REPORT TO COUNCIL
SUBJECT
Title
Consideration of an Affordable Housing Agreement with Legend SantaClara, LLC
Report
BACKGROUND
On September 27, 2016, the City Council approved land use entitlements for a 56-unit condominium housing project submitted by Legend GC, Inc., for the property located at 1890 El Camino Real. The property and entitlements have been transferred to Legend SantaClara, 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. 5.6 dwelling units) as Below Market Purchase (BMP) units to be sold to qualified first-time homebuyers at an affordable price based upon the 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 5.6 units, the developer can either elect to provide six BMP units, or five BMP units and pay a BMP in-lieu fee for the fractional unit. In this case the developer is proposing to provide five BMP units and pay the required in-lieu fee for the fractional units. The BMP housing units will be sold at prices deemed affordable to households with an income that does not exceed 110% of AMI. The resulting Affordable Sales Prices will be $295,000 for two 1-bedroom, 1-bath BMP units and $333,000 for three 2-bedroom, 2-bath BMP units. The anticipated BMP in-lieu fee will be established by an appraisal of the BMP units after completion. The BMP in-lieu fee will be equal to the difference between the appraised unrestricted Initial Market Value (IMV) and the Affordable Sales Price, multiplied by the 0.6 fraction. 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 year...
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