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Reso 94-04 InclusZoningOrd
RESOLUTION NO. 94 - 04 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN APPROVING GUIDELINES FOR IMPLEMENTING THE INCLUSIONARY ZONING ORDINANCE REGULATIONS WHEREAS, Chapter 8~68 of the Dublin Municipal Code, the Inclusionary Zoning Regulations, requires the provision of price or rent restricted affordable units in any residential development of 20 units or more; and WItEREAS, based on its experience implementing the ordinance in the last several years, the Community Development Department has concluded that it is necessar~ to provide additional detail to developers on how to implement the provisions of the Inclusionary Zoning Ordinance; and WItEREAS, Staff has developed the Layperson's Guide to the Inclusionary Zoning Ordinance Regulations (attached hereto as Exhibit,A) that address the most commonly asked questions. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby approve the Layperson's Guide to the Inclusionary Zoning Ordinance Regulations (attached hereto as Exhibit A); and BE IT FURTHER RESOLVED that the Community Development Department is authorized to provide this document to the public, developers and other interested parties. PASSED, APPROVED AND ADOPTED this 18th day of May 2004. AYES: Councilmembers McCormick, Oravetz, Sbranti and Zika and Mayor Lockhart NOES: None ABSENT: None // Mayor --- ATTEST: '(~/Cl~k ~ - _ K2/O/6-1-04/reso-inclusionary.do¢ (Item 8.2) G:XPAgh2001 \01-038 Inclusionary ZOA~lnclusionary GuidelinesLReso.lnclusionary Guidelines. doc CITY OF DUBLIN LAYPERSON'S GUIDE TO THE INCLUSIONARY ZONING ORDINANCE REGULATIONS 2004 Myl8 a , 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 Inclusi0nary Unit Obligation 2 1.3 How to Calculate How Many Units Mus? Be Constructed and How Many Units Will be Subject to the InLieu 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 7 2.1 What is an Affordable Housing Agreement 7 3 FOR SALE PROJECTS 8 3. l 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 12 4 ESTABLISHING SALES PRICE AND LOAN REQUIREMENTS FOR OWNERSHIP UNITS 13 4.1 Sales Price of Affordable Units t 3 4.2 Acceptable Home Loan Products for Inclusionary Zoning Units 15 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 19 5.6 Calculating Affordable Rents 20 5.7 Monitoring Rents 21 LIST OF'EXHIBITS Exhibit 1 Resale' Restriction Agreement and Option to Purchase Exhibit 2 Sample lnclusionary Unit Application packet EXhibit 3 Sample Application to Purchase [nclusionary 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 INCLUSION'ARY ZONINGORDINANCE 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.hous.~h01ds, 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 detined as households that have an income level, respectively, of 120% to 80%, 80% to 50%, and less than 50% of the median income fgr th..e..C.gunty 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 A!g~e~dg~,09~tY, 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 May 18, 2004 1 · 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 o£the Dublin Municipal Code. I 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 oft he 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. May 18, 2004 2 FIGURE 1 Example 1: 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 Subiect 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. FIGURE 2 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 limit~ for the Oakland Primary Metropolitan Statistical Area (PMSA) that are in effect at the time. The fee as of July 1, 2003 is $79,754 per Inclusionary Unit. May 18,'2004 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 Re=m,dations indicate that, where the allocation results in fewer units than would other~vise 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. May 18,2004 4 FIGURE 4 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-buildrequirement (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 e 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-inc0me units 1.6 How to Determine the Unit Sizes and bedroom requirements for Inclusionar¥ 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. May 18, 2004 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 proj eot includes: 50 one-bedroomunits (25 % of total) 100 two-bedroom units (50% of total) 50 three-bedroomunits (25% of total) Therefore: 25% of the Inclusionary Units are to be one-bedrooms 50% of the Inctusionary Units are to be two-bedrooms 25% of the Inclusionary Un]ts 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 ~s performed to determine the bedroom sizes of the low- income and moderate-income units. 1.7 How to Determine the Location of Inclusionarv 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 ro avoid concentration of the Inclusi0nary 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. May 18, 2004 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 A~reement 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 fora property, a new Affordable Housing Agreement would be required, which would replace the existing Agreement. Among other things, the Agreement must contain the foll owing 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 Lnclusi'onary 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 May 18, 2004 7 Management Plan may be produced and submitted after the Affordable Housing Agreement is executed, but prior to the issuance of building permits. _. 3 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 5. 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; May 18, 2004 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 o£the units will va~_ depending on the income of each prospective household ~ffered a unit. Figure 6 illustrates how the selection process works~ (See following page) May 18, 2004 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 th'e Library. Step 3. The applicant response period ends. The developer will sort and establish a list of all qualified applicants within one month followin~ closing of applicant list. This initial screening will qualify applicants based on. low, very Iow 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: May 18, 2004 1.0 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 s~ze, 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, and 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 I point. Table 1: The Priority Point System Priority Points Employed in Dublin 3 points Public service employee in Dublin I additional point Resides in Dublin 3 points Seniors (62 and over) 1 point Permanently disabled 1 point 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 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. May 18, 2004 11 To qualify for the permanently disabled point, the person must be able to provide written verificahon from a physician or show receipt of SSI. 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 folloxving points: Senior citizen 1 point Lives in Dublin 3 points Total number of points 4 points 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: May 18, 2004 12 COllect applications for a given time period. An initial qualification is made based on household size (See Section 3.t-,) and-household income (see Section 4.1). Sort and rank the applications based on the Inc!usionary 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. Iff all needed documents are included, the City will return to developer or agent within a week if possible. ESTABLISHING SALES PRICE AND LOAN REQUIREMENTS 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 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. As described below, a number of assumptions are used to calculate the maxim~um..sale price for inclusionary units. An individual homebuyer's actual expenses may differ fi.om 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. May18,2004 13 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: 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.) o 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 x~ary.) 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, Orthe 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 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). May18,2004 14 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 $ 15,000 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 $ 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. 4.2 Acceptable Home Loan Products for lnclusionar~ 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 May 18, 2004 15 2. 90-97% Loan to Value Loans 3. Up tO 95~/o 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 onthe ability of the buyer to make payments · Pledged-Assets Mortgages Virtually all CalHFA 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). 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, th~ 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 by the City of Dublin, on closing of each sale. May18,2004 16 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 2004 are attached as Exhibit No 6. 5.3 Screening Based on Household Size For both rental and for-sale units, household size for each [nclusionary 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 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 hotiseholds Four-bedroom units 4-8 people households May 1.8, 2004 17 5.4 Screenin~ 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) I point Permanently disabled I point 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. o To qualify as a public service employee the person shall be employed lay.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. Where definitions are not explicitly stated in the Regulations, the City has developed definitions: e 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. Figure 9 demonstrates how the preference points are calculated. May 18, 2004 18 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 5.5 Occupant Selection for Rental Developments 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 ApPlication for Inclusionar¥ Unit. 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. ~ox); May 18,2004 19 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. 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. Follo~ving 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 May 18, 2004 20 is responsible for any of the above, an'allowance reduces the rent by the mounts listed in Exhibit No. 7'. --. Figure 10 illustrates the calculation of maximum rent. FIGURE I0 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 [f the household were nor, 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 may be charge to this household could not exceed 5;2,259.50 monthly. 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 Iow-, 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. * 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: http//www.haca.net., then click on statistics. May 18, 2004 21 This report will be due annually on October 31 st. The City of Dublin Housing Staff will send a remS.rider-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. GSPA#\2001 \01-038 lnclusionary ZOA\lnclusionary Guidelines\Inclusionary Guidelines - Final on 5- l 8-04.doc May 18, 2004 22 EXHIBITS RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: CITY OF DUBLIN 100 Civic Plaza Dublin, California 94561 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 Iow-, Iow-, and moderate-income households ("the Program"). To further its goal of creating affordable home ownership opportunities for very Iow-, Iow-, 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 IOw-, Iow-, and moderate-income persons and families as defined herein. 204945.4 -1-- December 15, 2002 B. Owner is an eligible [very Iow-, iow- or moderate-]income purchaser under.the Program, intends to live in the PrOperty a__s anpwner 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 tow-, Iow-, 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 restrict, ions are.inteDded 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 Iow-, Iow-, 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 resou'rce by providing decent, safe, and sanitary housing to persons and families of [very iow, Iow, 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 costs that do notexceed 35% of maximum income level for very- iow-, Iow-, and moderate-income households, 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 iow, Iow, 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. 204945.4 --2-- December 15, 2002 d. Persons and families meeting the definition set forth in Paragraph l(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 T. HIS COVENANT SHALL BE VOID. 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/HERFFHEIR OWNERSHIP AND SHALL NOT RENT OR LEASE THE PROPERTY OR PORTION THEREOF DURING THE TERM QF THIS AGREEMENT. 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 Even[ (as defined in Paragraph 3.c below) and shall entitle the City to exercise its Option to purchase the Property. d. Hazard and Liability insurance. At all times during the term hereof, Owner shall keep the improvements and personal property now existing or hereafter erected on the Property insured against loss by fire, vandalism and malicious mischief by a policy of standard fire and extended all-risk insurance. The policy shall be written on a full replacement value basis and shall name Beneficiary as loss payee. Upon request Owner shall provide to City certificates evidencing carriage of the insurance policies required by this Section. 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. 204945.4 ---3 December 15, 2002 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"): 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 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; w. 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, 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 204945.4 --4-- December 15, 2002 to Transfer, a copy Of the prospective purchaser's income certification, a liSt of all assets owned by the prospective purchaser, and other financial informatior~reasonably requested by 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 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 204945.4 --5~ December 15, 2002 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-thi_.s_ 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 applicabletime 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 abandonmentwithi.n..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. viL 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) ninety (90) 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 204945.4 --8-- December 15, 2002 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 provide_.d by~utUal 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"): 204945.4 --7-- December 15, 2002 a. Capital Improvements. An increase for capital improvements made to the Property, but only if the amount of such improvements has been previously approved 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. A "capital improvement" for the purposes of this section is an upgrade to an existing interior or exterior component, such as replacing linoleum with wood flooring or the addition of built in shelving or recessed lighting. A "capital improvement" does not include regular or deferred maintenance such as roof replacement or plumbing or electrical replacement or repair. 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 under Section 3.d, 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. 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 or the market value of the property, whichever is less. 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 fro~ 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). 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 204945.4 --8-- December 15, 2002 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. T_b.e 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, provided that the City has received timely notice of such Option Event and has failed to either reinstate said mortgage or deed of trust or exercise its Option, 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 Ownerhas 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 Qption 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 204945.4 --9-- December 15, 2002 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, pursuant to paragraph 3.d.v, 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 insurance proceeds or award in condemnation 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, subject to the rights of any institutional lender. First, 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 on the condemnation valuation date shall be distributed to Owner, and, second, .the remaining 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 204945.4 --10-- December 15, 2002 real estate commissions paid (such commissions not to exceed six percent (6%) of the actual sales, price), and (b) the Adjusted Resale Price (as Set forth in paragraph 5 above) 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 Center 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. Genera! Provisions. 204945.4 --1 lw December 15, 2002 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. 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. Ail 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 prowsion hereof. 204945.4 --12-- December 15, 2002 i. Construction. The section headings and captions used in this Agreement axe 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 ali 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 By: Its: ATTEST: 204945.4 --13 December 15, 2002 City Clerk APPROVED AS TO FORM: City Attorney 204945.4 --14-- December 15, 2002 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 helshelthey executed the same in hislherltheir authorized capacity(les), 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(les), 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) 204945.4 --1-- December 15, 2002 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) 204945.4 --1-- December 15, 2002 CERTIFICATE OF ACCEPTANCE (Pursuant to Government Cod_e §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 204945.4 --1 -- December t5, 2002 EXHIBIT A Legal Description [To be inserted] 204945.4 -- 1-- December 15, 2002 EXHIBIT B FORM: NOTICE QF 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): 204945.4 --1-- December 15, 2002 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: Its: 204945.4 --1 December 15, 2002 EXHIBIT D INCLUSIONARY ZONING HOMEOWNERSHIP PROGRAM INCLUSIONARY ZONING BASE RESALE PRICE WORKSHEET Date: Owner: Address: Purchase Price ("Base Price"): Date of Purchase: Years Owned: years CALCULATION'BASED ON INCREASE IN MEDIAN INCOME~'~ Present Median ncome*: $ Date of Notice of Option Event: Family of four, County of Alameda (at time of sale of unit) Original Median income*: $ Effective Date: Family of four, County of Alameda (at time of purchase of unit) Increase in Median Income: $, divided by Original Median Income = Percentage increase in median income: * Median household incomes for Alameda County are published annually by the California Department of Housing and Community Development. Base Price $ multiplied by the __% (percentage increase n median income), (i .e. unit price at the time of ourchase) = $ Base Resale Price The Base Resale Price is the maximum gross allowable sales prices (subject to any adjustments to the base resale prices pursuant to section 5 of this agreement). Based on the above, the base resale price as of this date, , is: By: 204945.4 --1~ December 15, 2002 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 CALIFQRNIA ) ) 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(les), 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) 204945.4 --1-- December 15, 2002 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 Housinq Specialist 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. ! HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS: BUYER BUYER 204945.4 --1-- December 15, 2002 CITY OF DUBLIN 100 Civic Plaza, Dublin, California 94568 -Website: http:flwww, ci.dublin.ca.us AFFORDABLE OWNERSHIP OPPORTUNITY 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 tow-, 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 $64,350 $73,500 $82,700 $91,900 $99,250 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. I. 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, Day, Year. You must complete an "Application for Inclusionary Unit" to be pre-qualified. These forms must 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 EXN B;T 2. be returned to John Doe, Inc. for their review, along with a copy of your (latest year) Federal and State4ncome 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 Uni_t," 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 3 points ~ Employed in Dublin for at least 6 month 3 points · Public service employee working in Dublin 1 additional point > Senior applicant 1 point > Disabled 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 APPLICATION FOR INCLUSIONARY UNIT PLEASE PROVIDE THE FOLLOWING INFORMATION: (Please type or print clearly) To apply for an Inctusionary Unit, you must list all members of your household: No. in household I. Name: Social Sec. # Current Address: Age: City/Zip: Home Phone #: Employer: Work Phone #: Work Address: City/Zip: 2, Name: Social Sec.~ Employer: Age: Work Address: Work Phone #: City/Zip: 3. Name: Social See. # Employer: Age: Work Address: Work Phone #: City/Zip: (If you need additional space please attach a sheet of paper.) Total Annual Household Income: $ (Line 35 of 1040; Line 21 of 1040A; Line 4 of 1040EZ) To assist us with the process, please check the statement below which applies to at lease one aduk that will own the home. Yes No Are you over 62 years of age? [] [] Are you permanently disabled? [] [] Currently work in Dublin and have continuously for the past 6 months? [] [] And if so, are you a Public Service employee working in Dublin? [] [] Currently live in Dublin and have continuously for the past year or longer? [] [] I/We certify that the information provided in this application is true and correct. Si~onature/Date Signature/Date Development G :~HOUStNG\InctusionaryL~PPLICATION FOR INCLUSIONARY UNIT.doc 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 55 YEARS. 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 Housin.q Specialist OF THE CITY OF DUBLIN AT 925,833-6610. YOU SHOULD ALSO READ THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE RECORDED AGAINST THE PROPERTY. YOU MAY OBTAIN A COPY OF THESE DOCUMENTS FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY. I HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS. BUYER BUYER 26'-2 ....... - % 28,.2' APPLICATION FOR INCLUSIONARY UNIT PLEASE PROVIDE THE FOLLOWING INFORMATION: (Please type pr print clearly) To apply for an Inclusionary Unit, you must list all members of your household: No. in household 1. Name: Social Sec. # Current Address: Age: City/Zip: Home Phone #: Employer: -Work Phone #: Work Address: City/Zip: 2. Name: Social Sec. # Employer: Age: Work Address: Work Phone #: City/Zip: 3. Name: Social Sec. ~ Employer: Age: Work Address: Work Phone #: City/Zip: (If you need additional space please attach a sheet of paper.) Total Annual Household Income: $ (Line 35 of 1040; Line 21 of 1040A; Line 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. Yes No Are you over 62 years of age? [] [] Are you permanently disabled? [] [] Currently work in Dublin and have continuously for the past 6 months? [] [] And if so, are you a Public Service employee working in Dublin? [] [] Currently live in Dublin and have continuously for the past year or longer? [] [] I/We certify that the information provided in this application is true and correct. Signature/Date Signature/Date Development G:kHOUSING\InclusionaryL~PPLiCATION FOR INCLUSIONARY UNIT.doc EXhiBiT 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 55 yEARS. 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 Housin.q Specialist OF THE CITY OF DUBLIN AT 925-833-6610. YOU SHOULD ALSO READ THE RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE RECORDED AGAINST THE PROPERTY. YOU MAY OBTAIN~,ACOP¥ . OF THESE DOCUMENTS FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY. I HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS. BUYER BUYER DEVELOPER LETTERJdEAD Date Dear Interested Applicant: You have completed an Application for Inclusionary Unit as the first step to qualify to purchase an Inclusionary or Below Market Rate (BMR) home or 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-xxxx. You indicated that you or an aduk member who will own and occupy the home: Are 62 years of age or older Please submit 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 one of the following documents: [] 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 ' INCLUSIONARY ORDINANCE PREFERENCE POINT VERIFICATION LETTER Project: Page 2 Currently work in Dublin and have continuously for the past six (6) months. Please submit a copy of both, a first and most recent paycheck stub establishing length of employment. Please submit a letter from your employer, on company letterhead, indicating continuous employment for the past six months. W2 for the last two years **If you are a newly hired teacher 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. We request that you submit the above documents at our office by in order that your application for preferences might be considered. Sincerely, Josephine Smith Developer 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 State Income Limits for 2004 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 4t,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 12.750 14.600 16,400 18,250 19,700 21.150 22.800 24,100 Area Median Income: Very Low income 21,300 24,300 27.350 30,400 32.850 35.250 37.700 40,150 $60,800 Lower income 34,050 38,900 43.800 48,650 52,550 56,400 60.300 64,200 Median income 42,550 48,650 54,700 60,800 65,650 70.550 75,400 80,250 Moderate Income 51.050 58,350 65,650 72,950 78.800 84,600 90.450 96.300 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 65.200 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 74,900 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 Utility Allowances as of :10/01/02 $17 ~ Wa~r ~a~ $5 $7 $10 $13 ~15 $16 &Back to Tqp 22941 Atherton St., Hayward, CA 94541 (510) 538-8876 Main # ©2003 Housing Authority of Alameda County. All rights reserved. http://www.haca.net/stats,htm 5/7/2004