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15 CUSD BMR I CUPEI{fINO City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 (408) 777-3308 FAX (408) 777-3333 Community Development Department Planning Division Summary Agenda Item No. }5 Agenda Date: March 7, 2006 SUBJECT: Request from the Cupertino Union School District (CUSD) to amend the eligibility requirements for the Below Market Rate (BMR) program to give CUSD teachers a point for working within the City of Cupertino limits, regardless of the city they are working in, as long as they are employed by CUSD. RECOMMENDATION: The Cupertino Housing Commission recommends that rather than amend the point system for the BMR program, that progranunatic changes be instated by CCS to make it clear to applicants that they must continue to qualify for the BMR unit through the close of escrow. In addition, CCS shall encourage public service employees to inform their human resources office that they have applied for a BMR unit and must remain working within the City limits until they close escrow. DISCUSSION: Background: CUSD presented the attached Resolution 1865 from the CUSD Board of Education requesting the City amend the BMR mitigation manual to allow all CUSD teachers to qualify for the point awarded to applicants working within the city limits regardless of the city limits. Andy Mortensen met with the Housing Commission on February 9, 2006 to discuss the request. Mr. Mortensen explained to the Commission that there was an incident last year where a teacher applied for the BMR program, was reassigned to a school in another city and then realized after the fact that they needed to remain at a Cupertino school to qualify for the point awarded to applicants working within the city limits. The teacher then had to request that CUSD transfer them back to a Cupertino school, disrupting the classroom mid-year and causing concern among the parents. For this reason, CUSD is requesting that all CUSD teachers qualify for the Cupertino worker point even if they are employed in the neighboring cities of Sunnyvale, Santa Clara, Los Altos, Saratoga or San Jose. The program the school district is requesting be amended is not a teacher housing program, but the Below Market Rate program that was established by a 1992 study linking new office/industrial development to the need for affordable housing. One of C: \ Documents and Settings \ verag\ Desktop \ CUSD report.doc /1)-/ Page 2 the establishing principles of the program is to provide housing to Cupertino workers that are not able to afford to live in Cupertino. Currently, Cupertino workers receive two points in the point system established to qualify applicants with public service employees and Cupertino residents receiving one point each. Removing, or eliminating, the points for Cupertino workers could jeopardize the program funding, fees paid by Cupertino office/industrial companies receiving building permits for additional or new square footage. Prepared by Vera Gil, Senior Planner David W. Knapp City Manager Steve Piasecki Director of Community Development Attachments: Cupertino Union School District Resolution 1865 Cupertino Housing Mitigation Manual Minutes ftom the February 9, 2006 Housing Commission Meeting C:\Documents and Settings\verag\Desktop\CUSD report.doc 15-~ CUPERTINO UNION SCHOOL DISTRICT RESOLUTION 1865 ELIGIBILITY REQUIREMENTS FOR THE BELOW MARKET RATE PROGRAM FOR CUPERTINO UNION SCHOOL DISTRICT TEACHERS WHEREAS, in February 2003, the Cupertino City Council directed the Housing Commission to develop guidelines for the Below Market Rate Program in the city of Cupertino; and WHEREAS, the eligibility requirements for below market housing for Cupertino Union School District is limited to its teachers whose worksite in within the city of Cupertino boundaries; and WHEREAS, the Cupertino Union School District serves 16,500 students in a 26-square mile area; and WHEREAS, The district has 20 elementary schools and 5 middle schools located in the cities of Cupertino, Los Altos, San Jose, Santa Clara, Saratoga, and Sunnyvale where teachers are assigned to provide instruction for students; and WHEREAS, Goal 4 of the Cupertino Union School District's Strategic Plan is to attract, develop, and retain a highly competent, effective, and diverse staff. NOW, THEREFORE, BE IT RESOLVED that the Board of Education call on the city of Cupertino to consider amending the Below Market Rate Program eligibility guidelines; and NOW, THEREFORE, BE IT FURTHER RESOLVED that the Cupertino Housing Commission evaluate the purchase boundary issue in May 2005 in order to accommodate Cupertino Union School District teachers who teach at Cupertino Union School District schools in Cupertino as well as Los Altos, San Jose, Santa Clara, Saratoga, and Sunnyvale; and BE IT RESOLVED that the Cupertino Housing Commission through the Below Market Rate Program consider a boundary amendment for Cupertino Union School District teachers. PASSED AND ADOPTED by the Board of Education of the Cupertino Union School District at its meeting held on the 24th day of January, 2006. ~6~~:~ ~~ ABSENT: 0 ----G;;;-r~~ ,-:) ¡J/J;' pe~té'~~~{' C' 11/(( ð~ - ~~ Be 1 Liao /f "-- / Gary McCue " --------. 15-3 Revìsed 8/25/04 /.i,...J..f\\·'" <,.., K\ 'jl, " .1 j ;h;. ,. " I c...---J C F CUPEIQ1NO Housing Mitigation Procedural Manual Amended by City Council November 18, 2002 Resolution No. 02-208 City of Cupertino Housing Division Department of Community Development 10300 Torre Avenue Cupertino, CA 95014 Voice: (408)777-3251 Fax: (408)777-3330 /5-t.f City of Cupertino City Council Dr. Michael S. Chang, Mayor Sandra James, Vice Mayor Sandra James Patrick Kwok Richard Lowenthal Dolores Sandoval Planning Commission Charles Corr, Chairperson Marc Auerbach, Vice Chairperson Angela Chen Gilbert Wong Taghi Saadati Housing Commission Sarah Hathaway-Feit, Chairperson Richard Abdalah, Vice-Chairperson Julia Abdala Richard Schuster Frances Seward Community Development Department Staff Steve Piasecki, AICP, Director of Community Development Ciddy Wordell, AICP, City Planner Colin Jung, AICP, Senior Planner Gary Chao, Assistant Planner Vera GiI, Senior Planner Peter GiIIi, Associate Planner Aarti Shrivastava, Senior Planner Nancy Czosek, Administrative Secretary Kiersa Witt, Administrative Clerk City of Cupertino Staff David W. Knapp, City Manager Carol Atwood, Director of Administrative Services Charles Kilian, City Attorney Therese Smith, Director of Parks and Recreation Kimberly Smith, City Clerk Ralph Qualls, Jr., Director of Public Works 1 /5,) INTRODUCTION Assembly Bill No. 1600 (AB 1600, statutes of 1987, 1988 and 1989, California Government Code, Section 66000-et seq.) establishes standards for cities imposing development fees. To reiterate the standards, the City must show a relationship (nexus) exists between the fee's use and the type of project, identify the purpose of the fee and identify the use of the fee. The City of Cupertino has addressed these standards with the nexus study that was commissioned in 1991. The study, ("A Study to Examine the Relationship of Land Use and the Creation of Additional Housing Needs", Planning Resource and Associates, January 1992) evaluated the relationship between land use and affordable housing. The "nexus" study demonstrated that all new developments create additional housing needs and place additional strain on the City's Affordable Housing programs. However, the City Council believed that requiring retail developers to provide affordable housing would negatively impact the City's economy. Therefore, residential and office/industrial developers are required to mitigate the need for additional housing units. This document establishes procedures to implement housing mitigation as required by the General Plan Housing Element. The City or its agent will administer the programs. This procedural manual consists of two major components, Section One addressing the office and industrial mitigation and Section Two addressing residential housing mitigation. 2 /5-(p Section One: Office and Industrial Mitigation 1.01 Objective The purpose of Cupertino's Office and Industrial Housing Mitigation Program is to acknowledge housing needs created by the development of office and industrial projects and provide nominal fees to support the development of affordable housing for families and individuals who work in Cupertino but live elsewhere. This policy will help alleviate regional traffic congestion by reducing distances between residence and workplace. For the purposes of Section One of this manual, the terms "developer", "company", and "owner" shall be synonymous. 1.02 Program Requirements 1.02.01 Application of Program Housing mitigation shall apply to new development of office and industrial space. Office and industrial development, which has a valid use pennit at the adoption of the General Plan (June 1, 1993), shall be exempt. 1.02.02 Mitigation Fee Developers shall pay a fee as detennined by the City Council. The fee shall be adjusted annually using the Consumer Price Index (all items index for the San Francisco Bay Area) and shall only be used for the provision of affordable housing in Cupertino. The options for use of the fee include, but are not limited to the following: a. Development of new affordable units. b. Conversion of existing market rate units to affordable units c. Down payment assistance programs d Second mortgage programs In the event the funds are not used for affordable housing within five years fee will be returned to the developer as per AB 1600. 1.02.03 Mitigation Fee Payment Mitigation fee shall be due and payable at the issuance of any construction pennits for the office or industrial project. 3 /5-7 Section Two: Residential Mitigation 2.01 Objective The purpose of the Residential Mitigation segment ofthe program is to provide the City of Cupertino with a supply of affordable housing for households working and residing in Cupertino. The main goal is to provide a safe, clean living environment for those families and individuals making a contribution to Cupertino and its residents. Public service employees make especially high contributions to Cupertino and its residents by ensuring public safety and providing other vital services. As such, they shall receive a high priority in the placement system. 2.02 2.02.01 Program Requirements Application of Program Housing mitigation shall apply to all new residential developments of one unit or greater. In projects where units are being demolished, the net increase in units shall be used in detennining the number ofBMR units to be constructed. 2.02.02 Mitigation Requirement Residential developers shall designate at least 15% of the units in a development as "affordable". If the developer is constructing "for-sale" housing, the affordable units must serve median and moderate-income families. Fifty percent of the ownership BMR units shall serve median income and 50% shall be made available to moderate income households. If the units being constructed are rental units, then they must serve very low income and low-income families. Forty percent (40%) of the Below Market Rate (BMR) rental units shall be affordable to low income households and sixty percent (60%) of the BMR rental units must be affordable to very-low income households. For example, if the development consists of 120 rental units, then 18 units shall be affordable (7 to low income and 11 to very low income). In the case of ownership developments, when 50% of the BMR units results in an odd number, the "extra unit" shall benefit the median income group. When the computed housing mitigation for either rental or ownership results in a rraction of a unit, the developer's obligation shall be as follows: o - .49 of a unit: Round down .50 - .99 of a unit: Round up. For condominiums used as rental housing, the BMR units shall be made available to low and very low-income families using the above stated fonnula. Should the property owner decide to sell the individual condominiums units, then said owner must allow the BMR 4 /5-~ residents one year to secure new housing. After the BMR units have been vacated (during the conversion to condo use), the units will be sold to median and moderate-income households and will be deed restricted by the City for the remainder of the term of affordability . In phased developments, the BMR requirement shall be assessed against the overall development plan and not the individual phases of the proposed master plan. In all cases, the BMR units should be developed in a time frame consistent with the overall development. 2.02.03 Mitigation Options In projects of one to six units, the developer may pay a fee in lieu of development of the affordable units or meet the requirement with alternatives consistent with the Housing Element of the General Plan. Developments consisting of seven units or more must develop the BMR units on-site using the standards set forth in this procedural manual. 2.02.04 In-Lieu Fee Developers shall pay a fee as determined by the City Council for developments of one to six units. The fee will be assessed on a per square foot basis (inclusive of garages) on all new development and be adjusted annually using the Consumer Price Index (all items for the San Francisco Bay Area). For the purposes of assessing the fee, new development shall be defined as development on an existing vacant lot or redevelopment of a lot where an existing housing unit has been demolished. The in-lieu fee (collected for projects of less than seven units) shall only be used for the provision of affordable housing in Cupertino and will be collected at the building pennit stage of development. The in-lieu fee shall be paid prior to the issuance of any construction permits and prior to the commencement of any work on the site. The options for use of the fee include, but are not limited to, the following: a. Development of new affordable units b. Conversion of existing market rate units to affordable units c. Down payment assistance programs d. Second mortgage programs In the event the funds are not used for the purposes they were exacted or utilized within five years from the date the fee was collected, the in-lieu fee will be returned to the developer as per AB 1600. 2.02.05 Agreement between Developer and City Developer shall enter into an agreement with the city of Cupertino to provide the affordable units prior to the issuance of any construction permits and prior to the commencement of 5 I '5 -1 any construction on the site. Said agreements shall indicate where the units will be located on the site. 2.02.06 Annual Revision of Sale Prices and Rental Rates Both the affordable selling prices and rents for the affordable units shall be updated on an annual basis in confonnance with the HUD Income Guidelines as established for the County of Santa Clara by the United States Department of Housing and Urban Development (HUD). 2.02.07 Project Conformance Affordable units shall generally reflect the total project mix in tenns of bedroom count and size of unit. The units shall be scattered throughout the site and shall confonn to the exterior appearance of the other units in the project. Buyers should be permitted to upgrade fit and finishes prior to the close of escrow. Lowlvery low-income units can be substituted for market rate units at the developer's discretion. 2.03 City Contributions 2.03.01 Density Bonus To maximize housing opportunity and partially assist the developer by reducing or eliminating the development cost for the affordable units, a density bonus consistent with Ordinance No. 1569 ("An Ordinance of the City Council of the City of Cupertino Adopting and Implementing the State Density Bonus Law") may be pennitted. The bonus units shall be pennitted providing they can reasonably be accommodated on the site and meet City standards. Residentiallhousing mitigation requirements shall apply to the density bonus units. 2.03.02 Alternate Interior Finishes in Affordable Units The exterior design of the unit shall be consistent with other units in the project. Internally, the affordable units may differ from other units in the development by using alternate interior finishes that are approved by the Cupertino Housing Commission. 2.03.03 Financial Assistance If the project qualifies, the City may choose to utilize Affordable Housing Fund monies to create a greater percentage of affordable units at the 50% (very-low income) and 80% (low income) price levels. 2.03.04 Fee Waivers The City shall waive park dedication and construction tax fees for affordable units. 6 15-/D 2.03.05 Priority Processing The city shall, wherever possible, expedite the processing of developments with affordable units. 2.03.06 Management Agreement The City shall enter into an agreement with a management agency to administer the buyer selection process and manage the BMR rental program. To assist developers in separating themselves from the management and sale of the BMR units, developers shall have their affordable units managed and sold under the City agreement with the management agency. 2.03.07 Subordination Restrictions The City agrees to subordinate this housing mitigation program to any construction lender and to individual first deeds of trust to the extent of 90% of the below market rate value. The City shall have the nonexclusive right to cure a default to preserve the housing mitigation program. 2.04 Applicant Qualifications 2.04.01 Solicitation of Applicants Applications for BMR units shall be solicited as necessary to maintain adequate application pools for each appropriate income level. The City's agent shall provide and distribute program brochures that are culturally and linguistically appropriate to the community. These brochures will be available at City Hall, the Cupertino Public Library, the Quinlan Community Center, the Cupertino Senior Center and other appropriate locations. Furthermore, the City's agent shall conduct outreach efforts through local media that are culturally and linguistically appropriate to the community. Applicants may use a "self-qualifying" eligibility application, which will be subject to verification. Applicants will receive a point for meeting each of the following descriptions: One point = Cupertino resident; Two points = Primary full-time employment in Cupertino; One point = Public Service Employee. Applicants receiving four points shall be considered the highest priority; Applicants receiving three points shall be considered the second highest priority; Applicants receiving two points shall be considered the third highest priority; Applicants receiving one point shall be considered the fourth highest priority; and Applicants receiving zero points shall be considered the lowest priority. 7 (1) -( I 2.04.02 Definition of Residency Households applying under priority consideration for residency shall provide proof of residency in Cupertino for at least one year trom the date of application. Utility bills and rental agreements shall be considered proof of residency. 2.04.03 Definition of Full-time Employment Full-time employment is defined as 35 hours per week. Cupertino employees must show proof of being employed at a primary full-time, pennanent job within the city limits for at least 25 of the 35 hours. A letter trom the personnel department of the employer and one year's paycheck stubs shall serve as sufficient proof. 2.04.04 Definition of Public Service Employee Public Service employees are defined as full-time employees from the Cupertino Union School District, Fremont Union High School District, DeAnza College, the City of Cupertino and Cupertino Library. Santa Clara County Fire Department and Santa Clara County Sheriff Department employees must work within the city limits to be eligible for housing assistance; reassignment to another citylcounty area is cause for removal trom the eligibility list. However, if the Fire or Sheriff employee has received housing assistance and is reassigned, the employee will not need to relinquish the housing unit. The public service position, as defined in the above paragraph, must be the applicant's primary wage earning job in order to qualify under the public service definition. Proof shall be submitted in the fonn of paycheck stubs. 2.04.05 Applicant Waiting Lists Within each priority group, waiting list numbers shall be assigned based upon the date the application was verified and approved, or if a drawing is perfonned, the order drawn within each priority group. Waiting lists will be verified annually in accordance with the U.S. Department of Housing . and Urban Development (RUD) income guidelines. The verification procedure will consist of notifying the applicants on the waiting lists to complete a new "self-qualifying" Eligibility Application fonn or supply specific infonnation to detennine if they are still qualified. The infonnation will need to be supplied within 30 days of the request or the date specified on the letter. Applicants will retain their priority number on the Priority Waiting Lists trom the previous year, if their qualification infonnation is received within the specified time period. 2.04.06 Applicant Submittals All applicants remaining on the waiting list shall submit, when requested, proof of: a. Residency b. Place of Employment c. Annual Gross Income 8 (5-/2.- d. Other Assets 2.04.07 Applicant's Right to Refusal of Unit An applicant has one opportunity to refuse a development before being removed ITom the current applicant pool. Applicants who do not qualifY for a particular development shall retain their eligibility. 2.04.08 Income Qualification Household income is defined as the sum of all the income for every adult, 18 years or older, living in the unit. Sources of income include all wages or salaries, overtime pay, commissions, fees, tips, bonuses and other compensation, net income ITom a business or profession or ITom the rental of real or personal property, interest and dividends, payments received ITom social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, payments in lieu of earnings, public assistance, alimony and child support, and any other sources of income. Net assets in excess of $60,000 will have imputed income at 5% or actual income, whichever is larger, added to Household Income. Each able-bodied adult included in the household, 18 years or older must be employed. Exceptions will be reviewed by the City or its management agent (i.e. disabled, full-time student, etc.) 2.04.09 Appeal Process Any portion of this manual may be appealed. A written request is required ITom the appellant. The request should be addressed the Community Development Director. Any appeal will be referred to the Cupertino Housing Commission for recommendation within thirty (30) days of the date of the written request. The recommendation ITom the Cupertino Housing Commissiòn will then be forwarded to the City Council for final ruling. All City Council rulings on the appeal are final. 2.05. Ownership Units 2.05.01 Applicant Qualifications for Ownership Units The BMR program is designed to assist first-time homebuyers with incomes between 80% and 120% of the median for the County of Santa Clara as established by HUD. Applicants will be eligible according to the family size and income criteria indicated on Exhibit A. 2.05.02 Applicant Assets Households with net assets over $100,000 held in the United States or foreign countries will not be eligible. Excluded ITom net assets are all non-accessible funds; or any assets that generate a penalty when withdrawn i.e. 401K, CALPERS, SIRS and other pension plans. 9 /5' 13 2.05.03 Definition of First-time Homebuyer An applicant must be a first-time homebuyer to be considered for ownership. An applicant shall be considered a first-time homebuyer if their name has not appeared on a residential property title for a principal residence in at least three years from the date of application. This defmition applies to properties owned in foreign countries as well as the United States. 2.05.04 Price Determination The income range of the buyers shall detennine the unit type and sale price as indicated in Exhibit B. 2.05.05 Lending Institutions The prospective buyer, when seeking financing, may choose to contact lending institutions that have been briefed by the City or its agent. 2.05.06 Insurance Requirements Prior to the sale of any unit, the City shall require that each purchaser execute a subrogation agreement whereby the City shall be named the additional insured party to any policy of fire or casualty insurance and will be entitled to any such policy proceeds in excess of the affordable unit purchase price. 2.05.07 Qualification Period Applicants must verify qualifications and qualify to purchase a unit within 30 days of notice that they are eligible apply to purchase. 2.05.08 Occupancy Conditions Units must be owner-occupied verification of owner shall be on an annual basis. 2.05.09 Lease, Rent, or Sublet of Units Owner is not pennitted to lease, rent, sublet the unit, or othelWise assign their interests in the property without the express written pennission from the City or its property management agency. The lessee must meet the same requirements imposed on the owner. The lease shall be subject to review by the City or its agent. Example: The owner of an affordable unit is being transferred to a different state for a nine-month period. In order to lessen the burden of the owner paying a mortgage on the BMR unit as well as rent in the new state, the owner may lease the BMR unit with prior written approval from the City or its agent. 10 (5·/t 2.05.10 Resale Price The resale price will be established based on the following: a. Original Purchase Price. b. Cumulative increases or decreases during the period of ownership, as indicated by the Consumer Price Index for the Bay Area. c. The value of any substantial improvements or damage to the unit. Values of improvements, if any, are to be established by a property appraisal at the owner's expense. d. Administrative costs incurred by the property management agency or other selling agent to sell the unit. 2.05.11 Right of First Refusal During the period that an affordable unit is maintained at an affordable price the City has the right of first refusal on the sale of any of those units. Within sixty (60) days of notice from homeowner, the City must decide whether it will exercise this option. 2.05.12 Condition of Units Units shall be kept in good repair and resale price shall reflect the condition of the unit. Cost of termite reports and any required repairs are considered out of pocket expenses for the sellers. 2.05.13 Terms of Affordability The deed restrictions imposed on each affordable unit pursuant to the program shall remain in effect for a period of 99 years from the date of original sale of that unit. Furthermore, the resale restrictions shall renew at each change of title. 2.05.14 Resale of Unit - Owner's Responsibility If the owner elects to sell his unit, the City and/or its agent must be notified in writing. 2.05.15 Purchaser As units become available for resale, the next qualified buyer in the application pool will be notified. 2.05.16 Fees In addition to any fees noted, the City or their Agency may charge an administrative fee for services in qualifying a purchaser and maintenance of waiting lists. The fee will be the responsibility of the Purchaser. 11 ,,- I)-I) 2.06 Rental Units 2.06.01 Applicant Qualifications for Rental Units The program is designed to assist low and very low-income families, which are defined as families with an income equal to or less than 80% of the median income for the County of Santa Clara as established by HUD. Applicants will be eligible according to the family size and income criteria indicated in Exhibit B. Individual complexes may impose a minimum income not to exceed two times the monthly rent. 2.06.02 Applicant Assets Households with net assets exceeding one year of the maximum income allowed will not be eligible. Excluded from net assets are all non-accessible funds; or any assets that generate a penalty when withdrawn i.e. 401K, CALPERS, STRS and other pension plans. 2.06.03 Rental Rate Determination The income range and household size of the tenant shall determine the unit type (and therefore the maximum rental rate of the unit) by using Exhibit B. 2.06.04 Availability of Units An affordable unit shall not be available for lease until the City formally accepts the units. 2.06.05 City Contractor's Role in Leasing of Units The developer shall utilize the services of the City's management agency to assist in the selection of tenants. The services of this agency shall be funded out of the in-lieu or Community Development Block Grant (CDBG) funds and shall be monitored by the City. 2.06.06 Previewing of Unit It is the applicant's responsibility to contact the management agency to preview the unit. 2.06.07 Occupancy Conditions It is the intent of this policy that the original lessee shall occupy the unit during the term of the lease. However, if special conditions require that the unit be sublet, the applicant/tenant is only permitted to sublet the unit to qualified households with the express written permission from the City of Cupertino and its agent. If an additional occupant (roommate, family member, etc.) moves into the unit, he/she will be considered part of the existing household. In such cases, the BMR tenant must notify the City and/or it's agent prior to the move in date for reevaluation. At which time, the entire household (including the new occupant) will be reevaluated to determine eligibility, including household income requirements. All household members must reside in the unit for at least six months each year. 12 /5-1 fo 2.06.08 Annual Re-quafification On an annual basis, the city or its agent shall requalify tenants to verify they are eligible to remain in the below market rate rental units. Requalification· shall be based upon the tenant's income, as detennined by the three most recent pay stubs, prior year tax forms and family size. If no longer eligible for the below market rate rental unit, the tenant will have three months to locate alternate housing and vacate the BMR rental unit. A three month extension may be granted in cases of extreme hardship. 13 J5-1l 2.06.09 Annual Rental Rate Increases The annual rental rate increase shall be established from a fonnula provided by the City based on the following: a. Previous rental rate b. HUD income guidelines c. Household size d. Units size e. Annual Utility Allowance No annual increase shall exceed 5%. 2.06.10 Evictions Any falsification or knowingly withholding documents and infonnation will result in an immediate 30-day notice to vacate. Tenants are subject to apartment management regulations. 2.06.11 Condition of Units/Complex The unitslcomplex shall be kept in good repair. Tenants are subject to apartment management regulations, which may result in tennination of tenancy. 2.06.12 Terms of Affordability Deed restrictions placed on each unit/complex pursuant to the program shall remain in effect for a period of 99 years from the date of first occupancy of the unit/complex and shall become null and void upon the expiration of that period, unless it is extended by the developer in order to take advantage of incentives resulting from changes in public policy and programs. These deed restrictions shall run with the property and not be affected by the sale of the complex, or the individual units within the complex, prior to the completion of the tenn of affordability. In the event the program is tenninated prior to the 99-year period through fonnal action by the City Council, deed restrictions shall be null and void. Full ownership rights of the units/complex shall revert to the owner at the time oftennination. 14 /5-18' 15-Vi .lnC:()friéÇ;_at~g~_~-.è1~C:I.~tFjÌ;::;' ,';' Ršn'e--,:-:-':·}}i:).;.,f-:XMrS Va -low 0%- 50% Low 51% - 80% Median 81% -100% Moderate 101% -120% Exhibit A Department of Housing and Urban Development on an annual basis. Revised 2/04. 15 / S· d-ò Exhibit B ~- - ----,I----~---T--~~---1r -li',"""ffiriCìa i: J ~~À~' - j ll:t'J¡¡.:r1¡ío1t:~i'~I,r¡¡1if¡,(,f¡'1 'loFlõJ1·,rJ _~~l...fr¡t:~ 2 1 178,000 232,000 3 2 208,000 269,000 4 3 238,000 306,000 5 4 263,000 335,000 6 5 287,000 365,000 Rental Rates of Affordable Units by Household Size and Number of Bedrooms 2 3 4 1 2 3 $1,210 $1,350 $1,500 ~~~í¡~~~'~" . 16 15';)..1 MINUTES OF THE REGULAR MEETING OF THE CUPERTINO HOUSING COMMISSION February 9,2006 1. CALL TO ORDER The meeting of the Cupertino Housing Commission was called to order at 6:30 p.m. by Vice-Chair Kim Mosleh 2. ROLL CALL Present: Housing Commissioners Richard Abdalah, Sarah Hathaway-Feit and Kim Mosleh were present. Absent: Frances Seward 3. WRITTEN COMMUNICATIONS None 4. ORAL COMMUNICATIONS None 5. APPROVAL OF MINUTES a. October 13, 2005 Action: Approved 3-0, motion made by Commissioner Abdalah seconded by Commissioner Hathaway-Feit. 6. UNFINISHED BUSINESS None 7. NEW BUSINESS 1. Election of Chair and Vice Chair. Motion: Kim Mosleh was nominated to serve as Chair and Richard Abdalah was nominated as Vice-Chair. Action: Approved 3-0, motion by Commissioner Hathaway-Feit, seconded by Commissioner Abdalah. 2. Request by Cupertino Union School District to amend the eligibility requirements for the Below Market Rate (BMR) program to give CUSD teachers a point for working within the City of Cupertino limits, regardless of the city they are working in, as long as they are employed by CUSD. Andy Mortensen with CUSD was present at the meeting to present Resolution 1865 ITom CUSD requesting that the City amend the BMR mitigation manual to allow all CUSD teachers to qualify for the point awarded to applicants working within the city limits. Mr. Mortensen explained that there was an incident last year where a teacher applied for the BMR program, was reassigned to a school in another city and then /5>;r realized after the fact that they needed to remain at a Cupertino school to qualify for the point awarded to applicants working within the city limits. The teacher then had to request that CUSD transfer them back to a Cupertino school, disrupting the classroom mid-year and causing concern among the parents. For this reason, CUSD is requesting that all CUSD teachers qualify for the Cupertino worker point even if they are employed in the neighboring cities of Sunnyvale, Santa Clara, Los Altos, Saratoga or San Jose. Senior Planner Gil explained to the Housing Commission and the school district that the program the school district is requesting be amended is not a teacher housing program, but the Below Market Rate program that was established by a 1992 study linking new officelindustrial development to the need for affordable housing. One of the establishing principles of the program is to provide housing to Cupertino workers that are not able to afford to live in Cupertino. Currently, Cupertino workers receive two points in the point system established to qualify applicants with public service employees and Cupertino residents receiving one point each. Removing the points for Cupertino workers could jeopardize the program funding, fees paid by Cupertino officelindustrial companies that increase square footage. Jacquey Carey fÌ"om Cupertino Community Services was present at the meeting and discussed how the application process worked. She stated that at the close of escrow of the BMR unit, the applicants must provide proof that they still qualify for program. In other words, if a teacher received three point for working within the city limits and being a public service employee they must provide adequate proof that they are still employed as a teacher and working within the city limits. Mr. Mortensen stated that part of the problem is that many teachers that apply for the BMR program do not communicate to the school district that they have submitted an application and must remain at a Cupertino school. Senior Planner Gil suggested that rather than jeopardize the program funding, it may be possible for CCS to remind applicants that to qualify for the program they must meet all the eligibility requirements at the time of close of escrow. Furthermore, teachers can be encouraged to contact the human resources representative at the school district to request that they not be transferred to a CUSD school outside Cupertino until they have closed escrow on a BMR unit. The Housing Commission stated that it was important to try to support the teachers, but they did not want to jeopardize the program funding. Motion: Recommend that CCS make it clear to applicants that they must continue to qualify for the BMR unit through the close of escrow. In addition, CCS shall encourage public service employees to inform their human resources office that they have applied for a BMR unit and must remain working within the City limits until they close escrow. Action: Approved 3-0, Motion made by Commissioner Abdalah, seconded by Chair (5';:)3 Mosleh. 8. COMMITTEE MEMBER REPORTS None 9. ANNOUNCEMENTS None 10. ADJOURNMENT Meeting adjourned at 7:01 p.m. to regular meeting of the Cupertino Steering Committee immediately following the CHC meeting. SUBMITTED BY: Vera Gil, Staff liaison to the Cupertino Housing Commission ) 5 ifi