HomeMy WebLinkAboutCC Resolution 13349 (Purchase BMR)SAN RAFAEL CITY COUNCIL
RESOLUTION NO. 13349
A RESOLUTION OF THE SAN RAFAEL CITY COUNCIL AUTHORIZING
MARIN HOUSING TO FOREGO THE OPTION TO PURCHASE A
BELOW MARKET RATE HOUSING UNIT (APN 155-376-08)
WHEREAS, The City of San Rafael General Plan Policy H-19 requires all new
residential developments to include a portion of the units affordable to low and moderate income
households; and
WHEREAS, There are currently 115 affordable ownership units in San Rafael that have
been developed pursuant to General Plan Policy H-19; and
WHEREAS, in 2004, the City of San Rafael and MHP 11, a California Limited
Partnership, Renascor, LLC General Partner, initially entered into an Agreement to Provide a
Below Market Rate Housing Unit ("BMR") and the Marin County Housing Authority ("Marin
Housing") agreed to administer the BMR unit at McInnis Park II; and,
WHEREAS, the Below Market Rate Housing Agreement provides that each contract
conveying a Below Market Rate unit to a buyer include a resale restriction and an option to
purchase constituting a right of first refusal to Marin Housing ("Resale Restriction"); and
WHEREAS, the current owner has tendered a purchase offer to Marin Housing to
purchase the unit; and
WHEREAS, Marin Housing has undertaken an analysis comparing the resale price for the
unit and the fair market value and has determined that the resale value approximates fair market
value and therefore Marin Housing recommends that the unit be released from the program; and
WHEREAS, The Resale Restriction for this unit provides that any proceeds of the sale in
excess of the Restricted Resale Price after a reduction of reasonable selling expenses will be paid
to Marin Housing to be used for BMR administrative expenses for San Rafael.
NOW, THEREFORE, BE IT RESOLVED that the San Rafael City Council hereby:
Instructs Marin Housing to forego the option to purchase and allow the owner to sell the unit on
the open market, thereby releasing the unit from the BMR resale restrictions.
BE IT FURTHER RESOLVED that the City Council hereby instructs Marin Housing to
allow the owner to retain a maximum of 510,000 of net sales proceeds to provide an incentive to
achieve the higher resale value.
BE IT FURTHER RESOLVED that the City Council hereby instructs Marin Housing to
undertake any actions to assure that any funds received by Marin Housing from the sale of this
unit be expended by Marin Housing on administration of the remaining 114 BMR ownership
units in San Rafael.
BE IT FURTHER RESOLVED that this Resolution shall take immediate effect upon
adoption.
1, Esther C. Beirne, 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 of the
City of San Rafael, held on Monday, the fourth day of June, 2012, by the following vote, to wit:
AYES:
MEMBERS:
Connolly, Heller, Levine, McCullough & Mayor Phillips
NOES:
MEMBERS:
None
ABSENT:
MEMBERS:
None
ESTHER C. BEIRNE, City Clerk
May 14, 2012
&Uacbnieo1A
MARtt�N
HOUSING
Malang Housing More Affordable
400Civic Center Drive
San Rafael, C&04g0J-4\73
Stephanie
Economic Development Manager Executive Director
City of San Rafael Dan Nackerman
R8 3O1North Avenue, #21U
Stephanie:_
Early this year the Housing Authority was approached bvthe owners ofthe above subject
property asking how they would goabout selling their unit. Aithe time ofthe inquiry we
calculated the owner's resale price ooprovided by their Resale Restriction Agreement and
determined that price tobe $288.494. Further analysis determined that this resale price
approximated fair market value for enunrestricted unit. |twas determined that afull market
appraisal baconducted toascertain the actual fair market value. The appraisal returned an
unrestricted fair market value of
$315,000.
In mid-April the owners issued the Housing Authority their "Notice ofIntent bmTransfer" as
provided in the Resale Restriction Agreement. As required, MHA has a 60 day period to exercise
the option to purchase the property at the calculated resale price of $298,494. Given the cost of
marketing, the unit would have to be listed at approximately $315,000 and attempted to be sold to
a new below market rate homeowner. The likelihood of selling a BMR unit at a price equal to a
fair market value unit is non-existent.
MHA recommends the release ofthis unit from the program and allow the owner to sell on the
open market. The Resale Restriction Agreement provides that any proceeds ofsale |nexcess of
the resale calculated price ofS2S8.4S4and after reduction ofreasonable selling expenses
(commissions not to exceed 6%) will be paid to the Housing Authority for the benefit of the
jurisdiction (Son Rafael).
We look forward to San Rafael'sacceptance ofthe release and sale recommendation or other
appropriate guidance oeSan Rafael deems appropriate.
>Rich StevickHome Ownership Program
Support &Compliance
415-491-2547
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