REPORT TO COUNCIL
SUBJECT
Title
Consideration of an Affordable Housing Agreement with Toll West Coast, LLC for 3305 Kifer Road
Report
BACKGROUND
On November 29, 2016, City Council approved land use entitlements for a 45-unit condominium housing project submitted by the True Life Company for the property located at 3305 Kifer Road. The property and entitlements have been transferred to Toll West Coast, LLC who will act as developer. As a condition of the land use entitlements, and per the City's inclusionary housing policy, the developer was required to enter into an Affordable Housing Agreement (AHA) to designate 10-percent of the total units (i.e., 4.5 dwelling units) as Below Market Purchase (BMP) units to be sold to qualified first-time homebuyers at an affordable price based upon Area Median Income (AMI).
DISCUSSION
The BMP Policies and Procedures Guidelines adopted by the City Council indicate that in the case of a fractional obligation of 4.5 units, the developer can either elect to provide five BMP units or four BMP units and pay a BMP in-lieu fee for the fractional units. In this case the developer is proposing to provide five BMP units. The BMP housing units will be sold to households whose income does not exceed 100% of AMI. The resulting Affordable Sales Prices will be $414,000 for three 3-bedroom, 3.5-bath BMP units, and $452,000 for two 4-bedroom, 4-bath BMP units. To maintain long-term affordability, a twenty (20) year restrictive resale covenant (Covenant) is enforced and recorded against the property. The resale restrictions within the Covenant include:
1. If home is sold within 5 years of acquisition, the homeowner must sell the BMP unit to another income-eligible homebuyer.
2. After 5 years of ownership, the homeowner can resell the home at market price; however, the City and the homeowner will share the appreciated value of the home. The homeowner's share of any appreciation beyond the Initial Market Value (IMV) will increase by ...
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