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HomeMy WebLinkAboutItem 4.06 Modify Temp BMR PolicyG~~~ OF pp~~r~ ~9'~-~~•~8z F CITY CLERK `~~~~~1 STA F REPORT `~~j,~~~~~ DUBLIN CITY COUNCIL F~le #^~J^3 0-~~ DATE: August 16, 2011 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager SUBJEC : Extending and Modifying the Temporary Policy for the Rental of Below Market Rate Ownership Units Prepared by Jeri Ram, Community Development Director EXECUTIVE SUMMARY: Due to the continuing slow-down in the housing market, for-sale Below Market Rate (BMR Sale Unit) owners desiring to sell their BMR Sale Unit are having difficulty finding qualified buyers willing to purchase the Units at the restricted resale price. Qualified buyers would rather purchase market rate homes free of resale restrictions rather than a BMR Sale Unit that is priced close to or above market rate prices. To assist BMR Sale Unit owners who are having difficulty in finding qualified buyers, the City Council adopted and subsequently extended a temporary policy for BMR Sale Unit owners to rent their Units. Owners can rent their Units for two-year intervals if they satisfy requirements set forth in the temporary policy. Based on City Council direction at their meeting of July 19, 2011, the Temporary Policy is proposed to be modified and extended until August 19, 2014. FINANCIAL IMPACT: None. RECOMMENDATION: Staff recommends that the City Council adopt a Resolution Extending and Modifying the Temporary Policy for the Rental of Below-Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price. Su mitted By Commu ~ity Devefopment Director ~ " Rev Assistant Page 1 of 3 p BY Manager ITEM NO. ~ ~ BACKGROUND: The City's Inclusionary Housing Program requires purchasers of for-sale below market rate units (BMR Sale Unit) to execute a"Resale Restriction Agreement and Option to Purchase" (Resale Restriction Agreement) that is recorded against the BMR Sale Unit. The Resale Restriction Agreement requires, that the BMR Sale Unit remain affordable for a period of time; requires the owner to live in the Unit as his or her primary residence; prohibits the owner from selling the BMR Sale Unit for more than the restricted resale price; and, prohibits the owner from renting the BMR Sale Unit without the consent of the City. In mid-2008, several owners of BMR Sale Units desiring to sell their Units requested consent, from the City to rent their Units. The owners indicated that they are having difficulty finding qualified buyers willing to purchase the Units at the restricted resale price. At the August 19,' 2008 City Council meeting, the City Council adopted Resolution No. 157-08, Establishing a Temporary Policy for the Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price (Temporary Policy) for a two-year time period (Attachment 1). The Temporary Policy requires that a BMR Sale Unit must be on the market for at least six months and the owner make commercially reasonable efforts to sell the Unit, as determined by the City. If the efforts to sell are unsuccessful, the owner may enter into an Affordable Housing Rental Regulatory Agreement and Declaration. of Restrictive Covenants (Rental Regulatory Agreement) with the City and rent their BMR Sale Unit if they satisfy requirements set forth in the Temporary Policy. On May 18, 2010 the City Council adopted Resolution No. 73-10 extending the Temporary Policy until August 19, 2012 (Attachment 2). Since the inception of the Temporary Policy, the City has executed three Rental Regulatory Agreements. One owner has since stopped renting and sold their Unit. Currently, ten BMR Sale Unit owners have their Units on the market and have the option to utilize the Temporary Policy. ~ On July 19, 2011, the City Council reviewed a Staff Report (Attachment 3) to modify the Temporary Policy into a Standard Policy that would include: 1) Modifying the Temporary Policy into a Standard City Policy that would allow for the continual rental of ownership BMR Units; 2) In-lieu of listing the Unit for sale for at least six months, the owners could submit a real estate market analysis to verify the market value of the Unit; and, 3) The term of a Rental Regulatory Agreement would be changed from a two-year to an extendable five-year interval. The City Council reviewed the proposal and directed Staff to bring back a revised Temporary Policy, rather than a Standard Policy, that would: ,~ 1) Extend the Temporary Policy to August 19, 2014; 2) In-lieu of listing the Unit for sale for at least six months, the owners can submit a real estate market analysis to verify the market value of the Unit; and, Page2of3 3) The term of a Rental Regulatory Agreement would be changed from a two-year. to a non- extendable five-year interval. Proposed Temporary Rental Policy The attached Resolution (Attachment 4) implements the City Council direction. ATTACHMENTS: 1) Resolution No. 157-08, Establishing a Temporary Policy for the Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price (Temporary Policy) for a two-year time period 2) Resolution No. 73-10, Resolution Extending a Temporary Policy for the Rental of below Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price 3) City Council Staff Report for July 19, 2011 Converting the Temporary Policy for the Rental of Below Market Rate Ownership Units into a Standard City Policy 4) Resolution Modifying and Extending the Temporary Policy for the Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price Page3of3 ~~ a~ ~ RESOLUTION N0.157 - 08 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ~*~~,~*****,~ ESTABLISHING A TEMPORARY POLICY FOR THE RENTAL OF BELOW-MARKET RATE OWNERSHIP LTNITS BY OWNERS UNABLE TO SELL THETR IJNITS AT THE RESTRICTED RESALE PRICE RECITALS WHEREAS, the City of Dublin's ("City") Inclusionary Housing Program requires purchasers of Below Market Rate ("BMR") for-sale units ("UniY') to execute . and record a Resale Restriction Agreement with Option to Purchase ("Resale Restriction Agreement"); and WHEREAS, the Resale Restriction Agreement prohibits BMR owners from selling their BMR Units at more than a restricted price; and WI~EREAS, due to the recent slow down in the housing market, BMR owners are having difficulty finding qualified buyers willing to purchase their BMR units at the restricted resale price because such prices are so close to market prices that qualified buyers would rather purchase Market Rate homes free of resale restrictions; and WHEREAS, BMR owners who are unable to sell their BMR units would like to rent their BMR units; and WHEREAS, the Resale Restriction Agreement prohibits the rental of the BMR units without the consent of the City; and WHEREAS, although the Ciry does have a policy authorizing rental of BMR units when the owner has a hardship, the City does not currently have a policy regarding the rental of BMR units by BMR owners who are unable to sell their units at the restricted price; and WHEREAS, this Resolution is intended to establish a temporary policy for the rental of BI~YR units by BMR owners who are unable to sell their units. NOW, THEREFORE, the City Council of the City of Dublin does hereby resolve as follows: 1. Policy. During the Policy Term, the owner of a BMR unit who is unable to find a qualified buyer to purchase his or her unit at the Adjusted Resale Price may rent his or her unit provided that the following requirements are satisfied: (a) The BMR unit has been on the market for at least six (6) months and the l~wner has made commercially reasonable efforts to sell the BMR unit, as determined by the City. Such efforts sha11 include, but shall not be limited to, listing the unit with a Real Estate Broker, ensuring the unit is listed in the Multiple Listing Service, and making the unit reasonably available for viewing by Brokers and potential purchasers and their agents; (b) The BMR owner enters into a regulatory agreement with the City; (c) The future Tenant is an Eligible Household in the same income category as the BMR unit; Reso No. 157-08, Adopted 8/19/08, Item 7:2 Page 1 of 3 `~1~~ ~f! ~ ~~~-~' Attachment 1 ~ ~ ~ ~ (d) The lease contains the provisions set forth in Section 4 below; (e) The monthly rental payment does not exceed the amount set forth in Section 3 below; (~ A copy of the lease is submitted to the City within five (5) days following execution of the agreement by the Owner and Tenant; (g) The BMR owner does not live in the BMR unit during the term of the lease; and (h) The lease shall terminate no later than the Authorized Lease Termination Date. 2. Definitions. The following definitions sha11 apply to this Policy: (a) "Authorized Lease Termination Date" means two (2) yeazs from the effective date of this Resolution. (b) "Policy Term" means two (2) years from the effective date of this Resolution. (c) Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Resale Restriction Agreement. (d) Total Monthly Household Cost of the Unit means mortgage payment, taxes, homeowners association fees and insurance (does not include utilities). 3. Rent. The monthly rental payment for the BMR unit shall not exceed either the maximum rent, as calculated per Chapter 5.6 of the Layman's Guide to the Inclusionary Zoning Ordinance, for the applicable income category and household size, or the total monthly household cost of the unit, whichever is less. If the Tenant pays utilities or Homeowners' Association dues, maximum rent must be decreased pursuant to the Ciry's utility allowance schedule.. Household size will be assumed based on the number of bedrooms in the unit as follows: studio, 1 person; 1 bedroom, 2 persons; 2 bedroom, 3 persons; 3 bedrooms, 4 persons; 4 bedrooms, 5 persons; and 5 bedrooms, 6 persons. 4. Lease. The lease agreement shall clearly state: (1) the term of the lease; (2) the monthly rental payment; (3) that the BMR unit is an affordable unit subject to certain restrictions imposed by the City; (4) that the Tenant may be required to submit income documentation to the City upon request; (5) that the lease term will expire no later than the Authorized Lease Termination Date; and (6) that the City is a third party beneficiary to the lease. 5. Authority of City Manager. T'he City Manager or his or her designee shall have the authority and responsibility for the implementation of this Policy, including the authority to enter into regulatory agreements with the BMR owners in a.form approved by the City Manager and the City Attorney. 6. Ef~`'ect of Yiolation. Any lease that violates the provisions of this Policy is prohibited, and any owner who violates this Policy shall be deemed to be in default under his or her Resale Restriction Agreement. 7. Severability Clause. The provisions of this Resolution are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any Reso No. 157-08, Adopted 8/19/08, Item 7.2 Page 2 of 3 3~~ person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words, or parts thereof of this Resolution or their applicability to other persons or circumstances. 8. Effective Date. This Resolution shall take effect immediately. PASSED, APPROVED AND ADOPTED this 19th day of August, 2008, by the following vote: AYES: Councilmembers Hildenbrand, Oravetz, Sbranti, and Scholz and Mayor Lockhart NOES: None ABSENT: None ABSTAIN: None ATTEST• ~~ -2~' ~ ~~~ City Clerk Reso No. 157-08, Adopted 8/19/08, Item 7.2 Page 3 of 3 ~ ~ , ~ RESOLUTION NO. 73-10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ************w EXTENDING A TEMPORARY POLICY FOR THE RENTAL OF BELOW MARKET RATE OWNERSHIP UNITS BY OWNERS UNABLE TO SELL THEIR UNITS AT THE RESTRICTED RESALE PRICE WHEREAS, the City of Dublin's ("City") Inclusionary Housing Program requires purchasers of Below Market Rate ("~MR") for-sale units ("UniY') to execute and record a Resale Restriction Agreement with Option to Purchase ("Resale Restriction AgreemenY'); and WHEREAS, the Resale Restriction Agreement prohibits BMR owners from selling their BMR Units at more than a restricted price; and WHEREAS, due to the recent slow down in the housing market, BMR owners are having difficulty finding qualified buyers willing to purchase their BMR units at the restricted resale price because such prices are so close to market prices that qualified buyers would rather purchase Market Rate homes free of resale restrictions; and WHEREAS, BMR owners who are unable to sell their BMR units would like to rent their BMR units; and WHEREAS, the Resale Restriction Agreement prohibits the rental of the BMR units without the consent of the City; and WHEREAS, although the City does have a policy authorizing rental of BMR units when the owner has a hardship, the City does not currently have a permanent policy regarding the rental of BMR units by BMR owners who are unable to sell their units at the restricted price; and WHEREAS, the City does have a policy in place through August 19, 2010 (Temporary Policy for the Rental of below Market Rate Ownership Units by Owners Unable to Sel! Their Units at the Restricted Resa/e PriceJ that allows for the rental of BMR units by BMR owners who are unable to sell their units at the restricted price; and WHEREAS, to assist BMR owners with the difficulty of finding qualified buyers, this Resolution is to extend a temporary policy for additional twa years from the date of expiration of the origina! policy which is August 19, 2012 for the rental of BMR units by BMR owners who are unable to sell their units. NOW, THEREFORE, the City Council of the City of Dublin does hereby resolve as follows: Pvlicy. During the Policy Term, the owner of a BMR unit who is unable to find a qualified buyer to purchase his or her unit at the Adjusted Resale Price may rent his or her unit provided that the following requirements are satisfied: Page 1 of 3 ,..,, ,.,._... . Attachment 2 5 a~ ~ (a) The BMR unit has been on the market for at least six (6) months and the Owner has made commercially reasonable efforts to sell the BMR unit, as determined by the City. Such efforts shall include, but shall not be limited to, listing the unit with a Real Estate Broker, ensuring the unit is listed in the Multiple Listing Service, and making the unit reasonably available for viewing by Brokers and potential purchasers and their agents; (b) The BMR owner enters into a regulatory agreement with the City; (c) The future Tenant is an Eligible Household in the same income category as the BMR unit; (d) The lease contains the provisions set forth in Section 4 below; (e) The monthly rental payment does not exceed the amount set forth in Section 3 below; (f) A copy of the lease is submitted to the City within five (5) days following execution of the agreement by the Owner and Tenant; (g) The BMR owner does not live in the BMR unit during the term of the lease; and (h) The lease shall terminate no later than the Authorized Lease Termination Date. 2. Definitions. The following definitions shall apply to this Policy: {a) "Authorized Lease Termination Date" means August 19, 2012. (b) "Policy Term" means up to four years, from August 19, 2008 until August 19, 2012. (c) Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Resale Restriction Agreement. (d) Total Monthly Household Cost of the Unit means mortgage payment, taxes, homeowners association fees and insurance (does not include utilities). 3. Rent. The monthly rental payment for the BMR unit shall not exceed either the maximum rent, as calculated per Chapter 4.11.3 of the Guideline to the lnclusionary Zoning Ordinance Regulations, for the applicable income category and household size, or the total monthly household cost of the unit, whichever is less. If the Tenant pays utilities or Homeowners' Association dues, maximum rent must be decreased pursuant to the City's utility allowance schedule. Household size will be assumed based on the number of bedrooms in the unit as follows: studia, 1 person; 1 bedroom, 2 persons; 2 bedroom, 3 persons; 3 bedrooms, 4 persons; ~ bedrooms; 5 persons; and 5 bedrooms, 6 persons. Page 2 of 3 C ~~ ~ 4. Lease. The lease agreement shall clearly state: (1) the term of the lease; (2) the monthly rental payment; (3) that the BMR unit is an affordable unit subject to certain restrictions imposed by the City; (4) that the Tenant may be requi~ed to submit income documentation to the City upon request; (5) that the lease term will expire no later than the Authorized Lease Termination Date; and (6) that the City is a third party beneficiary to the lease. 5. Authority of City Manager. The City Manager or his or her designee shall have the authority and responsibility for the implementation of this Policy, including the authority to enter into Regulatory Agreements with the BMR owners in a form approved by the City Manager and the City Attorney. 6. Effect of Violation. Any lease that violates the provisions of this Policy is prohibited, and any owner who violates this Policy shall be deemed to be in default under his or her Resale Restriction Agreement. 7. Severability C/ause. The provisions of this Resolution are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words, or parts thereof of this Resolution or their applicability to other persons or circumstances. ~ 8. Effective Date. This Resolution shall take effect immediately. PASSED, APPROVED, AND ADOPTED BY this 18th day of May, 2010, by the following vote: AYES: Councilmembers Biddle, Hildenbrand, Scholz, and Mayor Sbranti NOES: None ABSENT: Councilmember Hart ABSTAIN: None ATTEST: N ~ ~--, Mayor J ~,'~ City Clerk Reso No. 73-10, Adopted 5-18-10, Item 4.10 Page 3 of 3 C.~~~~ ~F DU~~ti '°~ /// '`~~~~lz ~~ ~ ~~I,iFOR~~~ 7 ~~ ~ STAFF REPORT DU~LIN CITY COUNCIL CITY CLERK File # ^[~]~~-[~~ DATE: July 19, 2011 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager SUBJE . Converting the Temporary Policy for the Rental of Below Market Rate Ownership Units into a Standard City Policy ~ Prepared by John Lucero, Housing Specialist EXECUTtVE SUAAIVIARY: Due to the continuing slow-down in the housing market, for-sale Below Market Rate (BMR Sale Unit) owners desiring to sel) their BMR Sale Unit are having difficulty finding qualified buyers willing to purchase the Units at the restricted resale price. Qualified buyers would rather purchase market rate homes free of resale restrictions rather than a BMR Sale Unit that is priced close to or above market rate prices. To assist BMR Sale Unit owners who are having difficulty in finding qualified buyers, the City Council adopted and subsequently extended a temporary policy for BMR Sale Unit owners to rent their Units. Owners can rent their Units for two-year intervals if they satisfy requirements set forth in the temporary policy. Based on Staffs research, it is recommended that the temporary policy be converted into a standard City policy. FINANCIAL IMPACT: None. RECOMMENDATION: Staff recommends that the City Council: 1} Receive Staff presentation; and 2) Adopt a Resolution establishing a Policy for the Rental of Befow Market Rate Ownersiiip Units by Owne~s Unable to Sell Their Units at the Restricted Resale Price. S bmitted By Community evelopment Director evie ed B Assistant Ci anager Page 1 af 4 fTEM NO. ~•~ Attachment 3 ~~ a~ ~ BACKGROUND: ~~~ The City's Inclusionary Housing Prograrn requires purchasers of for-sale below market rate units (BMR Sale Unit) to execute a"Resale Restriction Agreement and Option to Purchase" (Resale Restriction Agreement) that is recorded against the BMR Sale Unit. The Resale Restriction Agreement requires, that the BMR Sale Unit remain affordable for a period of time; requires the owner to live in the Unit as his or her primary residence; prohibits the owner from selfing the BMR Sale Unit for more than the restricted resale price; and, prohibits the owner from renting the BMR Sale Unit without the consent of the City. In mid-2008, several owners of BMR Sale Units desiring to self their Units requested consent from the City to rent their Units. The .owners indicated that they are having difficulty finding qualified buyers willing to purchase the Units at the restricted resale price. At the August 19, 2008 City Council meeting, the City Council adopted Resolution No. 157-08, Establishing a Temporary Policy for the Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price (Temporary Policy) for a two-year time period (Attachment 1). The Temporary Policy requires that a BMR Sale Unit must be on the market for at least six months and the owner make commercially reasonable efforts to sell the Unit, as determined by the City. If the efforts to sell are unsuccessful, the owner may enter into an Affordable Housing Renta! Regulatory Agreement and Declaration of Restrictive Covenants (Rental Regulatory Agreement) with the City and rent their BMR Sale Unit if they satisfy requirements set forth in the Temporary Policy. - On May 18, 2010 the City Council adopted Resolution No. 73-10 extending the Temporary Policy until August 19, 2012 (Attachment 2). Since the inception of the Temporary Policy, the City has executed three Rental Regulatory Agreements. One owner has since stopped renting and sold their Unit. Currently, ten BMR Sale Unit owners have their Units on the market and have the option to utilize the Temporary Pol icy. Proposed Rental Policy Staff has evaluated the Temporary Policy and received feedback from several BMR Sale Unit owners, as well as real estate professionals, stating that it may take some time before the market corrects back to the price that would facilitate the sale of the BMR Sale Units. Based an Staff s research, it is recommended that the Temporary Policy should be converted into a policy that addresses the realities of the market for the near and long-term. Staff has developed a proposed standard Policy for the Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price (Policy) based on the existing Temporary policy for the City Council's consideration. The proposed standard Policy is similar to the Temporary Policy with the exception of two areas: 1) In-lieu of listing the Unit for sale for at least six months, the standard Policy specifies that awners can submit a.real estate market anatysis to verify the market value of the Unit; and, 2) The term of a Rental Regulatory Agreement would be changed from a two-year to a extendable five-year interval. Both areas are more fully discussed below. Page 2 of 4 ~~~ ~~ ~ 1. No Real Estate Listing Required The Temporary Policy currently requires that, prior to renting the unit, the unit must be listed for sale for at least six months (see Attachment 2, page 2). Due to real estate market conditions, market prices for homes are near or below the restricted resale price of a BMR Sale Unit. Therefore, BMR owners are having difficulty finding qualified buyers willing to purchase their Units at the restricted resale price. The proposed standard Policy provides the owner the opportunity to request to rent their Unit without having to market their Unit, providing that a real estate market analysis report that includes comparable home sales data and prepared by a City-approved real estate professional, is submitted to the City that demonstrates the restricted resale price is greater than the market price for a similar unit (see Attachment 3, page 2). 2. Term of Regu{atory Agreement The Temporary Policy currently requires that all Rental Regulatory Agreements terminate at the expiration of the Temporary Policy on August 12, 2012. The proposed standard Policy allows for a five-year term, with unlimited extensions. An extension would be approved if a new real estate market analysis states that the restricted resale price is greater than the market price for a similar unit. The changes to the Policy in these two major areas preserve the City's affordable housing stock by helping BMR Sale Unit owners avoid forecfosure. Current Rentals of BMR Sale Units Rentals of BMR Sale Units under the Temporary Policy would continue under that policy until the expiration of leases. Lease renewals would be subject to the terms and conditions of the proposed standard Policy. NOTICING REQUIREMENTS/PUBLIC OUTREACH: A Notice has been sent to the ten BMR Sale Unit owners that may be affected by the proposed Policy. ATTACHMENTS: 1) Resolution No. 157-08, Establishing a Temporary Policy for the Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units at the , Restricted Resale Price (Temporary Policy) for a two- year time period 2) Resolution No. 73-10, ResoVution Extending a Temporary Policy for the Rental of below Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price Page 3 of 4 1~~~ ~ ~ 3) Resolution Establishing a Policy for the Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price Page 4 of 4 ~'~~~ RESOLUTION NO. 157 - 08 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ,~,~**,~*,~**** ESTABLISHING A TEMP4RARY POLICY FOR THE RENTAL OF BELOW-MARKET RATE OWNERSHIP iT1vITS BY OWNERS UNABLE TO SELL THEIR UNITS AT THE RESTRICTED RESALE PRICE RECITALS WHEREAS, the City of Dublin's ("City") Inclusionary Housing Program requires pwchasers of Below Market Rate ("BMR") for-sale units ("UniY') to execute and record a Resale Restricrion Agreernent with Option to Purchase ("Resale Restriction Agreement"); and WI~REAS, the Resale Restriction Agreement prohibits BMR owners from selling their BMR Units at more than a restricted price; and WHEREAS, due to the recent slow down in the housing market, BMR owners are having difficulty finding qualified buyers willing to purchase their BMR. units at the restricted resale price because such prices are so close to market prices that qualified buyers would rather purchase Mazket Rate homes free of resale restrictions; and WHEREAS, BMR owners who are unable to sell their BMR units would like to rent their BMR units; and VV~IEREAS, the Resale Restriction Agreement prohibits the rental of the BMR units without the consent of the City; and WHEREAS, although the City does have a policy authorizing rental of BMR units when the owner has a hazdship, the City does not currently have a policy regarding the rental of BMR units by BMR owners who are unable to sell their units at the restricted price; and WHEREAS, this Resolution is intended to establish a temporary policy for the rental of BMK units by BMR owners who aze unable to sell their units. NOW, THEREFORE, the City Council of the City of Dublin does hereby resolve as follows: 1. Policy. During the Policy Term, the owner of a BMR unit who is unable to find a qualified buyer to purchase his or her unit at the Adjusted Resale Price may rent his or her unit provided that the following requirements aze satisfied: (a) The BMR unit has been on the market for at least six (6) months and the Owner has made commercially reasonable efforts to sell the BMR unit, as determined by the City. Such efforts shall incIude, but shall not be limited to, listing the unit with a Real Estate Broker, ensuring the unit is listed in the Multiple Listing Service, and making the unit reasonably available for viewing by Brokers and potential purchasers and their agents; (b) The BMR owner enters into a regulatory agreement with the City; (c) The future Tenant is an Eligible Household in the same income category as the BMR unit; Reso No. 157-08, Adopted 8/19/O8, Item 7.2 Page 1 of 3 ~~P:vn ~~' ~ ~ ~ j~~~ ~` ATTACHMENT 1 ~a ~ ~~ (d) The lease contains the provisions set forth in Section 4 below; (e) The monthly rental payment does not exceed the amount set forth in Section 3 below; (~ A copy of the lease is submitted to the City within five (5) days following execution of the agreement by the Owner and Tenant; (g) The BMR owner does not live in the BMR unit during the term of the lease; and (h) The lease shall terminate no later than the Authorized Lease Termination Date. 2: Definitions. The following definitions shall apply to this Policy: ~ (a) "Authorized Lease Termination Date" means two (2) years from the effective date of this Resolution. (b) "Policy Term" means two (2) years from the effective date of this Resolution. (c) Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Resale Restriction Agreement. (d) Total Monthly Household Cost of the Unit means mortgage payment, taxes, homeowners association fees and insurance (does not include utilities). 3. Rent. The monthly rental payment for the BMR unit shall not exceed either the maximum rent, as calculated per Chapter 5.6 of the Layman's Guide to the Inclusionary Zoning Ordinance, for the applicable income category and household size, or the total monthly household cost of the unit, whichever is less. If the Tenant pays utilities or Homeowners' Association dues, maximum rent must be decreased pursuant to the City's utility allowance schedule. Household size will be assumed based on the number of bedrooms in the unit as follows: studio, 1 person; 1 bedroom, 2 persons; 2 bedroom, 3 persons; 3 bedrooms, 4 persons; 4 bedrooms, 5 persons; and 5 bedrooms, 6 persons. 4. Lease. The lease agreement shall clearly state: (1) the term of the lease; (2) the monthly rental payment; (3) that the BMR unit is an affordable unit subject to certain restrictions imposed by the City; (4) that the Tenant may be required to submit income documentation to the City upon request; (5) that the lease term will expire no later than the Authorized Lease Termination Date; and (6) that the City is a third party beneficiary to the lease. 5. Authority of City Manager. The City Manager or his or her designee shall have the authority and responsibility for the implementation of this Policy, including the authority to enter into regulatory agreements with the BMR owners in a form approved by the City Manager and the City Attorney. 6. E, f~`'ect of Violation. Any lease that violates the provisions of this Policy is prohibited, and any owner who violates this Policy shall be deemed to be in default under his or her Resale Restriction Agreement. 7. Severability Clause. The provisions of this Resolution are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable ta any Reso No. 157-08, Adopted 8/19/08, Item 72 Page 2 of 3 i3 ~~ person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability sha11 not affect or impair any of the remaining provisions, clauses, sentences, sections, words, or parts thereof of this Resolution or their applicability to other persons or circwnstances. S. Effective Date. This Resolution shall take effect immediately. PASSED, APPROVED AND ADOPTED this 19th day of August, 2008, by the following vote: AYES: Councilmembers Hildenbrand, Oravetz, Sbranti, and Scholz and Mayor Lockhart NOES: None ABSENT: None ABSTAIN: None ATTEST• ~' .2~' GL ~'V~Z~`~ City Clerk Reso No. 157-08, Adopted 8/l9/08, Item ~.2 Page 3 of 3 ~ a ~~ RESOL.UTION NO. 73-10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ************* EXTENDING A TEMPORARY POUCY FOR THE RENTAI OF BELOW MARKET RATE OWNERSHIP UNITS BY OWNERS UNABLE TO SELL THEIR UNITS AT THE RESTRICTED RESALE PRICE WHEREAS, the City of Dublin's ("City") Inclusionary Housing Program requires purchasers of Below Market Rate ("BMR") for-sale units ("Unit") to execute and record a Resale Restriction Agreement with Option to Purchase ("Resale Restriction Agreement"); and WHEREAS, the Resale Restriction Agresment prohibits BMR owners from selling their BMR Units at more than a restricted price; and WHEREAS, due to the recent slow down in the housing market, BMR owners are having difficulty finding qualified buyers willing to purchase their BMR units at the restricted resale price because such prices are so close to market prices that qualified buyers woutd rather purchase Market Rate homes free of resale restrictions; and WHEREAS, BMR owners who are unable to se11 their BMR units would like to rent their BMR units; and WHEREAS, the Resale Restriction Agreement prohibits the rental of the BMR units without the consent of the City; and WHEREAS, although the City does have a poiicy authorizing rental of BMR units when the owner has a hardship, the City daes not currently have a permanent policy regarding the rental of BMR units by BMR owners who are unable to sell their units at the restricted price; and WHEREAS, the City does have a policy in place through August 19, 201Q (Temporary Policy for the Rental of be%w Market Rate Ownership Units by Owners Unable to Sell Their Units at the Restricted Resale Price) that a(lows for the rental of BMR units by BMR owners who are unable ta sel! their units at the restricted price; and WHEREAS, to assist BMR owners with the difficulty of finding quali~ed buyers, this Resotution is to extend a temporary policy for additional two years from the date of expiration of the original policy which is August 19, 2012 for the rental of BMR units by BMR owners who are unable to sell their units. NOW, THEREFORE, the City Council of the City of Dublin does hereby resolve as follows: Policy. During the Policy Term, the owner of a BMR unit who is unable to find a qualified buyer to purchase his or her unit at the Adjusted Resale Price may rent his or her unit provided that the following requirements are satisfied: Page 1 of 3 ATTACHMENT 2 1~' ~ ~~ (a) The BMR unit has been on the market for at least six (6) months and the Owner has made commercially reasonable efforts to sell the BMR unit, as determined by the City. Such efforts shall include, but shalt not be limited to, listing the unit with a Real Estate Broker, ensuring the unit is listed in the Multiple Listing Service, and making the unit reasonably available for viewing by Brokers and potential purchasers and their agents; (b) The BMR owner enters into a regulatory agreement with the City; (c) The future Tenant is an Eligible Household in the same income category as the BMR unit; (d) The lease contains the provisions set forth in Section 4 below; (e) The monthly rental payment does not exceed the amount set forth in Section 3 below; (~ A copy of the lease is submitted to the City within five (5) days following execution of the agreement by the Owner and Tenant; (g) The BMR owner does not live in the BMR unit during the term of the lease; and (h) The lease shatl terminate no later than the Authorized Lease Termination Date. 2. Definitions. The following defrnitions shall appfy to this Policy: • (a) "Auth~rized Lease Termination Date" means August 19, 2012. (b) "Policy Term" means up to four years, from August 19, 2008 until August 19, 2012. (c) Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Resale Resfriction Agreement. (d) Total Monthly Hausehold Cost of the Unit means mortgage payment, taxes, homeowners association fees and insurance (does not include utilities). 3. Rent. The monthly rental payment for the BMR unit shall not exceed either the maximum rent, as calculated per Chapter 4.11.3 of the Guideline to the Inclusionary Zoning Ordinance Regulations, for the applicable income category and household size, or the total monthly household cost of the unit, whichever is less. If the Tenant pays utilities or Homeowners' Association dues, maximum rent must be decreased pursuant to the City's utility allowance schedule. Household size will be assumed based on the number of bedrooms in the unit as follows: studio, 1 person; 1 bedroom, 2 persons; 2 bedroom, 3 persons; 3 bedrooms, 4 persons; 4 bedrooms, 5 persons; and 5 bedrooms, 6 persons. Page 2 of 3 i~ ~. ~~ 4. Lease. The lease agreement shaH clearly state: (1) the term of the lease; (2) the monthly rental payment; (3) that the BMR unit is an affordable unit subject to certain restrictions imposed by the City; (4) that the Tenant may be required to submit income documentation to the City upon request; (5) that the lease term will expire no later than the Authorized Lease Termination Date; and (6) that the City is a third party beneficiary to the lease. 5. Authority of Cify Manager. The City Manager or his or her designee shall have the authority and responsibility for the implementation of this Policy, including the authority to enter into Regulatory Agreements with the BMR owners in a form approved by the City Manager and the City Attorney. 6. Effect of Violation. Any lease that violates the provisions of this Policy is prohibited, and any owner who violates this Policy shall be deemed to be in default under his or her Resale Restriction Agreement. 7. Severability Clause. The provisions of this Resolution are severable and if any provision, clause, sentence, wo~d or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shali not affect or impair any of the remaining provisions, clauses, sentences, sections, words, or parts thereof of this Resolution or their applicability to other persons or circumstances. ~ 8. Effective Date. This Resolution shall take effect immediately. PASSED, APPROVED, AND ADOPTED BY this 18~' day of May, 2010, by the following vote: AYES: Councilmembers Biddle, Hildenbrand, Scholz, and Mayor Sbranti NOES: None ABSENT: Councilmember Hart ABSTAIN: None N ~J~ ,~~~~ ~ ATTEST: Mayor / ~-~- ' ' 0+~-C/ City Clerk Reso No. 73-10, Adopted 5-18-10, Item 4.10 Page 3 of 3 (7 ~ ~ RESOLUTION NO. XX - 11 A RESOLUTI4N OF THE CITY COUNCIL OF THE CITY OF DUBLIN **********~*** ESTABLISHING A POLICY FOR THE RENTAL OF BELOW MARKET RATE OWNERSHIP UNITS BY OWNERS UNABLE TO SELL THEIR UNITS AT THE RESTRICTED RESALE PRICE WHEREAS, the City of Dublin's ("City") Inclusionary Housing Program requires purchasers of below market rate units that are for sale ("BMR Sale Units") to execute and record a Resale Restriction Agreement with Option to Purchase ("Resale Agreement") with the City; and WHEREAS, the Resale Agreement prohibits owners from selling their BMR Sale Units at greater than a price as specified in the Resale Agreement; and WHEREAS, due to the re-set of the economy which began several years ago, many BMR Sale Unit owners are having difficufty finding qualified buyers willing to purchase their units at the restricted resale price because in many instances, such price is so close to market price that qualified buyers would rather purchase market rate homes free of resale restrictions; and WHEREAS, owners who are unable to sell their BMR Sale Units would like the ability to rent their BMR Sale Units to qualified renter at restricted rents; and WHEREAS, the Resale Ag~eement prohibits the rental of BMR Sale Units without the prior written cansent of the City; and WHEREAS, on August 19, 2008, the City Council adopted a"Temporary Policy for the Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units At The Restricted Resale Price" ("Temporary Policy"), effective through August 19, 2010; and WHEREAS, due to insufficient improvement in real estate market conditions, on May 18, 2010, the City Council extended the Temporary Policy through August 19, 2012; and WHEREAS, City StafF has evaluated the Temporary Policy, current and projected local reai estate market conditions, and feedback from several BMR Sale Unit owners and real estate professionals, and is of the opinion that it is unlikely that as of August 19, 2012, the local reaf estate market will have improved sufficiently for BMR Sale Unit owners who wish to sell their homes to find qualified buyers willing to accept resale restrictions; and WHEREAS, City Staff is further of the opinion that qualified potentia! renters of BMR Sale Units are unwil{ing to rent from BMR Sale Unit owners due to the short term of the Temporary Policy, as extended; and WHEREAS, based on the research and evaluation, City Staff recommends that the Temporary Policy be replaced by a policy that addresses the realities of the local real estate maricet for both the near and long term conditions, to help prevent foreclosures and ta preserve the City's stock of below market rate units. ATTACHMENT 3 ~ g ~ `~ ~ NOW, THEREFORE, the City Council of the City of Dublin does hereby resolve as follows: 1. Adoption. The City adopts the "Policy for the Rental of Below Market Rate Ownership Units By Owners Unable to Sell Their Units at the Restricted Resale Price" (the "Policy"). 2. Current Leases. Rentals of BMR Sale Units under the Temporary Policy shall continue in effect pursuant to the terms and provisions thereof, until the expiration of such leases. Lease renewals and new leases entered into on or after the Effective Date of this Resolution shall be subject to and governed by the terms and provisions of the City's Policy. 3. Condifions. A BMR Sale Unit owner who wishes to rent his or her unit must, at minimum, meet all of the following conditions: (a) Submission to the City of a market analysis, not less than every five (5) years, prepared by a City-approved real estate professional, demonstrating that the Adjusted Resale Price is greater than the market price for a similar unit; (b) Execution of a recordable Affordable Housing Rental Regulatory Agreement and Dec~aration of Restrictive Covenants ("Rental Regulatory Agreement") with the City for a term of not more than five (5) years, unless extended by the City based on current local real estate market conditions; (c) Qualification of the prospective tenant as an Eligible Household in the same income category as the BMR Sale Unit; (d) City approval of the form of lease; (e) A monthly rental payment that does not exceed the lesser of the maximum rent, calculated per Chapter 4.11.3 of the City's Guidelines to the Inclusionary Zoning Ordinance Regulations for the applicable income category and household size; or the total monthly household cost of the unit; (f) Submission of a copy of the lease to the City within five (5) days of its execution by the owner and tenant(s); (g) Owner's agreement that owner shall not live in the BMR Sale Unit during the term of the lease. (h) Owner's acknowledgement that compliance with the provisions of the Policy are and shall be applicable to each proposed lease of Owner's BMR Sale Unit. 4. De~nitions. The following defi~itions shall apply to this Policy: (a) The term of the Rental Regulatory Agreement shall not exceed five (5) years ("Term"). In the exercise of its discretion, City may agree to an extension of the Term based on Owner's submission, at five-year intervals, of a local real estate market analysis demonstrating to City's satisfaction that comparable market rate units are available for purchase at the same or lesser price as the Adjusted Resale Price. 2 of 4 i ~ ~. ~ (b) Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Resale Agreement. (b) Total Monthly Household Cost of the Unit shall mean the cost of an owner's monthly mortgage payment, taxes, homeowners' association fees and insurance for the BMR Sale Unit, but shall not include the cost of utilities or maintenance. 5. Rent and Household Size. The monthly rental payment for the BMR Sale Unit shall not exceed the definition of Affordable Rent for the applicable income category in the Rental Regulatory Agreement entered ~nto between the Owner and the City. The household size for each BMR Sale Unit may not exceed two people for each bedroom and may not be less than one person per bedroom. The cha-t below contains the household size permitted for each BMR Sale Unit based on the number of bedrooms: 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 6. Lease. The lease shall clearly state: (1) the term of the lease; (2) the monthly rental payment; (3) that the BMR Sale Unit is an affordable unit subject to certain restrictions imposed by the City; (4) that the tenant may be required to submit income documentation to the City upon request; (5) that the lease term will expire not later than five (5) years from execution of the lease, absent City's written authorization of continued rental of the BMR Sale Unit; (6) that the City is a third party beneficiary to the lease with the right, but not the obligation, to enforce the terms of the lease; and (7) that the tenant will be required to vacate the unit when the lease expires, and will not be eligible for any form of relocation benefits o~ assistance. 7. Authorify of City Manager. The City Manager or his or her designee shall have the authority and responsibility for the implementation of this Policy, including the authority to enter into Rental Regulatory Agreements and other implementing documents with the BMR Sale Unit owners in a form approved by the City Manager and the City Attorney. 8. Effect of Violation. City's approval of a lease shall be based on a BMR Sale Unit owner's compliance with the Policy. Theref~re any BMR Sale Unit owner who violates this Policy shall be deemed to be in default under both the owner's Rental Regulatory Agreement and Resale Agreement. 9. Severability Clause. The provisions of this Resolution are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words, or parts thereof of this Resolution or their applicability to other persons or circumstances. 10. Effective Date. This Resolution shatl take effect immediately. 3of4 ~~ ~ a PASSED, APPROVED, AND ADOPTED BY the City Council of the City of Dublin on this 19th day of July, 2011, by the foltowing votes: AYES: NOES: ABSENT: ABSTAIN: ATTEST: ` City Clerk 1662913.2 Mayor 4of4 ~i ~ RESOLUTION NO. XX - 11 ~ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN **~~,~*~~**~*,~~ MODIFYING AND EXTENDING THE TEMPORARY POLICY FOR THE RENTAL OF BELOW MARKET RATE OWNERSHIP UNITS BY OWNERS UNABLE TO SELL THEIR UNITS AT THE REST121CTED RESALE PRICE WHEREAS, the City of Dublin's ("City") Inclusionary Housing Program requires purchasers of Below Market Rate Units that are for sale ("eN1R Sale Units") to execute and record a Resale Restriction Agreement with Option to Purchase ("Resale Agreement") with the City; and WHEREAS, the Resale Agreement prohibits Owners from selling their BMR Sale Units at greater than a price as specified in the Resale Agreement; and WHEREAS, due to the re-set of the economy which began several years ago, many BMR Sale Unit Owners are having difficulty finding qualified buyers willing to purchase their Units at the restricted resale price because in many instances, such price is so close to market price that qualified buyers would rather purchase Market Rate homes free of resale restrictions; and WHEREAS, Owners who are unable to sell their BMR Sale Units would like the ability to rent their BMR Sale Units to qualified renter at restricted rents;. and WHEREAS, the Resale Agreement prohibits the rental of BMR Sale Units without the prior written consent of the City; and _ WHEREAS, on August 19, 2008, the City Council adopted a"Temporary Policy for the Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units At The Restricted Resale Price" ("Temporary Policy''), effective through August 19, 2010; and WHEREAS, due to insufficient improvement in real estate market conditions, on May 18, 2010, the City Council extended the Temporary Policy through August 19, 2012; and WHEREAS, City Council received a report from Staff of suggested modifications to the Temporary Policy to address local real estate market conditions, and feedback from several BMR Sale Unit Owners and real estate professionals, and is of the opinion that it is unlikely that as of August 19, 2012, the local real.estate market will have improved sufficiently for_BMR Sale. Unit Owners who wish to sell their homes to find qualified buyers willing to accept resale restrictions; and WHEREAS, City Staff is further of the opinion that qualified potential renters of BMR Sale Units are unwilling to rent from BMR Sale Unit Owners due to the short term of the Temporary Policy, as extended; and WHEREAS, City Council was desirous of extending the Temporary Policy two more years past the date of expiration to August 14, 2014. Attachment 4 ~a~ a~ NOW, THEREFORE, the City Council of the City of Dublin does hereby resolve as follows: 1. Adoption. This Temporary Policy supersedes the Temporary Policy adopted by the City Council on August 19, 2008 and extended on August 19, 2010. 2. Current Leases. Rentals of BMR Sale Units under the prior Temporary Policy shall continue in effect pursuant to the terms and provisions thereof, until the expiration of such leases. Lease renewals and new leases entered into on or after the Effective Date of this Resolution shall be subject to and governed by the terms and provisions of the amended Temporary Policy. 3. Conditions. A BMR Sale Unit Owner who wishes to rent his or her Unit must, at minimum, meet all of the following conditions: (a) Submission to the City ~of a market analysis prepared by a City-approved real estate professional, demonstrating that the Adjusted Resale Price is greater than the market price for a similar unit; (b) Execution of a recordable Affordable Housing Rental Regulatory Agreement and Declaration of Restrictive Covenants ("Rental Regulatory Agreement") with the City for a term of not more than five (5) years from the date executed; (c) Qualification of the prospective tenant as an Eligible Household in the same income category as the BMR Sale Unit; (d) City approval of the form of lease; (e) A monthly rental payment that does not exceed the /esser of the maximum rent, calculated per Chapter 4.11.3 of the City's Guidelines to the Inclusionary Zoning Ordinance Regulations for the applicable income category and household size; or the total monthly household cost of the Unit; (fl Submission of a copy of the lease to the City within five (5) days of its execution by the Owner and tenant(s); (g) Owner's agreement that Owner shall not live in the BMR Sale Unit during the term of the lease; and (h) Owner's acknowledgement that compliance with the provisions of the Policy are and shall be applicable to each proposed lease of Qwner's BMR Sale Unit. 4. Definitions. The following definitions shall apply to this Policy: (a) The term of the Rental Regulatory Agreement shall not exceed five (5) years from the date executed ("Term"). (b) Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Resale Agreement. ~ 2 of 4 ~~ ~~ (c) Total Monthly Household Cost of the Unit shall mean the cost of an Owner's monthly mortgage payment, taxes, homeowners' association fees and insurance for the BMR Sale Unit, but shall not include the cost of utilities or maintenance. 5. Rent and Household Size. The monthly rental payment for the BMR Sale Unit shall not exceed the definition of Affordable Rent for the applicable income category in the Rental Regulatory Agreement entered into befinreen the Owner and the City. The household size for each BMR Sale Unit may not exceed finro people for each bedroom and may not be less than one person per bedroom. The chart below contains the household size permitted for each BMR Sale Unit based on the number of bedrooms: One-bedroom units Two-bedroom units Three-bedroom units Four-bedroom units 1-2 people households 2-4 people households 3-6 people households 4-8 people households 6. Lease. The lease shall clearly state: (1) the term of the lease; (2) the monthly rental payment; (3) that the BMR Sale Unit is an affordable unit subject to certain restrictions imposed by the City; (4) that the tenant may be required to submit income documentation to the City upon request; (5) that the lease term will expire no later than five (5) years from execution of the lease; (6) that the City is a third party beneficiary to the lease with the right, but not the obligation, to enforce the terms of the lease; and (7) that the tenant will be required to vacate the Unit when the lease expires, and will not be eligible for any form of relocation benefits or assistance. 7. Authority of City Mariager. The City Manager or his or her designee shall have the authority and responsibility for the implementation of this Policy, including the authority to enter into Rental Regulatory Agreements and other implementing documents with the BMR Sale Unit Owners in a form approved by the City Manager and the City Attorney. 8. Effect of Violation. City's approval of a lease shall be based on a BMR Sale Unit Owner's compliance with the Policy. Therefore any BMR Sale Unit Owner who violates this Policy shall be deemed to be in default under both the Owner's Rental Regulatory Agreement and Resale Agreement. 9. Severability C/ause. The provisions of this Resolution are severable and if any provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences, sections, words, or parts thereof of this Resolution or their applicability to other persons or circumstances. 10. Effective Date. This Resolution shall take effect immediately. 3 of 4 a~~b a~{ NOW, THEREFORE, BE IT FURTHER RESOLVED that this Temporary Policy will expire unless renewed by the City Council on August 19, 2014. PASSED, APPROVED, AND ADOPTED BY the City Council of the City of Dublin on this 16th day of August, 2011, by the following votes: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 4 of 4