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CC Resolution No. 4160 . ? . ~ RESOLUTION N0. 4160 ~ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO ADOPTING A POLICY REGARDING THE PROVISION OF BELOW-MARKET HOUSING IN RESIDENTIAL DEVELOPMENT WHEREAS, the City of Cupertino, as a part of adopting overall goals for the community,recognized the need for a varied range and type of housing within the City; and WHEREAS, a varied range and type of housing must provide a range in housing costs for various economic segments of the community. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Cupertino does hereby adopt the attached policy statement labeled Exhibit A, an implementation procedure for providing below-market housing within residential developments. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this day of , 1976, by the following vote: Vote Members of the City Council AYES: NOES: . ABSENT: ABSTAIN: APPROVED: Mayor, City of Cupertino ATTEST: City Clerk ' ' Rev. May 4, 19 76 ~ POLICY OF THE CITY OF CUPERTINO REQUIRING BELOW-MARKET HOUSING IN RESIDENTIAL DEVELOPMENTS • Exhib i t A ~ The purpose of this policy dociunent is to define a more specific implementation program for the provision of below-market housing within residential develop- ments so that persons of moderate income will be provided housing within the City of Cupertino. Percentage Requirement for Below-Market Units All new residential developments involving densities of 7.6 units per acre or more or conversion of existing apartments to condominiums involving 20 or more • dwellings shall be required to provide a range of up to 20% of the units at below-market price. Below-market shall be defined as .2-1/2 x 80%* of the median annual income for Cupertino, based on the most recent census data or other commonly recognized data source. A range of up to 20% below-market units . may be allowed, depending on the size of the development, location, density and specific dwelling-unit type. The intent of permitting a variation 0-20% is to encourage a below-market housing mix which recognizes special housing needs. For instance, a developer may wish to propose a variation of unit types and • prices which fulfill the housing needs of senior citizens and handicapped persons. In such cases, each project will be reviewed on its own merits. Development Approval Process The percentage and type of below-market units to be required should be determined at the planning approval stage. Conditions for approval of development shall include the number of units to be below-market cost, the price of the units, a map describing the location of the units and approval by the City of Grant Deeds. The Planning Commission and the City Council shall place considerable emphasis * The United States Department of Housing and Urban Development (HUD) defines moderate income as equal to 80-100% of the median income. -i- on the need to ensure that if below-market units are scattered throughout a . project that they do not deviate greatly from the appearance of market dwellings. ~ Deed restrictions shall be placed on below-market units which will run for 59 years. The Deeds of Ownership shall contain a clause, giving the City of Cupertino, or its designee, the first right of refusal to buy the unit, should the owner decide to sell. In a case of the initial sale by the original devel- oper, the City may exercise the option within 60 days of receipt of notification that the developer received authorization from the State Department of Real Estate to commence sales or within .60 days of issuance of final building permit. In the case of subsequent sales, the City may exercise its options within 60 days • upon receipt of written notice of intent to sell the property. The sales price at which the City can exercise this option will be set at the lower of market value or the original price of the unit, plus an increase equivalent to the rise in the Consumer Price Index for the San Francisco Bay Area, as published by the ~ U.S. Bureau of Labor Statistics, plus improvements - including fixtures, land- scaping and building additions at verified cost, plus rise in Consumer Price Index. A second clause shall be included, stating that the owner of a below-market unit shall not rent, lease, sublet, assign or otherwise alienate any interest of the • City, provided that the City at its discretion reserves the right to approve any of the foregoing acts . . Qualifications of Buyers The buyer's household income shall not exceed 50% of the sales price of the below- market unit. The household income shall be defined as the latest year's income, as verified by the Internal Revenue Service Form 1040. Nor should the buyer's income have exceeded SO% of the sales price in any one of the past f ive years. • In the event that no applicants are available with incomes of 50% of the sales price, eligibility may be open to applicants with higher incomes. There shall -2- ~ ~ _ be a maximum ~asset limit, equal to one-third of the sales price, and limiting purchase to persons not owning all or any part of any other residential real , estate holdings. ~ The priority of eligible applicants shall be determined by the following criteria: 1. A resident of Cupertino for two years or more. 2. An employee working within the Cupertino sphere of influence, and other Cupertino residents not included in No. l. 3. till others. Administration The recruitment and qualifying of buyers shall be administered by a designated ~ City staff person, or another public or non-prof it agency designated by City Council. A list of all qualified buyers shall be established according to prior- ities listed above. A Buyers~ Selection Committee shall evaluate and select potential applicants, based upon the priority system listed above. The Buyers . Selection Committee shall be comprised of a Councilmember, as selected by the Mayor and City Council, the Director of Administrative Services, and the Housing Rehabilitation Counselor, or staff inembers as designated by the City Manager. The membership of the Committee shall not exceed three persons. The applicant • or citizen can appeal a decision of the Buyers-:.Selection Committee to the City Council for final determination. In the event that there are more applicants within a category than units,.eligible applicants shall be selected by lot. Approved for submittal to City Council, • Robert W. Quinlan City Manager -3- . ~ Exhibit B ~ • n A ,""f.^ 'f" , . . - . ;Y.'~ , ~ ~t~~.~ti . . ' ` (408) 243•SIIPg . ~:..~*.~~~~.fll:`~T'i~Lal ~~ILC3lfONC'a ifi9~F..~4~T6~1~ (:r~~ Southern Divisian . Of Northe~n California @i 345 Sarato9a Avonue, Santa Clara, Ca. 35050 (:orm~lrly ti~n Builders Association of Santa Clara-Santa Crui Counties) Jurie 11, 1975 PRES~DENT Dick J. Fandall • The William Lyon Company ' VIC[-PRESIDENT Jesse W. Stacy A~cadia Davelopmen! co. Mr. Donald J. C~G IS Pena TAEASURER: r~I81SUTe "B" Study Lead Staff Fichard E. Clark City of San Jose Pyramid Homes, Inc.. $O~. NO. First Street SECRETf~av: San Jose, Calif. 95110 Gary O. Brooks Robert H. Grant Corp. a;~ec~c~~: Dear pon: • Mark J. Alexander Samuel J. Eer~~~d This is in response to your letter of May 15, 1975, ~ Shapell Indus~riar, o~ regarding the coiisul.tant' s tiVorking Paper # 5 on ' Norihcrn Ca!it~~r„a "p,~eans of Achieving EQuitable Distribution Oi Jack R. Bl~~r.v1~~~ Housing for All income Levels." A special Blackwell Homes • Pl;. G. Engdol subcommittee of the Associated Building Industry Dura Style Homes, ~nc. (ABI ) has reviewed in~orking Paper # 5. Hopefully,~ Leonard A. Fryer OUT comments co~rer the three c{uestions outlined ' Singer Housing Company 111 yOUT' original letter. Edward E. Kaitz ' oitz-cra~e ~ FiI'St of alI and most importantly, the ABI believes ceo~9a •tJolte, that a determination must be made by tlle City that ~ George S. Noite & Assoc. 1tS C1t1Ze11S 3S a whole fully and completely Pairiek 0. O~co~~~n understand and endorse such a program of supplying w. Pn~n~ps . housing to all income levels throu~hout the city. Estate Homes. Only then can such a program be worlcalile. Paul E. Potts ~ , Lawyers Titla In;urance Corp. David A. R21sti~ The ABI also believes that the only way the market Ralstin 8, As.saciates minimum housing program can work in the private Neil M. Stone industry sector is through the statement by the Louie P. Tersini consultant that all housing be built at a profit. . Tersini co~5t~~~~~o~ The ABT is reatl concerr_ed that ~he reduced iees ~ R. S. Vtiilliams on tne ~i.tY ~ s ~art tn r-.f~rPnCe to t e mar%et Century Communiry Ueoetopers min mum hot:S@S ~I'2 TlOt t1St taciced Ori ;tU tl~e rice Alvin wooPNOrth ~f the other houses or bv an across-the- oar lncrease af, all fees L, therebv makin~ ne~a ~iomebuyeiu si_1' ic- the ,~ro ra~m. In reference to our initial comment~ above),-i~" this program is endorsed by the people as a whole (and it must be in order to work), the £xecutive Vice-Piesioent entire population of San Jose must be prepared to • JamesK.O•8?~e~ subsidize. these fees in some appropriate manner, Execut~veAuistant ~ • g • ~ P1•operty taxes . ' ' John P. Moore ' ' Adminitt~etive Auiatant Darlene A. Robinson ~ ~ OIVISION OFFICES WEST 6AY SOUTHERPV CENTRAL / EAST BAY NOR7HERN San Franciuo/Noveto Sante Clare Lafayette s~~,~ ao:o , ' , I'age 2 ~ ' Regarding the recommendations of Working Paper #S, ~ the ABI believes the following: - I. The.proposal of a residential development ~ having m~re than 25 units be required to offer 10-250 of all units to buyers at a price not to exceed 800 of the median price of all ne~~ housing built in the City is unrealistic. ~ 1) The consultants point out that the median price home in 1975 is $37,000. Therefore, a market minimum home (not to exceed 80~ of the median price of all new.housingj could not sell for more than (.80 X $37,000) $29,600. F.,-.--. --T tne ~Bi aoes not ~eliEVe tiiat, econom- ically or sociologically, a $2~5,000- .$30,000 home would be compatible in a ' ~S neighborhood with homes in the $70,000 ~ price rar.ge. Accordingly, the ABI WOwQd ~,~~;~s+~a~, suggests tnat this requi~ement be G_ applicable only to those housing . T~ developments where the maximum sales ~lMliklyqA ~S. price would not exceed 135 0 of the median price housing in the City of ' San Jose. Since the median price housing is currently $37,000, this requi.rement would be applicable to~ developments with a maximum selling . ' price of ~50,000. This maximum figure ~ would adjust automatically every year. 2) The,requirement that all developments ~ • with more than 25 units comply by supplying market minimum housing would prove a practical impossibility. In . - all likelihood developments of that , j..~? t.~~ S~ uP ~~T~~~i j~ ~.'..~.ni~ :Vt.. :74~~U1 the market minimum housing~approach. Therefo.re, the ABI suggests that the ~ . figure of 50 units be used with the ~ . option of the developer to offer market minimum housing in developments of ~ less than 50 units. ~ 3) The requirement of 10 to 250 of all units being market minimum housing we ~ would not favor because of the possiUility, . if not the probability, of,the maximum becoming the minimum. ABI suggests that . , ~ ~ _ ? ~ - Page 3 ~ 3) (Contd.) ' ~ this formula be reduced to a So minimum . with the option of increasing that percentage left to the developer. II. The proposal of the market minimum housing pro~ram being established on a two-y~ar trial basis with no restrictions,might be ~ a littlP naive. The ABI believes there ~ . should be a reauirement that all market minimum housing be owner-occupied. This would eliminate the possible problem of speculative buying by investors and subsequent rental units. . Regarding consultants' third and fourth recommenda- tions, we concur genera.lly and have no specific camments tc ~uon?it . ~ ~ tiUe very much.appreciate your furnishing us with copies of the several working papers and particularly wish to thank the task force for asking~our views on the.specific recommendations of ~~lorking Paper #S. If the task force has questions regarding our . comments, please call and we'll do our best to . ans~aer them by plione or in person, however the task force prefer~. . Sincerely, ` ,,~7if~.. ~ . , . JA;tiIES K. 0' BRIEN Executive Vice-President JKU:dr ~ , , ~ Exhibit C s~'~ ~ ' ~sg HOUSING AUTHORITY 0 F T H E C 0 U N T Y 0 F S A N T A C L A R A ~ 'o'vi'~a"v ~'m ~ 770 KIELY BOULEVARD, SANTA CLARA, CALIFORNIA 95051 • ~408) 241-0481 COMMISSIONERS DIRECTOR DANIEL RUIZ May 6, 1976 JOHN C. BURNS GHAIRMAN PAUL SEPULVEDA VICE-GNAIRMAN CARL S. EKLUND A. C. STEVENS MATT P. TALIA Ms. Nancy Hendee Housing Counselor City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Dear Ms. Hendee: There has been some discussion in Cupertino regarding a possible city requirement of developers to include, as part of proposed projects, a precentage of dwelling units to be sold to moderate income families at cost or at a predetermined selling price established by the city through negotiation with the developer. This approach has, in our opinion, a great deal of inerit, although it needs to be recognized that the total number of units which can be made available through this process will be small and it will be aiding families whose incomes are somewhat above the median. Nonetheless, should the city pursue this course, the Housing Authority would be interested in acting as the city's agent in taking applications and arranging the sale of these units. We feel the job would take a concentrated effort~over a relatively short period of time and additional time when resales occur. It would be a new field for us but we feel we have the~management and business ability to handle it. I understand the city would at the same time be considering other alternations. This is as it should be and we will be available ~ if you need answers to specific questions. Sincerely, HOUSING AUTHORITY OF THE COUNTY OF SANTA CLARA C.~u/!"'~/~ hn C. Burns Executive Director JCB/tr MAILING ADDRESS: P.O. BOX 2250 MISSION STATION, SANTA CLARA, CALIFORNIA 95051