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HomeMy WebLinkAboutED Purchase BMR Housing Unit 2011CITY OF SAN RAFAEL AGENDA ITEM NO.: 3 m. MEETING DATE: August 15, 2011 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING THE ALLOCATION OF AN AMOUNT NOT TO EXCEED TWO HUNDRED AND SEVENTY FIVE THOUSAND DOLLARS ($275,000) FROM AFFORDABLE HOUSING FUNDS FOR THE PURCHASE OF A BELOW MARKET RATE HOUSING UNIT AND MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA. SUBMITTED BY: .W i ;#e- APPROVED BY - Stephanie Lovette, Acting Economic Development Director ,,Nancy,Mackle City Manager RECOMMENDATION: Staff recommends that the City Council approve an allocation from affordable housing funds in an amount not to exceed $275,000 for the purchase of a Below Market Rate housing unit located outside the Redevelopment Project Area. BACKGROUND: The first units in the City's ownership BMR program were sold to qualified buyers in 1986. The Marin County Housing Authority ("Marin Housing") has been managing the program on behalf of the County and all of the towns and cities in the County, except Novato, since that date. There are now 113 BMR ownership units in San Rafael. The BMR Agreement with the developer of the property provides that each contract conveying a BMR unit to a buyer include a resale restriction and an option to purchase constituting a right of first refusal to Marin Housing ("Resale Restriction"). The majority of BMR unit resales occur between a willing seller and another low or moderate income family that has been qualified by Marin Housing. In these situations, Marin Housing does not provide funds for the unit acquisition. Occasionally, Marin Housing is in the position of exercising the resale option due to the owner's violation of the Resale Restriction. This type of situation requires Marin Housing to exercise its option to purchase the unit in order to maintain the unit in the BMR program. In these situations, Marin Housing either purchases the unit utilizing a loan from the Redevelopment Agency or assigns its purchase option directly to the Agency. FOR CITY CLERK ONLY File N'o. City Council Meeting: 91, 1 Disposition: i.ti I f Once Marin Housing obtains title and the subordinate liens are cleared, the unit is resold to on income -qualified buyer and the funds are returned to the Agency. ANALYSIS: Staff recommends taking actions to preserve this unit wan affordable ownership housing resource. This requires Marin Housing exercise its option hm purchase pursuant tothe Resale Restriction. Marin Housing requires aloan from the City ofSan Rafael tocomplete this transaction. Once the unit is resold to oqua|ified purcbaemr, the funds will boreturned |othe City ofSan Rafael. Normally, the City ofSan Rafael would request the San Rafael Redevelopment Agency to utilize the Agency's affordable housing fund for this type oftransaction. However, the Redevelopment Agency iocurrently inhiatus due 10the AB}{I26signed bythe Governor onJune 28`20ll. In addition, the Agency's affordable housing funds are now held by the City of San Rafael pursuant unAffordable Housing Grant and Cooperation Agreement dated February 22`Z0ll. 7,hcrufooa^ staff is recommending that the City ofSan Rafael provide the loan toMarin Housing pursuant to the Affordable Housing Grant and Cooperation Agreement. The California Redevelopment Law, Health and Safety Code Section 33334.2W.requires that the City Council make findings and approve the Agency's use of |ovv and moderate income housing funds when the funds will beused ooprojects |oCatedoutmidcof1hcCcnho San Rafael Redevelopment Project /\rou. Staff believes this requirement is in effect during the Agency's hiatus period. FISCAL IMPACT: No fiscal impact to the City of San Rafael General Fund, the $275,00 allocation will bufunded from the Redevelopment Agency's Low and Moderate Income Housing ACTION REQUIRED: Adopt the attached resolution. RESOLUTION NO. 13222 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING THE ALLOCATION OF AN AMOUNT NOT TO EXCEED TWO HUNDRED AND SEVENTY FIVE THOUSAND DOLLARS ($275,000) FROM AFFORDABLE HOUSING FUNDS FOR THE PURCHASE OF A BELOW MARKET RATE HOUSING UNIT AND MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA WHEREAS, the City Council (the "City Council") of the City of San Rafael (the "City") has adopted and amended, from time to time, the Redevelopment Plan (the "Redevelopment Plan") for the Central San Rafael Redevelopment Project Area (the "Project Area"); and WHEREAS, the Redevelopment Agency of the City of San Rafael (the "Agency") is responsible for administering the Redevelopment Plan to cause redevelopment of the Project Area, including the provision of housing available at affordable housing cost to low and moderate income households; and WHEREAS, The City of San Rafael General Plan Policy H-19 requires a portion of the units in residential projects include units affordable to low and moderate income households; and WHEREAS, the City of San Rafael has contracted with the Marin Housing Authority ("Marin Housing") to administer a Below Market Rate Home Ownership Program ("BMR Program"); and WHEREAS, as required by the BMR Program, an owner entered into a resale restriction and an option to purchase constituting a right of first refusal to Marin Housing ("Resale Restriction") in 2002; and WHEREAS, Marin Housing desires to exercise its option to purchase a Below Market Rate unit pursuant to the Resale Restriction, due to an option event as defined in the Resale Restriction thereby maintaining the property as an affordable housing resource; and WHEREAS, the City of San Rafael desires that the property remain in the affordable housing program; and WHEREAS, Marin Housing requires funding in an amount of Two Hundred and Seventy Five Thousand Dollars ($275,000) to pay the restricted resale price of the unit and other costs associated with the resale of the unit to another qualified buyer; and WHEREAS, the City of San Rafael desires these funds be paid from a funding source outside of the City's General Fund; and WHEREAS, on February 22, 2011 the City of San Rafael and the San Rafael Redevelopment Agency entered into an Affordable Housing Grant and Cooperation Agreement pursuant to Resolution 13114 of the San Rafael City Council and all of the Redevelopment Agency's affordable housing funds were transferred to the City of San Rafael; and WHEREAS, the City of San Rafael desires to allocate Two Hundred and Seventy Five Thousand Dollars ($275,000) from the Affordable Housing Grant Fund for the purchase of this unit; and WHEREAS, Health and Safety Code Section 33334.2(g) authorizes expenditure of Housing Fund monies outside the Redevelopment Project Area upon a finding by the City Council that such use will be of benefit to the Project Area; and WHEREAS, the transaction will benefit the Project Area and serve major Redevelopment Plan goals and objectives by maintaining housing available at affordable cost in the community, thereby decreasing the market pressure on the supply of affordable housing in the community and the Project Area; and WHEREAS, The California Environmental Quality Act (Public Resources Code Section 21000 et �Leq s .) ("CEQA") imposes no conditions on the City's consideration and approval of this Agreement, because the project undertaken pursuant to this Agreement is an acquisition of existing improvements and such projects are exempt from CEQA requirements under the categorical exemption set forth in 14 CCR Section 15301; and WHEREAS, by staff report accompanying this Resolution and incorporated into this Resolution by this reference (the "Staff Report"), the City Council has been provided with additional information upon which the findings and actions set forth in this Resolution are based. NOW, THEREFORE, BE IT RESOLVED that the City Council hereby finds and determines that the above recitals are true and correct and have served as the basis, in part, for the findings and actions of the City Council set forth below. BE IT FURTHER RESOLVED that, based on information and analysis set forth in the above Recitals and contained in the Staff Report accompanying this Resolution, the City Council hereby finds and determines pursuant to Health and Safety Code Section 33334.2(g) that the use of moneys from the Housing Fund to assist in the preservation of this affordable housing unit will be of benefit to the Project Area and the program of redevelopment pursuant to the Redevelopment Plan, BE IT FURTHER RESOLVED that the City Council hereby approves allocation of Two Hundred and Seventy Five Thousand Dollars ($275,000) of Affordable Housing Grant Fund monies to fund a loan to Marin Housing, or in the alternative, to fund the direct purchase of the below market rate property. BE IT FURTHER RESOLVED that this Resolution shall take immediate effect upon adoption. 1, ESTHER BEIRNE, City Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council held on the 15`h day of August 2011, by the following vote, to wit: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro None None Esther Beirne, City Clerk INSTRUCTIONS: 112--alfliv, DEPARTMENT CITY OF SAN RAFAEL USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT, ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY. Stephanie Lovette Economic Development_ SRRA / SRCC AGENDA ITEM NO. ' tl , DATE OF MEEIP* AUG) 210,111 L - 11 11 TITLE OF DOCUMENT: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING THE ALLOCATION OF AN AMOUNT NOT TO EXCEED TWO HUNDRED AND SEVENTY FIVE THOUSAND DOLLARS ($275,000) FROM AFFORDABLE HOUSING FUNDS FOR THE PURCHASE OF A BELOW MARKET RATE HOUSING UNIT AND MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA Departhent Head (signature) (LOWER HALF OF FORM FOR APPROVALS ONLY) APPROVED AS COUNCIL AGENCY AGENDA ITEM: Cit},.'Monager (signatu REMARKS: #0 p6t, I f S I,, I IF F-IT1010-09049 AME6100MV 1& , City Attorney (signature) 6a S/� (�� /�'c wc 0&4t� Pi.