ - Interest Rate Term 30 Maximum Loan $0.00 Downpayment required (5 %) $0.00 TOTAL SALES PRICE ALLOWED $0.00 60/2002 I *AC11li State Income Limits for 2005 Page 1 of 7 Ev"IBIT Number of Persons in Household County Income Category 1 2 3 4 5 6 7 8 Alameda County Extremely Low 17,400 19,850 22,350 24,850 26,850 28,800 30,800 32,800 Area Median Income: Very Low Income 29,000 33,100 37,250 41,400 44,700 48,000 51,350 54,650 82,200 Lower Income 46,350 53,000 59,600 66,250 71,550 76,850 82,150 87,450 Median Income 57,550 65,750 74,000 82,200 88,800 95,350 101,950 108,500 Moderate Income 69,050 78,900 88,800 98,650 106,550 114,450 122,350 130,200 Alpine County Extremely Low 13,100 15,000 16,850 18,700 20,200 21,700 23,200 24,700 Area Median Income: Very Low Income 21,850 24,950 28,100 31,200 33,700 36,200 38,700 41,200 62,400 Lower Income 34,950 39,950 44,950 49,900 53,900 57,900 61,900 65,900 Median income 43,700 49,900 56,150 62,400 67,400 72,400 77,400 82,350 Moderate Income 52,450 59,900 67,400 74,900 80,900 86,900 92,900 98,850 Amador County Extremely Low 12,850 14,700 16,500 18,350 19,850 21,300 22,750 24,250 Area Median Income: Very Low Income 21,400 24,500 27,550 30,600 33,050 35,500 37,950 40,400 61,200 Lower Income 34,250 39,150 44,050 48,950 52,900 56,800 60,700 64,650 Median Income 42,850 48,950 55,100 61,200 66,100 71,000 75,900 80,800 Moderate Income 51,400 58,750 66,100 73,450 79,350 85,200 91,100 96,950 Butte County Extremely Low 10,300 11,800 13,250 14,750 15,900 17,100 18,250 19,450 Area Median Income: Very Low Income 17,200 19,650 22,100 24,550 26,500 28,500 30,450 32,400 49,100 Lower Income 27,500 31,400 35,350 39,300 42,400 45,550 48,700 51,850 Median Income 34,350 39,300 44,200 49,100 53,050 56,950 60,900 64,800 Moderate Income 41,250 47,100 53,000 58,900 63,600 68,300 73,050 77,750 Calaveras County Extremely Low 12,200 13,900 15,650 17,400 18,800 20,200 21,600 22,950 Area Median Income: Very Low Income 20,300 23,200 26,100 29,000 31,300 33,650 35,950 38;300 58,000 Lower Income 32,500 37,100 41,750 46,400 50,100 53,800 57,550 61,250 Median Income 40,600 46,400 52,200 58,000 62,650 67,300 71,900 76,550 Moderate Income 48,700 55,700 62,650 69,600 75,150 80,750 86,300 91,850 Colusa County Extremely Low 10,300 11,800 13,250 14,750 15,900 17,100 18,250 19,450 Area Median Income: Very Low Income 17,200 19,650 22,100 24,550 26,500 28,500 30,450 32,400 49,100 Lower Income 27,500 31,400 35,350 39,300 42,400 45,550 48,700 51,850 Median Income 34,350 39,300 44,200 49,100 53,050 56,950 60,900 64,800 Moderate Income 41,250 47,100 53,000 58,900 63,600 68,300 73,050 77,750 Contra Costa County Extremely Low 17,400 19,850 22,350 24,850 26,850 28,800 30,800 32,800 Area Median Income: Very Low Income 29,000 33,100 37,250 41,400 44,700 48,000 51,350 54,650 82,200 Lower Income 46,350 53,000 59,600 66,250 71,550 76,850 82,150 87,450 Median Income 57,550 65,750 74,000 82,200 88,800 95,350 101,950 108,500 Moderate Income 69,050 78,900 88,800 98,650 106,550 114,450 122,350 130,200 Del Norte County Extremely Low 10,300 11,800 13,250 14,750 15,900 17,100 18,250 19,450 Area Median Income: Very Low Income 17,200 19,650 22,100 24,550 26,500 28,500 30,450 32,400 49,100 Lower Income 27,500 31,400 35,350 39,300 42,400 45,550 48,700 51,850 Median Income 34,350 39,300 44,200 49,100 53,050 56,950 60,900 64,800 Moderate Income 41,250 47,100 53,000 58,900 63,600 68,300 73,050 77,750 El Dorado County Extremely Low 13,450 15,400 17,300 19,250 20,750 22,300 23,850 25,400 Area Median Income: Very Low Income 22,450 25,650 28,850 32,050 34,600 37,200 39,750 42,300 64,100 Lower Income 35,900 41,000 46,150 51,300 55,400 59,500 63,600 67,700 Median-income 44,850 51,300 57,700 64,100 69,250 74,350 79,500 84,600 Moderate Income 53,850 61,500 69,200 76,900 83,050 89,200 95,350 101,500 Ev"IBIT HOUSING AUTHORITY OF THE COUTY OF A AMFDA LrIU Y ALLOWANCES EFFCCT'IVE 10/1/03 A=clied Homes - Apartments, Condos, Townhomes Utility or Serivice OBR 1 BR 2 BR 3 BR 4 BR 5 BR Gas Heating $8 $11 $12 $15 $17 $17 Electric Heating $9 $11 $16 $18 $20 $25 Gas Cooking $2 $2 $2 $2 $2 $2 Electric Cooking $2 $3 $3 $4 $4 $4 Gas Water Heating $5 $7 $10 $13 $15 $16 Electric Water Heating $11 $16 $25 $31 $32 $32 Water $9 $11 $14 $18 $25 $29 Trash $17 $17 $17 $27 $27 $44 Stove $2 $2 $2 $2 $2 $2 Refrigerator $2 $2 $2 $2 $2 $2 Other Electric $14 $20 $27 $34 $39 $43 Single Family Homes Utility or Serivice OBR 1 BR 2 BR 3 BR 4 BR 5 BR Gas Heating $10 $14 $18 $21 $25 $30 Electric Heating $10 $14 $25 $29 $48 $58 Gas Cooking $2 $2 $2 $2 $2 $2 Electric Cooking $2 $3 $3 $4 $4 $4 Gas Water Heating $5 $7 $10 $13 $15 $16 Electric Water Heating $11 $16 $25 $31 $32 $32 Water $9 $11 $14 $18 $25 $29 Trash $17 $17 $17 $27 $27 $44 Stove $2 $2 $2 $2 $2 $2 Refrigerator $2 $2 $2 $2 $2 .$2 Other Electric $14 $20 $27 $34 $39 $43 EXHIBIT 7 BELOW MARKET RATE UNIT MONITORING SHEET Any vacanc during previous Ethnicity of No of people Total house Documentation source No. of year? Yesino household* In household hold income of household Income Apartment Number bedrooms Current rent of unit Pis. List dates # # Only required if funding source requires (i.e. HUD) I I I EXHIBIT 8 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF DUBLIN, 100 Civic Plaza Dublin, California 94568 Attn: City Clerk To be recorded without fee. (Gov. Code, §§ 6103 and 27383.) Owner: (Space Above This Line For Recorder's Use Only) RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE Property Address: Dublin, California 94568 Name of Development: This RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE ( "Agreement') is entered into by and between the CITY OF DUBLIN, a California municipal corporation (the "City ") and ( "Owner") regarding certain improved real property which is more particularly described in Exhibit A attached hereto and incorporated herein and commonly known as as of , 20— ( "Effective Date ") referred to as the 'Parties." _, Dublin, CA, 94568 _ (the "Property") effective City and Owner are hereinafter collectively RECITALS A. The City has Inclusionary Zoning Regulations (Dublin Municipal Code Chapter 8.68) (the "Regulations ") that require developers of rental and ownership housing to construct. within their projects units that are affordable to very low -, low -, and moderate - income households ( "the Program "). To further its goal of creating affordable home ownership opportunities for very low -, low -, and moderate - income persons and families, the City has initiated a program for the sale of some homes at a price below their market rate (`Program "). Pursuant to the Program, developers of housing developments agree to set aside a certain number of units for purchase or rent, as applicable, by very low -, low -, and moderate - income persons and families, as defined herein. 125106 -8 —1— Form Revised May 27, 2005 Exhibit 4 B. Owner is an eligible [very low -, low- or moderate- ]income purchaser under the Program, intends to live in the Property as an owner occupant, and agrees to maintain the Property as Owner's principal residence. C. In order to maintain and preserve the Property as housing affordable to eligible [very low -, low -, or moderate - ] income purchasers, it is necessary to restrict the use and resale of the Property through imposition of the occupancy and resale restrictions set forth herein. These restrictions are intended to prevent initial and subsequent purchasers from using the Property for purposes incompatible with the Program and realizing unwarranted gains from sales of the Property at unrestricted prices. The terms and conditions of this Agreement are intended to provide the necessary occupancy and resale restrictions to ensure that the Property is used, maintained, and preserved as housing affordable to eligible [very low -, low -, or moderate - ]income purchasers. To further serve the purposes of the Program, it is necessary that the City be granted an option to purchase the property so that the property may be resold by the City to an eligible household. D. The Property constitutes a valuable community resource by providing decent, safe, and sanitary housing to persons and families of [very low, low, or moderate] income who otherwise would be unable to afford such housing. To protect and preserve this resource it is necessary, proper, and in the public interest for the City to administer occupancy and resale controls consistent with the Program and the Regulations by means of this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the substantial economic benefits inuring to Owner and the public purposes to be achieved under the Program, Owner and City hereby agree as follows: 1. Definitions. a. "Affordable Unit Cost" shall be as defined in the Regulations, as follows: "Owner- occupied units are deemed affordable units if the sales price results in annual housing expenses that do not exceed 35% of income level for very-low -, low -, and moderate - income households, adjusted for household size and as defined below. For a very low- income owner occupied units, the unit shall be deemed an affordable unit if the sales price results in annual housing expenses that do not exceed 35% of the maximum in the very low- income level, adjusted for household size and as defined below." b. "Area [Very Low, Low, or Moderate] Income for Alameda County" means those income and eligibility levels determined, updated, and published each year by the California Department of Housing and Community Development, based on Alameda County median income levels, adjusted for household size. c. "Persons and families of [very low, low, or moderate] income" means persons and families whose income does not exceed [fifty percent (50 %); eighty percent 125106 -8 —2— Form Revised May 27, 2005 (80 %); or one hundred twenty percent (120 %)j of the Area Median Income for Alameda County, as adjusted for household size. d. Persons and families meeting the definition set forth in Paragraph 1(b) above shall be referred to as "Eligible Households." 2. Program Requirements. a. Affordability Restrictions. Owner hereby covenants and agrees that during the term of this Agreement all of the requirements and restrictions of this Agreement shall apply, and the Property shall be sold or otherwise transferred only pursuant to the terms and conditions of this Agreement and only to (i) Eligible Households at a price not to exceed the Adjusted Resale Price, as defined in Paragraph 5, (ii) the City pursuant to Paragraph 3, or (iii) a permitted transferee pursuant to Paragraph 9. b. Disclosure. DURING THE TERM OF THIS AGREEMENT THERE SHALL BE NO SALE OR OTHER TRANSFER OF THE PROPERTY WITHOUT THE WRITTEN CERTIFICATION BY THE CITY THAT THE TRANSFEREE QUALIFIES AS AN ELIGIBLE HOUSEHOLD AND THAT THE PROPERTY IS BEING TRANSFERRED AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE, WHICH IS CAPPED AT THE AFFORDABLE UNIT COST AS DEFINED IN PARAGRAPH 1 a. ANY SALE OR OTHER TRANSFER OF THE PROPERTY IN VIOLATION OF THIS COVENANT SHALL BE VOIDABLE BY THE CITY. c. Principal Residence Requirement. OWNER COVENANTS AND AGREES THAT HE /SHE/THEY SHALL OCCUPY THE PROPERTY AS HIS /HER/THEIR PRINCIPAL RESIDENCE FOR THE DURATION OF HIS /HER/THEIR OWNERSHIP AND SHALL NOT RENT OR LEASE THE PROPERTY OR PORTION THEREOF DURING THE TERM OF THIS AGREEMENT WITHOUT PRIOR WRITTEN APPROVAL OF CITY. Without limiting the generality of the foregoing, any absence from the Property by Owner for a period of ninety (90) or more days shall be deemed an abandonment of the Property as the principal residence of Owner in violation of the conditions of this Paragraph. Upon request by the City made from time to time, the Owner of the Property shall submit an affidavit to the City certifying that the Property is the Owner's principal residence and provide such documents and other evidence as may be requested to verify Owner's compliance with this requirement. Abandonment of the Property shall constitute an Option Event (as defined in Paragraph 3.c below) and shall entitle the City to exercise its Option to purchase the Property. 3. Option to Purchase. a. Grant of Option to Purchase. Owner hereby grants to the City an option ( "Option ") to purchase all of Owner's right, title and interest in and to the Property upon the occurrence of an Option Event (defined in Paragraph 3.c below), subject to the terms and conditions contained herein. b. Assignment of the Option. The City may assign the Option to another government entity, a non - profit affordable housing provider or a person or family that qualifies as an Eligible Household. The City's assignment of the Option shall not extend 125106 -8 —3— Form Revised May 27, 2005 any time limits contained herein with respect to the exercise period of the Option or the period within which the Property must be purchased. c. Events Giving Rise to Right to Exercise Option. The City shall have the right to exercise its Option upon the occurrence of any of the following events (each, an "Option Event "): Receipt of a Notice of Intent to Transfer (defined in Paragraph 3.d.i below); ii. Any actual, attempted or pending sale, conveyance, transfer, lease or other attempted disposition of the Property or of any estate or interest therein, except as provided in Paragraph 10 below; iii. Any actual, attempted or pending encumbrance of the Property, including without limitation by way of mortgage or deed of trust, or by judgment, mechanics, tax or other lien, except as provided in Paragraph 9 below; iv. Recordation of a notice of default and /or notice of sale pursuant to California Civil Code section 2924 (or successor provisions) under any deed of trust or mortgage with a power of sale encumbering the Property; V. Commencement of a judicial foreclosure proceeding regarding the Property; Vi. Execution by Owner of any deed in lieu of foreclosure transferring ownership of the Property; Vii. Commencement of a proceeding or action in bankruptcy, whether voluntary or involuntary, pursuant to Title 11 of the United States Code or other bankruptcy statute, or any other insolvency, reorganization, arrangement, assignment for the benefit of creditors, receivership or trusteeship, concerning the Owner; or Viii. Any violation by Owner of any provision of this Agreement including, without limitation, the conditions set forth in Paragraph 2 above. d. Method of Exercising the Option. L Notice of Intent to Transfer. If Owner desires to sell, convey, transfer (other than pursuant to Paragraph 9), lease, encumber (other than pursuant to Paragraph 10) or otherwise dispose of the Property or of any estate or interest therein, no less than 45 days prior to the date of such proposed sale, conveyance, transfer, lease, encumbrance or disposition, Owner shall notify City in writing to that effect (the "Notice of Intent to Transfer'). The Notice of Intent to Transfer shall be in substantially the form attached hereto as Exhibit B. In the case of a proposed sale of the Property to an identified prospective purchaser, the Owner shall submit to the City, together with the Notice of Intent to Transfer, a copy of the prospective purchaser's income certification, a list of all assets owned by the prospective purchaser, and other financial information reasonably requested by City, in a form approved by the City, along with the income certification to be provided to any lender making a loan to the prospective purchaser. The City may require 125106 -8 —4— Form Revised May 27, 2005 documentation evidencing and supporting the income and other financial information contained in the certifications. ii. Notice of Exercise. Upon the occurrence of any Option Event, the City may exercise its Option by delivering notice, pursuant to Paragraph 16 and within the time period specified in Paragraph 3(d)(iv), to Owner of City's intent to exercise such Option pursuant to the terms of this Agreement ( "Notice of Exercise "). The Notice of Exercise may be in the form attached hereto and incorporated herein as Exhibit C, or in such other form as the City may from time to time adopt. If the Option Event relates to the potential foreclosure of a mortgage under Paragraphs 3.c.iv, 3.c.v, or 3.c.vi, then the City shall also deliver the Notice of Exercise to the mortgagee or beneficiary under such mortgage, at such mortgagee's or beneficiary's address of record in the Office of the Recorder of Alameda County. iii. Notice of Consent to Transfer. If the City does not exercise the Option, it may give its consent: to the occurrence of the Option Event ( "Consent to Transfer "). If the Option Event involves a proposed sale of the Property to a prospective purchaser, the City's consent shall be conditioned upon (i) the proposed purchaser's qualification as an Eligible Household; (ii) the sale of the Property at a price not to exceed the Adjusted Resale Price; (iii) the proposed purchaser's execution of a Disclosure Statement in the form attached hereto as Exhibit F or such other form or forms as may be promulgated by the City; and (iv) the proposed purchaser's assumption of Owner's duties and obligations under this Agreement pursuant to a written assumption agreement in a form acceptable to City, or execution of an agreement substantially similar to this Agreement, within thirty (30) days after the Consent to Transfer has been delivered to Owner and recordation of such assumption agreement or substitute agreement. SELLER SHALL PAY REAL ESTATE COMMISSIONS, IF ANY, WHICH SHALL NOT TO EXCEED 6% OF THE ACTUAL SALES PRICE. If the prospective purchaser (i) fails to qualify as an Eligible Household, (ii) fails to execute and deliver the Disclosure Statement to the City, or (iii) fails to execute and deliver to the City an assumption agreement or an agreement substantially similar to this Agreement within such thirty (30) day period, then the Consent to Transfer shall expire and the City may, at its option, either notify Owner of the disqualification, thereby entitling Owner to locate another purchaser who qualifies as Eligible Household, or exercise the Option, as if no Consent to Transfer had been delivered. iv. Time Period for Notice. The City shall deliver a Consent to Transfer, if applicable, not later than thirty (30) days after the date that it receives notification of an Option Event. The City shall deliver a Notice of Exercise, if applicable, on or before the date which is the later to occur of the following: (i) thirty (30) days after the date that the City receives notification of an Option Event or (ii) fifteen (15) days after a Consent to Transfer has expired. For purposes of computing commencement of the delivery periods, the City shall be deemed to have received notification of an Option Event on the date of delivery of a Notice of Intent to Transfer, pursuant to the terms of Paragraph 16 below or on the date it actually receives notice of default, summons and complaint or other pleading, or other writing specifically stating that an Option Event has occurred. The City shall have no obligation to deliver a Notice of Exercise or Consent to Transfer, and the applicable time period for exercise of the Option shall not commence to run, unless and until the City has received notification of an Option Event in the manner specified in this subparagraph. If there is a stay or injunction imposed by court order precluding the City 125106 -8 --5— Form Revised May 27, 2005 from delivering its Consent to Transfer or Notice of Exercise within the applicable time period, then the running of such period shall cease until such time as the stay is lifted or the injunction is dissolved and the City has been given written notice thereof, at which time the period for delivery of a Consent to Transfer or Notice of Exercise shall again begin to run. V. Notice of Abandonment. If the City fails to deliver a Notice of Exercise or Consent to Transfer within the time periods set forth in paragraph 3.d.iv, upon request by Owner, the City shall cause to be filed for recordation in the Office of the Recorder of Alameda County, a notice of abandonment, which shall declare that the provisions of the Option are no longer applicable to the Property. Unless Owner requests recordation of notice of abandonment within 30 days of the City's failure to deliver Notice of Exercise or Consent to Transfer, the City shall have no obligation to record the notice of abandonment. Upon recordation of a notice of abandonment, the Option shall terminate and have no further force and effect. If the City fails to record a notice of abandonment, the sole remedy of Owner shall be to obtain a judicial order instructing prompt recordation of such a notice. vi. Right to Reinstatement. If the Option Event is the recordation of a notice of default, then the City shall be deemed to be Owner's successor in interest under California Civil Code Section 2924c (or successor section) solely for purposes of reinstatement of any mortgage on the Property that has led to the recordation of the notice of default. As Owner's deemed successor in interest, the City shall be entitled to pay all amounts of principal, interest, taxes, assessments, homeowners' association fees, insurance premiums, advances, costs, attorneys' fees and expenses required to cure the default. If the City exercises the Option, then any and all amounts paid by the City pursuant to this Paragraph shall be treated as Adjustments to the Base Resale Price for the Property, as defined in Paragraph 5 below. vii. Inspection of Property. After receiving a Notice of Intent to transfer or delivering a Notice of Exercise, the City shall be entitled to inspect the Property one or more times prior to the close of escrow to determine the amount of any Adjustments to the Base Resale Price. Before inspecting the Property, the City shall give Owner not less than forty-eight (48) hours written notice of the date, time and expected duration of the inspection. The inspection shall be conducted between the hours of 9:00 a.m. and 5:00 p.m., Monday through Friday, excluding court holidays, unless the parties mutually agree in writing to another date and time. Owner shall make the Property available for inspection on the date and at the time specified in the City's request for inspection. viii. Escrow. Promptly after delivering a Notice of Exercise, the City shall open an escrow account for its purchase of the Property. Close of escrow shall take place on such date which is the later to occur of the following, (a) sixty (60) days after a Notice of Exercise has been delivered, or (b) ten (10) days after Owner has performed all acts and executed all documents required for close of escrow. Prior to the close of escrow, the City shall deposit into escrow with a title company of City's choosing, the Adjusted Resale Price as defined in Paragraph 5 below and all escrow fees and closing costs to be paid by City. Commissions (not to exceed 6% of the actual sales price), closing costs and title insurance shall be paid pursuant to the custom and practice in the County of Alameda at the time of the opening of escrow, or as may otherwise be provided by mutual 125106 -8 —6— Form Revised May 27, 2005 agreement. Owner agrees to perform all acts and execute all documents reasonably necessary to effectuate the close of escrow and transfer of the Property to the City. ix. Proceeds of Escrow; Removal of Exceptions to Title. Prior to close of escrow, Owner shall cause the removal of all exceptions to title to the Property that were recorded after the Effective Date with the exception of (i) taxes for the fiscal year in which the escrow for this transaction closes, which taxes shall be prorated as between Owner and City as of the date of close of escrow; (ii) quasi - public utility, public alley, public street easements, and rights of way of record, and (iii) such other liens, encumbrances, reservations and restrictions as may be approved in writing by City ( "Permitted Exceptions "). The purchase price deposited into escrow by the City shall be applied first to the payment of any and all Permitted Encumbrances (as defined in Paragraph 10) recorded against the Property in order of lien priority, and thereafter to the payment of Owner's share of escrow fees and closing costs. Any amounts remaining after the purchase price has been so applied, if any, shall be paid to Owner upon the close of escrow. If the purchase price is insufficient to satisfy all liens and encumbrances recorded against the Property, the Owner shall deposit into escrow such additional sums as may be required to remove said liens and encumbrances. In the event that the City agrees to proceed with close of escrow prior to the date that Owner has caused all exceptions to title recorded after the Effective Date other than Permitted Exceptions to be removed, then Owner shall indemnify, defend and hold City harmless from any and all costs expenses or liabilities (including attorneys' fees) incurred or suffered by City that relate to such exceptions and their removal as exceptions to title to the Property. 4. Base Resale Price. Prior to adjustment pursuant to Paragraph 5 the base resale price ( "Base Resale Price ") of the Property shall be the lowest of: a. Median Income. The original price ( "Base Price ") paid by Owner for acquisition of the Property pursuant to the Program, increased (but not decreased) by an amount, if any, equal to the Base Price multiplied by the percentage increase in the median household income ( "Median Income ") for Alameda County published by the California Department of Housing and Community Development, Division of Housing Policy Development, between the Effective Date and the date that the City receives notification of an Option Event; or b. Fair Market Value. The fair market value of the Property as determined by an appraiser selected and paid for by Owner and approved in writing by the City. To compute the Base Resale Price, the City may use the Base Resale Price Worksheet attached as Exhibit D hereto, or such other form as the City may from time to time adopt. 5. Adjustments to Base Resale Price. Subject to the Affordable Unit Cost restriction described in subparagraph (d) below, the Base Resale Price shall be increased or decreased, as applicable, by the following adjustment factors ( "Adjustment "): a. Capital Improvements. An increase for capital improvements made to the Property, but only if the amount of such improvements has been previously approved in 125106 -8 —7— Form Revised May 27, 2005 writing by the City after Owner has submitted original written documentation of the cost to the City for verification. The amount of the Adjustment shall equal the original cost of any such capital improvements. b. Damages. A decrease by the amount necessary to repair damage to the Property, if any, and to place the Property into saleable condition as reasonably determined by the City upon City's exercise of its Option hereunder, including, without limitation, amounts attributed to cleaning; painting; replacing worn carpeting and draperies; making necessary structural, mechanical, electrical and plumbing repairs; and repairing or replacing built -in appliances and fixtures. Owner hereby covenants to, at Owner's expense, maintain the Property in the same condition as in existence on the date of City's Notice of Exercise, reasonable wear and tear excepted. c. Advances by the City. A decrease in an amount equal to the sum of all costs advanced by the City for the payment of mortgages, taxes, assessments, insurance premiums, homeowner's association fees and /or associated late fees, costs, penalties, interest, attorneys' fees, pest inspections, resale inspections and other expenses related to the Property, which Owner has failed to pay or has permitted to become delinquent. d. Adjusted Resale Price Not to Exceed Affordable Unit Cost. The Base Resale Price as adjusted, is hereinafter referred to as the "Adjusted Resale Price." Notwithstanding any other provision hereof to the contrary, in no event shall the Adjusted Resale Price exceed the Affordable Unit Cost. 6. Priority and Effectiveness of the Option. a. Recordation. This Agreement shall be recorded in the Office of the Recorder of the County of Alameda on or as soon as practicable after the Effective Date. The Option shall have priority over any subsequent sale, conveyance, transfer, lease or other disposition or encumbrance of the Property, or of any estate or interest therein, and in the event of exercise of the Option by City, the City shall take the Property subject only to Permitted Exceptions. Except as otherwise provided in Paragraph 7.a, the exercise of the Option by the City at any time and from time to time shall not extinguish the Option or cause a merger of the Option into any estate or other interest in the Property, and the Option shall continue to exist and be effective with respect to the Property against any and all subsequent owners in accordance with the terms and conditions hereof. b. Request for Notice of Default. The City shall file a Request for Notice of Default.for recordation in the Office of the Recorder of the County of Alameda promptly upon execution of this Agreement (see Exhibit E). c. Subordination. The City agrees that in order to assist qualified purchasers to secure purchase money financing for the acquisition of the Property, the City will enter into a subordination agreement with a senior purchase money lender to subordinate this Agreement under such terms as the City and the senior purchase money lender shall negotiate. 7. Survival of Option Upon Transfer. 125106 -8 $ Form Revised May 27, 2005 a. In General. The City's right to exercise the Option shall survive any transfer of the Property by Owner. Each transferee, assignee or purchaser of the Property during the term hereof shall be required to execute an agreement substantially in the form of this Agreement, provided that the term of any such agreement shall be for the duration of the term hereof as of the date of any such transfer, assignment or sale. The Option may be exercised against the Property throughout the term hereof, regardless of whether the Property is owned, possessed or occupied by Owner or any successor, transferee, assignee, heir, executor, or administrator of Owner, regardless of household income (if applicable) including a debtor -in- possession, debtor or trustee pursuant to Title 11 of the United States Code. Notwithstanding the foregoing, the Option shall not survive (i) the sale and transfer of the Property to a third party purchaser pursuant to a judicial or non judicial foreclosure or a deed -in -lieu of foreclosure under a power of sale contained in a mortgage or deed of trust held by an institutional lender, or (ii) the recording of an instrument conveying Owner's interest in the Property to the City, or its assignee, provided the conveyance is in accordance with the terms of this Agreement. b. HUD Insured Mortgage. If Owner has acquired the Property by a mortgage insured by the Secretary of the United States Department of Housing and Urban Development, and a notice of default has been recorded pursuant to California Civil Code Section 2924 (or successor provisions), then this Option shall automatically terminate if title to the Property is transferred by foreclosure or deed -in -lieu of foreclosure, or if the insured mortgage is assigned to the Secretary. 8. Voidable Transfers. As long as the Option has not been abandoned pursuant to Paragraph 3.d.v, any actual or attempted sale, conveyance, transfer or other disposition of the Property, or of any estate or interest therein, in violation of the terms and conditions of this Agreement, shall be voidable at the election of the City. 9. Permitted Transfers. Provided that the transferee assumes, within 30 days of a written request by the City, all of Owner's duties and obligations under this Agreement pursuant to a written assumption agreement in a form acceptable to City, or at City's election, execution of an agreement substantially similar to this Agreement, the following transfers ( "Permitted Transfers ") of title to the Property, or of any estate or interest therein, shall not be subject to the City's prior approval, shall not trigger the exercise of the Option, and shall not be considered Option Events: (a) a good -faith transfer by gift, devise or inheritance to Owner's spouse or issue; (b) a taking of title by a surviving joint tenant; (c) a court- ordered transfer of title to a spouse as part of a divorce or dissolution proceeding; (d) a transfer by Owner into an inter vivos trust in which the Owner is a beneficiary and the Owner continues to occupy the property as his /her primary residence; (e) an acquisition of title, or of any interest therein, in conjunction with marriage; or (f) any good faith transfer to an Eligible Household. Notwithstanding any Permitted Transfer, the Option shall remain effective with respect to the Property for the duration of the term hereof. 10. Permitted Encumbrances and Refinancing. This Option shall not become exercisable as the result of Owner's encumbering the Property for the purpose of securing financing to purchase the Property pursuant to the Program, to refinance indebtedness incurred to purchase the Property pursuant to the Program, or to make necessary repairs to the Property in an amount approved by City pursuant to Paragraph 5a ( "Permitted Encumbrances "). The maximum aggregate amount of such encumbrances outstanding at 125106 -8 -9- Form Revised May 27, 2005 any time (the "Permitted Encumbrance Amount ") shall not exceed an amount equal to ninety percent (90 %) of the Base Resale Price calculated as provided in Paragraph 4. The Permitted Encumbrance Amount shall be calculated as if the City had received notification of an Option Event on the earlier of (a) the date on which the deed of trust or mortgage securing the indebtedness is filed for record in the Office of the Recorder of the County of Alameda, or (b) the date the City receives Notice of Intent to Transfer pursuant to Paragraph 3.d.i above. Owner hereby covenants and agrees that he /she /they shall use his /her /their best efforts to ensure that any deed of trust or other agreement encumbering the property shall include provisions providing for notice to be delivered to City of any default thereunder and for City's right to cure such default at City's election. 11. Obligation of Owner After Option Abandonment. If the City records a notice of abandonment of the Option, then the Property may be sold by Owner to a third party without restriction as to price; however, upon such sale, Owner shall pay to City an amount ( "City's Share ") equal to twenty-five percent (25 %) of the difference between (a) the actual sales price net of reasonable and customary real estate commissions paid (such commissions not to exceed six percent (6 %) of the actual sales price), and (b) the Adjusted Resale Price. The City's Share shall be paid to the City concurrently with close of escrow on the sale of the Property, or upon receipt by Owner of the sale price for the Property , whichever shall first occur. 12. Limits on Liability. In no event shall the City become liable or obligated in any manner to Owner by reason of the assignment of this Agreement or the Option, nor shall City be in any way liable or obligated to Owner for any failure of the City's assignee to consummate a purchase of the Property or to comply with the terms of this Agreement or the Option, or any escrow instructions or agreement for the purchase of the Property. 13. Insurance Proceeds and Condemnation Award. In the event the Property is destroyed and insurance proceeds are distributed to Owner instead of being used to rebuild the Property, or, in the event of condemnation, if the proceeds thereof are distributed to Owner, any surplus of proceeds remaining after payment of the senior liens and encumbrances on the Property shall be distributed as follows: that portion of the surplus up to, but not to exceed, the net amount Owner would have received pursuant to Paragraph 3.d.ix had the City exercised its Option on the date of the destruction of condemnation valuation date shall be distributed to Owner, and the balance of such surplus, if any, shall be distributed to the City. 14. Effective Date. The rights and obligations of the City and Owner set forth in this Agreement shall be effective as of the Effective Date.. 15. Term of Agreement and Option. The restrictions contained herein and the City's option to purchase the Property shall continue for a period of fifty -five (55) years commencing on the Effective Date. Notwithstanding anything to the contrary in the foregoing, the Agreement shall remain in effect until the first transfer on or after the termination of the restrictions and option to purchase pursuant to this paragraph. Upon such sale, Owner shall pay to City an amount ( "City's Share ") equal to twenty -five percent (25 %) of the difference between (a) the actual sales price net of reasonable and customary real estate commissions paid (such commissions not to exceed six percent (6 %) of the 125105 -8 —10— Form Revised May 27, 2005 actual sales price), and (b) the Adjusted Resale Price on the date of the termination of the restrictions and option to purchase pursuant to this paragraph. The City's Share shall be paid to the City concurrently with close of escrow on the sale of the Property, or upon receipt by Owner of the sale price for the Property, whichever shall first occur. Following completion of a sale in compliance with this provision, this Agreement shall terminate. 16. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Party in accordance with this Section. All such notices shall be sent by: (a) personal delivery, in which case notice shall be deemed delivered upon receipt; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; (c) nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or (d) facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. City: City of Dublin, 100 Civic Plaza Dublin, California 94568 Attn: City Manager Owner: At the address of the Property 17. Remedies Upon Breach. a. Specific Performance. Owner acknowledges that any breach in the performance of its obligations under this Agreement shall cause irreparable harm to the City. Owner agrees that the City is entitled to equitable relief in the form of specific performance upon its exercise of the Option, and that an award of damages shall not be adequate to compensate the City for Owner's failure to perform according to the terms of this Agreement. b. Other Remedies. City shall have all of the remedies provided for at law or equity. 18. General Provisions. a. Attorneys' Fees. If either party initiates legal proceedings to interpret or enforce its rights under this Agreement, the prevailing party in such action shall be entitled 125106 -8 —11— Form Revised May 27, 2005 to an award of reasonable attorneys' fees and costs in additions to any other recovery to which it is entitled under this Agreement. b. No Joint Venture; No Third -Party Beneficiary. No joint venture or other partnership exists or is created between the Parties by virtue of this Agreement. Except as expressly stated herein, this Agreement does not benefit any third party. c. Successors; Assignment. This Agreement shall inure to the benefit of and shall be binding upon the Parties to this Agreement and their respective heirs, executors, administrators, successors and assigns. City shall have the right to assign all of its rights and obligations under this Agreement without the consent of Owner. d. Entire Agreement; Amendment. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof, and supersedes any and all other prior negotiations, correspondence, understandings and agreements with respect thereto. There are no representations, promises, agreements or other understandings between the Parties relating to the subject matter of this Agreement that are not expressed herein. This Agreement may be modified only by an instrument in writing executed by the Parties or their respective successors in interest. e. Survival; No Merger. All of the terms, provisions, representations, warranties and covenants of the Parties under this Agreement shall survive the close of escrow of any sale of the Property and shall not be merged in any deed transferring the Property. f. Authority And Execution. Each Party represents and warrants that it has full power and authority to enter into this Agreement and to undertake all of its obligations hereunder, that each person executing this Agreement on its behalf is duly and validly authorized to do so. g. Severability. The invalidity or unenforceability of any term or provision of this Agreement shall not impair or affect the remainder of this Agreement, and the remaining terms and provisions hereof shall not be invalidated but shall remain in full force and effect. h. Waiver; Modification. No waiver or modification of this Agreement or any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the Party to be charged therewith. No evidence or any waiver or modification shall be offered or received in evidence in any proceeding, arbitration, or litigation between the Parties arising out of or affecting this Agreement or the rights or obligations of any Party hereunder, unless such waiver or modification is in writing and duly executed as aforesaid. The provisions of this section may not be waived except as herein set forth. A waiver or breach of any covenant, condition or provision of this Agreement shall not be deemed a waiver of any other covenant, condition or provision hereof. L Construction. The section headings and captions used in this Agreement are for convenience of reference only and shall not modify, define, limit or amplify any of the terms or provisions hereof. This Agreement shall not be construed as if it had been prepared by one of the Parties, but rather as if both Parties have prepared it. 125106 -8 —12— Form Revised May 27, 2005 j. Governing Law. This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of California. k. Time of the Essence. Time is of the essence in this Agreement as to each provision in which time is an element of performance. I. Further Assurances. Each Party will, upon reasonable request of the other Party, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments and documents as may be reasonably necessary in order to fulfill the intents and purposes of this Agreement. M. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above. OWNER(S): CITY: CITY OF DUBLIN 0 Its: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney 125105 -8 —13— Form Revised May 27, 2005 STATE OF CALIFORNIA ) COUNTY OF ) On before me, , a Notary Public in and for said county and state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) STATE OF CALIFORNIA ) COUNTY OF ) On before me, _, a Notary Public in and for said county and state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 125106 -8 —1— Form Revised May 27, 2005 STATE OF CALIFORNIA ) COUNTY OF ) On before me, _, a Notary Public in and for said county and state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 125106 -e —1— Form Revised May 27, 2005 CERTIFICATE OF ACCEPTANCE (Pursuant to Government Code §27281) This is to certify that the interest in real property conveyed by the Resale Restriction Agreement and Option to Purchase dated — from to the City of Dublin, a California municipal corporation, is hereby accepted by the undersigned office or agent on behalf of the City of Dublin pursuant to authority conferred by the Resolution No. dated and the grantee consents to recordation thereof by its duly authorized officer. Dated: By: Attest: City Clerk V 125106 -8 —1— Form Revised May 27, 2005 EXHIBIT A Legal Description [To be inserted] 125105 -8 —1— Form Revised May 27, 2005 EXHIBIT B FORM: NOTICE OF INTENT TO TRANSFER VIA CERTIFIED MAIL - RETURN RECEIPT REQUESTED To: City of Dublin 100 Civic Center Dublin, California Attn: City Manager Date: Re: Notice of Intent to Transfer Pursuant to the terms of the Resale Restriction Agreement and Option to Purchase, dated , the undersigned Owner(s), hereby give(s) notice of his /her /their intent to transfer the property located at Dublin, California (the "Property "). Owner may be contacted at the Property or at the following address: Owner's daytime telephone number is (_) [If applicable: The proposed transfer of the Property is to the following person(s): Name: Address: Telephone: (_ —) The proposed transfer is (check one): ❑ Sale ❑ Other Specify: Owner(s) signature(s): 125106 -8 —1— Form Revised May 27, 2005 EXHIBIT C FORM: NOTICE OF EXERCISE Date: To: Owner or Transferee Address Re: Notice of Exercise The City of Dublin ( "City ") hereby gives notice that it is exercising its option to purchase the real property located at , Dublin, California. The option has been granted to the City pursuant to the Resale Restriction Agreement and Option to Purchase between Owner and the City dated and recorded on _ as Instrument No. [The City has assigned its option to purchase the real property to ] An escrow for the purchase will be opened with the First American Title Company. City of Dublin By: 125106 -8 —1— Form Revised May 27, 2005 EXHIBIT D INCLUSIONARY ZONING HOMEOWNERSHIP PROGRAM INCLUSIONARY ZONING BASE RESALE PRICE WORKSHEET Date: Owner: Address: Purchase Price: Date of Purchase: Years Owned: years CALCULATION BASED ON INCREASE IN MEDIAN INCOME * ** Present Median Income: $ Family of four, County of Alameda (at time of sale of unit) Original Median Income: $ Family of four, County of Alameda (at time of purchase of unit) Amount of Increase: Family of four, County of Alameda (Present median income minus original median income) Increase in Price: Effective Date: Effective Date: x x = Method #1 Resale Price: + _ Based on the above, the base resale price as of this date, , is: By: 125106 -8 =1— Form Revised May 27, 2005 EXHIBIT E REQUEST FOR NOTICE OF DEFAULT Order No. Escrow No. Loan No. WHEN RECORDED MAIL TO: CITY OF DUBLIN Dublin, California Attn: (Space Above This Line For Recorder's Use Only) REQUEST FOR NOTICE UNDER SECTION 2924b CIVIL CODE In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No. _ on , , in the Official Records of Alameda County, California, and describing land therein as: executed by Dublin, California __, Attn: By: , as Trustor, in which is named as Beneficiary, and as Trustee, be mailed to the City of Dublin, NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORED. STATE OF CALIFORNIA COUNTY OF ) On before me, _ a Notary Public in and for said county and state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (This area for official notarial seal) 125106 -8 —1— Form Revised May 27, 2005 EXHIBIT F DISCLOSURE STATEMENT THERE ARE RESTRICTIONS ON THE SALE OF THE PROPERTY YOU ARE BUYING. EXCEPT FOR A TRANSFER TO THE CITY FOLLOWING CITY'S EXERCISE OF ITS OPTION TO PURCHASE, THIS PROPERTY MAY ONLY BE SOLD TO AN "ELIGIBLE HOUSEHOLD" AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE WHICH IS CAPPED AT AN "AFFORDABLE HOUSING COST." THIS MEANS THAT YOU MAY NOT SELL THE PROPERTY FOR MARKET VALUE TO WHOMEVER YOU LIKE. THESE RESTRICTIONS WILL BE IN EFFECT UNTIL — ANY SALE OF THE PROPERTY IN VIOLATION OF THE RESTRICTIONS, SHALL BE VOIDABLE AT THE ELECTION OF THE CITY. TO DETERMINE WHO AN ELIGIBLE HOUSEHOLD IS, AND WHAT THE ADJUSTED RESALE PRICE AND AFFORDABLE HOUSING COST ARE, YOU SHOULD CONTACT THE OF THE CITY OF DUBLIN. YOU SHOULD ALSO READ THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE RECORDED AGAINST THE PROPERTY. YOU MAY OBTAIN A COPY FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY. I HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS. BUYER BUYER 125106 -8 —1— Form Revised May 27, 2005 RECORDING REQUESTED BY: CITY OF DUBLIN When Recorded Mail To: City Clerk City of Dublin 100 Civic Plaza Dublin, CA 94568 Fee Waived per GC 27383 Space above this line for Recorder's use MEMORANDUM OF AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN- LIEU OF CONSTRUCTING INCLUSIONARY HOUSING UNITS This Memorandum of Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In -Lieu of Constructing Inclusionary Units (this "Memorandum ") is entered into on this _ day of , 2005, by and between the City of Dublin, a Municipal Corporation (hereafter "City ") and Pfeiffer Ranch Investors, Inc., a California corporation ( "the Developer "). 1. Pursuant to the Affordable Housing Agreement for the Construction of Inclusionary Units dated as of _, 200_ by and between City and Developer (the "Agreement "), the Parties have set forth their respective obligations with respect to the provision of affordable units on lands presently owned by Developer known generally as the Pinn Brothers Tralee project and more specifically described in Exhibit 5 -A (the "Property "). These obligations run with the land. 2. Developer and City have executed and recorded this instrument to give notice of the Agreement, and the respective rights and obligations of Developer and City. The unrecorded Affordable Housing Agreement for the Construction of Inclusionary Units is incorporated by reference in its entirety in this Memorandum. 3. This Memorandum shall bind and inure to the benefit of the parties and their respective heirs, successors and assigns, subject however to restrictions set forth in the Agreement regarding assignment. 744- 107v10 [EXECUTION PAGE FOLLOWS] Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee FINAL: September 20, 2005 Exhibit 5 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written. Dated: Attest: City Clerk Dated: all 202S CITY OF DUBLIN : City Manager PFEIFFER RANCH INVESTORS, IN a Califo ' c rporation It By: Alan R. Pinn Its: President ** Applicant's Signature shall be notarized prior to returning signed agreement to the City of Dublin Community Development Department. 744- 107v10 Affordable Housing Agreement PA 02 -062 Pfeiffer Ranch Investors - Tralee FINAL: September 20, 2005 CALIFORNIA ALL- PURPOSE ACKNOWLEDGMENT State of California �( County of ss. _ Q+'I Q' � On /i ZOoS before me, D.� -Pc) f I/� Date / �o Nam Trt19,01 Officer (e.g., "Jane Doe, Notary Public") personally appeared Alj6 1:�c rC . e; ✓2 , Name(s) of Signer(s) ROMEO N. CASTRO _ Commission # 1338296 Z Notary Public - California > Santa Clara County My Comm. Expires Jan 8, 2006 DR personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is /are subscribed to the within instrument and acknowledged to me that he /she /they executed the same in his /her /their authorized capacity(ies), and that by his /her /their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WIT my han o ' I a Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: ❑ Individual Top of thumb here ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney -in -Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: 0 1999 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 - Chatsworth, CA 91313 -2402 - www.nationalnotary.org Prod. No. 5907 Reorder: Call Toll -Free 1 -800- 876 -6827 EXHIBIT 5A LEGAL DESCRIPTION Real property in. the City of Dublin, County of Alameda, State of California, described as follows: Parcel C, Parcel Map No. 756, filed October 8, 1971 in Book 72 of Maps, Page 13, Alameda County Records. Excepting therefrom those portions conveyed to the County of Alameda by Deed recorded June 7, 1972, Reel 3150, Image 608, Official Records; Also excepting_ therefrom all oil, gas, minerals and other hydrocarbon substances from a depth below 500 feet, as reserved in the Deed from Angelo Gaspare to Safeway Holdings, Inc., a Delaware corporation, dated January 30, 1985 and recorded January 31, 1985, Series No. 85021089, Official Records; Also excepting therefrom those portions conveyed to the Qty of Dublin by Deeds recorded November 3, 1986, Series Nos. 86272873 and 86272874, Official Records; Also excepting therefrom that portion set forth In Certificate of Compliance for Lot-'line Adjustment, L -86 -3, recorded January 11, 1991, Series No. 91009054, and conveyed to Angelo Gaspare, by Deed recorded January 11, 1991, Series No. 91009055, Official Records, described as follows: 1 Beginning at the southwest comer of Parcel D on said Map, said point being on the northerly line 1 of Dublin Boulevard; thence north 34' 43' 09" west 150.00 feet to the northwest comer of said Parcel D; thence south 55' 16' 51" west 16.00 feet, thence south 34' 43' 09" east 150.00 feet to a point on the northerly line of Dublin Boulevard; thence along said line north 55'16' 51" east 16.00 feet to the point of beginning. APN: 941 -0205- 009 -08 First American Title AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN -LIEU OF CONSTRUCTING CERTAIN AFFORDABLE OWNERSHIP UNITS PA 02 -062, Dublin Tralee II, LLC, a Delaware limited liability company. (Townhomes) This Agreement ( "Agreement ") is entered into this IV"tday of AGuS -' , 2011 ( "Effective Date ") by and between the City of Dublin, a municipal corporat of n (the "City "), and Dublin Tralee II, LLC, a Delaware limited liability company (the "Developer "). This Agreement amends and restates in its entirety an Affordable Housing Agreement for the Construction of Inclusionary Units, dated October 19, 2005, by and between City and Developer's predecessor -in- interest (the "Original Agreement "), a memorandum of which was recorded in the Official Records of Alameda County on October 21, 2005 as Instrument No. 2005455428. The City and Developer are hereinafter collectively referred to as the "Parties." Recitals 1. Developer is the owner of real property located in the City of Dublin, County of Alameda, State of California generally located at the northwest corner of Dublin Boulevard and Dougherty Road, more particularly described in Exhibit 1 attached hereto and incorporated into this Agreement by reference (the "Property "). 2. Chapter 8.68 of the Dublin Zoning Ordinance ( "Ordinance ") requires developers of residential projects consisting of 20 units or more to set aside 12.5% of the units in the project as Inclusionary Units (defined below) and to execute and record an affordable housing agreement against the project property prior to the issuance of building permits. 3. The City of Dublin adopted the Ordinance pursuant to Strategy I.B. of the City's General Plan Housing Element, recognizing that the cost of new housing is so high that persons with very low -, low- and moderate - incomes are increasingly unable to locate affordable housing in the City. The purpose of the Ordinance is to achieve a balanced community with housing available at all income levels. 4. The original developer of the Property, Bancor Properties, proposed the development of 233 residential units in a residential and retail development on land consisting of the Property and other real property located immediately adjacent thereto. 5. In order to induce the City Council to approve the General Plan Amendment that was necessary to approve the project, Bancor committed to construct all 29 Inclusionary Units required by the Ordinance. On July 20, 2004, the City Council approved, Site Development Review (Reso. No. 143 -04) and a tentative subdivision map (Reso. No.143 —04) (the "Development Approvals ") for the project. Based on 233 units and in accordance with the Ordinance, the Development Approvals for the project require the developer to construct 29 Inclusionary Units (12.5% of 233 = 29). 6. Subsequently, Pfeiffer Ranch Investors, Inc. obtained the project from Bancor. Pfeiffer and the City entered into the Original Agreement specifying the location of the Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 1 -1 Inclusionary Units required to be constructed under the Development Approvals. The Original Agreement requires the construction of 13 Inclusionary Units on the Property (referenced in the Original Agreement as "Phase I "), and 16 Inclusionary Units in the mixed use buildings to be developed on adjacent property (referenced in the Original Agreement as "Phase II "). 7. Developer has now acquired the Property and intends to complete the development of Phase I, hereinafter referred to as the "Project." Another developer, PCCP CS II Tralee Village, LLC ( "PCCP "), has acquired the Phase II property and intends to complete the development of Phase II. 8. City and Developer are entering into this Agreement to govern the 13 Inclusionary Units required by the Development Approvals to be constructed in Phase I. PCCP and City have or will enter into a separate agreement governing the construction of the 16 Inclusionary Units required by the Development Approvals to be constructed in Phase II. 9. Subsequent to the issuance of the Development Approvals, the City amended its Ordinance to (i) eliminate the requirement to construct very low - income ownership units; (ii) change the income ratios for Affordable Ownership Units (defined below) to 40% low - income units and 60% moderate - income units; and (iii) change the method by which sale prices for the Inclusionary Units are calculated. 10. The City and Developer wish to amend and restate the existing Affordable Housing Agreement with respect to the Project, and the Property, to (i) remove the obligation to construct the Inclusionary Units required to be constructed in Phase II; (ii) adjust the income ratios for the Inclusionary Units to make them consistent with the amended Ordinance; and (iii) provide for payment of fees in -lieu of constructing a portion of the Inclusionary Units. 11. The purpose of this Agreement is to set forth the manner by which Developer will satisfy its inclusionary housing obligation for Inclusionary Units in the Project pursuant to the Ordinance. NOW, THEREFORE, in satisfaction of the requirements of Chapter 8.68 of the Dublin Municipal Code, conditions 121 & 122 of CC Resolution No. 143 -04 and in consideration of the City's approval of the Project, Developer and City for themselves and their respective successors and assigns hereby agree as follows: 1. Definitions and Interpretations. The following terms have the meaning set forth in this Section wherever used in this Agreement. "Inclusionary Unit" means a dwelling unit which is reserved for sale at an affordable price as set forth in Subsection 5.a.1. Other terms used in this Agreement shall be defined as set forth in the Ordinance. 2. Developer's Compliance with Affordable Housing Obligation. a. Developer shall provide thirteen (13) Inclusionary Units, allocated as follows: five (5) low- income units and eight (8) moderate - income units; provided, however, Developer Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 1 -2 may pay fees in lieu of constructing five (5) Inclusionary Units, pursuant to Section 3 of this Agreement. b. Prior to Developer's acquisition of the Project, Pfeiffer completed and sold one residential unit and partially completed construction of forty -nine (49) additional residential units. Developer intends to complete the Project in phases, completing the forty -nine (49) partially - constructed units in the first phase, and constructing the remaining fifty -three (53) units in the second phase. The location of the phases is shown on the Diagram of BMR Locations, attached hereto as Exhibit 2. Section 8.68.030 of the Ordinance requires that all Inclusionary Units in a project be constructed concurrently with a project or phase of a project. Developer has proposed, and the City hereby approves, subject to the conditions contained in this paragraph, the phased schedule for the construction of the Inclusionary Units. Low- income Moderate - Total units units income units Phase I(A) 50 1 (3- bdrms) 2 (3- bdrms) Phase I(B) 53 2 (3- bdrms) 3 (3- bdrms) Project Total 103 3. In -Lieu Fees. Developer has elected to satisfy its remaining obligation for five (5) Inclusionary Units in Phase I by paying fees in lieu of constructing said units. Accordingly, Developer shall pay in -lieu fees in the amount of $519,440 (or $103,888 per unit) to fulfill the obligation to construct five (5) of the thirteen (13) Inclusionary Units required by the Ordinance. As required by the Ordinance, the entirety of the fees shall be paid at time of issuance of the first building permit in Phase I(B), and in the amount set forth in the in lieu fee resolution of the Dublin City Council that is in effect at the time of such issuance. Developer acknowledges that such amount may differ from the figure estimated in this Agreement. 4. Inclusionary Unit Design, Location, and Size. a. Exterior Materials and Exterior Architectural Design. The exterior materials and exterior architectural design of the Inclusionary Units shall be consistent with the Project's market -rate units as reviewed and approved through the Site Development Review by the City Council on July 20, 2004; provided, however, that minor changes to unit size may be approved by the Community Development Director through a Site Development Review waiver. b. Unit Location. Consistent with Section 8.68.030 of the Ordinance, the Inclusionary Units shall be dispersed throughout the individual phase in which they are constructed. The Diagram of BMR Locations ( "Diagram "), attached hereto as Exhibit 2, shows the location of the Inclusionary Units as proposed by the Developer, and the City hereby finds that the units as shown are reasonably dispersed through the Project as required by Section 8.68.030.E of the Ordinance. Developer may request that the Community Development Director approve changes to the Diagram that alter the location of the Inclusionary Units. Upon the Community Development Director's approval, which shall be administrative, the revised Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 1 -3 Diagram shall automatically be incorporated into this Agreement as Exhibit 2, replacing the previous Exhibit 2. In approving any revised Diagram, the Community Development Director shall find that the Inclusionary Units are "reasonably dispersed" through the Project, as required by Section 8.68.030 E of the Ordinance. c. Unit Bedrooms and Size. The size of the Inclusionary Units shall be consistent with the Site Development Review approval of the City Council on July 20, 2004, provided however, that minor changes to unit size may be approved by the Community Development Director through a Site Development Review Waiver. As set out in Section 2, the developer proposes to provide: Three (3) low- income Inclusionary Units (3 three- bedroom units); and Five (5) moderate - income Inclusionary Units (5 three - bedroom units). The City hereby finds this breakdown reflects the range of numbers of bedrooms provided in the project as a whole, as required by Section 8.68.030.E of the Ordinance. 5. Ensuring Affordability. a. Sales Price and Marketing. Developer shall sell the Inclusionary Units at sales prices that are affordable to persons with low -, or moderate - incomes, as applicable, as defined in the Ordinance. For moderate - income households, the maximum sales price shall be a price that results in annual housing expenses that do not exceed 35% of 110% of the area median income for Alameda County, adjusted for household size. For low - income households, the maximum sales price shall be a price that results in annual housing expenses that do not exceed 35% of 70% of the area median income for Alameda County, adjusted for household size. Additional detail on the manner of calculating sales prices for the Inclusionary Units is set forth in the City's Guidelines to the Inclusionary Zoning Ordinance Regulations, adopted by the City Council on November 18, 2008 and revised January 2, 2009 ( "Guidelines ") and attached hereto as Exhibit 3. All units shall be marketed and sold consistent with the Ordinance. b. Marketing Plan. Prior to the City's issuance of final approval of an Inclusionary Unit for occupancy in Phase I(A), Developer shall submit a revised Marketing Plan for approval by City, as required by Section 4.10 of the Guidelines. C. Resale Agreements. Developer shall require the initial buyer of each Inclusionary Unit to execute a Resale Restriction and Option to Purchase Agreement in substantially the form attached hereto as Exhibit 4. This Agreement shall serve as the agreement required by Section 8.68.030 of the Ordinance. 6. Term. This Agreement shall be effective until all Inclusionary Units required to be constructed on the Property are constructed, sold, and subjected to resale restrictions approved by the City pursuant to the terms of this Agreement. 7. Memorandum of Agreement to be Recorded. Developer and City shall execute and acknowledge a Memorandum of this Agreement ( "Memorandum ") substantially in the Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 1 -4 form attached hereto as Exhibit 5, and City shall cause the Memorandum to be recorded in the Official Records of Alameda County upon its execution. . 8. Agreement Runs with the Land. All of the provisions, rights, terms, covenants, and obligations contained in this Agreement shall be binding upon the Parties and their respective heirs, successors and assignees, representatives, lessees, and all other persons acquiring the Property, or any portion thereof, or any interest therein, whether by operation of law or in any manner whatsoever. All of the provisions of this Agreement shall be enforceable as equitable servitudes and shall constitute covenants running with the land pursuant to applicable laws, including, but not limited to, Section 1468 of the Civil Code of the State of California. Each covenant to do, or refrain from doing, some act on the Property hereunder (a) is for the benefit of the Property and is a burden upon the Property, (b) runs with the Property, and (c) is binding upon each Party and each successive owner during its ownership of the Property or any portion thereof, and shall be a benefit to and a burden upon each Party and the Property hereunder and each other person succeeding to an interest in the Property. 9. Assip_nments and Transfers. a. Right to Assign. Developer may wish to sell, transfer or assign all or portions of its Property to other developers (each such other developer is referred to as a "Transferee "). In connection with any such sale, transfer or assignment to a Transferee, Developer may sell, transfer or assign to such Transferee any or all rights, interests and obligations of Developer arising hereunder and that pertain to the portion of the Property being sold or transferred, to such Transferee, provided, however, that: no such transfer, sale or assignment of Developer's rights, interests and obligations hereunder shall occur without prior written notice to City and approval by the City Manager, which approval shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, provided written notice is given, no City approval shall be required for any transfer, sale, or assignment of this Agreement, in whole or in part, to any entity or group, a majority interest of which is owned or held under common control with Developer ( "Affiliate ") in connection with the transfer of all or a portion of the Property to such Affiliate, provided that in the event of a partial transfer, Developer has, at the time of the transfer, complied with all obligations of this Agreement or provided evidence satisfactory to the City Manager demonstrating that the remaining obligations have been allocated between Developer and Affiliate. b. Approval and Notice of Sale, Transfer or Assignment. The City Manager shall consider and decide on any transfer, sale or assignment within thirty (30) days after Developer's notice thereof, provided all necessary documents, certifications and other information are provided to the City Manager to enable the City Manager to determine whether the proposed Transferee can perform the Developer's obligations hereunder. Notice of any such approved sale, transfer or assignment (which includes a description of all rights, interests and obligations that have been transferred and those which have been retained by Developer) shall be recorded in the official records of Alameda County, in a form acceptable to the City Manager, concurrently with such sale, transfer or assignment. c. Effect of Sale, Transfer or Assignment. Developer shall be released from any obligations hereunder sold, transferred or assigned to a Transferee pursuant to Section 9.a of this Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 1 -5 Agreement, provided that: a) if required, such sale, transfer or assignment has been approved by the City Manager pursuant to Sections 9.a and 9.b; and b) such obligations are expressly assumed by Transferee and provided that such Transferee shall be subject to all the provisions hereof. 10. Successors. Except as specifically provided in this Agreement, this Agreement shall bind and inure to the benefit of all successors and assigns of the parties and any associates in interest, and their respective directors, officers, agents, servants, and employees, and the successors and assigns of each of them, separately and collectively. Developer shall provide notice to the City of the names and'mailing addresses of any such successors or assigns. 11. Hold Harmless. Developer shall hold City, its elective and appointive boards, commission, officers, agents and employees harmless from and against any or all loss, liability, expense, claim, costs, suits, damages of every kind, nature and description directly or indirectly arising from the performance of the obligations or undertakings of Developer pursuant to this Agreement. Developer shall defend City and its elective and appointive boards, commission, officers, agents and employees from any suits or actions at law or in equity for damages caused or alleged to have been caused, by reason of any of the obligations or undertakings of Developer pursuant to this Agreement. It is further provided that this hold harmless agreement shall apply to all damages and claims for damages for every kind suffered, or alleged to have been suffered, by reason of any of the obligations or undertakings of Developer pursuant to this Agreement. 12. Enforcement. If the Developer defaults in the performance or observance of any covenant, condition, restriction or obligation of the Developer as set forth in this Agreement, and such default remains uncured for a period of thirty (30) days after notice thereof is given by the City (or such longer period as may be necessary to cure the default, provided that Developer commence the cure within the thirty (30) day period and diligently prosecutes the cure to completion), the City may take any one or more of the following steps: a. By specific performance or other action or proceeding at law or in equity, require the Developer to perform its obligations under this Agreement or enjoin any acts or things which may be unlawful or in violation of the rights of the City hereunder. b. Take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants, conditions and restrictions of the Developer under this Agreement. If Developer transfers any portion of the Project in bulk and a Transferee defaults under this Agreement, the City shall exercise the foregoing remedies only with respect to the defaulting Transferee and its portion of the Project; and so long as Developer has not otherwise defaulted hereunder, the City shall not seek to exercise any rights and remedies against Developer. 13. Attorneys' Fees. If legal action is necessary to enforce any provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and legal costs. 14. Amendments. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in interest, and the amendment, or a Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 1 -6 memorandum thereof, shall be duly recorded in the Official Records of the County of Alameda, California. In the event that Developer is unable to perform its obligations under Section 2 of this Agreement due to significant changes in circumstances, such as unanticipated delays in construction, the City shall confer with Developer in an effort to reach a mutually acceptable resolution, consistent with the terms of the affordable housing conditions in the Approvals. If an agreement is reached, this Agreement shall be amended accordingly. Developer shall pay the City its reasonable costs, including attorneys' fees, incurred in such negotiations and in amending this Agreement, and Developer shall, if requested by the City, provide the City with a reasonable deposit to cover the City's reasonable costs, upon Developer initiating such negotiations. 15. Corporate Authority. If either party is a corporation, each individual signing this Agreement on behalf of that corporation represents and warrants that each of them is duly authorized to execute and deliver this Agreement on behalf of the corporation and that the Agreement is binding on the corporation in accordance with its terms. 16. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. 17. Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby. 18. Governing Law. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. 1,9. Entire Agreement. This Agreement, together with Exhibits 1 through 5, contains the entire understanding between the parties relating to the transaction contemplated hereby, and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect. No provision of this Agreement may be amended, waived, or added except by an instrument in writing signed by the Parties hereto. The exhibits attached hereto are incorporated herein by this reference. 20. Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: i. personal delivery, in which case notice is effective upon delivery; ii. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 1 -7 ill. nationally recognized overnight courier, with charges prepaid or charged to the sender's account, in which case notice is effective on delivery if delivery is confirmed by the delivery service; iv. facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first -class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient's time or on a nonbusiness day. City: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attention: City Manager Facsimile: (925) 833 -6651 Developer: Dublin Tralee II, LLC c/o Signature Development Group, Inc. 2201 Broadway, Suite 604 Oakland, CA 94612 Attention: Mr. Patrick Van Ness Facsimile: (510) 832 -2638 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written. Attest: Caroline P. Soto, City Clerk CITY OF DUBLIN By Joni Pattillo, City Manager Dublin Tralee II, LLC, a Delaware limited liability company By: uthorized Agent Affordable Housing Agreement PA 02 -062 Dublin Tralee 1I, LLC 1 -8 EXHIBIT 1 Property Description [Exclude the parcels on which the Podium exists.] THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF DUBLIN, COUNTY OF ALAMEDA, STATE OF CALIFORNIA, BEING A PORTION OF LOT 1, AS SHOWN ON MAP OF TRACT 7457, FILED JUNE 13, 2006, IN BOOK 291 OF MAPS, PAGE 29 THROUGH 37, INCLUSIVE, ALAMEDA COUNTY RECORDS, FURTHER DESCRIBED AS FOLLOWS: UNITS 6526, 6530, 6534, AND 6538 IN BUILDING NO. 5, AND UNITS 6517 AND 6529 IN BUILDING NO.. 10, AS DEPICTED ON THAT CERTAIN CONDOMINIUM PLAN FOR LOT I OF TRACT 7457, WHICH IS ATTACHED AS EXHIBIT "A" TO THE TRALEE VILLAGE DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS RECORDED ON APRIL 18, 2008 AS DOCUMENT NO, 2008133996,-TOGETHER WITH ANY AMENDMENTS, MODIFICATIONS OR ANNEXATIONS AS MAY OCCUR FROM TIME TO TIME, IN THE OFFICIAL RECORDS OF ALAMEDA COUNTY, CALIFORNIA (THE "DECLARATION'), AND FURTHER DEFINED IN THE DECLARATION. UNITS 6630,66--34,6638,6642 OF BUILDING 1, UNITS 6608,6612,-6616,6620 OF BUILDING 2, UNITS . 6586,6590,6594,6598 OF BUILDING 3, UNITS 6647, 6651, 6655, 6659 OF BUILDING 6, UNITS 6615, 661% 6623, 6627, 6631, 6635, 6639 OF BUILDING 7, UNITS 6589, 6593, 6597, 6601, 6605 OF BUILDING 8, AS DEPICTED ON THE CONDOMINIUM PLAN - PHASES 2 & 3, TRACT 7457 RECORDED ON JUNE 17, 2011 AS DOCUMENT N0.2011174652 IN THE OFFICIAL RECORDS OF ALAMEDA COUNTY, CALIFORNIA. ALL OF FPCP 4,5 AND 6 AS DEFINED IN THE DECLARATION AND AS SHOWN ON THE PHASE 2 & 3 CONDOMINIUM PLAN. Affordable Housing Agreement PA 02-062 Dublin Tralee II, LLC 1 -1 ray �� JJ ✓r Bldgl - 8Idg2 8!dg3 W __. Bldg4 -. �.. .. _ BIdgS .�b� ... +� p'G - Phase A o Wd3 6 - -- 81dg 7 Bldg 8 7 Bldg 9 `= �'> ^°' Bids X10 Ell 5 Bldg Si e. . 0 8 - S�lriY ' - syens ti Phase IB • a _ - 8Wg 16 8Mg 17 - N..:. Bidg AINIE Ob CIS e S H 1� ` •ebe• m® v meameamneee e �.'/ t e A- aa,. �s alyi sue' e (✓% GW &�.. A y �• a i a-1 gdj e I 1 VHN 1 5 3 1328 3/3 6534 Sierra Lane Complete Inventory Moderate Income, 2 10 3 1328 3/3 6525 Bantry Bay Street Sold to third Party Moderate Income ` .µ 3 10 3 1328 313 6529 Santry Bay Street Complete Inventory Low income' 4 19 3 1328 3/3 6489 Bantry Bay Street Finished Lot Moderate income 1, 5 20 3 1328 3/3 6486 Tralee Village Drive Finished Lot Low Income _ i 6 20 3 1328 3/3 6490 Tralee Village Drive Finished Lot Moderate Income ' 7 15 3 1328 3/3 6661 Tralee Village Drive 'Finished Lot Moderate Income 8 15 3 1328 3/3 6665 Tralee Village Drive' Finished Lot Low Income EXHIBIT 3 Guidelines to the Inclusionary Zoning Ordinance Regulations CITY OF DUBLIN TABLE OF CONTENTS 1 LIST OF EXHIBITS 4 2 GUIDELINES TO THE INCLUSIONARY ZONING ORDINANCE REGULATION 5 3 DEFINITION OF TERMS 6 4 REQUIREMENTS FOR DEVELOPERS 12 4.1 Overview of the Inclusionary Zoning Process 12 4.2 Determining the Number and Size of Units Required 12 4.3 How to Calculate the Inclusionary Obligation 13 4.4 How to Calculate How, Many Units Must Be Constructed and How Many Units of the Obligation May be Satisfied with an In -Lieu Fee 13 4.5 How to Calculate the Amount of the In -Lieu Fee 14 4.6 How to Calculate How Many BMR Units Must Be Provided for Each Income Level 14 4.7 How to Determine the Size of BMR Units 15 4.8 How to Determine the Location of BMR Units Within the Development 16 4.9 Housing Agreements 17 4.10 Procedures for Initial Sale of BMR Units 18 4. 10.1 The Marketing Plan for Ownership Units 18 4.10.2 Application and Screening Process 19 4.10.3 Sale price of BMR Units 22 4.11 Procedures for Initial Rental of BMR Units 23 4.11.1 The Management Plan for Rental BMR Units 23 4.11.2 Application and Screening Process 24 4.11.3 Calculating Maximum Rent 25 4.11.4 Annual Report 26 4.11.5 Annual Monitoring by City 26 5 BUYER AND RENTER QUALIFICATIONS. FOR BMR UNITS 27 Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LL 5.1 Buyer Qualifications 27 5.2 Renter Qualifications 28 5.3 Household Size 28 5.4 Total Household Income 29 5.4.1 Gross Household Income 29 5.4.2 Income Calculation 30 5.4.3 Assets 31 5.5 Credit Score 32 5.6 Alternative Credit History Parameters 32 5.7 Preference Points 33 6 REQUIREMENTS FOR BUYERS OF BMR UNITS 36 6.1 Financing Requirements 36 6.1.1 Acceptable Loan Products for Purchase and Refinancing of a BMR Unit36 6.1.2 Prohibited Loan Products 36 6.2 Down Payment 36 6.2.1 Down Payment Assistance 37 6.3 Debt to Income Ratio 37 6.4 First Mortgage Loan Value Ratio 37 6.5 Closing Costs and Deposits 37 6.6 Homebuyer Education Program 37 6.7 Documents that Each Buyer Must Sign 37 6.7.1 Highlights of the Resale Restriction Agreement 37 7 REQUIREMENTS FOR RESALE OF BMR UNITS 40 7.1 Resale Procedure 40 7.2 Calculating Restricted Resale Price 41 7.3 Fees Associated with the Selling of a BMR Unit 41 7.4 Capital Improvements 41 7.4.1 Procedure for Receiving Approval of Capital'Improvements 41 7.4.2 Special Assessments 43 Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 3 -2 7.4.3 Capital Improvements Cap 43 7.4.4 List of Eligible and Ineligible Capital Improvements 43 7.4.5 Building Permits 44 8 REQUIREMENTS FOR OWNER'S OF BMR SECONDARY UNITS 46 8.1 Rental Requirements 46 8.2 Reporting Requirements 46 8.3 Annual Report - Inspections 46 8.4 Management Responsibilities 47 Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 3 -3 1 LIST OF EXHIBITS Exhibit 1 Resale Restriction Agreement and Option to Purchase Exhibit 2 Performance Deed of Trust Exhibit 3 Sample Application for Inclusionary Unit Exhibit 4 Sample Ownership BMR Unit Application Packet Exhibit 5 Sample Credit Report Authorization and Release Exhibit 6 Excel Spreadsheet to Calculate Ownership Sale Prices Exhibit 7 State of California Housing and Community Development Department Income for Guidelines (Example 2008) Exhibit 8 Current Alameda County Housing Authority Utility Allowance Sheet Exhibit 9 Annual Report for Rental Units Exhibit 10 Sample Marketing Plan Exhibit 11 Internal Revenue Service (IRS) Code 26 USC, Section 61 Exhibit 12 Sample Management Plan Exhibit 13 Reservation Instrument Exhibit 14 Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants For a copy of the above - referenced Exhibits, please contact the City of Dublin Community Development Department at (925) 833 -6610. Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 34 GUIDELINES TO THE INCLUSIONARY ZONING ORDINANCE REGULATION This document is the Guidelines (these "Guidelines ") to the City's Inclusionary Zoning Ordinance Regulations (the "Ordinance ") set forth in the City's Municipal Code at Chapter 8.68. The City Council's purpose in adopting the Ordinance is to increase the diversity of housing prices /rents in the community and ensure that the range of prices /rents continues over time. In general, the Ordinance requires that 12.5% of the units constructed in a Residential Development project of 20 residential units or more be restricted in.occupancy and in sale price or rent charged. Such restricted units are referred to as Below Market Rate (BMR) Units. For for -sale units, 60% must be affordable to moderate - income households and 40% to low- income households. For rental units, 50% must be affordable to Moderate - Income households, 20% to Low - Income households and 30% to Very Low- Income households. (Section 8.68.030.B) The purpose of these Guidelines is to assist the layperson in interpreting the Ordinance. The Guidelines will assist developers early in the development process so that Residential Development projects are sensitively designed from the beginning in compliance with the requirements of the Inclusionary Zoning Ordinance. In addition, the Guidelines will inform developers, management firms and owners of BMR Secondary Units of the procedures for selling and renting BMR Units and Secondary Units. Furthermore, the Guidelines will provide households interested in renting or purchasing a BMR Unit with an overview of the eligibility requirements, the application and screening process, the restrictions on ownership BMR Units, and the procedures for reselling a BMR Unit. These Guidelines should be read in conjunction with the Ordinance. While every effort has been made to ensure that these Guidelines are consistent with the Ordinance, if there is any conflict with these Guidelines and the Ordinance, the terms of the Ordinance shall prevail. In addition, the provisions of a Housing Agreement or Resale Restriction Agreement (or like Agreement) recorded against a BMR Unit shall prevail over any general requirements of the Ordinance. Users of these Guidelines are encouraged to seek their own legal counsel to aid in understanding the requirements of the City's Inclusionary Program. For any general questions regarding the Guidelines, users may call 925- 833 -6610. The effective date of these Guidelines is January 2, 2009. The City will review and to the extent necessary update these Guidelines annually. The Community Development Director may make interim revisions, interpretations or clarifications to these Guidelines provided that he or she considers the revision, interpretation, or clarification to be minor and consistent with the purposes of the Inclusionary Zoning Regulations and the Guidelines. Any such revision, interpretation, or clarification shall not become effective until posted on the City's website Affordable housing Agreement PA 02 -062 Dublin Tralee n, LLC, 3 -5 2 DEFINITION OF TERMS As used in these Guidelines, the following terms shall be defined as follows: Administration Fees • A $1,500 fee charged by the City to the BMR Owner for all sales and re -sales of BMR Units, • A $500 fee charged by the City to the developer /property manager for the annual review of rental developments • A $200 fee charged by the City to the BMR Owner for requests to subordinate the Resale Restriction Agreement and/or Performance Deed of Trust or requests to refinance a BMR unit Fees may be adjusted from time to time by the City. Affordable Housing Agreement An agreement between the developer and the City for an ownership Residential Development project which is recorded against the property containing the BMR Units; sets forth the developer's Inclusionary Obligation and the method by which the developer will comply with the requirements of the Inclusionary Zoning Ordinance; and requires, among other things, that the developer require purchasers of BMR Units to execute and record a Resale Restriction Agreement and Option to Purchase and Performance Deed of Trust. Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants An agreement between the developer and the City for a rental Residential Development project which is recorded against the property containing the BMR Units; sets forth the developer's Inclusionary Obligation and the method by which the developer will comply with the requirements of the Inclusionary Zoning Ordinance; and requires, among other things, that the BMR Units are reserved for occupancy by Very-Low, Low -, and/or Moderate - Income households at rents affordable to such households for a period of not less than 55 years. AMI or Area Median Income The area median income adjusted for household size as published annually by the County of Alameda's Department of Housing and Community Development (HCD). Approved Capital Improvements Capital improvements to BMR Units that have been approved by the City pursuant to the procedure set forth in Section 7.4.1. The cost of such improvements may be added to the resale price of the BMR Unit. BMR Owner A household that owns a BMR Unit. Below Market Rate (BMR) Units A Below Market Rate or BMR Unit is a unit that is reserved for rent to Very-Low, Low, or Moderate - Income households or for -sale to Low or Moderate Income households at a price or rent that is affordable to such households. BMR Units have restrictions recorded against them to ensure that they remain affordable for a period as set forth in the Housing Agreement or Resale Restriction Agreement, Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 3 -6 • Rental units are deemed affordable if the annual rent does not exceed 30% of the maximum income level for Very Low- Income, Low- Incorrie, or Moderate - Income households, as applicable, adjusted for household size. Owner - occupied units are deemed affordable if the sales price results in annual Housing Expenses that do not exceed 35% of the maximum income level for Low- or Moderate - Income households, as applicable, adjusted for household size. CalHFA The California Housing Finance Agency City The City of Dublin Consent Agreement An agreement between the City and a Qualified Household which authorizes the City to access and review the Qualified Household's credit reports or other personal or financial information to verify a Qualified Household's compliance with the Resale Restriction Agreement, the Ordinance and these Guidelines. This agreement must be executed by purchasers of ownership BMR Units prior to the close of escrow. Domestic Partner A legal or personal relationship between individuals who live together and share a common domestic life, but are not joined in a traditional marriage or a civil union as formalized through a local or state registry. Homebuyer A person who has not owned any interest in real property during the three -year period prior to the date of the household's application to qualify for purchase of a BMR Unit, including without limitation, real property in which a household member's name appears on title regardless of whether the member's interest in such property results in a financial gain, such property is located in another state or country, or the member has occupied such property as his or her primary residence. If any person has had his or her name on title of a property, but the property was sold more than three years ago from the date of application, the person is considered a Homebuyer. Homebuyer Education Workshop for Below Market Rate Buyers A HUD approved 8 -hour course designed to provide basic education specific to Below Market Rate Homebuyers. Refer to the City's web site for organizations that may offer this course at www.ci.dublin.ca.us . The date on the completion certificate for the class must be within 6 months of the date of application for a Below Market Rate unit. Gross Household Income "Gross Household Income" means all income, from whatever source derived, of all adult household members (18 years of age and older), whether or not such income is exempt from Federal income tax. Such income includes, but is not limited to, the following: • Compensation received from an employer • Compensation includes, but is not limited to salary, overtime pay, and other pay Affordable Housing Agreement PA 02 -062 Dublin Tralee Il, LLC, 3 -7 -= — • Other pay includes, but is not limited to, compensation for special working conditions or one time pay -out of unused vacation and sick leave. • Alimony, spousal and child support • Cash • Pensions, if at an age where pension is being received as income • Public benefits including, but not limited to, CaMorks, SSI, and disability income • All interest, dividends, and royalties • Income derived from private businesses • Rental Income • Income from pensions • Compensation for services rendered including fees, fringe benefits, commissions, tips, and bonuses • Stipend received for participation in a mentor, learning or education opportunity • Gains from dealings in private and/or commercial property • Gambling Winnings • Annuities, life insurance, and endowment contracts • Income from discharge of indebtedness • Gross partnership contributions or distributions • Income from an interest in an estate or trust Exceptions: 1) Gross Household Income does not include income earned by a household member who is between the ages of 18 -26 and meets both of the following criteria: • Is claimed as a dependent of a household member on such member's federal income taxes; and • Is a full time student (12+ units -school transcript must be provided) l 2) Gross Household Income does not include payments to a household member from a governmental fund income if all of the following requirements are satisfied: • The payments are based on the recipient's or the recipient's family's financial need; • The payments do not represent compensation for services rendered; and • The payments are part of a governmental housing subsidy program including, but not limited to, Section 8 federal housing assistance payments (These) Guidelines These Guidelines to the Inclusionary Zoning Regulations HCD The California Department of Housing and Community Development. HOA Homeowner's Association Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 3 -8 Housing Agreement An Affordable Housing Agreement, an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants or a Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants or other Agreement that relates to Housing that may be adopted from time to time by the City. Housing Expenses Principal, interest, taxes, insurances and HOA dues. HUD The United States Department of Housing and Urban Development. Immediate Family Member A mother, father, brother, sister, child, grandparent or grandchild. Inclusionary Obligation The number of BMR Units a developer is required to construct (or pay fees in lieu thereof) in a Residential Development project to comply with the Inclusionary Zoning Regulations. Inclusionary Zoning Regulations Chapter 8.68 of the City of Dublin Municipal Code. In -Lieu Fee A fee paid by a developer in lieu of constructing BMR Units to satisfy up to 40% of its inclusionary obligation. Legal Resident A citizen or other national of the United States or a qualified alien as defined by the Federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (" PRWORA "). Low Income Total Household Income that is 50% to 80% of AMI, adjusted for actual household size. Management Plan A plan required for rental Residential Developments that contains the information set forth in Section 4.11.1 of these Guidelines. Marketing Plan A plan required for ownership Residential Developments that contains the information set forth in Section 4. 10.1 of these Guidelines. Maximum Income The maximum income for an income category (Very-Low, Low -, or Moderate - Income) determined periodically by HCD based on AMI. See Section 5.4 of these Guidelines for Maximum Incomes. Moderate Income Total Household Income that is 80% to 120% of AMI, adjusted for actual household size. Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 3 -9 Performance Deed of Trust A deed of trust recorded against a BMR Unit by the City which secures a BMR Owner's compliance with the Resale Restriction Agreement and Option to Purchase. Preference Points Points assigned to persons employed within the City of Dublin, public service employees working within the City of Dublin, Dublin residents, Seniors (62 +), persons who are permanently disabled (with written verification from a physician or show receipt of SSI or SSDI), persons who are immediate family members of a Dublin resident, and persons who are required to relocate from a Dublin residence due to demolition of the residence or conversion of the residence from a rental to an ownership unit. Persons with Preference Points are given priority over other Qualified Households in the rental or purchase of a BMR Unit. Principal Residence The place where a person resides on a substantially full -time basis during not less than ten (10) months per year. Children attending college and not living at home as their principal residence may not be counted as a household member. Priority List A list which ranks Qualified Households based on the number of Preference Points received. Qualified Household A qualified household is defined in terms of financial relationships and can include any group of persons, so long as such persons, when viewed as a whole, satisfy the eligibility requirements for a household. For an ownership BMR Unit or for a rental BMR Unit, a "qualified household" means a household that satisfies the requirements listed in Section 5 of these Guidelines. Resale Restriction Agreement and Option to Purchase, also known as "Resale Restriction Agreement" An agreement between the City and a BMR Owner that is recorded against the BMR Unit and , among other restrictions, requires the unit to remain affordable to Low- or Moderate- Income households usually for a period of 55 years or as outlined in the Housing Agreement, restricts the resale price of the BMR Unit, requires the BMR Owner to notify the City upon refinancing, reselling or changing the title of a BMR Unit, and provides the City with an option to purchase the BMR Unit upon the occurrence of certain events. Residential Development This includes, without limitation, detached single - family dwellings, multiple- dwelling structures, groups of dwellings, condominium or townhouse developments, condominium conversions, cooperative developments, mixed use developments that include housing units, and residential land subdivisions intended to be sold to the general public. Secondary Unit A legal secondary dwelling unit that has been approved by the City and that is reserved for occupancy by Very Low -, Low- or Moderate - Income households at rents affordable to such households. Affordable Housing Agreement PA 02 -062 Dublin Tralec II, LLC, 3 -10 Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants An agreement between the City and the owner of a Secondary Unit which is recorded against the property containing the Secondary Unit and requires, among other things, that the Secondary Unit be reserved for occupancy by Very-Low, Low -, or Moderate - Income households at rents affordable to such households for an amount of time specified in the Affordable Housing Agreement or Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants. Senior A person 62 years of age or older for the purpose of qualifying for preference points Special Assessment A proportional fee charged to the BMR Owner by an HOA to cover the cost of physical improvements to the entire building. Total Household Income All Gross Household Income and assets received (as calculated pursuant to Sections 5.4.2 and 5.43). Very -Low Income Total Household Income that is fifty percent (50 %) or less of AMI, adjusted for actual household size. Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -11 3 REQUIREMENTS FOR DEVELOPERS 3.1 Overview of the Inclusionary Zoning Process Residential Developments consisting of 20 residential units or more must comply with the Inchisionary Zoning Regulations (Section 8.68.030(A)). In general, the Regulations require that 12.5% of the units constructed in a Residential Development be reserved for occupancy by For -Sale Units to Moderate - Income households and Low - income households or rented at prices affordable to, Very -Low -, Low -, and Moderate - Income households. Such restricted units are referred to as BMR Units. (Section 8.68.030.A) While the Regulations require that 12.5% of the units in the Residential Development be BMR Units, the Regulations permit the developer to meet 5% of this obligation by paying an In -Lieu Fee. Thus, there is a "must- build" requirement of 7.5% of the units in the Residential Development, and the obligation with respect to the remaining 5% of the units may be satisfied by the payment of an.In- Lieu Fee. BMR Units must remain affordable for a period of 55 years, through affordability restrictions recorded against the property. In addition, the Inclusionary Zoning Regulations require that BMR Units: • Be constructed concurrently with the market -rate units in the Residential Development; • Have a similar range of bedrooms to the market -rate units in the Residential Development; • Not be distinguished by design or materials from the market -rate units in the Residential Development; and • Be reasonably dispersed throughout the Residential Development. A developer may also satisfy its Inclusionary Obligation by dedicating land or constructing BMR Units off -site if the City Council makes the required findings. See Section 8.68.040 of the Inclusionary Zoning Regulations for alternate methods of complying with the requirements of the Ordinance. 3.2 Determining the Number and Size of Units Repaired Prior to submitting an application to the City for a Residential Development that includes 20 or more residential units, the developer should begin thinking about how to comply with the Inclusionary Obligation. As part of the initial project review, Housing Staff is available to discuss with the developer options for meeting the Inclusionary Obligation. For example, if a developer intends to build only the minimum number of BMR Units and to pay an In -Lieu .Fee for the remaining units, Housing Staff can, for planning purposes, provide the developer with the preliminary number of BMR Units the developer would be required to build, the income levels and sizes of the required BMR Units, and the amount of the In -Lieu Fee under the then - current fee schedule. After a Residential Development application is submitted to the Community Development Department for review, a Project Review Committee meeting is generally held. In this meeting City Staff and interested agencies involved in the development process review the Residential Development and give preliminary comments to the developer. Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -12 Prior to or following the Project Review Committee (PRQ meeting, Housing Staff will send a letter to the developer indicating the developer's Inclusionary Obligation for the Residential Development as preliminarily proposed. A copy of this letter will also be directed to the City's Project Planner responsible for the Residential Development. The purpose of this letter is to provide the developer information on the Inclusionary Obligation as early as possible in the development process. The City recognizes that the Residential Development is likely to evolve over time and that the Residential Development will likely change prior to obtaining City entitlements. However, this information is provided early in the process as a service to the developer for planning purposes. The developer's final Inclusionary Obligation will be formalized in an Affordable Housing Agreement between the City and the developer, prior to the recordation of the first final map or the issuance of the first building permit, whichever occurs first, for the development. 3.3 How to Calculate the Inclusionary Obligation Developers of projects subject to Section 8.68.030.A of the Inclusionary Zoning Regulations shall construct 12.5% of the total number of dwelling units within the development as affordable units, unless subject to an exception approved by the City Council. In making this calculation, any decimal fraction less than or equal to 0.50 is disregarded, and a decimal fraction greater than 0.50 is construed as a unit. Two examples of how the Inclusionary Obligation for a particular development is calculated are shown in Figure 1. FIGURE 1 Example 1: The developer proposes a 224 -unit subdivision. 12.5% percent of 224 is 28. The Inclusionary Obligation is 28 units of the original 224 units. Example 2: The developer proposes a 316 -unit subdivision. 12.5% percent of 316 is 39.5. Rounding the decimal fraction down, the Inclusionary Obligation is 39 units of the original 316 units. 3.4 How to Calculate How Many Units Must Be Constructed and How Many Units of the Obligation May be Satisfied with an In -Lieu Fee The Ordinance permits a Developer to pay an In -Lieu Fee for up to 5% of its Inclusionary Obligation. When the calculation of the fee results in a decimal fraction, the rounding rules contained in Section 8.68.030A are used. Using the same examples from Figure 1, Figure 2 illustrates the calculation of the number of BMR Units that may be subject to the In -Lieu Fee. Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -13 FIGURE 2 Example 1: The developer proposes a 224 -unit subdivision, for which the Inclusionary Obligation is 28 units of the 224 units. 40% of 28 units =11.2 units. Disregarding the fraction, the developer may pay an In -Lieu Fee for the remaining 11 units, and the developer's "must- build" obligation would be 17 units. 11 + 17 = 28 units. Example 2: The developer proposes a 316 -unit subdivision, for which the Inclusionary Obligation is 39 units of the 316 units. 40% of 39 units = 15.6 units. This number is rounded up to 16 and In -Lieu Fees may be paid for this amount, instead of providing units. The "must - build" obligation would be 23 units. 16 + 23 = 39 units. 3.5 How to Calculate the Amount of the In -Lieu Fee The amount of the In -Lieu Fee is set by Resolution of the City Council. Resolution No. 56 -02 provides that the In -Lieu Fee per BMR Unit is adjusted annually on July 1 to reflect the greater of the percentage change either in a) the Bay Area Urbari Consumer Price Index (CPI) as of February of each year, or b) the United States Department of Housing and Urban Development (HUD) Fair Market Rent limits for the Oakland Primary Metropolitan Statistical Area (PMSA) that are in effect at the time. The fee as of July 1, 2008 is $ 91,916 per BMR Unit. THE ENTIRE IN -LIEU FEE AMOUNT FOR THE RESIDENTIAL DEVELOPMENT IS DUE AND PAYABLE UPON ISSUANCE OF THE FIRST BUILDING PERMIT FOR THE RESIDENTIAL DEVELOPMENT. Using the examples from Figures 1 and 2, Figure 3 illustrates how to calculate the amount of the In- Lieu Fee. FIGURE 3 Example 1: The developer proposes a 224 -unit subdivision. In -Lieu Fees may be paid for 11 units. 11 X $91,916 is $1,011,076 which is the amount of the In -Lieu Fee for the Residential Development. This entire amount would be due prior to issuance of first building permit. Example 2: The developer proposes a 316 -unit subdivision. In -Lieu Fees may be paid for 16 units. 16 X $91,916 = $1,470,656 which is the amount of the In -Lieu Fee for the Residential Development. This entire amount would be due prior to issuance of first building permit. 3.6 How to Calculate How Many BMR Units Must Be Provided for Each Income Level Pursuant to Section 8.68.030.13 of the Inclusionary Zoning Ordinance, the BMR Units included in each Residential Development project must be allocated to households in the following manner: Affordable housing Agreement PA 02 -062 Dublin Tralee R, LLC, 3 -14 For -Sale Units: ■ 60% to moderate - income households ■ 40% to low - income households Rental Units: ■ 50% to moderate - income households ■ 20% for low- income households 30% for very -low income households Once again, if the allocation calculations results in a decimal fraction; the rounding rules contained in Section 8.68.030.A apply. In addition, if the allocation calculation results in fewer units than would otherwise be required; one additional unit should be allocated to the lowest income level with the decimal fraction closest to 0.50. (Section 8.68.030.B) Figure 4 illustrates how to calculate the number of units that must be provided at each income level and how the rounding requirement is implemented: FIGURE 4 FOR RENTAL BELOW MARKET RATE UNIT The Residential Development includes 200 units. The Inclusionary Obligation is 25 units. The developer chooses to pay an In -Lieu Fee for 40% of the units, which equals 10 units. The developer's must -build requirement (7.5 %) is 15 units. O 50% of those 15 units would need to be restricted for Moderate - Income households, 50% of 15 = 7.5 • 20% of those 15 units would need to be restricted for Low - Income households, 20% of 15 = 3 • 30% of those 15 units would need to be restricted for Very Low - Income households, 30% of 15 = 4.5 7.5 +3 +4.5 =15 Since two of these numbers are fractions at exactly .5, the City of Dublin would require that the unit be provided in the lower income category. In this example the income - unit mix would be: S 7 Moderate - Income units • 3 Low - Income units • 5 Very Low - Income units 3.7 How to Determine the Size of BMR Units The Ordinance requires that the same proportion of bedrooms be reflected in the BMR Units as are in. the market rate units. Once again, the rounding conventions in Section 8.68.030.A are used, if the allocations result in decimal fractions. Figure 5 illustrates how to determine the number of BMR Units that must be provided at each unit size: Affordable Housing Agreement PA 02 -062 Dublin Tralee H, LLC, 3 -15 FIGURE 5 To determine bedroom requirement: The developer proposes a 200 -unit rental Residential Development and is paying In- Lieu Fees for 40% of the 13MR Units. The must build obligation is 15 units. The Residential Development includes: • 50 one - bedroom units (25 % of total) • 100 two- bedroom units (50% of total) • 50 three - bedroom units (25% of total) Therefore: • 25% of the BMR Units are to be one - bedrooms • 50% of the BMR Units are to be two- bedrooms • 25% of the BMR Units are to be three - bedrooms To determine bedroom requirement per income category: If 5 of the units are Very Low - Income, using the percentages above the requirement for bedrooms are: • 25% of 5 = 1.25 one - bedroom units • 50% of 5 = 2.5 two - bedroom units • 25% of 5 = 1.25 three - bedroom units Therefore, the development would be required to provide: • 1 one - bedroom unit • 3 two bedroom units • 1 three bedroom unit The same calculation is performed to determine the bedroom sizes of the Low - Income and Moderate - income units. 3.8 How to Determine the Location of BMR Units Within the Development The Inclusionary Zoning Ordinance requires that BMR Units be reasonably dispersed throughout the Residential Development. The purpose of this requirement is to avoid concentration of the BMR Units in a particular location within a development, effectively segregating them from the rest of the Residential Development. There are many ways in which to implement this requirement and consultation with Community Development Department Staff is recommended prior to developing the final site plan. Ultimately, the Planning Commission or City Council will determine, based on Staff recommendation, if this requirement has been met. Per section 8.68.040(E) of the Inclusionary Zoning Regulations, the City Council, at its discretion may waive, wholly or partially, the requirements of this ordinance and approve alternate methods of compliance with this Chapter if the developer demonstrates, and the City Council finds, that such alternate methods meet the purposes of this Chapter. Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -16 Affordable Housing Agreement An agreement between the developer and the City for a Residential Development project that includes ownership BMR units (and potentially Secondary Units). Such Agreements are recorded against the property on which the Residential Development is being constructed; set forth the developer's Inclusionary Obligation and the method by which the developer will comply with the requirements of the Inclusionary Zoning Ordinance; and require, among other things, that the developer require purchasers of BMR Units to execute a Resale Restriction Agreement and Option to Purchase with the City. Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants An agreement between the developer and the City for a Residential Development project that includes rental BMR units. Such agreements are.recorded against the property containing the BMR Units; set forth the developer's Inclusionary Obligation and the method by which the developer will comply with the requirements of the Inclusionary Zoning Ordinance; and requires, among other things, that the BMR Units are reserved for occupancy by Very-Low, Low -, and /or Moderate - Income households at rents affordable to such households for a period of not less than 55 years. Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants This Agreement is similar to a Resale Restriction Agreement and is executed after an Affordable Housing Agreement or Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants. This agreement is between the City and the owner of a Secondary Unit and is recorded against the property containing the Secondary Unit and requires, among other things, that the Secondary Unit be reserved for occupancy by Very - Low, Low -, and Moderate - Income households at rents affordable to such households for the period of time set forth in the agreement. The Housing Agreements set forth the legal requirements for the Residential Development project for compliance with the Inclusionary Zoning Ordinance. The Housing Agreements are recorded against the property _ on which the Residential Development is being constructed, run with the land, and survive transfer or sale of the land. The term of the Affordable Housing Regulatory Agreements is a period of 55 years. The Affordable Housing Agreement is effective until all of the In -Lieu Fees are paid; the BMR units are constructed, sold, and subject to a Resale Restriction Agreement. If a developer executes a Housing Agreement for a particular Residential Development project but the project is not built and new entitlements are sought for the applicable property, the developer must execute a new Housing Agreement, which would replace the existing Agreement. Among other things, the Housing Agreements must contain the following information: 1. A description of how the developer will comply with its Inclusionary Obligation (whether through unit construction and/or payment of an In -Lieu Fee); Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -17 3. The number of BMR Units the developer will construct for each income category; 4. The size of the BMR Units the developer must construct for each income category; 5.. Depending on the nature of the development, the timing of construction of the units to ensure that the BMR Units are constructed concurrently with the market -rate units; 6. If the development proposes ownership BMR Units, a requirement that the developer prepares and obtains City approval of a Marketing Plan, prior to issuance of any building permits in the Residential Development, indicating how the developer plans to sell the BMR Units. This requirement is discussed in additional detail in Section 4.10.1 below; 7. If the development proposes ownership BMR Units, there is a requirement that the developer require the purchasers of such units to execute a Resale Restriction Agreement or a Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants and a Performance Deed of Trust. A sample Resale Restriction Agreement is attached as Exhibit No. 1. A sample Performance Deed of Trust is attached as Exhibit No. 2. A sample Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants is attached as Exhibit No. 3. 8. If the development proposes rental BMR Units, a requirement that the developer provide a Management Plan and Marketing Plan as described in Section 4.11.1 to the City for its approval and prepare the Annual Report described in Section 4.11.4. 3.10 Procedures for Initial Sale of BMR Units 3.10.1 The Marketing Plan for Ownership Units Prior to the issuance of building permits for any ownership BMR Units, the developer shall submit a Marketing Plan to the City for approval. The Marketing Plan must contain the following: 1. A one -page narrative summary suitable for advertising the availability of the BMR Units on the City web page and other locations, including a description of the total number of BMR Units and market -rate units in the Residential Development; the HOA dues for each BMR Unit; the amenities included in the unit, and a telephone number for interested applicants to call for additional information; 2. An explanation of the application process and the deadline for submitting applications. If the development is phased, the developer must establish deadlines for each phase of the development that includes BMR Units; An explanation of the selection process, including an explanation of the Preference Point system; Affordable Housing Agreement PA 02 -062 Dublin Tralee 1I, LLC, 3 -18 4. Timelines for buyer selection. If the development is a phased project, information must be provided on the number of phases and the timelines for those phases; 5. Timeline for the developer's sales staff to meet with the City's Housing Staff to receive training on the sale selection and application process; 6. Marketing materials; 7. An application packet which includes: • Application for Inclusionary Unit • Disclaimer for BMR Application Qualification Questionnaire • Credit Authorization and Release • Signed Sample Resale Disclosure Statement • Required Supporting Documentation Submitted • Highlights of Dublin Resale Restriction Agreement • Written confirmation of pre - approval for-the home which must be validated through Developer's preferred lender. See Exhibit No. 3 for a sample ownership BMR Unit application packet. No marketing of the BMR Units shall begin until the developer has received written approval of the Marketing Plan from the City and the developer's sales staff has met with the Housing Staff for training so that the sales staff understands and can explain the application process. 3.10.2 Application and Screening Process The developer must require each applicant to complete the application that has been approved by the City as part of the Marketing Plan and to provide the required supporting documentation by the deadline set forth in the Marketing Plan. The developer should plan accordingly to assure that applicants are not qualified more than 6 months before the move -in date of the unit. Application packets should include at a minimum: • Complete application; • Income documentation set forth in Section 5.4.1; • Reservation instrument showing the address, number of bedrooms and sales price; • A loan pre- approval letter with Good Faith Estimate and Truth in Lending Statement; • A signed Disclosure Statement (Exhibit F of the Resale Restriction Agreement); • A signed credit report authorization and release or other consent and verification letter; • Copy of tri -merge Credit Report; and • Evidence of 3% available funds to be used as a down payment. The developer must comply with the following process to sell the BMR Units: Affordable housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -19 Developer collects applications for the period of time set forth in the approved Marketing Plan. 2. Developer screens applicants to determine whether they satisfy the requirements for Qualified Households set forth in Section 5.1. 3. Developer sorts and ranks the Qualified Households based on the Preference Points and creates a Priority List with those applicants with the most Preference Points at the top followed by all other applicants in descending order based on the number of Preference Points received. If more than one qualified applicant receives the same number of Preference Points or if some applicants receive no Preference Points, the developer shall rank the Qualified Households based on other objective criteria outlined in its approved Marketing Plan. For example, the developer may date stamp all applications and, in the case of a tie, rank the Qualified Households based on who applied first, or the developer may choose to hold a lottery to break ties. However, whichever criteria the developer uses must be set forth in its approved Marketing Plan. 4. Developer completes the Priority List within 30 days of the application deadline and submits the list to the City. 5. Developer reviews and sorts the application packets in order of the Priority List and submits complete application packets of Qualified Households, together with supporting documentation, to the City within forty -five (45) days prior to close of escrow. 6. The City reviews the application packets to verify the applicants are Qualified Households. The City will make every effort to review the applications within 7 working days of receiving a complete application packet. Once the City has verified that the applicant is a Qualified Household, the City will send the developer a conditional approval letter (or similar document) indicating the applicant's name, income level and the maximum sale price of the unit (see Section 4.10.3 for more detail on establishing the sale price) and any requirements that must be met before moving forward with the applicant. Once all the required information is received, the City will then send a conditional qualification letter (or similar document) which is valid for 6 months from the date of the letter. A copy of the application packet, along with income verification for the household will be retained by the City as proof of the buyer's qualification to purchase the BMR Unit. If the City determines that the applicant is not a Qualified Household, the City will send the developer an ineligibility letter. An applicant who has been deemed to be ineligible may not reapply for a period of one year from the date of the ineligibility letter. The developer bears the responsibilities of ensuring applicants are not qualified more than 6 months before a unit becomes available and closes escrow. Applicants must be re- qualified if occupancy is to take place more'than 6 months from the date of the conditional qualification letter. Applicants may or may not qualify to purchase a BMR Unit upon re- qualification. In addition, the price of the BMR Unit may change upon re- qualification. If, upon re- qualification, an applicant does not qualify, it is the responsibility of the developer to notify the applicant. Affordable Housing Agreement PA 02 -062 Dublin Tralee Il, LLC, 3 -20 Conditional approvals are based on information which was supplied to the City by the developer, or their agent. If there are any material changes to the financial conditions, marital status, employment status or other facts or information that is made known to the City prior to loan closing, the developer, their agent or the lender must notify the City of Dublin in writing of these changes. The City expressly reserves the right to re- verify the applicant(s) and may void or cancel this conditional approval or other approval at any time prior to the loan closing if these material changes affect the qualification status of the buyer(s). Qualification determinations may be appealed by the Developer to the Community Development Director. THE SALE CANNOT PROCEED UNTIL ALL REQUIRED DOCUMENTS ARE PROVIDED TO THE CITY AND THE DEVELOPER RECEIVES A WRITTEN QUALIFICATION LETTER FROM THE CITY. 7. The developer will offer the unit to Qualified Households based on the Priority List, offering the BMR Unit first to those applicants with the most Preference Points, then in descending order. 8. The developer and applicant will enter into a purchasing agreement. 9. The developer will require the selected buyer to execute a Resale Restriction Agreement and Option to Purchase and a Performance Deed of Trust. 10. The developer will provide the City with the name and address of the title company closing the sale and the name of the escrow officer. 11. Prior to the City sending escrow instructions the City will review all final loan documents for compliance to the Section 6.1 Financing Requirements. 12. The City will prepare and send escrow instructions to the Title Company. 13. The Title Company will submit the following documents to the City: • Completed and Signed Residential Loan Application; • Completed Truth in Lending Statement, Good Faith Estimate, and a estimated HUD -1 statement from the Title Company; • Completed, executed, and notarized Resale Restriction Agreement and Option to Purchase; and • Completed, executed, and notarized Performance Deed of Trust. 14. The City will review the above documents for completeness, prepare the Request for. Notice of Default for each of the buyer's loans, secure the signature of the City Manager or his/her designee on the necessary documents, and return the loan documents to the lender. Affordable Housing Agreement PA 02 -062 Dublin Tra)ee II, LLC, 3 -2I 15. The City will send the original Resale Restriction Agreement, Performance Deed of Trust and Request(s) for Notice of Default to the escrow officer for recording. If at any time during the application, screening, or sale process, an applicant requires translation services, the developer shall provide such services at the developer's sole cost and expense. 3.10.3 Sale price of BMR Units Pursuant to Section 8.68.020A.2 of the Inclusionary Zoning Ordinance, Owner - occupied units are deemed affordable units if the sales price results in annual housing expenses that do not exceed 35% of the maximum income level for low -, and moderate- income households, adjusted for household size. Below Market Rate For -Sale units are priced based on a designated income point that is affordable to a greater range of households in each applicable income category. • For Low - Income Households (household income of between 50% and 80% of Area Median Income), the sales price would be set at a level so that total monthly housing payment would not exceed thirty-five percent (35 %) of one - twelfth of seventy percent (70 %) of the Area Median Income for Alameda County. • For Moderate - Income Households (household income of up to 120% of Area Median Income), the sales price would be set at a level so that total monthly housing payment would not exceed thirty -five percent (35 %) of one - twelfth of one hundred and ten percent (110°/x) of the Area Median Income. In addition, the fixed sales price approach would be based upon the number of bedrooms in the home instead of the number of persons in the particular household. For example, if a developer is selling a two - bedroom unit, the sales price would be calculated under the "number of bedrooms, plus one" rule for the assumed household size. In each case the sales price would be set based upon the following assumed household sizes for the following sizes of residential units: No. of Bedrooms Assumed Household Size 1 2 2 3 3 4 4 5 The assumptions below are used to calculate the maximum sale price for BMR Units. However, a Qualified Household's actual Housing Expenses may differ from these assumptions. • Interest - Prevailing rate (fixed rate for 30 years), secondary market fixed rate, Fannie Mae or Freddie Mac, as determined by staff, on the date that is 30 days prior to the applicable application deadline. • Mortgage Term — fixed rate for 30- years. • Taxes - 1.25% of the estimated sale price of the unit. • Insurance - homeowner's insurance. Affordable Housing Agreement PA 02 -062 Dublin Tralee 11„ LLC, 3 -22 o Homeowner's Insurance -- The cost of homeowner's insurance may be calculated based on an estimate provided by the developer. (If the homeowner's insurance is covered by an HOA structure, homeowner's insurance need not be included, but it must be documented that the HOA will provide adequate insurance.) • HOA dues, if any. Figure 6 shows how the sale price is calculated: FIGURE 6 TABULATION OF MAXIMUM SALE PRICE FOR A Enter Blue Rows MODERATE BMR UNITS Only Household size Max. allowable annual income 102 300 00_ Annual household income 102;300;.00.. Gross monthly income (line 1 divided by 12) 8;525.00 % paid toward housing 35% Enter Amounts Gross monthly housing expense (line 2 multiplied by 35 %) 2,98175 Less Interior Homeowner Insurance 50`.00 2,933.75 Less Property Taxes (1.25% of line 6) 447.02 2,486.73 Less Homeowners Association Dues (HOA) 117 :. 2,369.73 Net monthly housing expense 2,369.73 2,369.73 MAXIMUM MONTHLY MORTGAGE PAYMENT 2,369.73 Interest Rate 5.25% Term 30 Maximum Loan 429,140.55 3.11 Procedures for Initial Rental of BMR Units After the Housing Agreement is executed, and prior to the issuance of any building permits, the developer must prepare and submit a Management Plan to the City of Dublin Housing Division for approval. After the Management Plan has been approved by the City, and prior to the rental of any units, the developer must screen, rank and qualify eligible tenants and send a priority list to the City of Dublin's Housing Division. This should happen within 30 days, if possible. In addition, the rent for a BMR Unit must be calculated pursuant to Section 4.11.3. 3.11.1 The Management Plan for Rental BMR Units, Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -23 • a Plan outlining how the management firm will market and maintain the rental BMR Units, • how the firm will maintain a waiting list for the BMR Units; • how the management firm will verify applicants' Total Household Income, both initially and annually; • information on the units to be made available for the City to use on the City website; • a contact telephone number; • and the names of those individuals responsible for contact and communication with the City. 3.11.2 Application and Screening Process The management firm (which could be the owner or builder) is the entity that will be responsible for occupant selection and documentation of rental BMR Units. The management firm's leasing staff should be trained so the staff understands and can explain the rental application process to applicants. The management firm must require each applicant to complete and return to the management company a Rental BMR Unit Application packet. A sample Rental BMR Unit Application packet is attached as an Exhibit to these Guidelines. To lease the BMR Units the developer /management company must do the following: 1. Collect applications for a given time period. 2. Screen applicants to determine whether they satisfy the requirements for Qualified Households set forth in Section 5.2. 3. Sort and rank the applications of Qualified Households based on the Preference Points and produce a Priority List with those applicants with the most Preference Points at the top followed by all other applicants in descending order based on number of Preference Points received. If more than one applicant receives the same number of Preference Points or if some applicants receive no points the developer shall use other objective criteria set forth in the approved Management Plan to select occupants. For example, the management firm may date stamp all applicant applications and, in the event of a tie, offer the unit to that applicant that applied first, or the management firm may choose to hold a lottery to break ties. However, .whichever criteria the management firm uses must be set forth in the approved Management Plan. 4. The Priority List must be completed within 30 days of the application deadline and submitted to the City for approval; 5. Offer the BMR Units to applicants based on the Priority List, offering first to those applicants with the most points, then in descending order; Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 3 -24 6. Execute a Rental Agreement with the tenant that notifies the tenant that he or she may not sublease the unit and that annual certification is required. 7. Maintain applications with income verification and re- certification for City to review at annual onsite monitoring. Qualification determinations may be appealed by the Developer to the Community Development Director. 3.11.3 Calculating Maximum Rent The Inclusionary Zoning Regulations state that maximum rents cannot exceed 30% of the Maximum Income in a given income category. Affordable rents are calculation formula is listed below for Very Low, Low and Moderate Income Households: • Very Low Income Tenants, monthly rent not in excess of thirty percent (30 %) of one - twelfth of fifty percent (50 %) of the annual Median Income for the Area; • Low Income Tenants, monthly rent not in excess of thirty percent (30 %) of one - twelfth of sixty percent (60 %) of the annual Median Income for the Area; and • Moderate Income Tenants, monthly rent not in excess of thirty percent (30 %) of one- twelfth of one - hundred and ten percent (110 %) of the annual Median Income for the Area, with in each case based upon the following assumed household sizes for the following sizes of residential units in the Project. If tenant is required to pay for utilities, the maximum rent must be reduced to account for the cost of such utilities (a utility allowance). Utilities include gas, electric, water, and trash disposal. In addition, if tenants are required to provide their own stove, refrigerator, or washer and dryer, these expenses are considered utilities, and the maximum rent is further reduced. If the tenant is responsible for any of the above, the maximum rent must be reduced by the amounts listed in the Utility Allowance Sheet* (See Exhibit No. 8). 7 illustrates the calculation of maximum rent: FIGURE 7 2008 Rent limits i Bedroom Size ;Assumptions 10 bdrm = 1 person =1 bdrm = 2 people !.-- 2 bdrm = 3 people 3 Wan = 4 people ---- .____. ___ ---------- 50% .- - - -___ 60% j 110% - { ._ _ ._...._. 0 t..,...... $905 90 ? $1,658 - _ ...- ..._.. ---- 1 - -- -- $861 -...,. _._.. - - - $1,034 -1 —it-895 i j — - 2 i $969 — $1,163 _ $2,131 3 - -_ ` $1 076 $1,292_ ;_$2,368 i - -�- 4 $1,163 $1,395 i $2,558 If a tenants/households income increases to where the tenant/household is no longer income or household size qualified for the BMR rental unit, the tenant/household will not be required to move; The Utility Allowances are established by the Housing Authority of Alameda County and revised periodically. The most current Utility allowances for Alameda County may be accessed at the following web site: htq!Lwww.haca.net., then click on statistics. Affordable Housing Agreement PA 02 -062 Dublin Tralee li, LLC, 3 -25 however, the household will no longer be considered qualified for a BMR unit and the rent may be increased to market rate rent. The developer /landlord will then offer the next available unit with the same specifications (i.e. bathrooms and bedrooms) as a BMR rent restricted unit. 3.11.4 Annual Report Pursuant to Section 8.68.050.13 of the Inclusionary Zoning Regulations, the management entity for the development must provide the City an annual report (See Exhibit No 9). The annual report must include the following information: • Total Household Income for the prior year for each BMR Unit; • Number of people residing in each BMR Unit; • Monthly rents charged and proposed to be charged for each BMR Unit; and • Vacancy of BMR Units during the previous year. The management firm must submit the report annually by October 31 st. The City of Dublin Housing Staff will send a reminder letter to the management firm, with a copy of the Annual Report form for completion and certification at least three months prior to the anniversary date. This form must be completed and returned to the City by the anniversary date. 3.11.5 Annual Monitoring by City The City of Dublin may perform an annual site visit to monitor the records of all BMR Units. The City will provide at least two- week's notice to the developer and /or management firm as to the date of the site visit. Files for all BMR Units must be made available for review at the request of the City. The purpose of the monitoring is to ensure compliance with the City's Inclusionary Zoning Ordinance and these Guidelines. If a Residential Development is financed through a government program that has stricter occupant selection or occupant documentation requirements than the City, the City may elect to rely on those requirements and associated documentation and not require additional documentation. The City will require tenant income verification and restriction of the BMR units for 55 years; however, the management firm may send to the City copies of the documentation that is required and produced for other monitoring agencies. Affordable Housing Agreement PA 02-062 Dublin Tralee 11, LLC, 3 -26 4 BUYER AND RENTER QUALIFICATIONS FOR BMR UNITS 4.1 Buyer Qualifications A household is qualified to purchase a BMR Unit if it satisfies the following requirements: The household's Total Household Income does not exceed the applicable Maximum Income set forth in Section 5.4; 2. The household will occupy the unit as its Principal Residence within 30 days of the close of escrow on the unit; 3. The household is of a size meeting the household size criteria set forth in Section 5.3; 4. All title holders of the property must take an 8 -hour Homebuyer Education workshop and receive a certificate of completion. Certificate of Completion must be dated within 6 months of the date of application; 5. All applicants have a minimum FICO credit score of 620 (See Section 5.5); 6. The City will require all household members to be either a citizen or national of the United States or a qualified aliens defined by the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996(PRWORA); 7. All members of the household are either: a. persons who hold title to the BMR Unit„ appear on the mortgage, and have executed a Resale Restriction Agreement and Performance Deed of Trust for the unit; or b. persons who are claimed as a dependent on the tax returns of a household member who satisfies the requirements in subsection (a) above; and 8. All members of the household must meet the definition of a qualified homebuyer. Qualified Households with Preference Points will receive priority over other Qualified Households. For information on the application and screening process, see Section 4.10.2. Once the City has verified that the applicant is a Qualified Household, the City will send the developer a conditional approval letter (or similar document) indicating the applicant's name, income level and the maximum sale price of the unit (see Section 4.10.3 for more detail on establishing the sale price) and any requirements that must be met before moving forward with the applicant. Once all the required information is received, the City will then send a conditional qualification letter (or similar document) which is valid for 6 months from the date of the letter. A copy of the application packet, along with income verification Applicants who are determined ineligible will receive an ineligibility letter. Ineligible applicants may not reapply to purchase any BMR Unit for a period of one year from the date of the City's ineligibility letter. Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -27 Qualification determinations may be appealed by the Developer to the Community Development Director. 4.2 Renter Qualifications A household is qualified to rent a BMR Unit if it satisfies the following requirements: 1. The household's Total Household Income does not exceed the applicable Maximum Income (See Section 5.4); 2. All members of the household are Legal Residents; 3. The household will occupy the unit as its Principal Residence within 30 days of executing the lease; and, 4. The household is of a size meeting the household size criteria set forth in Section 5.3). 5. The names of all non - dependent household members must appear on the lease for the BMR Unit 6. No member of the Qualifying Household must own any interest in any real property, including but not limited to, any dwelling unit, commercial real estate, or land. Qualified Households with Preference Points will receive priority over other Qualified Households. For information on the application and screening process, see Section 4.11.2. Qualification determinations may be appealed by the Developer to, the Community Development Director. 4.3 Household Size The size of the household is determined by the number of people jjyjag in a household at the time of application. In the case of a pregnant person, the baby may not be included as a member of the household until the baby is born. To qualify for a BMR Unit, the size of a household must be compatible with the size of the unit being rented or purchased. The household size for each BMR Unit may not exceed two people for each bedroom and may not be less than one person per bedroom, unless otherwise permitted by special financing sources. Consult with the City of Dublin for further clarification. The chart below contains the household size permitted for each BMR Unit based on the number of bedrooms: Studio One - bedroom units Two - bedroom units Three - bedroom units Four - bedroom units 1 -2 people households 1 -2 people households 2 -4 people households 3 -6 people households 4 -8 people households Affordable Housing Agreement PA 02 -062 Dublin Tralee 1I, LLC, 3 -28 4.4 Total Household Income To be eligible for a BMR Unit, the applicant's Total Household Income must not exceed the applicable Maximum income. Total Household income means the household's Gross Household Income (see Section 5.4.1 below) plus assets calculated pursuant to Section 5.4.3. Maximum Income is determined periodically by HCD based on AMI. Below are the Maximum Incomes for Alameda County for 2008. Number of Persons in Household Income Category 1 2 3 4 5 6 7 8 Very Low $ 30,150 $ 34,450 $ 38,750 $ 43,050 $ 46,500 $ 49,950 S 53,400 S 56,850 Low $ 46,350 S 53,000 $ 59,600 $ 66,250 $ 71,550 $ 76,850 $ 82,150 $ 87,450 Moderate $ 72,300 $ 82,600 S 93,000 $ 103,300 $ 111,600 $ 119,800 $ 128,100 $ 136,400 4.4.1 Gross Household Income Gross Household Income-means all income from all adult household members (18 years of age and older) derived from all sources as provided in the Internal Revenue Code (Title 26, Subtitle A, Chapter 1, Subchapter B, Part I, Section 61), whether or not such income is exempt from Federal income tax. Such income includes, but is not limited to, the following: • Compensation received from an employer • Compensation includes, but is not limited to salary, overtime pay, and other pay • Other pay can include, but is not limited to compensation for special working conditions or one time pay -out of unused vacation and sick leave. • Alimony, spousal and child support • Cash • Pensions, if at an age where pension is being received as income • Public benefits including, but not limited to, CalWorks, SSI, and disability income • . All interest, dividends, and royalties • income derived from private businesses • Rental Income • Income from pensions • Compensation for services rendered including fees, fringe benefits, commissions, tips, and bonuses • Stipend received for participation in a mentor, learning or education opportunity • Gains from dealings in private and/or commercial property • Gambling Winnings • Annuities, life insurance, and endowment contracts • Income from discharge of indebtedness • Gross partnership contributions or distributions • Income from an interest in an estate or trust Exceptions: Affordable Housing Agreement PA 02 -062 Dublin Tralee I1, LLC, 3 -29 1) Gross Household Income does not include income household earned by a household member who is between the ages of 18 -26 and meets both of the following criteria: • Is claimed as a dependent of a household member on such member's federal income taxes; and • Is a full time student (I2+ units -school transcript must be provided) 2) Gross Household Income does not include payments to a household member from a governmental fund Income if all of the following requirements are satisfied: • The payments are based on the recipient's or the recipient's family's financial need; • The payments do not represent compensation for services rendered; and • The payments are part of a governmental housing subsidy program including, but not limited to, so- called Section 8 federal housing assistance payments. For purposes of determining Gross Household Income, each person, 18 years of age or older, must present the following: • a complete set of Federal and State Income Tax Returns for the past three years, including all schedules (signed & dated) and W -2 forms; (in the case where taxes have not been filed for any of the past three years, a letter of verification of non - filing from the Internal Revenue Service is required); • four most recent and consecutive pay stubs; and • three recent and consecutive statements for all financial accounts, including but not limited to, savings accounts, checking accounts, retirement accounts, 401(K) accounts, stock accounts and another accounts held in the applicant(s) name(s), whether held individually or together. If a household member is self - employed, in addition to the information above, the member must submit profit and loss statements for the past 3 years (if applicable), and a current profit and loss` statement for the year. 4.4.2 Income Calculation a. Wage and Salary If an applicant is a full time employee (usually 30 to 40 hours) or an employee with consistent regular hours or income, or income with overtime or adjustments as a regular part of their job, one of the following formulas listed below in Section "a" will be used to determine the applicant's salary. Bonuses and commissions may be calculated into the annual income calculation. In the case of unclear income or income that is somewhat difficult to calculate, please contact the City of Dublin Housing Division. The City of Dublin will make the final determination which Income Calculation to use. Monthly income x 12 months = annual income Twice monthly x 24 = annual income Bi- weekly income x 26 = annual income Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLQ 3 -30 i I Weekly income x 52 = annual income Hourly income x 40 (or whatever normal hours per week may be) x 52 = annual income An employee who works consistent hours, with some overtime, shall be calculated using the above formula. b. Variable Income For applicants who are part-time employees or employees with variable hours every pay period (or variable hours less than 40 hours per week), inconsistent income or hours, overtime, bonuses and commissions, etc. their annual salary shall be calculated using year -to- date income, plus previous year income (from same income source or employer), divided by the number of months reviewed (UP TO BUT NOT EXCEEDING 12 MONTHS) times 12 to arrive at their annual income. If there is no previous year income from same employer, or the job was started mid -year, use current income year to date using the calculation explained in (a) above shall be used. If an applicant works consistently 40 hours per week and has occasional or regular overtime, use the calculation listed in "a" above to calculate income. c. Inconsistent or Temporary change in Income Due to a Temporary Circumstance If an applicant has a temporary situation (7 months or less) that makes income calculation difficult, a Verification of Employment may be used to calculate applicant's income based on a normal annual time period. Or, the income maybe calculated based on the person's hourly rate times their normal working hours (as shown in item "a" above). d. Self- Employed or Non - Corporation A self - employed applicant is also considered to have variable income. Gross annual income calculations will be based on the previous two year's net income shown on Schedule C of the federal income tax returns, plus net income before taxes from the applicant's signed, year -to- date Profit and Loss Statement, divided by the appropriate number of months (NOT TO EXCEED 12 MONTHS) times 12 to arrive at the annual income. 4.4.3 Assets An asset test will be applied to all applicants to determine whether they satisfy the income requirements. If an applicant has assets that exceed $30,000, the following amounts will be added to the applicant's Gross Household Income to determine the household's Total Household Income: • Ten percent (10 %) of all assets between $30,001 and $130,000 • Thirty percent (30 %) of all assets over $130,000 The maximum assets allowed are $250,000. Households with assets in excess of $250,000 will be disqualified. Assets include, but are not limited to, cash, all savings and checking accounts, stocks, bonds, real estate, gifts and other sources of money. Pensions and federally approved retirement savings accounts, such as IRA's, Roth IRA's and 401K's, are excluded; however, retired applicants who receive income from their retirement account must include such income as Gross Household Income on their application. Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -31 Figure 8 illustrates the calculation for determining income with assets: FIGURE 8 Example: Household of 3 earns $50,000 a year and has $150,000 in total household assets $150,000 (minus) $30,000 = $120,000 (which equals less than $130,000) 10% of $120,000 = $12,000 New total household income: $50,000 + $12,000 = $62,000 Household of 3 earns $50,000 a year and has $200,000 in total household assets $200,000 (minus) $30,000 = $170,000 (which equals more than $130,000) 10% of $130,000 = $131)000 30% of balance of $40,000 = $12,000 New total household income: $50,000 + $13,000 + $12,000 = $75,000 4.5 Credit Score For ownership BMR Units, a credit check will be conducted on all adults (other than dependents) in the household. Applicants must have sufficient creditworthiness to qualify. Creditworthiness means that: i) All household individuals shall have a minimum of three years since Chapters 7 or 13 bankruptcy discharge date and/or foreclosure and evidence of reestablished credit is required; and ii) All persons appearing on the mortgage shall have a minimum FICO credit rating of 620 points from all three credit agencies. The representative credit score is the middle score of the three sets of repository scores reported for each household member. If more than one eligible applicant is applying, all middle scores will be considered and the lowest of the middle scores shall be the score used in qualifying the household (must be 620 or higher). Figure 9 shows an example of how to calculate a representative credit score: Borrower Co- Borrower The Lowest Middle Credit Score of Borrowers FIGURE 9 Lowest Middle Credit Credit Score Score 678 706 690 697 697 4.6 Alternative Credit History Parameters Highest Credit . Score 709 703 Affordable Housing Agreement PA 02 -062 Dublin Tralee H, LLC, 3 -32 Alternative Credit History is permitted with a minimum of four trade lines and twelve -month of satisfactory payment record. One of the trade lines must be a twelve -month verification of rent (VOR) history. 4.7 Preference Points Applicants will be screened by the developer or their designated party, for initial eligibility based on the requirements set forth in Section 5.1 (for ownership units) or Section 5.2 (for rental units). Qualified Households will then be ranked based on the number of Preference Points they receive. The Preference Point system set out in the Inclusionary Zoning Ordinance (see Table 1) provides priority to those persons who live in Dublin, work in Dublin, are public - service employees in Dublin, are seniors age 62 and older, are-permanently disabled, are an immediate family member of a Dublin resident, and/or are being required to relocate from their current Dublin residence due to demolition of their dwelling or conversion of their dwelling from rental to ownership. Each household may only claim Preference Points once for any given category. The Ordinance provides that even if two persons in the household qualify for Preference Points for the same category, the points are only awarded for one person. For example, if a husband and wife are both employed in Dublin, the couple receives only 3 Preference Points for being employed in Dublin, or if the applicant lives with a family member in Dublin, the applicant will only be entitled to a total of 3 Preference Points. Similarly, if two seniors make up a household, they would be entitled to only 1 Preference Point. Table 1: The Preference Point System Priority Points Employed in Dublin for at least 6 months* 3 points Public service employee in Dublin ** 1 additional point Has resided in Dublin for at least one year 3 points Seniors (62 and over) 1 point Permanently disabled 1 point Has an immediate family member who is a Dublin 1 point resident & who has continuously lived in Dublin for at least one year Must move because housing is to be demolished or 1 point converted to condo *Newly hired teacher that will be working in Dublin may waive the six -month employment criteria by submitting a copy of their employment contract. Teacher must be credentialed and work as a school that is a State accredited school. * If self - employed in Dublin, then the business must have a current City business license for at least 6 months at the time of application ** A public service employee is a person who is employed by a public agency such as the City of Dublin, a fire fighter or police officer assigned to work in Dublin, BART, DSRSD, or USPS working in Dublin. Figure 10 demonstrates how Preference Points are calculated: FIGURE 10 Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -33 Example 1: An applicant for a BMR Unit both lives in Dublin (for at least one year) and works in Dublin (for at least 6 months). This individual will receive the following points: Lives in Dublin 3 points Works in Dublin 3 points Total number of points 6 points Example 2: An applicant for a BMR Unit works in Dublin and is a schoolteacher. This individual will receive the following points: Works in Dublin 3 points Public Service Employee i point Total number of points 4 points Example 3: An applicant for a BMR Unit is a senior citizen (62 years old) and lives in the City of Dublin (for at least one year). This individual will receive the following points: Senior citizen 1 point Lives in Dublin 3_points Total number of points 4 points If the household indicates on its application that it qualifies for Preference Points, the household will be required to provide the following proof: If Resident of Dublin: • Copy of two utility bills (PG &E or water), one from at least one year ago and one most recent utility bill both showing the applicant with a Dublin address; or • Copy of a current rental agreement. If Employed in the City of Dublin: • Copy of first and most recent pay stub establishing length of employment; or • Letter from employer, on company letterhead, indicating continuous employment for the past six months; or • For a newly hired teacher that will be working in Dublin, a copy of employment contract. • If self - employed in Dublin, then the business must have a current City business license for at least 6 months at the time of application If Public Service Employee working in Dublin: 0 Copy of first and most recent pay stub establishing length of employment; or Letter from employer, on company letterhead, indicating continuous employment for the past six months; or Affordable Housing Agreement PA 02 -062 Dublin Tralee 1I, LLC, 3 -34 • For a newly hired teacher, at a State accredited school, that will be working in Dublin, a copy of employment contract; and • A letter from employer confirming employment and employer contact information. If Senior Citizen: • A valid California (or other state with photo ID.) driver license; or • A valid California (or other state with photo ID.) identification card; or • A valid passport. If Permanently Disabled Individual: • Doctor's note confirming that applicant is permanently disabled; or • Other verification from a State Agency establishing permanent disability status; or • Verification of receipt of SSI or SSDI. If Person Who Has an Immediate Family Member(s) That Are Dublin Residents: • Copy of two utility bills (PG &E or water), one from at least one year ago and one most recent utility bill both showing the immediate family member with a Dublin address; or • Copy of the immediate family member's current rental agreement; and • A copy of birth certificates for self and immediate family member, establishing relationship; or • Other legal document establishing relationship. If Relocated Dublin resident due to Demolition or Condominium Conversion: • Letter from apartment owner or management firm verifying eithex the imminent condominium. conversion or demolition of the unit; and • Confirmation from the City's Community Development Department. Where definitions are not explicitly stated in the Regulations, the City has developed these definitions: • A senior is defined as a person 62 years of age or older for the purpose of qualifying for preference points; • To qualify for the permanently disabled point, the person must be able to provide written verification from a physician or show receipt of SSI. • Immediate family is defined as a mother, father, brother, sister, child, grandparent or grandchild currently living together for 6 months or more. Affordable Housing Agreement PA 02 -062 Dublin Tralee It, LLC, 3 -35 5 REQUIREMENTS FOR BUYERS OF BMR UNITS 5.1 Financine Requirements All BMR buyers must be able to secure a loan through a lending institution for a BMR Unit. At the time of application, the developer may require that all applicants get pre- approval from the developer's preferred lender. However, once an applicant receives approval to purchase a unit, the applicant may use a lender of its choice, provided that the lender is able to adhere to the City of Dublin's Guidelines for acceptable loan products. 5.1.1 Acceptable Loan Products for Purchase and Refinancing of f a BMR Unit The City reserves the right to reject loan products if the City believes in its sole discretion that there is a stronger likelihood that the loan product would potentially result in loss of the BMR Unit due to the purchasers' inability to comply with the terms of the loan. Ca1HFA or Ca1VA loan products for first mortgages are not available to purchase BMR units; however a number of Ca1HFA loan products are permitted for second and third loans. Other loan products may be evaluated upon request. From time to time, the City will make available a list of acceptable loan products. The following is an example of a non - exclusive list of the loan products that may be acceptable to the City. The list is not intended to be exhaustive and other loan products may be evaluated upon request. Acceptable 1st Mortgage Loan Products • Fixed Mortgages up to 40 years • Maximum 100% combined loan to value 5.1.2 Prohibited Loan Products • Interest -only loans • Negative amortizing loans • Adjustable rate loans • Balloon payment loans • Some lines of credit that exceed the resale price of the unit Unacceptable Mortgages Features • Stated income loans • Excessive points and fees 5.2 Down Payment • Applicants must provide a minimum down payment equal to three percent (3 %) of the purchase price from their own funds. • Funds must be seasoned (on deposit in a financial institution) for a minimum of three months prior to the initial date of the application with documentation showing these funds are available for use as down payment. Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -36 Funds must be placed into escrow prior to close of escrow and proof of availability of funds must be given to the City before close of escrow. 5.2.1 Down Payment Assistance The City reserves the right to reject down payment assistance products if the City believes in its sole discretion that there is a stronger likelihood that the down payment assistance product would potentially result in loss of the BMR Unit due to the purchasers' inability to comply with the terms of the assistance. 5.3 Debt to Income Ratio Homebuyer's total debt to income ratio will be set from time to time by the City based on current financial or real estate market conditions. 5.4 First Mortgage Loan Value Ratio Borrower must provide funds in an amount equal to a minimum of 3% of the purchase price for use as a down payment. Buyer must deposit 3% of the purchase price of their own money into escrow prior to the close of escrow. The 3% must be applied to the purchase price so the combined loan to value does not exceed 100 %. The 3% down payment may not be used towards closing costs. 5.5 Closing Costs and Deposits The buyer is responsible for all closing costs related to the purchase of the BMR Unit, including but not limited to, title fees, escrow fees, and loan origination fees (approximately 2 -3% percent of the purchase price). Homebuyer maybe "gifted" funds to pay for closing costs. The buyer may take advantage of other down payment assistance programs to assist with closing costs with the approval from the City. 5.6 Homebuyer Education Program Homebuyer(s) must successfully complete a City approved Below Market Rate 8-hour Homebuyer Education Class prior to the close of escrow and must provide the City with evidence of completion. 5.7 Documents that Each Buyer Must Sign The Inclusionary Zoning Ordinance requires that all BMR Units be restricted for a period of 55 years. As a result, BMR Unit buyers must execute a Resale Restriction Agreement with the City and a Performance Deed of Trust. These documents must be signed by all titleholders and recorded. 5.7.1 Highlights of the Resale Restriction Agreement The following list highlights some of the restrictions in the Resale Restriction Agreement. This list is not intended to be exhaustive. Affordable Housing Agreement PA 02 -062 Dublin Tralee TI, LLC, 3 -37 Principal Residence Requirement The unit must be owner - occupied and shall not be used as an investment or rental property. BMR Owners are required to occupy the BMR Unit as their Principal Residence. BMR Owners are prohibited from renting their unit without prior written approval from the City. The owner of an ownership BMR Unit may rent his or her unit for a period not to exceed twelve (12) months upon demonstration of hardship, as determined in the sole and absolute discretion of the City Manager, and written approval from the City of Dublin. "Hardship" means circumstances in which a BMR Owner is required to be absent from the unit for an extended period of time due to either a change in the location of his or her employment or health problems of the BMR Owner or an Immediate Family Member of the BMR Owner. Once the BMR Owner obtains written approval from the City to rent his or her BMR Unit, the BMR Owner shall select a Qualified Household to rent the unit. The monthly rental payment for the BMR Unit shall be calculated pursuant to Section 4.11.3. The BMR Owner shall not execute a rental agreement for the BMR Unit without first obtaining the City's approval of such agreement. The rental agreement shall clearly state (1) the term of the rental (not to exceed the twelve month period rental is permitted pursuant to these Guidelines), (2) the monthly rental payment, and (3) that the rental is for a limited period of time. Any rental agreement in violation of these Guidelines is .prohibited, and any BMR Owner who violates these Guidelines shall be deemed to be in default under his or her Resale Restriction Agreement. Resale of BMR Unit The City of Dublin is not responsible for locating or providing qualified buyers for BMR units; however, all potential buyers must be qualified by the City before the sale can proceed. BMR owners may only sell their units to a Qualified Household or to the City for a restricted price calculated pursuant to Section 7.2. A BMR owner must follow the requirements set forth in Section 7.1 when selling his or her unit. The City has the right of first refusal. Appreciation Share Upon the first sale of the BMR Unit after the end of the 55 -year term of the Resale Restriction Agreement, the owner must pay to the City an amount equal to 25% of the difference between the actual sale price and the adjusted resale price calculated pursuant to the formula set forth in Section 7.2. For example, if a unit is originally purchased for $200,000 (actual sale price) and at the end of 55 years sells for $500,000 (adjusted resale price), the equity of the unit is $300,000. The amount owed to the City would be 25% of the $300,000 or $75,000. Title Changes A BMR Owner cannot make changes to the title on a BMR Unit without prior written approval from the City of Dublin. BMR Owners must request changes to title in writing before making any changes to the title of a BMR Unit and are responsible for all costs associated with adding or removing a person to or from the title. In the case of a change in the household makeup, due to either marriage, divorce, legal separation, death or other occasion that will cause a person to move in or to vacate the BMR Unit, owners should contact the City to ascertain how to add or remove names from the Resale Restriction Agreement and Performance Deed of Trust. Affordable Housing Agreement PA 02-062 Dublin Tralee H, LLC, 3 -38 City's Option to Purchase The City has the option to purchase a BMR Owner's unit upon the occurrence of certain events, including but not limited to, the sale of the BMR Unit, bankruptcy of the BMR Owner, and foreclosure. A BMR Owner must notify the City when it desires to sell its BMR Unit by submitting a Notice of Intent to Transfer (Exhibit B to the Resale Restriction Agreement) to the City. If the City decides not to purchase the unit, the City will send the BMR Owner a letter, along with a packet of information that will assist the BMR Owner in finding another Qualified Household to purchase the unit. Refinancing BMR Units and Taking Cash Out In general, BMR Owners may refinance their units only to take advantage of a new loan that benefits the BMR Owner financially (e.g. a lower interest rate with lower monthly payments). BMR Owners must contact the City in writing for prior written approval of all refinancing. Taking cash out of the unit is not allowed unless the cash is going to be used for Approved Capital Improvements as outlined in Section 7.4. Annual Survey/Monitoring Each year, the City of Dublin will monitor and require occupancy certification for all BMR Units. An annual survey will be mailed to the owner(s) of each BMR Unit, usually around the anniversary date of the purchase of the unit. Each owner must complete and return the survey along with qualifying documentation. Failure to return the survey and documentation could place the owner(s) in default of the Resale Restriction Agreement. In addition, pursuant to the Consent Agreement, the City may access and review the BMR Owner's credit reports or other financial or personal information to verify the BMR Owner's compliance with the Resale Restriction Agreement and these Guidelines. Estate Planning Upon the death of a BMR Owner, the inheriting owner must notify the City of the BMR Owner's death within 30 days of the date of death and must sell the BMR Unit to a Qualified Household at a restricted resale price within 180 days (or longer if approved by the City of Dublin due to market conditions) unless (i) the inheriting owner is the legal child or step -child of the BMR Owner; (ii) the City verifies that legal child or step -child qualifies as a Qualified Household; and (iii) the legal child or step -child signs a Resale Restriction Agreement and a Performance Deed of Trust. Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3 -39 1. The owner must inform the City of his or her intent to sell the unit by filling out a Notice of Intent to Transfer (Exhibit B to the Resale Restriction Agreement) and submitting it, along with any letters from the City for Approved Capital Improvements, to the City. (The owner may still decide not to sell their unit after submitting these documents.) 2. The City may exercise its option to purchase the unit. If the City decides not to purchase the unit, the City will send the BMR Owner a Conditional Consent to Transfer letter and a packet of information that will assist the BMR Owner in finding another Qualified Household to purchase the unit. The Conditional Consent to Transfer letter is valid for 90 days from the date of the letter. 3. The City will inform the owner of the permissible sale price of the unit and any other conditions of sale within thirty (30) days following receipt of the Notice of Intent to Transfer. The sale price will be calculated pursuant to the formula in Section 7.2. 4. The BMR Owner must market the unit and pay all fees associated with the sale of the unit. The BMR Owner may resell the BMR Unit through a BMR Resale Program conducted by a for -profit or non - profit organization, such as the Tri- Valley Housing Opportunity Center. If the seller uses a Real Estate Agent, the Agent must contact the City to find out requirements for listing the property, and proper contact information. 5. At least thirty (30) days prior to the anticipated date of the close of escrow, the prospective buyer must submit the following documentation to the City Housing Staff for approval: a. The income documentation set forth in Section 5.4.1; b. Evidence of completion of a Below Market Rate Homebuyer Education Workshop; c. Completed purchase agreement; d. 'A loan pre - approval letter with Good Faith Estimate and Truth in Lending . Statement e. A signed Disclosure Statement (Exhibit F of Resale Agreement) f. A signed Credit Authorization and Release Form, or similar document g. Name, address and phone number of Title Company handling the transaction along with the name of the escrow officer h. Copy of tri-merge Credit Report; and i. Evidence of 3% available funds to be used as a down payment. Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 3 -40 6. The City shall notify the owner within seven (7) days of receipt of complete packet of documentation as listed above of its approval or disapproval of the prospective buyer. 6.2 Calculating Restricted Resale Price The resale price of a BMR Unit is dependent on AMI at the time of sale and the value of Approved Capital Improvements. The resale price is equal to: The lowest of the (1) original price paid by the owner for the BMR Unit, increased by an amount equal to the original price multiplied by the percentage increase in AMI between the effective date of the Resale Restriction Agreement and the date the City receives the owner's Notice of Intent to Transfer. (For instance, if the original price of the unit was $200,000 and the median income increases 2% between the effective date of the Resale Restriction Agreement and the date the City receives the owner's Notice of Intent to Transfer, the unit price will increase by 2 %, or $4,000 to 204,000); or (ii) the fair market value of the BMR Unit as determined by an appraiser approved in writing by the City; plus 2. The cost of Approved. (in writing by the City) Capital Improvements; minus 3. The cost to repair damage to the BMR Unit and to place the unit into saleable condition (the determination of what is considered damage to a unit will be determined by the City). Such items may include, but not limited to, ripped or torn carpet, damage to kitchen or bathroom appliances or fixtures; broken light fixtures, broken or missing tiles and/or grout around tiles, damage to floor or ways; minus 4. The amount of all costs advanced by the City for the payment of mortgages, taxes, assessments, insurance premiums HOA dues .and /or associated late fess, costs, penalties, interest, attorneys' fees, pest inspections, resale inspections and other expenses related to the BMR Unit, which the owner has failed to pay or has permitted to become delinquent. 6.3 Fees Associated with the Selling of a BMR Unit The BMR Owner is responsible for all fees associated with the sale of the unit including, but not limited to, any real estate fees, and the City's Administration Fee of $1,500, which may be adjusted from time to time. 6.4 Capital Improvements As discussed in Section 7.2 above, the resale price of the BMR Unit will be increased by the amount of Approved Capital Improvements. It is the responsibility of the BMR Owner to keep cost and accounting records of all Approved Capital Improvements. 6.4.1 Procedure for Receiving Approval of Capital Improvements In the exercise of reasonable discretion in accordance with regulations adopted by the City from time Affordable Housing Agreement PA 02 -062 Dublin Tralee U, LLC, 3 -41 to time, the City will approve capital improvements that improve the health and safety conditions of a BMR Unit. To receive such approval, the BMR Owner must: • submit evidence to the City showing the purpose and estimated cost of the capital improvements; • receive written approval from the City prior to commencing any improvements; and • submit documentation to the City within 30 days of completion of the improvements verifying that such improvements have been completed. Upon receipt of the estimate for capital improvements, City Staff will review the request for compliance with these Guidelines. The City will review all capital improvements claims and categorize them into three distinct categories: 1) Eligible Capital Improvements; 2) Eligible Replacement and Repair; and 3) Ineligible Costs. Each category is defined below. 1. Eligible Capital Improvements include major structural system upgrades, Special Assessments, selected additions to the unit (where the new space is needed to meet the size of a growing family) and improvements related to increasing the health, safety and energy efficiency of the BMR Unit. Improvements that meet these criteria will be given 100% credit. 2. Eligible Replacement . and Repair includes in -kind replacement of existing amenities, repairs and ' general maintenance that keeps the BMR Unit in good working condition. Costs that meet these criteria will be given 50% credit. 3. Ineligible Costs include cosmetic enhancements, installations with limited useful life spans and non - permanent fixtures. Homeowners may undertake these projects at their discretion; however, they will not be given capital improvements credit. The City will send a letter to the BMR Owner either approving or denying the submitted capital improvements within 30 days of original receipt. The letter will be maintained in the BMR Unit's file at the City of Dublin for use when the unit is resold. Once the City has approved the capital improvements, the BMR Owner may then proceed with the work, obtaining permits from the Building Division, if applicable. Within 30 days of completion of the improvements and sign -off by the Building Division, if applicable, the BMR Owner must submit the following information: • A copy of the receiptlinvoice for each eligible improvement; • Proof of payment, such as a cancelled check, bank account statement or credit card bill; • A copy of Building Permit, if required; and • A picture or pictures of completed work. The City may, at its discretion, visit the job site to visually view the completed work. Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 3 -42 6.4.2 Special Assessments HOA- initiated Special Assessments are considered capital improvements and will be added to the resale price of the BMR Unit. In order to receive credit for Special Assessments, homeowners must submit the following documentation within 3- months of payment: • Invoice for Special Assessment; and • Proof of Payment, such as a cancelled check, bank account statement or credit card bill. 6.4.3 Capital Improvements Cag In order to maintain the affordability of the BMR Unit for subsequent buyers, at the time of sale, the City of Dublin will cap all Approved Capital Improvements at 5% of the resale price. 6.4.4 List of Eligible and Ineligible Capital Improvements Eligible Capital Improvements include major structural system upgrades, some new additions to the unit and improvements related to increasing the health, safety and energy efficiency of the BMR Unit. Improvements that meet these criteria will be given 100% credit. Below is'a non - exclusive list of Eligible Capital Improvements: • Major Electrical Wiring System Upgrade • Major Plumbing System Upgrade • Upgrade to Double Paned Windows • Fireplace Glass Screen • Room Additions (if room addition meets the criteria for the family size) • Installation of Additional Closets and Walls • Alarm System • Removal of Toxic Substances such as Asbestos; Lead or Mold/Mildew • Insulation • Upgrade to Energy Star Built -In Appliances, as follows: o Furnace o Water Heater o Stove/Range o Dishwasher o Microwave Hood Eligible Replacement and Repair includes in -kind replacement of existing amenities, repairs and general maintenance that keeps the property in good working condition. Costs that meet these criteria will be given 50% credit for repairs. Below is a non- exclusive list of Eligible Replacement and Repair: • Electrical Maintenance and Repair, such as: Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC, 3-43 o Switches o Outlets • Plumbing Maintenance and Repair, such as: o Faucets o Supply Line o Sinks • Flooring • Countertops • Cabinets • Bathroom Tile • Bathroom Vanity • Replacement of Built -In Appliances, as follows: o Furnace o Water Heater o Stove /Range o Dishwasher o Microwave Hood o Garbage Disposal • Window Sash • Fireplace Maintenance or In -kind Replacement (Gas) • Heating System • Lighting System (Recessed) Ineligible Costs include cosmetic enhancements, installations with limited useful life spans and non- permanent fixtures. Owners may undertake these projects at their discretion, however they will not be given capital improvements credit. Below is a non- exclusive list of Ineligible Costs: • Cosmetic Enhancements, such as: o Fireplace Tile and Mantel o Decorative Wall Coverings or Hangings o Window Treatments (Blinds, Shutters, Curtains, etc.) o Installed Mirrors o Shelving o Refinishing of Existing Surfaces • Non - Permanent Fixtures, such as: o Track Lighting o Door Knobs, Handles and Locks o Portable Appliances (Refrigerator, Microwave, Stove /Oven, etc.) • installations with Limited Useful Life Spans, such as: • Carpet • Painting of Existing Surfaces • Window Glass • Light Bulbs 6.4.5 Building Permits It is the responsibility of the BMR Owner to ascertain (and obtain if necessary) if the work to be Affordable Housing Agreement PA 02 -062 Dublin Tralee H, LLC, 3-44 performed requires a City building permit. Any work that is done without the required permit will automatically be deemed ineligible as a capital improvement expense whether 'or not it fits within the definition of an Eligible Capital Improvement or Eligible Replacement and Repair. BMR Owners may call (925) 833 -6620 to inquire about building permits. Affordable Housing Agreement PA 02 -062 Dublin Tralee D, LLC, 345 7 REQUIREMENTS FOR OWNER'S OF BMR SECONDARY UNITS A Secondary Unit is a legal secondary dwelling unit on an owner's property that has been approved by the City of Dublin as a rental BMR Unit for purposes of compliance with the Inclusionary Zoning Ordinance and that is reserved for occupancy by, and at rents affordable to, Very -Low, Low -, and Moderate - Income households. The City Council may approve such units as part of Developer's proposal for an alternate method of compliance with the Inclusionary Zoning Regulations. The owner of a Secondary Unit must sign a Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants, which is recorded against the property containing the Secondary Unit and requires, among other things, that the Secondary Unit be reserved for occupancy by, and at rents affordable to, Very -Low, Low -, and Moderate - Income households for the length of the restrictions. The Agreement will remain in effect regardless of any sale, assignment, or transfer of the property, unless the Agreement is terminated by the City in writing. 7.1 Rental Requirements If the owner rents the Secondary Unit, the owner shall rent the unit to a Qualified Household and must follow the procedures set forth in Section 4.11. The rent charged to the Qualified Household must not exceed one twelfth (1/12) of thirty percent (30 %) of the applicable Maximum Income, adjusted for household size, less a utility allowance as specified by the Housing Authority of Alameda County. Owner shall ensure that all leases and contracts with tenants prohibit subleasing of the Secondary Unit. 7.2 Reporting Requirements Prior to a household's initial occupancy of a Secondary Unit, and on every anniversary thereafter, the owner or its authorized agent shall obtain from each household written documentation verifying each tenant's eligibility containing all of the following, including additional documentation as City may reasonably require: • Number of people in the household; and • Total household income. The owner or its authorized agent shall retain this documentation for not less than three (3) years, and upon City's request, shall make the documentation available for inspection by City and shall provide copies of the documentation to City. The owner or its authorized agent may require each household to certify the verifying documentation. . 7.3 Annual Report - Inspections Owner shall submit an annual report to the City in conformity with the requirements of Section 8.68.050.B of the Inclusionary Zoning Regulations, together with a certification that the property is in compliance with the requirements of the Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants. The annual report shall, at a minimum, include the following information: (i) the address of the Secondary Unit; (ii) the monthly rents charged and proposed to be charged; (v) the number of people residing in the unit; and (vi) the total household income of residents. Upon City's request, Owner shall include with the annual report, a copy of the verifying documentation described Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC, 3-46 in Section 8.3, and such additional information as City may reasonably request from time to time in order to show compliance with the Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants. Owner shall permit representatives of City to enter and inspect the property during reasonable business hours in order to monitor compliance with the Secondary Unit Regulatory Agreement and Declaration of Restrictive Covenants upon 24 hours advance notice of such visit to Owner. 7.4 Management Responsibilities Owner shall be responsible for all management functions with respect to the Property, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. Except as City may otherwise agree in writing, City shall have no responsibility for management or maintenance of the Property. The contracting of management services to a management entity shall not relieve owner of its primary responsibility for proper performance of management duties. Affordable Housing Agreement PA 02 -062 Dublin Tralee R, LLC, 3-47 Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee I1, LLC A-1 Recording requested by and when recorded mail to: City of Dublin 100 Civic Plaza Dublin :CA 94568 Attn: City Clerk EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE &66103.27383 (Space Above RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE Owner: Name Property Address: Address Dublin, CA 94568 Name of Development: Development This RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE ( "Agreement") is entered into by and between the CITY OF DUBLIN, a California municipal corporation (the "City") and .Owner Name(s) ( "Owner") regarding certain improved real property which is more particularly described in Exhibit A attached hereto and incorporated herein and commonly known as Unit Address, Dublin; CA 94568 (the "Property") effective as of Date ( "Effective Date "). City and Owner are hereinafter collectively referred to as the "Parties." RECITALS A. The City has Inclusionary Zoning Regulations (Dublin Municipal Code Chapter 8.68) '(the "Regulations ") that require developers of ownership housing to construct within their projects units that are affordable to, low -, and moderate - income households ("the Program "). To further its goal of creating affordable home ownership opportunities for, low -, and moderate - income persons and families, the City has initiated a program for the sale of some homes at a price below their market rate ( "Program "). Pursuant to the Program, developers of ownership housing developments agree to set aside a certain number of units for purchase by low- and moderate - income persons and families, as defined herein. B. Owner is an eligible low- or moderate - income purchaser under the Program, intends to' live in the Property as an owner occupant, and agrees to maintain the Property as Owner's principal residence. C: In order to maintain and preserve the Property as housing affordable to eligible moderate- income purchasers; it is necessary to restrict the use and resale of the Property through imposition of Amended and Restated Affordable housing Agreement PA 02 -462 Dublin Tralee II, LLC 4 -2 the occupancy and resale restrictions set forth herein. These restrictions are intended to prevent initial and subsequent purchasers from using the Property for purposes incompatible with the Program and realizing unwarranted gains from sales of the Property at unrestricted prices. The terms and conditions of this Agreement are intended to provide the necessary occupancy and resale restrictions to ensure that the Property is used, maintained, and preserved as housing affordable to eligible low- and moderate- income purchasers. To further serve the purposes of the Program, it is necessary that the City be granted an option to purchase the Property so that the Property may be maintained as affordable housing. D. The Property constitutes a valuable community resource by providing decent, safe, and sanitary housing to persons and families of low- and moderate - income who otherwise would be unable to afford such housing. To protect and preserve this resource it is necessary, proper, and in the public interest for the City to administer occupancy and resale controls consistent with the Program and the Regulations by means of this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the substantial economic benefits inuring to Owner and the public purposes to be achieved under the Program, Owner and City hereby agree as follows: 1. Definitions. a. "Affordable Unit Cost' means a sales price that results in annual housing expenses that do not exceed 35% of the maximum income level for [Low- or Moderate -] Income households, adjusted for Household Size Appropriate for the Unit. For purposes of this definition, . "annual housing expenses" means principal, insurance, property taxes, property and mortgage insurance, and homeowner's association dues. b. "Area Median Income" means the area median income adjusted for household size as published annually by the California Department of Housing and Community Development .("HCD ") for the County of Alameda pursuant to California Health and Safety Code Section 50093 or successor provision. c. "Eligible Capital Improvements" is defined in Paragraph 5.a. d. "Eligible Households" means a household whose gross annual income does not exceed f Low- or Moderate -] Income and who otherwise meets the requirements of the Program. e. "Household Size Appropriate for the Unit" shall mean 1 person for a studio, two person for a one - bedroom unit, three persons for a two - bedroom unit, four.persons for a three - bedroom unit, and five persons for a four - bedroom unit. f. "Low- Income" means persons and families whose annual gross income does not exceed eighty percent (80 1/o) of Area Median Income, as adjusted for household size. Amended and Restated Affordable Housing Ag rnent PA 02 -062 Dublin Tralee II, LLC 4-3 g. "Moderate- Income" means persons and families whose annual gross income does not exceed one hundred twenty percent (120 %) of the Area Median Income, as adjusted for household size. h. "Permitted Encumbrances" means any encumbrances permitted to be recorded against the Property pursuant to Paragraph 10. i. "Permitted Exceptions" is defined in Paragraph 3.d.ix. j. "Transfer" is defined in Paragraph 9. 2. Program Requirements. a. Affordability Restrictions. Owner hereby covenants and agrees that during the term of this Agreement all of the requirements and restrictions of this Agreement shall apply, and the Property shall be sold or otherwise transferred only pursuant to the terms and conditions of this Agreement and only to (i) Eligible Households at a price not to exceed the Adjusted Resale Price, as defined in Paragraph 5, (ii) the City pursuant to Paragraph 3, at a price not to exceed the Adjusted Resale Price or (iii) a permitted transferee pursuant to Paragraph 9. b. Disclosure. EXCEPT AS PROVIDED IN PARAGRAPHS 9.a AND 9.b BELOW, DURING THE TERM OF THIS AGREEMENT OWNER SHALL NOT SELL OR OTHERWISE TRANSFER THE PROPERTY WITHOUT THE WRITTEN CERTIFICATION BY THE CITY THAT THE TRANSFEREE QUALIFIES AS AN ELIGIBLE HOUSEHOLD AND THAT THE PROPERTY IS BEING TRANSFERRED AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE, WHICH IS CAPPED AT THE AFFORDABLE UNIT 'COST AS DEFINED IN PARAGRAPH La. ANY SALE OR OTHER, TRANSFER OF THE PROPERTY IN VIOLATION OF THIS COVENANT SHALL BE VOIDABLE BY THE CITY. c. Principal Residence Requirement. OWNER COVENANTS AND AGREES THAT HE/SHE/THEY SHALL OCCUPY THE PROPERTY . AS HIS/HER/THEIR PRINCIPAL RESIDENCE FOR THE DURATION OF HIS/HER/THEIR OWNERSHIP AND SHALL NOT RENT OR LEASE THE PROPERTY OR PORTION THEREOF DURING THE TERM OF THIS AGREEMENT WITHOUT PRIOR WRITTEN APPROVAL OF CITY. Owner shall occupy the Property as his/her /their principal residence within sixty (60) days of close of escrow for the Property. Owner sliall be considered as occupying the Property as a principal residence if the Owner is living in the Property for at least ten (10) months out of each calendar year. Upon request by the City made from time to time, the Owner of the Property shall submit an affidavit to the City certifying that the Property is the Owner's principal residence and provide such documents and other evidence as may be requested to verify Owner's compliance with this requirement. Abandonment of the Property shall constitute an Option Event (as defined in Paragraph 3.c below) and shall entitle the City to exercise its Option to purchase the Property. 3. Option to Purchase. a. Grant of Option to Purchase. Owner hereby grants to the City an option ( "Option') to.purchase the Property at the Adjusted Resale Price subject only to Permitted Exceptions upon Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 4-4 the occurrence of an Option Event (defined in Paragraph 3.c below), subject to the terms and conditions contained herein. b. Assignment of the Option. The City may assign the Option to another government entity, a non - profit affordable housing provider or a person or family that qualifies as an Eligible Household. The City's assignment of the Option shall not extend any time limits contained herein with respect to the exercise period of the Option or the period within which the Property must be purchased. c. Events Giving Rise to Right to Exercise of Option. The City shall have the right to exercise its Option upon the occurrence of any of the following events (each, an "Option Event "): i. Receipt of a Notice of Intent to Transfer (defined in Paragraph 3.d.i below); ii. Any actual, attempted or pending sale, conveyance, transfer, lease or other attempted disposition of the Property or of any estate or interest therein, except as provided in Paragraph 9 below; iii. Any actual, attempted or pending encumbrance of the Property, including without limitation by way of mortgage or deed of trust, or by judgment, mechanics, tax or other lien; except as provided in Paragraph 10 below; iv. Recordation of a notice of default and/or notice of sale pursuant to California Civil Code section 2924 (or successor provisions) under any deed of trust or mortgage with a power of sale encumbering the Property; v. Commencement of a judicial foreclosure proceeding regarding the Property; vi. Execution by Owner of any deed in lieu of foreclosure transferring ownership of the Property; . vii. Commencement of a proceeding or action in bankruptcy, whether voluntary or involuntary, pursuant to Title 11 of the United States Code or other bankruptcy statute, or any other insolvency, reorganization, arrangement, assignment for the benefit of creditors, receivership or trusteeship, concerning the Owner; or viii. Any violation by Owner of any provision of this Agreement including, without limitation, the conditions set forth in Paragraph 2 above. d. Method of Exercising the Option. i. Notice of Intent to Transfer. If Owner desires to sell, convey, lease, encumber (other than pursuant to Paragraph 10 below) or otherwise transfer the Property or of any estate or interest therein (other than pursuant to Paragraph 9 below), Owner shall deliver written notice to City of such intent ( "Notice of Intent to Transfer ") by certified mail not less than 45 days prior to the date of such proposed sale, conveyance, transfer, .lease, encumbrance or disposition. The Notice of Intent to Transfer shall be in Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee Il, LLC 4 -5 substantially the form attached hereto as Exhibit B or such substitute form in use by City at such time. In the case of a proposed sale of the Property to an identified prospective purchaser, the Owner shall submit to the City, together with the Notice of Intent to Transfer, a copy of the prospective purchaser's income certification, a list of all assets owned by the prospective purchaser, and other financial information reasonably requested by City, in a form approved by the City, along with the income certification to be provided to any lender making a loan to the prospective purchaser, a copy of the proposed sales contract and all documents setting forth the terms of sale, the name of the title company and escrow information. The City may require documentation evidencing and supporting the income and other financial information contained in the certifications. ii. Notice of Exercise. Upon the occurrence of any Option Event, the City may exercise its Option by delivering notice, pursuant to Paragraph 17 and within the time period specified in Paragraph 3.d.iv, to Owner of City's intent to exercise such Option pursuant to the terms of this Agreement ("Notice of Exercise "). The Notice of Exercise may be in the form attached hereto and incorporated herein as Exhibit C, or in such other form as the City may from time to time adopt. If the Option Event relates to the potential foreclosure of a mortgage under Paragraphs 3.c.iv, 3.c.v, or 3.c.vi, then (i) the City shall also deliver the Notice of Exercise to the mortgagee or beneficiary under such mortgage, at such mortgagee's or beneficiary's address of record in the Office of the Recorder of Alameda County and (ii) the City shall not complete the purchase of the Property if the default is cured within the time periods permitted by law. iii. Notice of Consent to Transfer. If the Option Event involves a transfer of the Property and the City does not exercise the Option, the City may consent to the transfer ("Consent to Transfer") provided that all of the following requirements are satisfied: (i) the proposed purchaser qualifies as an Eligible Household; (ii) the sale of the Property is at a price not to exceed the Adjusted Resale Price; (iii) the proposed purchaser executes a Disclosure Statement in the form attached hereto as Exhibit F or such other form or forms as maybe promulgated by the City; (iv) the proposed purchaser and the City execute and record an agreement substantially similar to this Agreement in a form approved by the City within the time set forth in the Consent to Transfer; and (v) the proposed purchaser executes a Performance Deed of Trust substantially in the form attached hereto as Exhibit 'G. OWNER SHALL PAY REAL ESTATE COMMISSIONS, IF ANY, WHICH SHALL NOT EXCEED 6% OF THE ACTUAL SALES PRICE. If any of the foregoing requirements are not satisfied, then the Consent to Transfer shall expire and the City may, at its option, either. (i) notify Owner of the disqualification, thereby entitling Owner to locate another purchaser who qualifies as an Eligible Household, or (ii) exercise the Option, as if no Consent to Transfer had been delivered. iv. Time Period for Notice. The City shall deliver a Consent to Transfer, if applicable, not later than thirty (30) days after the date that it receives notification of an Option Event. The City shall deliver a Notice of Exercise, if applicable, on or before the date which is the later to occur of the following: (i) thirty (30) days after the date that the City receives notification of an Option Event or (ii) fifteen (IS) days after a Consent to Transfer has expired; provided, -however, that if the City delivers a Notice of Exercise to Owner upon occurrence of an Option Event described in Paragraphs 3.c.iv, 3.c.v, or Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4-6 3.c.vi, the City shall deliver the Notice of Exercise on or before sixty (60) days after the date that the City receives notice of the Option Event, and the City or its assignee shall close escrow for the purchase of the Property no later than 90 days after the date the City receives notification of such Option. Event, unless extended by mutual agreement of Owner and the City. For purposes of computing commencement of the delivery periods, the City shall be deemed to have received notification of an Option Event on the date of delivery of a Notice of Intent to Transfer, pursuant to the terms of Paragraph 17 below or on the date it actually receives notice of default, summons and complaint or other pleading, or other writing specifically stating that an Option Event has occurred. The City shall have no obligation to deliver a Notice of Exercise or Consent to Transfer, and the applicable time period for exercise of the Option shall not commence to run, unless and until the City has received notification of an Option Event in the manner specified in this subparagraph. If there is a stay or injunction imposed by court order precluding the City from delivering its Consent to Transfer or Notice of Exercise within the applicable time period, then the running of such period shall cease until such time as the stay is lifted or the injunction is dissolved and the City has been given written notice thereof, at which time the period for delivery of a Consent to Transfer or Notice of Exercise shall again begin to run. v. No Waiver. If the City in its sole discretion determines not to exercise the Option in any particular instance, or fails to deliver a Notice of Exercise or Consent to Transfer within the time periods set forth in Paragraph 3.d.iv, above, such determination or failure shall not affect City's rights to exercise the Option upon the occurrence of any future Option Event. vi. Right to Reinstatement. If the Option Event is the recordation of a notice of default, then the City shall be deemed to be Owner's successor in interest under California Civil Code Section 2924(c) (or successor section) solely for purposes of reinstatement of any mortgage on the Property that has led to the recordation of the notice of default. As Owner's deemed successor in interest, the City shall be entitled to pay all amounts of principal, interest, taxes, assessments, homeowners' association fees, insurance premiums, advances, costs, attorneys' fees and expenses required to cure the default. If the City exercises the Option, then any and .all amounts paid by the. City pursuant to this Paragraph shall be treated as Adjustments to the Base Resale Price for the Property, as defined in Paragraph 5 below. vii. Inspection of Property. After receiving a Notice of Intent to Transfer or delivering a Notice of Exercise, the City shall be entitled to inspect the Property one or more times prior to the close of escrow to determine the amount of any Adjustments to the Base Resale Price. Before inspecting the Property, the City shall give Owner not less than forty-eight (48) hours written notice of the date, time and expected duration of the inspection. The inspection shall be conducted between the hours of 9:00 am. and 5:00 p.m., Monday through Friday, excluding court holidays, unless the parties mutually agree in writing to another date and time. Owner shall make the Property available for inspection on the date and at the time specified in the City's request for inspection. Amended and Restated Affordable Housing Agreement PA 02-062 Dublin Tralee 11, LLC 4-7 viii. Escrow. Promptly after delivering a Notice of Exercise, the City shall open an escrow account for its purchase of the Property. Close of escrow shall take place on such date which is the later to occur of the following, (a) sixty (60) days after a Notice of Exercise has been delivered, or (b) ten (10) days after Owner has performed all acts and executed all documents required for close of escrow; provided however, if the City 'exercises the Option upon the occurrence of an Option Event described in Paragraphs 3.c.iv, 3.c.v, or 3.c.vi, close of escrow shall take place no later than ninety (90) days after the date'the City receives notification of such Option Event. Prior to the close of escrow, the City shall deposit into escrow with a title company of City's choosing; the Adjusted Resale Price as defined in Paragraph 5 below and all escrow fees and closing costs to be paid by City. Commissions (not to exceed 6% of the actual sales price), closing costs and title insurance shall be paid pursuant to the custom and practice in the County of Alameda at the time of the opening of escrow, or as may otherwise be provided by mutual agreement. Owner agrees to perform all acts and execute all documents reasonably necessary to effectuate the close of escrow and Transfer of the Property to the City. ix. Proceeds of Escrow; Removal of Exceptions to Title, Prior to close of escrow, Owner shall cause the removal of all exceptions to title to the Property that were recorded after the Effective Date with the exception of (i) taxes for the fiscal year in which the escrow for this transaction closes, which taxes shall be prorated as between Owner and City as of the date of close of escrow; (ii) quasi- public utility, public alley, public street easements, and rights of way of record, and (iii) such other liens, encumbrances, reservations and restrictions as may be approved in writing by City ( "Permitted Exceptions "). The purchase price deposited into escrow by the City shall be applied first to the payment of any and all Permitted Encumbrances recorded against the Property in order of lien priority, and thereafter to the payment of Owner's share of escrow fees and closing costs. Any amounts remaining after the purchase price has been so applied, if any, shall be paid to Owner upon the close of escrow. If the purchase price is insufficient to satisfy all liens and encumbrances recorded against the Property; the Owner shall deposit into escrow such additional sums as may be required to remove said liens and encumbrances. In the event that the City agrees to proceed with close of escrow prior to the date that Owner has caused all exceptions to title recorded after the Effective Date other than Permitted Exceptions to be removed, then Owner shall indemnify, defend and hold City harmless from any and all costs expenses or liabilities.(including attorneys' fees) incurred or suffered by City that relate to such exceptions and their removal as exceptions to title to the Property. 4. Base Resale Price. Prior to adjustment pursuant to Paragraph 5 the base resale price ( "Base Resale Price ") of the Property shall be the lowest of: a. Median Income. The original price ( "Base Price ") paid by Owner for acquisition of the Property pursuant to the Program, increased (but not decreased) by an amount, if any, equal to the Base Price multiplied by the percentage increase in the Area Median Income between the Effective Date and the date that the City receives notification of an Option Event; or Amended and Restated Affordable. Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4 -8 b. Fair Market Value. The fair market value of the Property as determined by an appraiser selected and paid for by Owner and approved in writing by the City. To compute the Base Resale Price, the City may use the Base Resale Price Worksheet attached as Exhibit D hereto, or such other form as the City may from time to time adopt. J 5. Adjustments to Base Resale Price. Subject to the Affordable Unit Cost restriction described in subparagraph (d) below, the Base Resale Price shall be increased or decreased, as applicable, by the following adjustment factors ( "Adjustment "): a. Capital Improvements. An increase for Eligible Capital Improvements (defined below) made to the Property. The amount of the Adjustment shall equal the original cost of any such capital improvements. In the exercise of reasonable discretion in accordance with the Guidelines to the Inclusionary Ordinance Regulations adopted by the City from time to time, the City will approve capital improvements that will improve the health and safety conditions of the Property. To receive such approval, the Owner must submit evidence to the City showing the purpose and cost of the capital improvements. If the City approves the capital improvements, they shall be deemed "Eligible Capital Improvements." b. Damages. A decrease by the amount necessary to repair damage to the Property, if any, and to place the Property into saleable condition as reasonably determined by the City, including, without limitation, amounts attributed to. cleaning; painting; replacing worn carpeting and draperies; making necessary structural, mechanical, electrical and plumbing repairs; and repairing or replacing built -in appliances and fixtures. Owner hereby covenants to, at Owner's expense, maintain the Property in the same condition as in existence on the date of City's Notice of Exercise, reasonable wear and tear excepted. c. Advances by the City. - A decrease in an amount equal to the sum of all costs advanced by the City for the payment of mortgages, taxes, assessments, insurance premiums, homeowner's association fees and/or associated late fees, costs, penalties, interest, attorneys' fees, pest inspections, resale inspections and other expenses related to the Property, which Owner has failed to pay or has permitted to become delinquent. d. Adjusted Resale Price Not to Exceed Affordable Unit Cost. The Base Resale Price as adjusted; is hereinafter referred to as the "Adjusted Resale Price." Notwithstanding any other provision hereof to the contrary, in no event shall the Adjusted Resale Price exceed the Affordable Unit Cost. 6. Priority and Effectiveness of the Option. a. Recordation. This Agreement shall be recorded in the Office of the Recorder of the County of Alameda on or as soon as practicable after the Effective Date-. The Option shall. have priority over any subsequent sale, conveyance, transfer, lease or other disposition or encumbrance of the Property, or of any estate or interest therein, and in the event of exercise of the Option by City, the City shall take the Property subject only to Permitted Exceptions. Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee I1, LLC 4-9 Except as otherwise provided in Paragraph Ta, the exercise of the Option by the City at any time and from time to time shall not extinguish the Option or cause a merger of the Option into any estate or other interest in the Property, and the Option shall continue to exist and be effective with respect to the Property against any and all subsequent owners in accordance with the terms and conditions hereof. b. Request for Notice of Default. The City shall file a Request for Notice of Default for recordation in the Office of the Recorder of the County of Alameda promptly upon execution of this Agreement (see Exhibit E). c. Subordination. The City agrees that in order to assist qualified purchasers to secure purchase money financing for the acquisition of the Property, the City will enter into a subordination agreement with a senior purchase money lender to subordinate this Agreement under such terms as the City and the senior purchase money lender shall negotiate. 7. Survival of Option Upon Transfer. a. In General. The City's right to exercise the Option shall survive any Transfer of the Property by Owner. Each transferee, assignee or purchaser of the Property during the term he shall be required to execute an agreement substantially in the form of this Agreement, provided that the term of any such agreement shall be for the duration of the term hereof as of the date of any such transfer, assignment or sale. The Option may be exercised against the Property throughout the term hereof, regardless of whether the Property is owned, possessed or occupied by Owner or any successor, transferee, assignee, heir, executor, or administrator of Owner, regardless of household income (if applicable) including a debtor -in- possession, debtor or trustee pursuant to Title 11 of the United States Code. Notwithstanding the foregoing, the Option shall not survive (i) the Transfer of the Property to a third party purchaser pursuant to a judicial or non judicial foreclosure or a deed -in -lieu of foreclosure under a power of sale contained in a mortgage or deed of trust held by an institutional lender, or (ii) the recording of an instrument conveying. Owner's interest in the Property to the City, or its assignee, provided the conveyance is in accordance with the terms of this Agreement. b. HUD Insured Mortgage. If Owner has acquired the Property by a mortgage insured by the Secretary of the United States Department of Housing and Urban Development, and a notice of default has been recorded pursuant to California Civil Code Section 2924 (or successor provisions), then this Option shall automatically terminate if title to the Property is transferred by foreclosure or deed -in -lieu of foreclosure, or if-the insured mortgage is assigned to the Secretary. 8., Voidable Transfers. Any actual or attempted sale, conveyance, Transfer or other disposition of the Property, or of any estate or interest therein, in violation of the terms and conditions of this Agreement, shall be voidable at the election of the City. Notwithstanding the foregoing, if the Property is financed with an FHA - backed mortgage, this Section 8 does not apply and will not be operative. 9. Permitted Transfers. Except as provided in Paragraphs 9.a and 9.b below, throughout the term of this Agreement, the Property may only be sold or otherwise conveyed only to Eligible Amended and Restated Affordable Dousing Agreement PA 02 -062 Dublin Tralee 11, LLC 4.10 Households at a price not to exceed the Adjusted Resale Price. As more particularly described in Paragraph 5, the Adjusted Resale Price may not exceed the Affordable Unit Cost. There shall be no Transfer of the Property without City's certification that the transferee is an Eligible Household and that the Property is being transferred at a price not to exceed the Adjusted Resale Price. "Transfer" means any sale, assignment or transfer, voluntary or involuntary, of any interest in the Property, including, but not limited to, a fee simple interest, a joint tenancy interest, a life estate, a leasehold interest, an interest evidenced by a land contract by which possession of the Property is transferred and Owner retains title, or a deed of trust. Any Transfer of the Property in violation of the requirements of this Paragraph is prohibited and shall constitute an Event of Default and an Option Event entitling City to exercise its Option to purchase the Property. a. Permitted Transfers. Provided that the transferee and the City executes and records an agreement substantially similar to this Agreement in a form approved by the City, the following Transfers ( "Permitted Transfers ") of title to the Property, or of any estate or interest therein, shall not trigger the exercise of the Option, and shall not be considered Option Events: (a) a good -faith Transfer by gift, devise or inheritance to Owner's spouse or issue; (b) a taking of title by a surviving joint tenant; (c) a court- ordered Transfer of title to a spouse as part of a divorce or dissolution proceeding; (d) a Transfer by Owner into an inter vivos trust in which the Owner is a beneficiary and the Owner continues to occupy the property as his/her primary residence; or (e) an acquisition of title, or of any interest therein, in conjunction with marriage. Notwithstanding any Permitted Transfer, the Option shall remain effective with respect to the Property for the duration of the term hereof. b. Inheritance. In the event a Transfer occurs by devise or inheritance due to death of the Owner, the administrator of the Owner's estate or the person inheriting the Property shall provide written notice to the City of the Owner's death within thirty (30) days of the date of death, and the following procedures shall apply: (i) If the person inheriting the Property (the "Inheriting Owner ") is the child or stepchild of the deceased Owner (an "Inheriting Child "), he or she shall provide the City With documentation that he or she is the child or stepchild of the deceased Owner together with income information, to be verified by the City, so that the City may determine if the Inheriting Child is an Eligible Household. If the Inheriting Child fails to provide required documentation of his or her relationship to the Owner or financial information, he or she shall be deemed not to qualify as an Inheriting Child and/or Eligible Household, as applicable. If the Inheriting Child qualifies as an Eligible Household, he or she shall succeed to the Owner's interest and obligations under this Agreement and new documents shall be executed between the Inheriting Child and the City and recorded against the Property. If the Inheriting Child fails to qualify as an :Eligible Household, he or she shall be required to Transfer the Property to an Eligible Household at a price not exceeding the Adjusted Resale Price, pursuant to the procedures set forth in this Agreement and the City may exercise its Option; provided however, the Inheriting Child may occupy the Property for up to twelve (12) months from the date of the death of Owner provided that the Inheriting Child remains in compliance with the requirements of this Agreement and the Deed of Trust. Amended and Restated Affordable Housing Agreement PA 02-062 Dublin Tralee B, LLC 4-11 (ii) If the Inheriting Owner is not the child or stepchild of the deceased Owner, he or she shall Transfer the Property to an Eligible Purchaser at a price not exceeding the Adjusted Resale Price, pursuant to the procedures set forth in this Agreement, and the City may exercise its Option. In this event, the Inheriting Owner shall provide the City with a Notice of Intent to Transfer within sixty (60) days of the date of death of the Owner. (iii) Failure of an Inheriting Owner to follow the procedures and file the notices described in this Paragraph 9.b shall constitute an Event of Default under this Agreement, and the City may then exercise any of the remedies set forth in this Agreement or available to City under law or equity, including, without limitation, exercise of the City Option. c. Changes to Title. Notwithstanding paragraphs 9.a and 9.b above, Owner shall obtain City's written approval prior to making any changes to the title of the Property, including but not limited to, the addition or deletion of the names of any person to or from title to the Property. 10. Restrictions on Financing Secured by Property. Owner shall permit no mortgage, deed of trust or other security instrument to be recorded against the Property other than the following: (i) a fixed rate conventional mortgage with a term of up to 40 years; (ii) this Agreement; (iii) other loan products approved by the City; and (iv) encumbrances permitted pursuant to Paragraph 11 below. Owner hereby covenants and agrees that he /she /they shall use his/her /their best efforts to ensure that any deed of trust or other agreement encumbering the property shall include provisions providing'for notice to be delivered to City of any default thereunder and,for City's right to cure such default at City's election. 11. Initial Financing; Refinancing; Junior Loans. a. Initial Financing. Owner's aggregate purchase money financing for the Property ( "Initial Financing ") shall not exceed an amount equal to one hundred percent (100 %) of the Base Resale Price calculated as provided in Paragraph 4. b. Refinancing. Any prepayment and refinance of the Initial Financing shall not be permitted unless expressly approved by the City in writing, and the City may approve such refinancing only if all of the following conditions are met: i. the refinance reduces Owner's interest rate and monthly payments of principal and interest on the Initial Financing or shall be used to finance Eligible Capital Improvements; - ii. the refinance does not cause the principal amount of all debt secured by the Property to exceed the then outstanding balance (plus refinancing and closing costs) of the Initial Financing plus. the cost of any Eligible Capital Improvements that shall be made by Owner; Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 4 -12 iv. the refinance does not cause the. Property's loan to value ratio (calculated by comparing the total debt secured by the Property to the Adjusted Resale Price of the Home) to exceed 100% if the Owner does not receive any cash from the refinance or 97% if the Owner receives cash from the refinance for Eligible Capital Improvements. v. the total outstanding balance of principal and any accrued interest on all loans secured by the Property does not exceed the Adjusted Resale Price, calculated by the City pursuant to Paragraph 5 of this Agreement. c. Junior Loans. Mortgage loans or equity lines of credit junior in lien priority to the Performance Deed of Trust are not permitted, except when expressly approved by the City in writing. The City shall only approve junior mortgage loans or equity lines of credit as follows: i. the loan or equity line of credit does not cause the Property's loan to value ratio (calculated by comparing the total debt secured by the Property to the Adjusted Resale Price of the Property) to exceed 100 %. ii. the proceeds of such loan or equity line of credit are used only for Eligible Capital Improvements; and iii. the total outstanding balance of principal and any accrued interest on all loans secured by the Property does not exceed the Adjusted Resale Price, calculated by the City pursuant to Paragraph 5 of this Agreement. For purposes of this Paragraph 11, the Adjusted Resale Price shall be calculated by the City pursuant to Paragraph 5 of this Agreement as of the earlier of (a) the date on which the deed of trust or mortgage securing the new mortgage is filed for recordation in the Official Records. of the County of Alameda, or (b) the date the City receives Notice of intent to Transfer pursuant to Paragraph 3.d.i. iv. Eligible Capital Improvements. In the event (i) the Owner refinances the Initial Financing in accordance with Paragraph I Lb, or (ii) the Owner borrows a junior loan or takes an equity line of credit in accordance with Paragraph I Lc, and the funds from such refinance, loan, or line of credit shall be used for Eligible Capital Improvements, Owner shall provide evidence to City, in a form acceptable to City in its sole and absolute discretion, that any amount of funds received by Owner for. such Eligible Capital Improvements shall be and are used for the construction of such Eligible Capital Improvements. v. Affordable Housing Cost; Subordination. The City and the Owner agree that the requirements of this Paragraph 11 are necessary to ensure the continued affordability of the Property to Owner and to minimize the risk of loss of the Property by Owner through default and foreclosure of mortgage loans. Owner further acknowledges that violation of the provisions of this Paragraph 11 shall constitute a Default under this Agreement. In no case shall this Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee A LLC 4 -13 Agreement and the Performance Deed of Trust be in lower than third lien position on the Property. Any subordination agreement to be executed by City shall include notice and cure rights for City regarding any defaults in the mortgage to which the City is subordinating. 12. Payment of Excess Sale Proceeds. a. Upon Sale in Violation of Agreement. If Owner sells or otherwise transfers the Property in violation of the price restrictions set forth herein, and if City chooses not to exercise its Option, or exercises its Option but is unable to close escrow due to Owner's failure to remove liens and encumbrances recorded against the Property, then City shall be entitled to receive from Owner without any deduction, offset or recoupment, one hundred percent (100 %) of the difference (the "Excess Sale Proceeds ") between (a) the actual sales price net of reasonable and customary real estate commissions paid (such commissions not to exceed six percent (6 %) of the actual sales price), and (b) the Adjusted Resale Price, calculated as of the earlier of (i) the date of close of escrow for the sale of the Property to the third party, or (ii) the date the City receives Notice of Intent to Transfer pursuant to Paragraph 3.d.i. This amount shall be a debt of Owner to City and shall be secured by the Performance Deed of Trust. Owner acknowledges that City shall have no obligation to reconvey the Performance Deed of Trust or this Agreement unless and until the Excess Sale Proceeds are paid to City. City shall use the Excess Sale Proceeds for affordable housing programs. The Owner acknowledges that the formula used to determine the amount of the Excess Sale Proceeds is intended to cause Owner to receive the same or less net sale proceeds from the unrestricted sale of the Property as Owner would have received if the Property had been sold to an Eligible Household at the Adjusted Resale Price. b. Upon Foreclosure. If the Property is sold at a foreclosure sale and the proceeds of such sale are distributed to Owner, any surplus of proceeds remaining after payment of the senior liens and encumbrances on the Property shall be distributed as follows: (i) where the City did not exercise its Option, that portion of the surplus up to, but not to exceed, the net amount Owner would have received pursuant to Paragraph 3.d.ix had the City exercised its Option on the date of such sale shall be distributed to Owner, and the balance of such surplus, if any, shall be distributed to the City for deposit in the City's Inclusionary Zoning In Lieu Fee Fund; or (ii) where the City exercised its Option but was unable to close escrow due to Owner's failure to remove liens and encumbrances recorded against the Property, that portion of to, but not to exceed, the net amount Owner would have received pursuant to Paragraph 3.d.ix as of the date of exercise of City's Option shall be distributed to Owner, and the balance of such surplus, if any, shall be distributed to City for deposit in the City's Inclusionary Zoning In Lieu Fee Fund. 13. Limits on Liability. In no event shall the City become liable or obligated in any manner to Owner by reason of the assignment of this Agreement or the Option, nor shall City be in any way liable or obligated to Owner for any failure of the City's assignee to consummate a purchase of the Property or to comply with the terms of this Agreement or the Option, or any escrow instructions or agreement for the purchase of the Property. 14. Insurance Proceeds and Condemnation Award. In the event the Property is destroyed and insurance proceeds are distributed to Owner instead of being used to rebuild the Property, or, in the event of condemnation, if the proceeds thereof are distributed to Owner, any surplus of proceeds remaining after payment of the senior liens and encumbrances on the Property shalt be Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4-14 distributed as follows: that portion of the surplus up to, but not to exceed, the net amount Owner would have received pursuant to Paragraph 3.d.ix had the City exercised its Option on the date of the destruction or condemnation valuation date shall be distributed to Owner, and the balance of such surplus, if any, shall be distributed to the City. 15. Effective Date. The rights and obligations of the City and Owner set forth in this Agreement shall be effective as of the Effective Date. 16. Term of Agreement and Option. The restrictions contained herein and the City's option to purchase the Property shall continue for a period of fifty -five (55) years commencing on Original Date of Sale. Notwithstanding anything to the contrary in the foregoing, the Agreement shall remain in effect until the first Transfer on or after the termination of the restrictions and option to purchase pursuant to this Paragraph. Upon such sale, Owner shall pay to City an amount ("City's Share ") equal to twenty -five percent (25 %) of the difference between (a) the actual sales price net of reasonable and customary real estate commissions paid (such commissions not to exceed six percent (6 %) of the actual sales price), and (b) the Adjusted Resale Price on the date of the termination of the restrictions and option to purchase pursuant to this Paragraph. The City's Share shall be paid to the City concurrently with close of escrow on the sale of the Property, or upon receipt by Owner of the sale price for the Property, whichever shall first occur. Following completion of a sale in compliance with this provision, this Agreement shall terminate. 17. Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Party in accordance with this Paragraph. All such notices shall be sent by: a. personal delivery, in which case notice shall be deemed delivered upon receipt; b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail; c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof. City: City of Dublin Attn: City Manager 100 Civic PIaza Dublin, California 94568 Owner: Owner Address Dublin, CA 94568 Amended and Restated Affordable Housing Agreement PA 02-062 Dublin Tralee H, LLC 4 -15 18. Defaults and Remedies. a. Events of Default. The following shall constitute the occurrence of an Event of Default hereunder, and shall entitle City to exercise the Option or to pursue any other remedy provided herein or at law or in equity: i. Owner's failure to use the Property as Owner's principal residence; ii. The sale, conveyance, or other transfer of the Property (including a foreclosure sale) if the remaining ownership interest of the Owner in the Property is less than fifty percent (50 %), except as provided in Paragraph 9.a_ or 9.b. iii. A default occurs under the terms of a deed of trust secured by the Property and such default is not cured prior to the expiration of any applicable cure period. iv. Owner encumbers the Property in violation of this Agreement. v. Owner fails to observe or perform any other covenant, condition, or agreement to be observed or performed by Owner pursuant to this Agreement, and such breach remains uncured beyond the expiration of any applicable cure period. - b. Specific Performance. Owner acknowledges that any breach in the performance of its obligations under this Agreement shall cause irreparable harm to the City. Owner agrees that the City is entitled to equitable relief in the form of specific performance upon its exercise of the Option, and that an award of damages shall not be adequate to compensate the City for Owner's failure to perform according to the terms of this Agreement. c. Other Remedies. City shall have all of the remedies provided for at law or equity, all of which shall be cumulative. 19. General Provisions. a. Attorneys' Pees. If either party initiates legal proceedings to interpret or enforce its . rights under this Agreement, the prevailing party in such action shall be entitled to an award of reasonable attorneys' fees and costs in additions to any other recovery to which it is entitled under this Agreement. b. No Joint Venture; No Third -Party Beneficiary. No joint venture or other partnership exists or is created between the Parties by virtue of this Agreement. Except as expressly stated herein, this Agreement does not benefit any third party. c. Successors; Assignment. This Agreement shall inure to the benefit of and shall be binding upon the Parties to this Agreement and their respective heirs, executors, administrators, successors and assigns. City shall have the right to assign all of its rights and obligations under this Agreement without the consent of Owner.. Amended and Restated Affordable Housing Agreement PA 02 -062 Dubtin Tralee U, LLC 4-16 d. Entire Agreement; Amendment, This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof, and supersedes any and all other prior negotiations, correspondence, understandings and agreements with respect thereto. There are no representations, promises, agreements or other understandings between the Parties relating to the subject matter of this Agreement that are not expressed herein. This Agreement may be modified only by an instrument in writing executed by the Parties or their respective successors in interest. e. Survival; No Merger. All of the terms, provisions, representations, warranties and covenants of the Parties under this Agreement shall survive the close of escrow of any sale of the Property and shall not be merged in any deed transferring the Property. f. Authority And Execution. Each Party represents and warrants that it has full power and authority to enter into this Agreement and to undertake all of its obligations hereunder, that each person executing this Agreement on its behalf is duly and validly authorized to do so. g. Severability. The invalidity or unenforceability of any term or provision of this Agreement shall not impair or affect the remainder of this Agreement, and the remaining terms and provisions hereof shall not be invalidated but shall remain in full force and effect. h. Waiver; Modification. No waiver or modification of this Agreement or any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the Party to be charged therewith. No evidence of any waiver or modification shall be offered or received in evidence in any proceeding, arbitration, or litigation between the Parties arising out of or affecting this Agreement or the rights or obligations of any Party hereunder, unless such waiver or modification is in writing and duly executed as aforesaid. The provisions of this section may not be waived except as. herein set forth. A waiver or breach of any covenant, condition or provision of this Agreement shall not be deemed a waiver of any other covenant, condition or provision hereof. i. Construction. The section headings and captions used in this Agreement. are for convenience of reference only and shall not modify, define, limit or amplify any of the terms or provisions hereof. This Agreement shall not be construed as if it had been prepared_ by one of the Parties, but rather as if both Parties have prepared it. j. Governing Law. This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of California. k. Time of the Essence. Time is of the essence in this Agreement as to each provision in which time is an element of performance. 1. Further Assurances. Each Party will, upon reasonable request of the other Party, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments and documents as may be reasonably necessary in order to fulfill the intents and purposes of this Agreement. _ Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 417 m. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all which together shall constitute one and the same instrument. SIGNATURES ON FOLLOWING PAGE; SIGNATURES MUST BE NOTARIZED. Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee IL LLC 4-18 IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above. ATTEST: Deputy City Clerk OWNER(S): Owner Owner CITY: City of Dublin, a California municipal corporation City Manager Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 419 NOTARY ACKNOWLEDGMENT [Insert Here] 0 Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4 -20 CERTIFICATE OF ACCEPTANCE (Pursuant to Government Code §27281) This is to certify that the interest in real property conveyed by the Resale Restriction Agreement and Option to Purchase dated DATE from Owner(s) to the City of Dublin, a California municipal corporation, is hereby accepted by the undersigned office or agent on behalf of the City of Dublin pursuant to authority conferred by the Resolution No. 24 -87 dated April 13, 1987; and the grantee consents to recordation thereof by its duly authorized officer. Dated: City Manager Attest: Deputy City Clerk Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4-21 EXHIBIT A: LEGAL DESCRIPTION [Insert Here] Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4-22 EXHIBIT B FORM OF NOTICE OF INTENT TO TRANSFER ? To: City of Dublin 100 Civic Plaza Dublin, CA 94568 i Attn: City Clerk I Date: Re: Notice of intent to Transfer Pursuant to the terms of the Resale Restriction Agreement and Option to Purchase, dated Date, the undersigned Owner(s), Owner Name(s), hereby give(s) notice of his/her /their intent to transfer the property located at Unit Address, Dublin, California 94568 (the "Property"). Owner may be contacted at the Property or at the following address: Telephone:_ t i L I I I ! Email: If applicable: The proposed transfer of the Property is to the following person(s): Name: i I Address: i Telephone: l The proposed transfer is (check one): ❑ Sale ❑ Other Specify: 1 Owner(s) signature(s): i Signature Signature Print Name Print Name Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 4 -23 EXHIBIT C FORM OF NOTICE OF EXERCISE Date: To (Owner /Transferee): Address: Re: Notice of Exercise The City of Dublin (" City ") hereby gives notice that it is exercising its option to purchase the real property located at Unit Address, Dublin, California 94568. The option has been granted to the City pursuant to the Loan, Occupancy, Refinancing and Resale Restriction Agreement with Option to Purchase executed by and between Owner and the City dated as of Date and recorded on Date as Instrument No. . 201XXXXXXX (the City has assigned its option to purchase the real property to An escrow for the purchase will be opened with Title Company. .Dated: CITY OF DUBLIN City Manager Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4 -24 EXHIBIT D INCLUSIONARY ZONING BASE RESALE PRICE WORKSHEET Date: Owner(s): Address: Dublin, CA 94568 Purchase Price: $ Date of Purchase: Years Owned: years CALCULATION BASED ON INCREASE IN MEDIAN INCOME' Present Median Income: $ Effective Date: Family of four, County of Alameda (at time of sale of unit) Effective Date: Original Median Income: $ Family of four, County of Alameda (at time of purchase of unit) Amount of Increase: Family of four, County of Alameda (Present median income minus original median income) Increase in Price: x x = Method #1 Resale Price: + _ Based on the above, the base resale price as of this date, is: By: Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee IL LLC 4 -25 EXHIBIT E VIV FORM OF REQUEST FOR NOTICE OF DEFAULT Recording requested by and when recorded mail to: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attn: City Clerk EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE §§6103,27383 (Space Above This Line For Recorder's Use Only) Escrow Number: Loan Number: In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No. 201OXXXXXX recorded concurrent herewith in the Official Records of Alameda County, California, and describing land therein as Address, Dublin, California 94568: (See attached legal description) Executed by Owner(s), as Trustor, in which Bank is named as Lender, with Trustee as Trustee, and Beneficiary as Beneficiary, be mailed to the City of Dublin, 100 'Civic Plaza, Dublin, California 94568, Attn.: City Manager By: City Manager NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE RECORDED. Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4 -26 EXHIBIT F DISCLOSURE STATEMENT THERE ARE RESTRICTIONS ON THE SALE OF THE PROPERTY YOU ARE BUYING. EXCEPT FOR A TRANSFER TO THE CITY FOLLOWING CITY'S EXERCISE OF ITS OPTION TO PURCHASE, THIS PROPERTY MAY ONLY BE SOLD TO AN "ELIGIBLE HOUSEHOLD" AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE WHICH IS CAPPED AT AN "AFFORDABLE UNIT COST." THIS MEANS THAT YOU MAY NOT SELL THE PROPERTY FOR MARKET VALUE TO WHOMEVER YOU LIKE. THESE RESTRICTIONS WILL BE IN EFFECT UNTIL 55 years from original date of sale. ANY SALE OF THE PROPERTY IN VIOLATION OF THE RESTRICTIONS SHALL BE VOIDABLE AT THE ELECTION OF THE CITY. ; TO DETERMINE WHO AN ELIGIBLE HOUSEHOLD IS, AND WHAT THE ADJUSTED RESALE PRICE AND AFFORDABLE HOUSING COST ARE, YOU SHOULD CONTACT THE HOUSING SPECIALIST OF THE CITY OF DUBLIN. YOU SHOULD READ THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE RECORDED AGAINST THE PROPERTY. YOU MAY OBTAIN A COPY FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY. YOU SHOULD ALSO BE AWARE THAT A PERFORMANCE DEED OF TRUST WILL BE RECORDED AGAINST THE PROPERTY TO ENSURE COMPLIANCE WITH THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE. YOU MAY OBTAIN A COPY FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY. I HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS. Owner Owner Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee IL LLC 4 -27 EXHIBIT G PERFORMANCE DEED OF TRUST Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4 -28 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF DUBLIN, 104 Civic Plaza Dublin, California 94568 Attn: City Clerk To be recorded without fee. (Space Above 7biis Line For Recorder's Use Only) (Gov. Code, §§ 6103 and 27383.) OF PERFORMANCE DEED OF TRUST ��wtnu� (Option to Cure and Purchase Agreement) THERE ARE RESTRICTIONS ON THE SALE OF THE PROPERTY ENCUMBERED BY THIS DEED OF TRUST. EXCEPT FOR A TRANSFER TO THE CITY OF DUBLIN (THE "CITY ") OR CITY'S ASSIGNEE FOLLOWING CITY'S EXERCISE OF ITS OPTION TO PURCHASE, THIS PROPERTY MAY ONLY BE SOLD TO AN "ELIGIBLE HOUSEHOLD" AT A PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE WHICH IS CAPPED AT AN "AFFORDABLE UNIT COST." THE RESALE RESTRICTION AGREEMENT, ALSO RESTRICTS THE EXTENT TO WHICH THIS PROPERTY MAY BE ENCUMBERED BY JUNIOR FINANCING AND LIMITS TRUSTOR'S RIGHTS TO REFINANCE EXISTING MORTGAGES. This PERFORMANCE DEED OF TRUST ("Deed of Trust ") is made as of ("Effective Date ") by ( "Trustor ") whose address is Dublin, CA 94568 in favor of ( "Trustee "), for the benefit of the CITY OF DUBLIN (referred to variously as "City" or `Beneficiary ") whose address is 100 Civic Plaza, Dublin, CA 94568, as Beneficiary. RECITALS A. Trustor is the owner of the real property located at i Dublin, California and more particularly described in the attached Exhibit A, (the "Property). B. The Trustor's predecessor in interest developed the Property pursuant to the City's Inclusionary Zoning Regulations, which regulations require developers of rental and ownership housing to construct within their projects units that are affordable to very low -, low -, and moderate - income households and which regulations require the Property to be subjected to restrictions on resale that ensure that the Property remains affordable. C, In connection with the Inclusionary Zoning Regulations, Beneficiary and Trustor entered into a Resale Restriction Agreement and Option to Purchase dated as of the Effective Date and recorded in the Official Records of Alameda County substantially concurrently Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee H, LLC 4 -29 herewith (the "Resale Restriction Agreement ") (capitalized terms used without definition herein have the meaning ascribed to such terms in the Resale Restriction Agreement); and D. Pursuant to the Resale Restriction Agreement, Trustor is obligated, among other requirements, to sell the Property only to Eligible Purchasers at a price not in excess of the Adjusted Resale Price, which is capped at the Affordable Unit Cost; and E. The Resale Restriction Agreement also provides (among other provisions) that: (i) Trustor is obligated to notify Beneficiary of Trustor's intent to sell the Property in order to enable Beneficiary to exercise its option to purchase the Property at a restricted price; (ii) Beneficiary has an option to purchase the Property if Trustor defaults under the Resale Restriction Agreement; and (iii) there are restrictions on Trustor's ability to encumber the Property and to refinance the existing loans secured by the Property. AGREEMENT NOW, THEREFORE, to secure the full and timely performance by Trustor of the Secured Obligation, it is agreed as follows: 1. Grant in Trust. Trustor, in consideration of the promises herein recited and the trust herein created, hereby irrevocably and unconditionally grants, transfers, conveys and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale, all estate, right title and interest which Trustor now has or may later acquire in and to that certain real property located in the City of Dublin; County of Alameda, State of California, described in the attached Exhibit A and commonly known as: , Dublin, California (the "Property's together. with all of the following: (i) all improvements now or hereafter located or constructed on the Property and all replacements and additions thereto ("Improvements"); (ii) all easements, rights of way, appurtenances and other rights used in connection with the Property or as a means of access thereto ( "Appurtenances "); (iii) all fixtures now or hereafter attached to or used in and about the Property or the improvements located thereon or hereafter located or constructed on the Property, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or. shall be attached to the improvements in any manner ( "Fixtures and Equipment "); and (iv) all leases, subleases, licenses and other agreements relating to use of occupancy of the Property ( "Leases ") and all rents or other payments which may now or hereafter accrue or otherwise become payable to or for the benefit of Trustor ( "Rents ") (whether or not such Leases and Rents are permitted by the Resale Restriction Agreement). All of the above - referenced Property, Improvements, Appurtenance, Fixtures and Equipment, Leases and Rents are herein referred to collectively as the "Security ". Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Traloe H, LLC 4-30 2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and /or performance of the following (the "Secured Obligations "): (i) all present and future obligations of Trustor set forth in this Deed of Trust or in the Resale Restriction Agreement (including without limitation, Trustor's obligation to convey the Property only to Eligible Purchasers at no more than the Adjusted Resale Price, which is capped at an Affordable Unit Cost (as such terms are defined in the Resale Restriction Agreement); (ii) all additional present and future obligations of Trustor, to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iii) all modifications, supplements, amendments, renewals, and extensions of any of the foregoing, whether evidenced by new or additional documents; and (iv) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary's interests under this Deed of Trust. 3. Assi nment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assigtment and not an assignment for security only. Except to the extent that the lease or rental of the Property is prohibited by the Resale Restriction Agreement, Beneficiary hereby confers upon Trustor a license to collect and. retain such, rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person,'by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys' fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary's right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid., shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land and Improvements, Beneficiary shall not be deemed to be a "mortgagee in possession," shall not be responsible for performing any obligation of the lessor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and unless due solely to the willful misconduct or gross negligence of Beneficiary, shall not be responsible for any dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. 4. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 4-31 being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of Alameda County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. The full name of Trustor and the mailing address of Trustor are set forth in Section 10.2 of this Deed of Trust. 5. Trustor's Representations Warranties and Covenants - 5.1 Trustor's Estate. Trustor represents and warrants that Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security, that other than this Deed of Trust, the Security is encumbered only by: (a) that deed of trust executed by Trustor in connection with a loan made to Trustor by (the "First Lender "), securing a promissory note executed by Trustor in . favor of the First Lender ( "First Lender Note "), to assist in the purchase of the Property (the "First Lender Deed of Trust ") and (b) the Resale Restriction Agreement. Trustor agrees to warrant and defend generally the title to the Security against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring the City's interest in the Security. (As used in this Deed of Trust, the term- "First Lender" shall include all successors and assigns of the First Lender.) 5.2 Repayment of Sums Owed under Resale Restriction Agreement. Trustor will promptly pay to the City all sums due under the Resale Restriction Agreement, including all principal and interest. 5,3 Resale Restriction Agreement. Trustor will observe. and perform all of the covenants and agreements of the Resale Restriction Agreement. 5.4 First Lender Loan. Trustor will observe and perform all of the covenants and agreements of the First Lender Note, First Lender Deed of Trust, and related First Lender loan documents. 5.5 Charges; Liens. Trustor will pay prior to delinquency, all taxes, assessments and other charges, fines and impositions affecting the Security directly to the payee thereof. Upon request by the City, Trustor will promptly furnish to the City all notices of such amounts due. Trustor shall pay when due each obligation secured by or reducible to a lien,'charge or encumbrance which now does or later may encumber or appear to encumber all or part of the Property or any interest in it, whether or not such lien, charge or encumbrance is or would be senior or subordinate to this Deed of Trust. Trustor shall not be required to pay any tax, levy, charge or assessment so long as its validity is being actively contested in good faith and by appropriate actions and/or proceedings which will operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof. Amended and Restated Affordable housing Agreement PA 02 -062 Dublin Tralee II, LLC 4-32 5.6 Hazard. Insurance. Trustor will keep the Security insured by a standard all risk property insurance policy equal to the replacement value of the Security (adjusted every five (5) years by appraisal, if requested by the City). If the Security is located in a flood plain, Trustor shall also obtain flood insurance. In no event shall the amount of insurance be less than the amount necessary to prevent Trustor from becoming a co- insurer under the terms of the policy. The insurance carrier providing this insurance shall be licensed to do business in the State of California and be chosen by Trustor subject to approval by the City. All insurance policies and renewals thereof will be in a form acceptable to the City, and will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of the First Lender Note and the City as their interests may appear and in a form acceptable to the City. The City shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the City, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the City or its designated agent. The City, or its designated agent, may make proof of loss if not made promptly by Trustor. The City shall receive thirty (30) days advance notice of cancellation of any insurance policies required under this section. Unless otherwise permitted by the City in writing, insurance proceeds, subject to the rights of the First Lender, will be applied to restoration or repair of the Security damaged. If permitted by City, and subject to the rights of the First Lender, the insurance proceeds shall be used to repay any amounts due under Section 13 of the Resale Restriction Agreement, with the excess, if any, Paid to Trustor. If the Security is abandoned by Trustor, or if Trustor fails to respond to the City, or its designated agent, within thirty (30) days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle a claim for insurance benefits, the City, or its designated agent, is authorized to collect and apply the insurance proceeds at the City's option either to restoration or repair of the Security or to pay amounts due under the Resale Restriction Agreement. If the Security is acquired by the City, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed of Trust immediate prior to such sale or acquisition, subject to the rights of the First Lender. During the course of any rehabilitation of the improvements located on the Property, Trustor shall hire only licensed contractors who maintain the following forms of insurance: Liability Insurance. Comprehensive general liability insurance against liability for bodily injury to or death of any person or property damage arising out of an occurrence on or about the Property. The limits of such insurance shall be not less than One Million Dollars ($1,000,000) combined single limit for bodily injury and property damage. Amended and Restated Affordable Housing Agreement PA 02 -662 Dublin Tralm Q, LLC 433 Worker's Compensation Insurance. Worker's compensation insurance covering all persons employed in connection with any work on the Property. 5.7 Preservation and Maintenance of Security. Trustor will keep the Security in good repair and in a neat, clean, and orderly condition and will not commit waste or permit impairment or deterioration of the Security. If there arises a condition in contravention of this Section, and if the Trustor has not cured such condition within thirty (30) days after receiving a City notice of such a condition, then in addition to any other rights available to the City, the City shall have the right (but not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Security to recover its cost of curing. 5.8 Protection of the City's Security. If Trustor fails to perform the covenants and agreements contained in this Deed of Trust or if any action or proceeding is commenced which materially affects the City's interest in the Security, including, but not limited to, default under the First Lender Deed of Trust, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the City, at the City's option, without releasing Trustor from any obligation hereunder, may make such appearances, disburse such sums and take such action as it determines necessary to protect the City's interest, including but not limited to, disbursement of reasonable attorneys' fees for any lawful purpose, including, without limitation, attorneys' fees incurred in monitoring pending First Lender defaults, foreclosure proceedings, short sales or other third -party sales in order to ensure the protection of City's Security interest, and entry upon the Security to make repairs. Any amounts disbursed by the City pursuant to this paragraph, with interest thereon, will become an indebtedness of Trustor secured by this Deed of Trust and recoverable to City from proceeds of any City, First Lender or other foreclosure, or otherwise. Unless Trustor and City agree to other terms of payment, such amount will be payable upon notice from the City to Trustor requesting payment thereof, and will bear interest from the date of disbursement at the lesser of (i) ten percent (10 %); or (ii) the highest rate permissible under applicable law. Nothing contained in this paragraph will require the City to incur any expense or take any action hereunder. 5.9 Inspection.. The City may make or cause to be made reasonable entries upon and inspections of the Security; provided that the City will give Trustor reasonable notice of inspection. 5.10 Hazardous Substances. Trustor shall not cause or permit the presence, use, disposal, storage, or .release of any -Hazardous Substances in, on, under, about, or from the Property. Trustor shall not do, nor allow anyone else to do, anything affecting the Property that is in violation of any Environmental Law. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property when used and disposed of in accordance with Environmental Law. "Hazardous Substances" means any substance defined as toxic or hazardous substances or hazardous waste or regulated under any Environmental Law, and the following substances: Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4-34 gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. "Environmental Law" means all federal, state or local statutes, ordinances, regulations, orders, decrees and judgments that relate to health, safety or environmental protection including without limitation the regulation of the use, disposal, manufacture, or release of Hazardous Substances. Trustor shall promptly give City written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Trustor has actual knowledge. If Trustor learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Trustor shall promptly take all necessary remedial actions in accordance with Environmental Law. 6. Nonliabili1y for Negligence, Loss, or Damage, No Joint Venture. Trustor acknowledges, understands and agrees that the relationship between Trustor and the City is solely that of a borrower and lender, and that the City does not undertake or assume any responsibility for or duty to Trustor to select, review, inspect, supervise, pass judgment on, or inform Trustor of the quality, adequacy or suitability of the Security or any other matter. The City owes no duty of care to protect Trustor against negligent, faulty, inadequate or defective building or construction or any condition of the Security and Trustor ' agrees that neither Trustor, or Trustor's heirs, successors or assigns shall ever claim, have or assert any right or action against the City for any loss, damage or other matter arising out of or resulting from any condition of the Security and will hold City harmless from any liability, loss or damage for these things. Nothing contained herein or in Note or the Resale Restriction Agreement shall be deemed to create or construed to create a partnership, joint venture or any relationship other than that of a borrower and lender. 7. Indemnity. Trustor agrees to defend, indemnify, and hold the City of Dublin and its elected and appointed officials, officers, employees, and agents ( "Indemnitees ') harmless from and against all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys' fees that the Indemnitecs may incur as a direct or indirect consequence of- (i) Trustor's failure to perform any obligations as and when required by the Resale Restriction Agreement and this Deed of Trust; or (ii) the failure at any time of any of Trustor's representations or warranties to be true and correct. 8. Acceleration; Remedies. Upon Trustor's breach of any covenant or agreement of Trustor in Resale Restriction Agreement or this Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed of Trust, the City, prior to acceleration, will mail by express delivery with delivery receipt, notice to Trustor specifying; (1) the breach; (2) the action required to cure such breach; (3) a date, not less than thirty (30) days from the date the notice is received by Trustor as shown on the return receipt, by which such breach is to be cured; and (4) if the breach is curable, that failure to cure such breach on or Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee II, LLC 4-35 before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Security. The notice will also inform Trustor of Trustor's right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of default or any other defense of Trustor to acceleration and sale. If the breach is not cured on or before the date specified in the notice, the City, at the City's option, may: (a) declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law; (b) either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the City shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; (c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924 et seq., as amended from time to time; or (e) exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. The City shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees. 9. Trustor's Right to Reinstate. Notwithstanding the City's acceleration of the sums secured by this Deed of Trust, Trustor will have the right to have any proceedings begun by the City to enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the Security pursuant to the power of sale contained in this Deed of Trust or 'at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays City all sums which would be then due under this Deed of Trust if there were no acceleration under this Deed of Trust or the Resale Restriction Agreement; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in the Resale Restriction Agreement or this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by City and Trustee in enforcing the covenants and agreements of Trustor contained in the Resale Restriction Agreement or this Deed of Trust, and Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee It LLC 4-36 in enforcing the City's and Trustee's remedies, including, but not limited to, reasonable attorney's fees; and (d) Trustor takes such action as City may reasonably require to assure that the lien of this Deed of Trust, City's interest in the Security and Trustor's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred. 10. Deleted. 11. Reconve ance. Upon the expiration of the term of the Resale Restriction Agreement if the Trustor owns and occupies the Property and is not in violation of any provisions of this Deed of Trust or the Resale Restriction Agreement, the City will reconvey the Security and will surrender this Deed of Trust and the Resale Restriction Agreement to Trustee. Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 12. Substitute Trustee. The City, at the City's option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 13. Superiority of First Lender Documents. Notwithstanding any provision herein, this Deed of Trust shall not diminish or affect the rights of the First Lender under the First Lender Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against the Security in compliance with the requirements of Section 25 of the Resale Restriction Agreement. Notwithstanding any other provision hereof, the provisions of this Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights of the First Lender, or such lender's assignee or successor in interest, to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the ' Trustor. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, this Deed of Trust shall be forever terminated and shall have no Turther effect as to the Property or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure, this Deed of Trust shall automatically terminate upon such acquisition of title, provided that (i) the City has been given written notice of default under such First Lender Deed of Trust with a sixty (60) -day cure period and .(ii) the City shall not have cured or commenced to cure the default within such sixty (60) -day period or commenced to cure and given its firm commitment to complete the cure in form and substance acceptable to the First Lender. 14. Request for Notice. City requests that copies of-the notice of default and notice of sale be sent to City at the address set forth in Section 15.5. Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 4-37 15. Miscellaneous. 15.1 Forbearance by the City Not a Waiver. Any forbearance by the City in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by the City will not be a waiver of the City's right to require satisfaction of any obligations secured by this Deed of Trust. 15.2 Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 15.3 Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the City and Trustor subject to the provisions of this Deed of Trust. 15.4 Joint and Several Liability. if this Deed of Trust is executed by more than one person as Trustor, the obligations of each shall be joint and several. 15.5 Notices. Except for any notice required under applicable law to be given in another manner, (a) any notice to Trustor provided for in this Deed of Trust will be given by certified mail, return receipt requested, express delivery with delivery receipt or personal delivery with delivery receipt, addressed to Trustor at the address shown in the first paragraph of this Deed of Trust or such other address as Trustor may designate by notice to the City as _provided herein, and (b) any notice to the City will be given by certified mail, return receipt requested, express delivery with delivery receipt or personal delivery with delivery receipt, to the City of Dublin, 100 Civic Plaza, Dublin, CA 94568 Attn: City Manager, or to such other address as the City may designate by notice to Trustor as provided above. Notice shall be effective as of the date received by City as shown on the return receipt. 15.6 Governing Law. This Deed of Trust shall be governed by the laws of the State of California, 15.7 Severability. In the event that any provision or clause of this Deed of Trust or the Resale Restriction Agreement conflicts with applicable law, such conflict will not affect other provisions of this Deed of Trust or the Resale Restriction Agreement which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and the Resale Restriction Agreement are declared to be severable. 15.8 Captions. The captions and headings in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 15.9 Nondiscrimination. Trustor covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry.or national origin in.the sale, transfer, use, occupancy, tenure or enjoyment of the Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee 11, LLC 4 -38 I Property, nor shall Trustor or any person claiming under or through Trustor establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Property. The foregoing covenant shall run with the land. [EXECUTION PAGE FOLLOWS; SIGNATURES MUST BE NOTARIZED] Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee % LLC 439 IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above. 1681143.1 Trustor Trustor Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee ]I, LLC 4 -40 EXHIBIT A LEGAL DESCRIPTION Amended and Restated Affordable Housing Agreement PA 02-062 Dublin Tralee 11, LLC 4-4I EXHIBIT 5 Memorandum of Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In -Lieu of Constructing Certain Affordable Ownership Units Amended and Restated Affordable Housing Agreement PA 02 -062 Dublin Tralee H, LLC 5 -] Recording requested by and when recorded mail to: City of Dublin 100 Civic Plaza Dublin, CA 94568 Attn: City Clerk EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE $27383 above this line for Recorder's use MEMORANDUM OF AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN -LIEU OF CONSTRUCTING CERTAIN AFFORDABLE OWNERSHIP UNITS This Memorandum (this "Memorandum ") of Amended and Restated Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In -Lieu of Constructing Certain Affordable Ownership Units (the "Agreement ") is entered into on this day of , 2011, by and between the City of Dublin, a municipal corporation (hereafter "City ") and Dublin Tralee II, LLC, a Delaware limited liability company (the "Developer"). This Memorandum supersedes a similar Memorandum recorded on October 21, 2005 in the Official Records of Alameda County as Instrument No. 2005455428. 1. Pursuant to the Agreement, dated as of , 2011 by and between City and Developer, the Parties have set forth their respective obligations with respect to the provision of affordable units on lands presently owned by Developer known generally as the Tralee project and more specifically described in Exhibit A (the "Property "). These obligations run with the land. 2. Developer and City have executed and recorded this instrument to give notice of the Agreement, and the respective rights and obligations of Developer and City. The unrecorded Amended and Restated Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In -Lieu of Constructing Certain Affordable Ownership Units is incorporated by reference in its entirety in this Memorandum. 3. This Memorandum shall bind and inure to the benefit of the parties and their respective heirs, successors and assigns, subject however to restrictions set forth in the Agreement regarding assignment. [EXECUTION PAGE FOLLOWS; SIGNATURES MUST BE NOTARIZED] Amended and Restated Affordable Housing Agreement PA 02-062 Dublin Tralee ll, LLC 5 -2 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written. CITY OF DUBLIN. a municipal corporation Attest: City Clerk By: Joni Patillo, City Manager Dublin Tralee II, LLC a Delaware limited liability company By: Authorized Agent ** Applicant's Signature shall be notarized prior to returning signed agreement to the City of Dublin Community Development Department. 1686180 I. Amended and Restated Affordable Housing Agreement PA 02-062 Dublin Tralee 11, LLC 5_3 EXHIBIT A Property Description THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF DUBLIN, COUNTY OF ALAMEDA, STATE OF CALIFORNIA, BEING A PORTION OF LOT 1, AS SHOWN ON MAP OF TRACT 7457, FILED JUNE 13, 2006, IN BOOK 291 OF MAPS. PAGE 29 THROUGH 37, INCLUSIVE, ALAMEDA COUNTY RECORDS, FURTHER DESCRIBED AS FOLLOWS: UNITS 6526, 6530, 6534, AND 6538 IN BUILDING NO. 5, AND UNITS 651.7 AND 6529 IN BUILDING NO. 1.0, AS DEPICTED ON THAT CERTAIN CONDOMINIUM PLAN FOR LOT 1 OF TRACT 7457, WHICH IS ATTACHED AS EXHIBIT "A" TO THE TRALEE VILLAGE DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS RECORDED ON APRIL 18, 2008 AS DOCUMENT NO 2008133996, TOGETHER WITH ANY AMENDMENTS, MODIFICATIONS OR ANNEXATIONS AS MAY OCCUR FROM TIME TO TIME, IN THE OFFICIAL RECORDS OF ALAMEDA COUNTY, CALIFORNIA (THE "DECLARATION "), AND FURTHER DEFINED IN THE DECLARATION. UNITS 6630, 6634, 6638, 6642 OF BUILDING 1, UNITS 6608, 6612, 6616, 6620 OF BUILDING 2, UNITS 6586,6590,6594,6598 OF BUILDING 3, UNITS 6647, 6651, 6655, 6659 OF BULL.DING 6, UNITS 6615, 6619, 6623, 6627, 6631, 6635, 6639 OF BUILDING 7, UNITS 6589, 6593, 6597, 6601, 6605 OF BUILDING 8, AS DEPICTED ON THE CONDOMINIUM PLAN - PHASES 2 & 3, TRACT 7457 RECORDED ON JUNE 17, 2011 AS DOCUMENT NO. 2011,174652 IN THE OFFICIAL RECORDS OF ALAMEDA COUNTY, CALIFORNIA. ALL OF FPCP 4,5 AND 6 AS DEFINED IN THE DECLARATION AND AS SHOWN ON THE PHASE 2 & 3 CONDOMINIUM PLAN. Amended and Restated Affordable Housing Agreement PA 02-062 Dublin Tralee I1, LLC 5 -4 SheaHomes. Caring since 788T March 4"', 2013 Luke Sims, Community Development Director City of Dublin 100 Civic Plaza Dublin, CA 94568 RE: Tralee Town Homes Affordable Housing Mr. Sims, Per the affordable housing agreement for the Tralee Village Town Home Project ( "Project ") Dublin Tralee 11, LLC /Shea Homes ( "Owners ") were to meet their obligations under the City of Dublin's inclusionary housing ordinance by supplying thirteen (13) affordable housing units as follows: 1. Eight (8) housing units were to be sold at below market rates with the purchase price calculated using the following income limitations: a. 3 units to be sold to low income households b. 5 units to be sold to moderate income households 2. Payment of in lieu inclusionary housing fee for a total of five (5) units. The Owners are requesting that the affordable housing obligation for the Tralee Town Homes be modified as follows: 1. Payment of in lieu inclusionary housing fee for Five (5) units paid at first production building pen-nit (Complete): a. In January of 2013, Dublin Tralee 11 paid $107,005 per unit for One (1) unit (Total of $107,005). b. In January of 2013, Shea Homes paid $107,005 per unit for Four (4) units (Total of $428,020). 2. Two (2) Units sold to moderate income households (Complete) a. 6534 Sierra Lane was sold and closed to a Moderate income buyer per the City of Dublin's inclusionary zoning prograiri. b. In May of 2013, Signature Homes will close the sale on 6525 Bantry 13ay Street to a qualified Moderate income buyer. 3. For satisfaction of the remaining Six (6) units, Shea Homes will pay $107,005 per unit (total $642,030) 30 days after execution of an affordable housing agreement amendment allowing this in lieu payment to satisfy the obligation to deliver° the following units: 5_ ;1100 .1. %hco N.,w,e, Lim flo! I'rtrlue0'ijk. nu tndrpen'lo11 membe). !/ 1be5Nhea.flmW1'.?/ corn /a�Inie,. j. 6489 Bantry Bay Street ii. 6486 Tralce Village Drive iii, 64901'ratee Village Drive iv, 6543 rralee Village Drive v. 6661 Tralee Village Drive vi. 6665 Tralee Village Drive Please review our proposal at your earliest convenience and let me know when you would be available to discuss it further, Sincerely, David Best Cornirrunity Development Manager Shea Homes, Northern Calitbriiia 2580 Shea Center Drive Livcirnore, CA 94550 925-245-3631 (0) 925-525-0162 (M) SheaHomes. Caring Since 1881 May 3'-d' 9013 Mamie Delgado, Sr. Planner City of Dublin 100 Civic Plaza Dublin, CA 94568 RE: Tralee Town Hoines BMR in-lieu proposal Dear Mamie, Shea Homes has requested a modification to the inclusionary housing requirements on the Dublin Tralee project on the comer of Dublin Blvd and Dougherty Rd. The proposal will convert the requirement from delivery of 8 inclusionary units and payment of in-lieu fee on 5 units, to delivery of 2 inclusionary units and payment of in-lieu for 11. Shea is proposing to provide cash payment in lieu of construction of inclusionary units on the Tralee project. The City Council has the authority under 8.68-040 (✓) to approve alternate methods of compliance if the applicant demonstrates, and the City Council finds, that such alternate methods meet the purposes of chapter 8.68. The purpose of Chapter 8.68 is to: A. Effliance the public welfare and assure that further housing development contributes to the attainnient of the City's housing goals by increasing the production of residential units affordable by households of very low, low, and moderate income. B. Assure that the limited remaining developable land in the City's planning area is utilized in a manner consistent with the City's housing policies and needs. In our experience, inclusionary housing policies that enforce a must build requirement on development projects don't typically achieve the best results for solving the need for low income housing in a community. One of the biggest hurdles to overcome is the effort associated with finding a buyer in the marketplace that meets all of the ci.iteria necessary to make the purchase. 1) Their income must be low enough to qualify for the program. 2) Their income must be high enough to qualify for the loan 3) They must have a sufficient down payment to make the purchase 4) They must be willing to accept the terms of the deed restriction. 5) They must meet a minimum HCO score of 620 IJ-1i ^[5. W100 I, %A " I it, )j I, , th) I itcd 1 "1,i , , it I At, 1,71, V h it 'I I; to I, T I( IA r V), I IJ It;. ) , of , . mtlw) I h � It is a rare instance that a buyer conies that meets all of the above criteria, and is willing to sign up for the onerous restrictions that come along with ownership of an inclusionary unit. Signature Homes finally closed an inclusionary home recently that was on the market for over a year, in and out of escrow several times, and over 5 months in escrow with the final buyer. Because the market price for the homes in Tralee that are reserved for the inclusionary program is close to the price that would define an "Affordable Unit" under 8.68.020 (A), restricting these units for sale only through the City's inclusionary housing program actually serves to reduce the inventory of market priced homes available to buyers in challenged income categories. Limiting supply will always serve to increase prices in the market and exacerbate problems with affordability. While Shea Homes has not yet priced the homes designated for affordability at Tralec, the current market for similar square footage and layout in Dublin is in the high $400,000s. Toll Bros. 1,300sgft 2 bedroom condo is selling at $485K. Shea's Portico project in west Livermore at 1,379sgft 2 bedroom is selling at $484K. We expect the Tralee homes of similar sgft to be priced competitively with those comps at around $490K to $505K. The calculated affordable price for moderate income in Alameda County is approximately $490K. There are 12 of these homes that will be available in the 53 unit project that can be sold to future buyers at an affordable price. Additionally, there were 6 other homes in the previous 50 homes constructed in phases 1 through 3, two of which are already deed restricted and in the City's affordable program. In total, the Tralee project at buildout will have provided 18 homes that are currently priced at an affordable level 16 of which could be available without an inclusionary deed restriction. Buyers who purchase deed restricted homes never really enjoy the economic benefits of home ownership. Because they must sell back into the inclusionary program, the investment in their home is subject not to the ups and downs of the market, but rather to average income in the local area which may potentially result in negative equity in the home. Additionally, the City's program requires that to re -sell their home, the owner must market it, verify that the prospective buyer meets the inclusionary requirements, assure the buyer has completed a BMR education workshop, and cover all the costs associated with the qualification and sale including a $1,500 fee to the City. The better method for providing a stock of affordable housing in a community can be achieved through zoning policy and publicly funded projects targeted specifically to lower income households. A good example of this is the Crown Chevrolet site in downtown Dublin that is poised to be re- developed into a 76 unit apartment complex to serve low income residents and military veterans. By accepting cash in -lieu and releasing the deed restricted homes to the marketplace, the City can both enhance the stock of lower priced market rate homes, and bolster local funding sources to help projects like the Crown Chevrolet site become a reality. Overall it seems that the goal of increasing the production of residential units affordable to households of lower income categories is best served by larger scale inclusionary projects that can produce more units for the dollar, and serve the lower end of the income scale. Assuring that the remaining developable land is utilized to meet all income levels is best achieved by promoting density through zoning, and concentrating on increasing supply to the market which will stabilize prices. Thank you for considering our proposal. Regards, David Best Community Development Manager Shea Homes, Northern California 2580 Shea Center Drive Livei7nore, CA 94551 925- 245 -3631 (o) 925 -525 -0162 (m) RESOLUTION NO. XX - 13 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * ** APPROVING AN AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT FOR THE PAYMENT OF FEES IN -LIEU OF CONSTRUCTING CERTAIN AFFORDABLE OWNERSHIP UNITS BETWEEN THE CITY OF DUBLIN AND SHEA HOMES AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT AND TAKE OTHER NECESSARY AND APPROPRIATE ACTIONS WHEREAS, pursuant to the requirements of the Inclusionary Zoning Regulations of the City of Dublin Zoning Ordinance (the "Ordinance "), on October 19, 2005, the City of Dublin (the "City ") and Pfeiffer Ranch Investors, Inc. ( "Pfeiffer "), entered into an Affordable Housing Agreement for the Construction of Inclusionary Units (the "Original Agreement ") for the construction of 233 residential units known as the Tralee project, including the construction of 13 Inclusionary Units on certain property it owned ( "Phase I ") and 16 Inclusionary Units in mixed use buildings to be developed on adjacent property ( "Phase II "); and WHEREAS, subsequent to the issuance of the Development Approvals, the City amended the Ordinance to (i) eliminate the requirement to construct very low- income ownership units; (ii) change the income ratios for Affordable Ownership Units to 40% low- income units and 60% moderate- income units; and, (iii) change the method by which sale prices for the Inclusionary Units are calculated; and WHEREAS, subsequent to execution of the Original Agreement, Pfeiffer was unable to complete the project which remained in a partial state of construction for a number of years; and WHEREAS, Dublin Tralee 11, LLC, a Delaware limited liability company ( "Dublin Tralee 11, LLC "), acquired the Phase I property from Pfeiffer with the intention of completing the development of Phase I (the "Project "); and WHEREAS, upon acquiring Phase I, Dublin Tralee 11, LLC's Inclusionary Zoning obligation was to provide thirteen (13) Inclusionary Units, allocated as follows: construction of five (5) low- income units and eight (8) moderate - income units; and WHEREAS, Dublin Tralee 11, LLC requested an amendment to the Original Agreement consistent with the amended Ordinance to construct 7.5% of the Inclusionary Zoning obligation and pay fees in -lieu of constructing 5% of the Inclusionary Zoning obligation; and WHEREAS, on August 16, 2011, Dublin Tralee 11, LLC entered into an Amended and Restated Affordable Housing Agreement for the Construction of Inclusionary Units and Payment of Fees In -Lieu of Constructing Certain Affordable Ownership Units (the "Current Agreement ") with the City of Dublin for the construction of eight (8) Inclusionary Units (three low- income units and five moderate - income units) and the payment of fees in -lieu of constructing five (5) Inclusionary Units consistent with the Ordinance; and WHEREAS, on January 23, 2013, Dublin Tralee 11, LLC paid in -lieu fees for one (1) Inclusionary Unit and assigned the Affordable Housing Agreement to Shea Homes who paid in- lieu fees for four (4) Inclusionary Units, as anticipated under the Current Agreement; and WHEREAS, to date, two (2) Inclusionary Units have been sold by Dublin Tralee II, LLC to moderate - income households and six (6) Inclusionary Units (three low- income and three moderate - income) remain to be constructed and sold; and WHEREAS, Shea Homes has proposed to amend the Current Agreement to provide that it will satisfy its obligations through its predecessor's previous production of two moderate - income units, it and its predecessor's previous payment of in -lieu fees for five units and the payment of fees in -lieu of constructing the remaining six (6) Inclusionary Units; and WHEREAS, Section 8.68.040.E of the Dublin Zoning Ordinance allows the City Council, at its discretion, to waive, wholly or partially, the requirements of the Inclusionary Zoning Regulations and approve an alternate method of compliance if the applicant demonstrates, and the City Council finds, that such alternate methods meet the purposes of the Inclusionary Zoning Chapter; and WHEREAS, the purpose of the Inclusionary Zoning Regulations are to enhance the public welfare and assure that further housing development contributes to the attainment of the City's housing goals by increasing the production of residential units affordable by households of very - low, low and moderate - income and assure that the limited remaining developable land in the City's planning area is utilized in a manner consistent with the City's housing policies and needs; and WHEREAS, the City Council hereby finds that the proposal by Shea Homes to pay fees in -lieu of constructing the remaining six (6) Inclusionary Units is an alternate method of complying with, and is consistent with the purposes of, the Inclusionary Zoning Regulations as follows and hereby waives the requirement that 7.5% of the units in the project be affordable: (1) Shea Homes will pay fees, in -lieu of constructing six (6) Inclusionary Units, in the amount of $642,030 which will be deposited into the City's Inclusionary Zoning In Lieu Feed Fund and such fees will be used for the purposes of providing affordable housing in the City of Dublin. This will fully satisfy the remaining six (6) Inclusionary Unit requirement but it will not result in 7.5% of the units in the Project being Inclusionary Units as required by the Regulations. (2) The Phase I project meets affordability goals by providing Medium -High Density Residential units of certain sizes that will promote the City's affordability and Housing Element goals. The City hereby finds that certain types and sizes of townhome units in the project are likely to meet the affordability standards for moderate - income units based on the current market for similar units in the Tri- Valley. The remaining portions of the project include 12 units that are of a size that is likely to result in sales prices, under currently prevailing market conditions, that are very near, at, or below the moderate - income affordability standard. The existence of these "affordable by design" units mitigates the reduced number of deed - restricted Inclusionary Units in the project. (3) Based on currently prevailing market conditions, if the Developer were to be required to produce the six (6) Inclusionary Units it would prove difficult for the Developer to sell the units at prices that approach the current maximum affordable price, since the market prices for units without deed restrictions are less than the affordable prices. Such a requirement would place an unfair burden on the Developer that is not consistent with the purposes of the Regulations. (4) Furthermore, if the Developer were required to produce the Inclusionary Units, the future buyers of those units would have difficulty reselling the units because of the likely -to -be small difference between the affordable price and the market price of similar units without deed restrictions. Such a circumstance would be inconsistent with the purposes of the Regulations. WHEREAS, the Project has been found to be Categorically Exempt from the California Environmental Quality Act (CEQA); and WHEREAS, a Staff Report setting forth in further detail the background and terms of the proposed Amended and Restated Agreement has been submitted to the City Council for consideration of this request. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve the Amended and Restated Affordable Housing Agreement for the Construction of Inclusionary Units and the Payment of Fees In -Lieu of Constructing Certain Affordable Ownership Units between the City of Dublin and Dublin Tralee II, LLC, as described in Exhibit A. BE IT FURTHER RESOLVED that the City Manager is authorized and directed to execute the Amended and Restated Agreement and such other documents, and to take such other and further action, as necessary and appropriate to carry out the Intent of this Resolution. BE IT FURTHER RESOLVED that the Community Development Director is authorized and directed to modify the approved Planned Development Zoning and Site Development Review by administrative action to maintain consistency between the Amended and Restated Agreement and the approved Planned Development Zoning and Site Development Review. PASSED, APPROVED AND ADOPTED this 4t" day of June 2013, by the following vote- AYES- NOES- ABSENT- ABSTAIN- ATTEST- City Clerk Mayor RECORDING REQUESTED BY: CITY OF DUBLIN When Recorded Mail To: City Clerk City of Dublin 100 Civic Plaza Dublin, CA 94568 Fee Waived per GC 27383 Space above this line for Recorder's use FIRST AMENDMENT TO AMENDED AND RESTATED AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF INCLUSIONARY UNITS AND THE PAYMENT OF FEES IN -LIEU OF CONSTRUCTING CERTAIN AFFORDABLE OWNERSHIP UNITS PA 02 -062, Shea Homes, Inc., a Delaware corporation. (Tralee Townhomes Project) This First Amendment ( "Amendment ") to the Amended and Restated Affordable Housing Agreement, dated August 16, 2011, for the Tralee Townhomes Project ( "Agreement ") is entered into this 4 t day of June, 2013 ( "Effective Date ") by and between the City of Dublin, a municipal corporation (the "City "), and Shea Homes, Inc., a Delaware corporation (the "Developer "). Recitals 1. Developer is the owner of portions of real property located in the City of Dublin, County of Alameda, State of California generally located at the northwest corner of Dublin Boulevard and Dougherty Road, more particularly described in Exhibit 1 attached hereto and incorporated into this Agreement by reference (the "Property "). 2. Chapter 8.68 of the Dublin Zoning Ordinance ( "Ordinance ") requires developers of residential projects consisting of 20 units or more to set aside 12.5% of the units in the project as Inclusionary Units (defined below) and to execute and record an affordable housing agreement against the project property prior to the issuance of building permits. 3. Developer's predecessor in interest had entered into the Agreement so as to document its means of complying with the Ordinance. In particular, the Agreement provided —I— Amendment to Affordable Housing Agreement PA 02 -062 Tralee Townhomes that Developer's predecessor would satisfy its obligation to produce 13 affordable units on the property by: a. Paying fees in -lieu of construction to satisfy the obligations for 5 units. b. Constructing 3 low- income units and 5 moderate income units, in locations as specified. 4. On June 4, 2013, the City Council approved the Developer's proposed alternate method of complying with the Ordinance. 5. The purpose of this Amendment is to set forth the manner by which Developer will satisfy its inclusionary housing obligations for Inclusionary Units in the Project pursuant to the Ordinance. NOW, THEREFORE, in satisfaction of the requirements of Chapter 8.68 of the Dublin Municipal Code, conditions 121 & 122 of CC Resolution No. 143-04 and in consideration of the City's approval of the Project, Developer and City for themselves and their respective successors and assigns hereby amend the Agreement as follows: Section 1. Paragraph 2 of the Agreement is amended to read as follows: " 2. Developer's Compliance with Affordable Housing Obligation. a. Developer shall provide thirteen (13) Inclusionary Units, allocated as follows: five (5) low- income units and eight (8) moderate - income units; provided, however, Developer may pay fees in lieu of constructing eleven (11) Inclusionary Units, pursuant to Section 3 of this Agreement. b. Developer intends to complete the Project in two phases. The location of the phases is shown on the Diagram of BMR Locations, attached hereto as Exhibit 2. Section 8.68.030 of the Ordinance requires that all Inclusionary Units in a project be constructed concurrently with a project or phase of a project. Developer has proposed, and the City hereby approves, subject to the conditions contained in this paragraph, the following phased schedule for the construction of the Inclusionary Units. Total Low - income Moderate - units units income units Phase I(A) 50 0 (3- bdrms) 2 (3- bdrms) Phase I(B) 53 0 (3- bdrms) 0 (3- bdrms) Project Total 103" —2— Amendment to Affordable Housing Agreement PA 02 -062 Tralee Townhomes Section 2. Paragraph 3 of the Agreement is amended to read as follows: "3. In -Lieu Fees. Developer will satisfy its remaining obligation for eleven (11) Inclusionary Units in Phase I by paying fees in lieu of constructing said units. Accordingly, Developer shall pay in -lieu fees in the amount of $1,177,055 (or $107,005 per unit) to fulfill the obligation to construct eleven (11) of the thirteen (13) Inclusionary Units required by the Ordinance. The entirety of the fees shall have been paid prior to the issuance of any further city approvals for the project, such as occupancy authorizations or building permits, and in no event later than June 21, 2013. Developer and City both acknowledge that as of the date of execution of the First Amendment to the Amended and Restated Agreement, the Developer had previously satisfied the obligation for Phase I(A) in full through delivery of two (2) moderate income units, and had satisfied the obligation for five (5) of the remaining eleven (11) Inclusionary Units in Phase I(B) in January of 2013 when the City received fee in lieu payments totaling $535,025 (or $107,005 per unit)." Section 3. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. Section 4. Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby. Section 6. Entire Agreement. The Agreement, together with Exhibits 1 through 5, and this Amendment contain the entire understanding between the parties relating to the transaction contemplated hereby, and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect. No provision of this Agreement may be amended, waived, or added except by an instrument in writing signed by the Parties hereto. The exhibits attached hereto are incorporated herein by this reference. Signature Page Follows —3— Amendment to Affordable Housing Agreement PA 02 -062 Tralee Townhomes IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date and year first above written. CITY OF DUBLIN Attest: City Clerk City Manager SHEA HOMES, INC. a Delaware corporation By: Name: Its: By: Name: Its: 2081283.3 —4— Amendment to Affordable Housing Agreement PA 02 -062 Tralee Townhomes