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HomeMy WebLinkAboutMINUTES - 08072001 - D.3 s . Contra ..�� Costa AMENDED BOARD MEMO .-�•. County (Staff .eport & Attachments Unchanged) J' TO: BOARD OF e"'!PERVISORS FROM: Dennis M. Barry, AICP, director of Community Development DATE: June 26, 2001 SUBJECT: Dougherty Valley Affordable Housing Program SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND;ice'RTIFICATION RECOMMENDATIONS CONSIDER report of the Director of Community Development regarding compliance of Shapell Industries of Northern California with the Dougherty Valley Affordable Housing Program and issues related thereto; DETERMINE whether Shapell Industries is in compliance With the Dougherty Valley Affordable Housing Program for the years 1999 and 2000; and CONSIDER action to be taken on the request of Shapell Industries to amend the Dougherty Valley Affordable Housing Program.for the Shapell portion of the-program. FISCAL IMPACT None. No.General Funds involved. CONTINUED ON ATTACHMENT: X SIGNATURE: RECOMMENDATION OF. COUNTY ADMINISTRATOR �RECOMkf NDATIONOF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON I APPRovtb AS RECOMMENDED VOTE OF SUPERVISORS SEE ADDENDUM FOR BOARD ACTION I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT /2,d7Ze ) — TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Source: Jim.,Kennedy 335-1255 ATTESTED Z V6,V JOHN SWEEfTEN67LERR OF THE cc: County Administrator's Office BOARD OF SUPERVISORS AND County Counsel COUNTY ADMINISTRATOR Community Development-Land Development Community Development-Housing Via: Community Development BY EPUTY - Shapell Industries - Lennar Homes - Tri-Valley Interfaith Poverty Forum W:\Personal\\Boardorders\BOARD.dou gheilyva l ley6.5 AMENDED BOARD MEMO (Staff Report & Attachments Unchanged) BACKGROUND/REASONS FOR RECOMMENDATIONS On October 10,2000 the Board heard a report from the Community Development Director regarding compliance of Shapell Industries of Northern California with the Dougherty Valley Affordable Housing Program. The Board requested staff to return to the Board with additional information. This report responds to the request of the Board, and includes: • the legislative history of the Dougherty Valley Affordable Housing Program (DVAHP); • further explanation of the three alternatives(A,B, &C) set forth in the October 10, 2000 report; • assurances/mechanisms for securing at least a 30-year term for affordable moderate income rental units; • terms of a Memorandum of Understanding between Ecumenical Association for Housing and Shapell for very low income and low income housing; • disclosure program regarding the mixed income nature of the Dougherty Valley and the location of rental units within the area, including the possibility of incorporating disclosure into project CC&R's; • provisions for assuring the delivery of the affordable housing units should subsequent traffic studies limit the total development in Dougherty Valley to 8,500 units rather than 11,000 units; and • the identification of any other issues that should be addressed by the Board. On May 22,2001 the Board of Supervisors referred a letter of same date from the Tri-Valley Interfaith Poverty Forum to staff for a report. The questions in that letter regarding-compliance with the DVAHP are contained herein. The May 22,2001 letter of the Tri-Valley Interfaith Poverty Forum is attached as Exhibit H. I. SUMMARY OF OCTOBER 10, 2000 REPORT TO THE BOARD The full October 10, 2000 report is included as Attachment A, and summarized below. The Dougherty Valley Affordable Housing Program, adopted by the Board of Supervisors on March 22, 1994, is incorporated by reference into the Development Agreements between the County and the two development entities—Shapell Industries of Northern California and Windemere Ranch Partners, PLC. The fundamental requirement is that 25% of the housing units in the Dougherty Valley be affordable to very low, low, and moderate income households. Compliance is determined by the Board of Supervisors in its review of annual compliance reports submitted by the developers. Shapell submitted annual reports found to be in compliance with the DVAHP as of October, 1997 and October, 1998. The annual report submitted as of October, 1999 has not yet been determined to be in compliance. Outstanding issues were 1) the term of affordability for moderate-income rental projects,and 2)compliance with the very low income and low-income program requirements. The term of affordability for moderate-income rental projects is in dispute. Based on the Dougherty Valley Specific Plan,the legislative history of the DVAHP,and the changed housing market conditions,the County staff has indicated that a 30-year term of affordability for moderate-income rental projects exists. Shapell disagrees stating that the DVAHP sets forth no term of affordability for moderate-income units. Six alternative approaches to resolving the dispute have been identified. The Board requested additional information bn Alternatives A, B, &C. The six alternatives are: Alternative A - County position based on adopted DVAHP — 30 year term; rents at 30% of 100% of monthly median household income (see Table 2(a) of October 10, 2000 report). Alternative B -Shapell proposal of July 19,2000—term of perpetuity; rents at 30%of 110%and 120%of monthly median household income (see Table 2(b) & 2(c) of October 10, 2000 report). Alternative C — Compromise on rents. Fixed Term: permit rents to be computed at 30% of 110% of monthly median household income (see Table 2(b) of October 10, 2000 report); 30-year term. Alternative D—Step-down rents: utilize Shapell proposal to permit higher rents on larger units at the outset, but limit their adjusting to inflation so that they do not fully use the inflationary increase. This would allow rents to adjust to their desired rents; 30 year term. Alternative E — Apply any change to the DVAHP rents/terms to Shapell's Falcon Bridge project only, (project currently renting-up);maintain current definition of permitted rents for moderate-income rentals at 30%of 100% of median monthly household income (see Table 2(a)of October 10,2000 report) for all other units; restate the 30-year term for moderate-income rental projects. Alternative F—Compromise on rents,Falcon Bridge only(project currently renting-up);Fixed Term:permits rents at Falcon Bridge to be computed at 30% of 110% of monthly median household income (see Table 2 (b) of October 10, 2000 report); 30—year term for entire DVAHP. With respect to the very low-income and low-income program,annual reports submitted by Shapell as of October,1999 was found deficient because it lacked sufficient detail to reasonably conclude that these program elements would occur. Shapell and Ecumenical Association for Housing were negotiating a Memorandum of Understanding to address this need for detail at the time the Board received the October 10,2000 report. 11. TERM OF AFFORDABILITY FOR MODERATE INCOME RENTAL UNITS The major area of non-compliance is in the affordability term in proposed moderate-income rental units. The goals and policies of the Dougherty Valley Specific Plan and the DVAHP emphasize the need to maintain housing affordability over the long run. Policy H-9, in the Specific Plan states"affordable units will be maintained the maximum period feasible. W:Tersona111Board(hden\BOARD.doughertyvalley6.5 Target period shall be a minimum of 20 years for for-sale units and 30 years for rental units." A) Legislative History A review of the legislative history of the DVAHP was requested by the Board. At the time the DVAHP was approved,the understanding of the parties was that the moderate income housing obligation would be met through the provision of home ownership opportunities at market prices without the need for public subsidy. A March 8, 1994 memorandum from Harvey Bragdon,then County Director of Community Development, to the Board of Supervisors (Attachment B) reflects this understanding between the parties. It says, "Most of the moderate income units (65% of all affordable units)will be owner occupied." Due to the lack of specific financial benefit to the buyer(e.g.: homes affordable to moderate-income households were approximately the projected market price; no expectation of below market rate financing, etc.), it was not considered feasible or appropriate to require moderate-income households to purchase an essentially market rate unit with an affordability term restriction. Consequently,the adopted DVAHP does not currently specify a required term of affordability for moderate-income units. The legislative history that preceded adoption of the DVAHP is noteworthy and summarized below: • May 7, 1993—A draft outline of the Dougherty Valley Affordable Housing Program prepared by County staff includes on page 4 (Section VI (13)(1)) a provision for a term of affordability as the"greater of financing program or SAP (Specific Plan policy) H-9" (which states a 20 year term for homeownership terms and 30 year term for rental projects); • June 24, 1993—A memorandum to the Board of.Supervisors on policy options related to the DVAHP includes, on page 4 (Section 5) a discussion of affordability term. The draft DVAHP as of that date reflects the provisions of the Dougherty Valley Specific Plan (minimum 20 year for home ownership and 30 years for rental projects). Options are delineated; • September 10, 1993—An updated memorandum to the Board of Supervisors on DVAHP content and policy options indicates continued requirement for affordability term per Dougherty Valley Specific Plan, i.e., minimum 20 years for homeownership, 30 years for rental projects. Options are delineated; • March 8, 1994—A memorandum to the Board of Supervisors delivering the DVAHP for formal consideration by the Board indicates that the "moderate income units are not subject to affordability terms as a result of this Affordable Housing Program" (page 2, paragraph 5). Importantly, the memorandum also sets forth the expectation of the parties"that most of the moderate-income units (65% of all affordable units)will be owner occupied" (page 2, paragraph 3). The DVAHP was adopted pursuant to the terms of this March 8, 1994 memorandum, and with the expectations of the parties set forth and understood. B) Analysis of Alternative Approaches for Resolving Issue The three alternative approaches for which the Board requested additional information are: Alternative A - County position based on adopted DVAHP — 30 year term; rents at 30% of 100% of monthly median household income (see Table 2(a) of October 10, 2000 report). Alternative B -Shapell proposal of July 19,2000—term of perpetuity;rents at 30%of 110%and 120%of monthly median household income (see Table 2(b) &2(c) of October 10,2000 report). Alternative C — Compromise on rents. Fixed Term: permit rents to be computed at 30% of 110% of monthly median household income (see Table 2(b) of October 10,2000 report); 30-year term. These alternatives exist along a continuum framed by the position of the County(Alternative A)and Shapell(Alternative B), with a compromise(Alternative C). The alternatives have two policy dimensions,one of which is in dispute—required rent term—and one of which is not—permitted monthly rent. The policy variables are presented in Table 1. The best way of assessing the financial impact of these alternatives is to calculate the capitalized value of a project using the revenue streams and standard loan underwriting criteria. Table 2 uses the current 256-unit Shapell Falcon Bridge projectto derive a capitalized value comparison of the three alternatives. Alternative A has the greatest affordability and the lowest capitalized value;Alternative B has the least targeted affordability and the highest capitalized value; and Alternative C represents a compromise on rents and a mid-range capitalized value. Of note,Shapell Industries has represented thatthe Falcon Bridge project,which is now completing construction and renting up,was designed with numerous amenities not typically found in apartment complexes(separate enclosed garages,fireplaces, etc.),therefore higher rents are needed to support. Future projects could be designed to a high quality but without the additional amenity package thereby providing an argument for limiting the discussion of a compromise on rents (Alternative B or C)to the Falcon Bridge project only, and ratifying that future projects in the Dougherty Valley are subject to rents/term set forth in Alternative A. An additional way of comparing the Alternatives is to compare the rents under the various alternatives to market rents on comparable projects in the Tri-Valley. Table 3 below suggests that the proposed rents are,under all three alternatives 10- 20%, above the market rates in large Tri-Valley apartment projects built since 1985. However,when compared to new projects only(built in late 1990's)only the proposed rents under Alternative A are at or slightly below the market rent for new units,Alternative B rents are slightly above the market rent for newer units, and Alternative C rents are comparable to the market rent for newer units. Yet another way of comparing the alternatives is to compare the percentage of median income used to calculate monthly rents for moderate-income projects/programs that stipulate affordable rents. Table 4 below suggests that there is little precedent for allowing rents to be calculated at the 120% of median income levels. Rents are generally computed on the basis of 100 or 110% of median income. W:\Pcrsonal\\BoardOrders\BOARD.doughertyv.illey6.5 ADDENDUM Item D:3 August 7, 2001 Dougherty Valley Affordable Housing Program On this date, the Board considered the staff report from Jim Kennedy, Deputy-Director Redevelopment, and Dennis Barry, Director,Comm unity Development Department, regarding compliance of Shapell Industries of Northern California with the Dougherty Valley Affordable Housing Program. The Board discussed the history of the issue and requested clarifications of various relative items from staff. The Chair invited the public to comment. The following persons presented testimony: Millie Greenberg, Councilmember, Town of Danville, 634 Sheri Lane, Danville-, Nancy Tatarka, 12207 Toluca Drive, San Ramon; Ralph Hoffmann, 60 Saint Timothy Court, Danville; Claude Battaglia, Independent Living Resource, 3200 Clayton Road, Concord; Al Coolidge, Independent Living Resource, 3200 Clayton Road, Concord, Tom Kirk, 524 Norfolk Place, Danville; Marilyn Langlois, League of Women Voters of Diablo Valley, 3878 Paseo Grande, Moraga; John Chap m an,Tri-Valley Business Council Vision 2010, 671 Clipper Hill Road, Danville; Olika Cardon, CCISCO, 724 Ferry Street, Martinez; Jerry Cambra, 9762 Tareyton Ave, San Ramon; Dennis Viers, General Plan Review Commission-San Ramon, 25 Marilyn Place, San Ramon; Donna Dickey, 3295 Ensenada Drive, San Ramon; Brian Stein-Webber, Interfaith Council of Contra Costa County, and Faith Works!, 1543 Sunnyvale Avenue, Walnut Creek; Maurine Behrend, P.O. Box 1652, San Ramon; Archer Futch, Poverty Forum, 1252 Westbrook Place, Livermore; Kathleen Nimr, Sierra Club, 2204 Olympia Drive, Martinez; Mike Daley, Sierra Club, 729 Everett Street, El. Cerrito; Lamar Turner, EAH, 2169 E. Francisco Blvd. Ste B, San Rafael; Tom Koch, Shapell Industries, 100 N. Milpitas Blvd., Milpitas. The following persons did not wish to speak, but submitted comments for the Board to consider: Sandy Barclay, 3210 Ensenada Drive, San Ramon; Christa Freihofner, South San Ramon Neighborhood Association, 3272 Estero Drive, San Ramon; Joan Bartulovich, 7102 Donal Ave, El Cerrito, Dave Hudson, Mayor of San Ramon. Before and during the deliberations, the following notes, letters, and petitions were received: Letter from Richard A. Petersen, Lennar Communities, 3 13 0 Crow Canyon Place#310, San Ramon; Letter/Petition from Eartha Newson, 20 Irwin Way#638, Orinda; Letter from-Dorothy W. Vance, 1164 Lincoln Ave. #253, Walnut Creek; Letter from Millie Greenberg, Councilmember, Town of Danville. Following discussion, the Board took the following actions: 1. CONSIDERED the staff report from the Director, Community Development and the Deputy Director-Redevelopment regarding compliance of Shapell Industries of Northern California with the Dougherty Valley Affordable Housing Program and related issues; 2. DETERMINED that Shapell Industries is in compliance with the Dougherty Valley Affordable Housing Program for the years 1999 and 2000, said determination being conditioned upon the Board's receipt of certain documents, including the regulatory agreement, and proposed condition of approval language to ensure the reservation of site for required very-low and low income housing; 3. DIRECTED Communtity Development staff to return to the Board as soon as possible, before the end of September, with the aforesaid documents; 4. DIRECTED CDD staff to return to the Board with amendments to the Dougherty Valley Affordable Housing Program plan relative to a modified definition of moderate income rent and a moderate income rental term, S. DIRECTED County Counsel to seek a written legal opinion from independent counsel not affiliated with the County, the project developers, or any company associated with the project developers regarding the legal strength of County staffs position that Shapell industries is legally required by the documentary record and the County's intent to provide moderate income rental housing for a term of 30 years' 6. and REFERRED all County housing policies to be reviewed by the Internal Operations Committee to ensure the maximization of future opportunities relative to affordable housing programs, subsized and non-subsidized. (AYES: I, III, IV, V and II; NOES: None; ABSENT: None; ABSTAIN: None) TABLE 1 COMPARISON OF ALTERNATIVE APPROACHES FOR DOUGHERTY VALLEY MODERATE INCOME RENTAL PROJECTS Alternative A Alternative B Alternative C Rent Term 30 years perpetuity 30 years Rental Rate (monthly`) 1 bedroom unit $1,432 $1,575 $1,575 2 bedroom unit 1,611 1,933 1,772 3 bedroom unit 1,790 2,148 1,969 'Does not include a utility allowance that would reduce these rents. TABLE 2 COMPARISON OF CAPITALIZED VALUE — FALCON BRIDGE PROJECT USING ALTERNATIVE APPROACHES (SEE ATTACHMENT C FOR DETAIL) Capitalized Value Alternative A $37.0 million Alternative B $43.0 million Alternative C $40.7 million W:\Personal\\BoardOrders\BOARD.doughertwal ley6.5 I� TABLE 3 COMPARISON OF DOUGHERTY VALLEY ALTERNATIVE RENTS TO RENTS IN THE TRI-VALLEY MONTHLY RENT Scenario/Project (Year Built) One Bedroom Unit Two-Bedroom Unit Three Bedroom Unit Alternative A $1,432 $1,611 $1,790 Alternative B 1,575 1,933 2,148 Alternative C 1,575 1,772 1,969 Dublin Amador Lake, (1985) $1,420-1,480 $1,560-1,775 Amador Oaks, (1989) 1,300-1,525 1,700-1,775 Archstone Emerald Park, (1999) 1,546-1,646 1,900-2,080 2,416-2,561 Cottonwood, (1988) 1,400-1,480 1,580-1,795 Jefferson, (1999) 1,515-1,905 1,855-1,910 Park Sierra, (1999) 1,595-1,705 1,585-2,010 Parkwood, (1991) 1,300-1,650 1,625-1,800 Livermore The Arbors, (1985) 1,110-1,225 1,280-1,500 LaVina, (1995) 1,515 1,735 Mill Springs Park, (1989) 1,295-1,310 1,510-1,590 Portola Meadows, (1990) 1,180-1,215 1,410-1,445 Pleasanton Archstone Hacienda (1999) 1,711-1,836 2,200-2,386 2,580-2,900 Civic Square, (1987) 1,275-1,290 1,500-1,725 Hacienda Commons, (1988) 1,395-1,575 1,685-1,895 The Promenade, (1997) 1,495 1,750-2,200 Springhouse, (1989) 1,305-1,450 1,575-1,830 Stoneridge, (1988) 1,640-1,680 2,090-2,225 San Ramon Bel Air Fairway, (1999) 1,455-1,525 1,755-2,040 Bel Air Villas, (1987) 1,160-1,300 1,535-1,575 Canyon Woods, (1986) 1,500-1,700 1,895-2,095 Cedar Pointe, (1985) 1,347-1,377 1,547-1,687 Copper Ridge, (1986) 1,627-1,677 1,927-2,327 Country Brook, (1986) 1,140-1,250 1,400-1,500 East Ridge, (1987) 1,350-1,450 1,560-1,780 Foothill Twin Creeks, (1985) 1,700-1,840 Promontory Point, (1992) 1,260-1,480 1,785-1,850 2,385-2,455 Promontory View, (1996) 1,295-1,490 1,695-1,890 2,095-2,385 Reflections, (1987) 1,380-1,665 1,660-2,125 Villas, (1989) 1,390-1,690 1,695-2,195 Source: Apartment Trends, December 2000, Real Data, Inc. TABLE 4 COMPARISON OF METHODOLOGIES FOR COMPUTING MONTHLY RENTS - DOUGHERTY VALLEY ALTERNATIVE RENTS AND OTHER PROGRAMS Percent(%) of Median Income Income Used to Calculate Monthly Rents Alternative A 100% Alternative B One-bedroom units 110% Two/three bedroom units 120% Alternative C 110% State Redevelopment Law 110% Monterey County 100% Santa Cruz County 100% W:\Personal\\BoardOrders\BOARD.doughertyvallev6.5 C) Mechanism for Assuring Long-Term Compliance The mechanism for contractually accomplishing the 30-year term for affordable rental units(very low-income,low-income, and; moderate-income) is through execution of a Regulatory Agreement and Declaration of Restrictive Covenants (Regulatory Agreement). A form of such a Regulatory Agreement is included as Attachment D. This Agreement was modeled after the County's form of Regulatory Agreement used with tax-exempt bond financing. This form has been subject to review by both the Shapell and Windermere interests. The major aspects of the Regulatory Agreement are: • It is executed by both the County and the Developer, and is recorded against the property for its term; • It defines the project; • It defines eligible tenants by reference to maximum income; • It defines affordable rents; • It defines the term of affordability or"Qualified Project Period," as 30-years; • Obligates the Developer to construct the project as a residential rental property meeting various requirements; • Stipulates the percentage of units in the rental development are subject to affordability restrictions, and the targeting of affordability required; • Sets forth reporting requirements of the Developer to the County; • Provides for indemnification of the County by the Developer; • Sets forth conditions under which sale or transfer of the project can occur,and provides the County with approval rights as prescribed; • Provides the County with rights to enforce the terms of the Agreement if necessary to achieve required results; • Requires the Developer to pay an annual fee to the County to cover the cost of monitoring the Agreement; D) Shapell Position as of June 14, 2001 Staff metwith a representative of Shapell on Thursday,June 14,2001 to review steps necessary to achieve full compliance with the DVAHP. During the course of this meeting staff was advised that Shapell was not willing to execute any Regulatory Agreement for the Falcon Bridge project that contained a rent term. They did indicate they would abide by the requirements of the DVAHP and rent the units at the 100% levels. Shapell restated their opinion that the DVAHP,as to moderate-income units,contained a term governed solely by the term of any subsidy source,of which there is none.Shapell representatives indicated they have no intent to verify income eligibility via a certification and monitoring process,as required by the form of Regulatory Agreement (Attachment D). Furthermore,the Shapell representative indicated that their proposal of July 19, 2000 (term of perpetuity; rents at 30% of 110% and 120% of monthly median income—see discussion of Alternative B in Section II(B)of this report)was no longer"on the table." Staff requested Shapell to state this in writing,which has not been received as of June 18). W:\Persona111BoardOrderslBOARD.dougliertyroalley6.S III. SHAPELL'S VERY LOW INCOME AND LOW INCOME PROGRAM — MEMORANDUM OF UNDERSTANDING WITH ECUMENICAL ASSOCIATION FOR HOUSING To deliver on its obligation to produce at least 511 Very Low Income and Low Income units in its portion of the Dougherty Valley, Shapell has indicated it would partner with the non-profit housing development corporation Ecumenical Association for Housing (EAH). Based in Marin County, but working throughout the western United States,EAH is among the elite non-profit housing developers. Shapell and EAH have entered into a Memorandum of Understanding (MOU included as Attachment E). The MOU, in combination with other recent submittals from Shapell's address the prior issues set forth in our October 10, 2000 report to the Board, including: • The proposed location with a description of the specific site or sites to be used, including the identification of acreage, configuration, and the identification of significant development and environmental constraints; • The type of housing proposed, i.e., mixed income or 100% affordable multi-family,senior, unit size/ number of bedrooms; • Range of incomes and household size,target population; • The relationship to other units in the development; • Identification of involved parties with role and responsibilities delineated; • A schedule for development of the required units with development and financing related benchmarks identified. IV. DISCLOSURE PROGRAM Concerns were expressed by the Board that the mixed income nature of the Dougherty Valley approvals was not adequately understood, particularly by current and future buyers of market rate homes. To address this issue a disclosure form, signed by homebuyers and disclosure materials setting forth information about all aspects of the Dougherty Valley Affordable Housing Program have been developed. The content of the disclosure form (Attachment F) have been reviewed by both Shapell and Windemere Ranch Partners, PLC. V. ASSURANCES FOR DELIVERY OF AFFORDABLE HOUSING UNDER REDUCED BUILD-OUT SCENARIO The Dougherty Valley Settlement Agreements provide for specified performance standards to be achieved in the traffic area in order to build beyond 8,500 units. The Board has expressed concern that the delivery of affordable housing not be affected by this potential traffic cap, and that a program for assuring delivery of the proportional amount of affordable housing be provided for. The annual review process,including the requirement of a finding of compliance with the Dougherty Valley Affordable Housing Program in order to proceed with the processing and issuance of subsequent entitlements is the mechanism for achieving this goal. As the October 10, 2000 report to the Board indicated, this issue was highlighted, and was a basis for the staff insisting upon a fully formed affordable housing program, particularly in the Very Low-Income and Low-Income areas, from Shapell. Staff has deemed subsequent applications for development entitlements as incomplete subject to the Board's finding of Shapell in compliance with the Dougherty Valley Affordable Housing Program requirements. Similar requirements will apply to Windemere Ranch Partners, PLC as they begin their build out program. Initial entitlement applications are expected to be submitted in the near future, along with their initial Affordable Housing Program reports. Based on meetings with principals of Windemere Ranch Partners,PLC it is expected that most of the affordable housing proposed would be delivered in the earlier Village Center phases,which would occur under the 8,500 cap level. An arm of the private developers involved in Windemere Ranch Partners, PLC would likely be the development entity for the Very Low-Income and Low-Income Housing Program. This entity— Simpson Housing Solutions, LLC — is highly experienced in multi-family bond and tax credit financed affordable housing projects nationwide. Additional local partnerships could also occur. Since the potential 8,500 cap for traffic came into existence after the DVAHP was adopted, staff suggests that the developers be obligated to fully comply with the affordable housing requirements at the time they achieve build-out to that level. To not require full compliance could result in a shortfall of affordable units. VI. OTHER ISSUES The Board in accepting the October 10,2000 report requested staff to work with the developers to identify any other potential implementation issues. Because the bulk of the Dougherty Valley Affordable Housing Program is expected to be rental units subject to a Regulatory Agreement and Declaration of Restrictive Covenants, (see prior discussion under Section II(c), and Attachment D),this discussion identified one additional issue that may need resolution. The additional issue is a derivative of a concept initiated by Shapell that,as to the moderate-income component,the program could start with a rental product with a term of affordability,but could convert to a home ownership program at a later date prior to expiration of the term of any Regulatory Agreement. (Note that most,if not all new rental projects get approved with underlying condominium maps in order to secure financing commitments,i.e.,project owners would not have to submit application for condominium conversion under the County Subdivision Ordinance.) Regulatory Agreements typically do not provide for conversion of a project to condominium inside the specified term except under financial default scenario with the lender exercising their security rights. Staff does not believe a mid-term conversion to condominium for-sale is in the broader public interest. The largest identified housing need (currently and for at least the past 25 years) is for affordable rental units. Furthermore,the conversion of affordable rental units to ownership, while addressing an area of need (albeit of lesser priority),does so at the direct loss of affordable rental units. Staff believes that the term of any Regulatory Agreement should be fulfilled. W:\Personal\\Boardordm\BOAR D.dO Ll glrerty%•a I I ev6.5 Should the Board wish to pursue this option, however, the staff suggests the following issues, among others, be addressed: • Relocation implications, including notification and relocation benefits; and • Home ownership requirements, including the feature of continuing affordability via resale restrictions for the duration of any affordability period. VII. SHAPELL'S ANNUAL REPORT AS OF OCTOBER 10, 2000 On March 28,2001 Shapell Industries submitted its annual compliance reportas ofOctober2000(Attachment G). The Annual Compliance Report of Shapell represents significant progress. Staff has requested the following additional information in order to confirm compliance: 1. With Respect to Phase I Development(1,216 units): •:• Execution of a Regulatory Agreement for the Falcon Bridge Apartments to conform with the resolution of the term of affordability Issue set forth in Section II of this report. Implementation activities to document ongoing compliance with the Regulatory Agreement are contained therein. ❖ Documentation of household eligibility for homes represented to have been sold to Moderate- Income homebuyers. ❖ Further explanation/clarification of Shapell's intent to deliver Moderate-Income units as part of the Cedar Bridge Townhouse Development. 2. With Respect to Phase II Development (1,825 units): ❖ Supplementary information to confirm site,plan of finance,and anticipated schedule for Very- Low and Low-Income rental units proposed. ❖ Supplementary information to confirm site, development data (number of units, bedroom sizes, pro-forma rents, etc.), and anticipated development schedule for Moderate-Income rental units proposed. ❖ Supplementary data with respect to pricing, product type, and association dues (if any) for Moderate-Income home ownership units proposed. 3. With Respect to Phase III Development(1,433 units): ❖ Identification of site(s)and a proposed development schedule for Very-Low and Low-Income units proposed. ❖ Preliminary data with respect to pricing, product type, and association dues for Moderate- Income home ownership units proposed. ❖ A plan for the full achievement of DVAHP requirements should Shapell's portion of the Dougherty Valley not be able to proceed substantially beyond the cumulative units in Phases I,II,and III due to potential Settlement Agreement limit of 8,500 units in Dougherty Valley due to traffic counts. Compliance with the Dougherty Valley Affordable Housing Program consists of representations and performance. Performance must be documented, contracts and agreements entered into, and project reporting systems implemented. The steps needed are: 1) Resolution of the moderate-income affordability term issue. 2) Regulatory Agreements executed for rental projects. 3) Reporting systems implemented to reasonably determine the feasibility of proposals for project compliance, and after the fact compliance thereof. 4) Homebuyer income and income/price eligibility needs to be determined to verify program compliance. 5) Sites need to be explicitly identified and reserved and made available to EAH,via contract,for the development of very-low and low-income housing; VIII. SUMMARY CONCLUSION In view of the Shapell position regarding no term of affordability for moderate income units, Shapell's removal of it's compromise proposal,and Shapell's unwillingness to execute a Regulatory Agreement for the Falcon Bridge Apartments, there is no basis to find Shapell in compliance with the Dougherty Valley Affordable Housing Program. W:\Personal\\BoardOrders\BOARD.doughertyval ley6.5 ATTACHMENT A October 10, 2000 Report to the Board of Supervisors on the Dougherty Valley Affordable Housing Program and Shapell Industries Compliance with Said Program. J �= Contra TO: BOARD OF SUPERVISORS ,/ Costa FROM: Dennis M. Barry, AICP Director of Community Development J' County DATE: October 10, 2000 SUBJECT: Dougherty Valley Affordable Housing Program SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS CONSIDER report of the Director of Community Development regarding compliance of Shapell Industries of Northern California with the Dougherty Valley Affordable Housing Program; and CONSIDER action to be on the request of Shapell Industries to amend the Dougherty Valley Affordable Housing Program for the Shapell portion of the program. FISCAL IMPACT None. No general funds involved. CONTINUED ON ATTACHMENT: X SIGNATURE: tzj� i RECOMMENDATION OF COUNTY ADMINISTRATOR RECOM ENDATION O BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROV AS RECOMMENDED VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Source: Jim Kennedy 335-1255 ATTESTED PHIL BATCHELOR, CLERK OF THE cc: County Administrator's Office BOARD OF SUPERVISORS AND County Counsel COUNTY ADMINISTRATOR Community Development-Land Development Community Development-Housing BY , DEPUTY BACKGROUND The Dougherty Valley Affordable Housing Program was adopted by the Contra Costa County Board of Supervisors on March 22, 1994. The Dougherty Valley Affordable Housing Program (DVAHP) is incorporated by reference into the Development Agreements between Shapell Industries of Northern California and the County, as well as between Windemere Ranch Partners-BLC and the County. The basic requirement of the DVAHP is that 25% of the housing units within Dougherty Valley must be affordable to very low, low and moderate-income households. At least 10% of the affordable units must be affordable to very low-income households; at least 25% of the affordable units must be affordable to low-income households, and no more than 65% of the affordable units are affordable to moderate income households. Defined terms from the DVAHP are included as Attachment A. Compliance with the DVAHP requirements applies to each of the development entities separately. Compliance with the DVAHP is determined on an annual basis by the County Board of Supervisors based on reports submitted by the respective developers. The annual compliance report must provide for a one-year and a three-year strategic plan for the provision for the affordable units. A) Shapell Industries Compliance History The following summarizes the major issues in the following matters: 1. Term of affordability for moderate income projects; and 2. Compliance with the very low-income and low-income program. Shapell Industries has submitted compliance reports as of October 1997 and October 1998 that have been determined to be in compliance with the DVAHP. The County staff has been unable to determine that Shapell Industries is in compliance as of October 1999. The following will explain the basis for the inability of the County staff to make such a determination and Shapell's response. 1) Issue 1 —Rents/Term of Affordability From the County's perspective, the major area of non-compliance is in the affordability term in proposed moderate-income rental units. The goals and policies of the Dougherty Valley Specific Plan and the DVAHP emphasize the need to maintain housing affordability over the long run. Policy H-9, in the Specific Plan states "affordable units will be maintained the maximum period feasible. Target period shall be a minimum of 20 years for for-sale units and 30 years for rental units." At the time the DVAHP was approved, it was assumed that the moderate income housing obligation would be met through the provision of home ownership opportunities at market prices without the need for public subsidy. A March 8, 1994 memorandum from Harvey Bragdon, then County Director of Community Development, to the Board of Supervisors reflects this understanding between the parties. It says, "Most of the moderate income units W:\Persotial\BoardOrders\BOARD.9.26.doughertyvalley (65% of all affordable units) will be owner occupied." Due to the lack of specific financial benefit to the buyer (e.g.: homes affordable to moderate-income households were approximately the projected market price; no expectation of below market rate financing, etc.), it was not considered feasible or appropriate to require moderate-income households to purchase an essentially market rate unit with an affordability term restriction. Consequently, the adopted DVAHP does not currently specify a required term of affordability for moderate-income units. As we are all aware, the housing market conditions have changed substantially since 1994. Housing prices have increased significantly, therefore Shapell indicates its plans for addressing the moderate-income obligation have changed. Shapell now proposes to address a substantial portion of its moderate-income obligation through a rental program. Shapell has proposed to satisfy over 80% of the moderate-income housing obligation through the production of rental units. The County position is that the switch to a rental program requires a 30-year regulatory period as set forth in the Dougherty Valley Specific Plan. A form of regulatory agreement accomplishing this 30-year term was provided as an appendix to the DVAHP. Shapell Industries does not agree with the County position. (See Shapell letter of July 19, 2000.) From their perspective the DVAHP states that no term for moderate-income affordability is assumed. Furthermore, they reference the Development Agreement, which prohibits changes to terms of the policy set forth including those relating to affordable housing, without the mutual consent of the parties. (See Shapell letter of June 5, 2000.) County staff believes the Dougherty Valley Specific Plan and the legislative history leading up to the adoption of the affordable housing program is inconsistent with Shapell's position. a) Shapell Compromise Proposal Shapell Industries has proposed a compromise approach. Their proposal, which would apply to all of Shapell's obligation under the DVAHP, is set forth in their letter of July 19, 2000. Shapell's compromise proposal is to limit the rents on the studio and 1 bedroom units to rents set at 110% of monthly median household income, and 2 bedroom and larger units to rents at 120% of monthly median household income. Shapell has proposed an affordability term in perpetuity in exchange for these higher rents. Table 1 depicts the Falcon Bridge project, Shapell's initial 256-unit moderate-income rental project, and makes an estimate of the change in capitalized value given the two rent schedules. WAPersonahBoardOrderABOARD.9.26.doughertyvaI ley Shapell Industries represents they designed the Falcon Bridge project using an erroneous assumption (which they acknowledge as their error) that moderate-income rents were calculated based on 120% of median income. In fact, the DVAHP sets forth the moderate-income rental rates at 100% of median income. The Tables 2(a), 2(b), and 2(c) on the following pages reflect the difference between the rents at 100% of median monthly household income and 110% and 120% of median monthly household income. TABLE 1 —FALCON BRIDGE ANNUAL RENT/CAPITALIZED VALUE ANALYSIS Unit Type Number of Units Annual Rents- Annual Rents- (# bedrooms DVAHP # Sha ell Pro osal # 1 104 $1,687,296 $1,855,776 2 128 $2,336,256 $2,803,200 3 24 $486,720 $584,064 256 Gross Annual Rents $4,510,272 $5,243,040 Minus Vacancy ($225,514) ($262,152) 5% Minus Operating ($1,488,390) ($1,730,203) Expenses 33% Net Income for Debt $2,796,369 $3,250,685 Service Cap Rate 8.0% 8.0% Capitalized Value $34,954,608 $40,633,560 # Monthly Rents currently are: DVAHP SHAPELL PROPOSAL 1 bedroom units $1,352.00 $1,487.00 2 bedroom units $1,521.00 $1,825.00 3 bedroom units $1,690.00 . $2,028.00 W APersonal\BoardOrders\BOARD.9.26.doughertyval ley TABLE 2(a) MEDIAN INCOME RENT SCHEDULE Monthly Rent* Unit Size at 100% of median income Studio $1183 1 bedroom $1352 2 bedroom $1521 3 bedroom $1690 TABLE 2(b) 110% RENT SCHEDULE Monthly Rent* at Unit Size 110% of median Difference from median rents Studio $1301 $118 1 bedroom $1487 $135 2 bedroom $1673 $152 3 bedroom $1859 $169 TABLE 2(c) 120% RENT SCHEDULE Monthly Rent* at Unit Size 120% of median Difference from median rents Studio $1420 $237 1 bedroom $1622 $270 2 bedroom $1825 $304 - 3 bedroom $2028 $338 * Does not include a utility allowance that would reduce these rents. W:\Personal\BoardOrders\BOARD.9.26.doughertyvalley b) Alternative Policy Approaches for the Board to Consider- Rents/Term of Affordability The policy aspects of this issue have two dimensions: 1) required rent term; and 2) permitted monthly rents. Any consideration of alternatives should bear in mind the relationship between allowable incomes and permitted rents. A variety of alternatives exist along a continuum framed by the positions of Shapell and the DVAHP. They are: Alternative A—County position based on adopted DVAHP —30 year term; rents at 30% of 100% of monthly median household income(see Table 2(a)). Alternative B — Shapell proposal of July 19, 2000—term of perpetuity; rents at 30% of 110% and 120% of monthly median household income (see Table 2(b) & 2(c)). Additional alternatives for discussion and consideration, include: Alternative C — Compromise on rents. Fixed Term: permit rents to be computed at 30% of 110% of monthly median household income (see Table 2(b)); 30 year term. Alternative D — Step-down rents: utilize Shapell proposal to permit higher rents on larger units at the outset, but limit their adjusting to inflation so that they do not \ fully use the inflationary increase. This would allow rents to adjust to their desired rents. Attachment B provides an example of this concept; 30 year term. Alternative E — Apply any change to the DVAHP rents/terms to the Falcon Bridge project only; maintain current definition of permitted rents for moderate-income rentals at 30% of 100% of median monthly household income (see Table 2(a)) for all other units; restate the 30-year term for moderate-income rental projects. Alternative F— Compromise on rents, Falcon Bridge only; Fixed Term: permits rents at Falcon Bridge to be computed at 30% of 110% of monthly median household income (see Table 2 (b)); 30-year term for entire DVAHP. - 2) Issue 2– Very Low and Low Income Program The DVAHP requires the delivery of very low and low-income units. The information submitted to date on this component by Shapell is very limited. County staff has requested additional information as part of its determination of compliance as of October 1999 to facilitate this component of the DVAHP. The information requested would include: WAPcrsona1\Board0rdcrs\BOARD.9.2G.doughcrtyva[icy • The proposed location with a description of the specific site or sites to be used, including the identification of acreage, configuration, and the identification of significant development and environmental constraints; • The type of housing proposed, i.e. mixed income or 100% affordable multi- family, senior, unit size/number of bedroom; • Range of incomes and household size, target population; and • The relationship to other units in the development, • Identification of involved parties with role and responsibilities delineated; • A schedule for development of the required units with development and financing related benchmarks identified. Shapell has expressed concern that the County staff position may have the effect of requiring Shapell to accelerate the delivery of the very low- and low-income component of the program beyond the terms of that document. Shapell asserts that the DVAHP provides for flexibility in determining when the very low- income and low-income units need to be determined. Staff concurs with Shapell with respect to the DVAHP allowing for flexibility in determining the distribution and timing of very low- and low-income units. However, Shapell has now submitted tentative map applications, or has approved entitlements (vesting tentative maps) or has pending final maps for approximately 75% of their portion of the 8,500 units approved by the Dougherty Valley Specific.Plan. Table 3 provides a summary of the planning status of the Shapell portion of the Dougherty Valley development. This suggests the need to identify the elements of very-low and low-income program at this time. On September 28`h staff held a meeting with representatives of Shapell and Ecumenical Association for Housing (EAH) a major non-profit affordable housing builder. An executed letter of intent between Shapell and EAH was presented. A memorandum of understanding outlining the business parameters in greater detail is expected by the end of October. This September 28th meeting was a first show of positive activity in this regard, and hopefully represents the progress needed. WAPersonaffloard0rdersWARD.9.26.doughertyvalley TABLE 3—HOUSING UNIT APPROVAL STATUS SHAPELL PORTION, DOUGHERTY VALLEY Percentage of units Percentage of units Number of Units allowed per Settlement allowed per ,Specific Agreement4505 units Plan, subject to traffic studies-5830 units Approved with Tentative Maps Gale I 1216 27% 21% Gale II 1825 41% 31% Requested Tentative Map 1433 32 25 Gale III Total 4474 99% 77% B) Correspondence The following correspondence, which provides more information with respect to these issues as well as other minor issues, is attached: 1. August 17, 1999, letter from Community Development Department to Shapell Industries; 2. November 22, 1999, letter from Shapell Industries to Contra Costa County; 3. April 18, 2000, letter from Community Development Department to Shapell Industries; 4. June 5, 2000, letter from Shapell Industries to Contra Costa County; 5. July 19, 2000, letter from Shapell Industries to Contra Costa County; 6. July 20, 2000, letter from Community Development Department to Shapell Industries; 7. August 10, 2000, letter from McCutchen, Doyle, Brown & Enerson to Contra Costa County. C) Next Steps Should the Board opt to make any changes in the Dougherty Valley Affordable Housing Program, the staff should be directed to prepare the necessary documentation. It should be noted that any change would apply to the entire Dougherty Valley program, i.e., to both the Shapell and Windemere portions. Consultation with all parties will be needed. An affirmative process to determine compliance with the DVAHP would be triggered by W:\Persotial\13oardOrders\BOARD.9.26.doughertyvalley the developers submitting revised compliance reports, and the Community Development Department reviewing and recommending an action to the Board. All aspects of the DVAHP — the very low income, the low income, and moderate income elements — would be subject to review. Any actions necessary to modify legal agreements and policy documents to correspond to DVAHP changes will also be identified and recommendations set forth. cc: Debbie Sanderson Kathleen Hamm Shapell Industries L.ennar/Centex/Brook£ield File C4.3(bx1.6xa) W:\Personal\BoardOrders\BOARD.9.26.dougliertyvalley ATTACHMENTS "ATTACHMENT A - DEFINED TERMS (FROM DVAHP)" III. Definitions The terms defined herein for all purposes of this Dougherty Valley Affordable Housing Program shall have the respective meanings specified as follows: "Affordable Units" means any one or more of the units reserved for occupancy by Very Low, Low, or Moderate Income Households in the Dougherty Valley. The Dougherty Valley Specific Plan requires that 25% of the units in the Dougherty Valley be Affordable Units. "First Time Homebuyer" means households who shall not have had a present ownership interest in a principal residence at any time during the three-year period prior to the origination of a mortgage to purchase an Affordable Unit. "Lower Income" means generically all households of Very Low, Low, and Moderate Income. "Low Income Households" means households whose incomes are from 51 to (and including) 80 percent of the Contra Costa County Median Income, as adjusted for family size and published by the California Department of Housing and Community Development pursuant to Health & Safety Code Sections 50079.5 and 50105. "Low Income Rent" means the lesser of (1) the monthly market rate rent, including a Utility Allowance; or (2) a monthly rent which is no greater than one hundred percent (100%) of the Section 8 Existing Program Fair Market Rents, established in accordance with 24 CFR Part 882, effective at the time of occupancy, less the Utility Allowance then in effect. "Low Income Sales Price" means a price determined by taking into account family size, unit size, the Prevailing Interest Rate, and other conventional loan underwriting criteria (example provided as Appendix D). "Medi-Cal Patient" means person determined by the County's Social Service Department's Medi-Cal Eligibility Unit to be eligible for Medi-Cal benefits and a person who holds a valid Medi-Cal number. "Median Income" means the median income for the Contra Costa County, adjusted for family size as published by the California Department of Housing and Community Development pursuant to Health & Safety Code Sections 50079.5-and 50105. "Median Monthly Income" means 1/12 of the Median Income. "Moderate Income Households" means households whose incomes are from 81 to (and including) 120 percent of the Contra Costa County Median Income, as adjusted for family size and published by the California Department of Housing and Community Development pursuant to Health & Safety Code Sections 50079.5 and 50105. "Moderate Income Rent" means the lesser of(1) the monthly market rate rent; or (2) a monthly rent which is no greater than 30% of 100% of the Median Monthly Income, including a Utility Allowance. Rents for studio units shall be calibrated utilizing the one- person Median Income Household income; one-bedroom units shall use a two-person Median Income Household income; two-bedroom units shall use a three-person Median Income Household income, etc. "Moderate Income Sales Price" means the lesser of(1) the market rate sales price; or (2) a price determined by taking into account family size, unit size, the Prevailing Interest Rate, and other conventional loan underwriting criteria (example provided as Appendix E). "Prevailing Interest Rate" means the then current rate for 30-year fixed rate loans insured by the U. S. Department of Housing and Urban Development pursuant to Section 203 (b) and (i) of the National Housing Act of 1934, otherwise known as FHA 203(b) Federal Mortgage Insurance. "Utility Allowance" means the allowance for tenant purchased utilities adopted by the Contra Costa County Housing Authority and approved by the U. S. Department of Housing and Urban Development for the Section 8 Existing Rent Subsidy/Section 8 Voucher Programs. "Very Low- Income-Households" means households whose incomes do not exceed 50 percent of the Contra Costa County Median Income for Contra Costa County, as adjusted for family size and published by the State Department of Housing and Community Development pursuant to Health & Safety Code Sections 50079.5 and 50105. "Very Low Income Rent" means a monthly rent which is no greater than 30% of 50% of the Median Monthly Income including a Utility Allowance. Rents for studio units shall be calibrated utilizing the one-person Very Low Income Household income; one- bedroom units shall use a two-person Very Low Income Households income, two- bedroom units shall use a three-person Very Low Income Households income, etc. "Very Low Income Sales Price" means a price determined by taking into account family size, unit size, the Prevailing Interest Rate, and other conventional loan underwriting criteria (example provided as Appendix F). Housing_Types "Co-Housing" means Developments containing homes with common facilities for cooking, child care, recreation, and work, which are managed by the residents themselves. Can be developed and financed as condominiums, limited-equity cooperatives, or rental housing. "Condominium" means a type of ownership in which each individual has fee-simple title to a specific unit in a multi-tenant building. Each unit owner has an individual mortgage and contributes a share of the common area maintenance and operating expenses of the property. "Congregate Housing" means long term housing in a group setting that includes independent living and sleeping accommodations in conjunction with shared dining and recreational facilities. It is usually occupied by seniors. "Cooperative Ownership" means a corporate ownership in which each individual owns shares of stock. Each shareholder then gets a proprietary lease to occupy a unit. "Duplex" means a detached two-family dwelling unit on a single lot. "Factory-Built Housing" means any of the following: (1) Open panel housing which is preassembled with conventionally framed wall, floor and ceiling structural panels which are joined on site; (2) modular housing is .composed of factory assembled three dimensional boxes of wall floor, ceiling and roof elements. Plumbing, electrical, insulation, and finished walls are also installed in the factory; and (3) manufactured housing are factory built mobile homes built to the HUD mobile home standards. "Intermediate Care Housing" means housing for individuals who are not capable of independent living, but do not require 24 hour care. Emphasis is on social services, personal care, and rehabilitation programs. "Mixed Use" means a development that combines residential uses with one or more other uses such as office, retail, public, entertainment, or even manufacturing. Mixed Use developments are characterized by significant physical and functional integration of project components, including uninterrupted pedestrian connections. "Multi-Family Housing" means a residential structure with more than one dwelling unit in the same building. "Second Units" means an attached or detached residential unit on the same parcel or parcels as the primary unit, which provides complete, independent living facilities for one or more persons, including sanitation and food preparation facilities. Second units may also be referred to as "in-law units," "granny flats," or "ECHO units." "Self-Help Housing" (also known as sweat equity) is housing in which the homebuyer is contributing their labor to the construction or renovation. Self-Help saves money both for participants and funding sources because of the labor provided. "Senior Citizen Household" means a household in which the head of household is 62 years of age or older. - "Senior Housing" means housing designed or managed for Senior Citizen Households. Senior Housing may be independent living, congregate care, or assisted living. "Shared Living" means people residing together for social contact, mutual support and assistance, and/or to reduce housing expenses. "Single-Family Housing" means a type of residential dwelling designed to house one family. "Shared Living" means people residing together for social contact, mutual support and assistance, and/or to reduce housing expenses. "Single-Family Housing" means a type of residential dwelling designed to house one family. "SROs" means single room occupancy residences with individual or shared sanitary and food preparation facilities. SROs do not include student housing. "Supportive Housing" means housing which includes services designed to assist the target population in their daily living and/or efforts to achieve an independent living status. Examples include assisted housing for the mentally and physically disabled, and transitional housing for homeless individuals and families, battered women, and substance-abusing populations. Senior Housing is not Supportive Housing. "Townhouse" means a type of single family housing built as an attached or semi-detached row house. 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V C C En C) ::3=�r:�:��� M 00 00 t0 m N N r, 'r M � �.{ o � � t C) 7 "C�c *>: N . t cr N t0 O r-t tr ri M N \ � a .>:. o �' o o ;<>" QJ. t0 N r♦ a- O O Ln M %D M Ln O C C E o = N O 00 t0 Ln �r M M M tf Ln M C1 {Y O N r� 00 00 of C) ri N M V' In t0 n uj � U 41 7. .. i O 'tJ . L . t . t . t N rV N N N N rl M Q) QJ YI O L yr ;::. N i?:::s<>:a OO E ry?'"?,f C V 7 OR >> O .-� N M Vr Ln tD r\ 00 Ot CO {` `) ), Ell '`:e<:.; .-+ N M � Ln tD r, O o� .-� .� ra .--t r-t .-� .� .� .--t .--t N O C LO 41 N >� 'v s C) •p ai to ►� O 7 O Ln Q p C C rias•'>�;:':: ATTACHMENT 2 BEDROOM RENTS OVER TIME RENTS 2250 100% 2200 Rents 2150 2100 2050 110%Rents 2100 Stepped 2050 Down Rents 2000 1950 1900 1850 1800 1750 1700 1650 1600 1550 1500* BASE 1 2 3 4 5 6 7 8 9 10 YEARS Stepped Down 100% Rents Rents-110% to 100%; 10 vrs. 100% Rents Base $1521 1673 1673 1 1588 1731 1747 2 1658 1790 1824 3 1731 1852 1904 4 1807 1915 1988 5 1886 1981 2075 6 1969 2041 2166 7 2056 2118 2262 8 2147 2189 2361 9 2241 2263 2465 10 2340 2340 2574 W:\Personal\13oardOrders\BOARD.9.26.doughertyvalley CORRESPONDANCE i rM 'i.4! MCCUTCnEN,DOYLE,BROWN&ENERSEN,LLP J �' 00 AUG ! P11 4: 3 _ 6 August 10, 2000 Direct:(925)975-5339 ctalbert cr mdbe.com VIA FACSIMILE AND MAIL Debra R. Sanderson Special Projects Manager Community Development Department County of Contra Costa 651 Pine Street 4th Floor, North Wing Martinez, CA 94553 Gale Ranch III FDP Application, DP998306 Dear Ms Sanderson: This letter responds to your letter of July 20, 2000, concerning the County's determination that Shapell's Gale Ranch III application is incomplete, based solely upon the County's unfounded and erroneous conclusion that-Shapell is not in compliance with the Dougherty Valley Affordable Housing Program ("Program"). As is further explained below, not only does Shapell's phase one development fully comply with the Program, but the County's recent conclusion completely contravenes the County's earlier findings in the 1998 and 1999 Compliance Monitoring Reports that Shapell was in compliance with the Program. As you are aware, Shapell is now in year two of what is expected to be a 20 year build-out of Gale Ranch. The first phase of that build-out, Gale Ranch I, includes 1216 units that will be constructed and sold over an approximate five year period. Included in this phase are the 256 Falcon Bridge apartments, which are currently under construction. In order to satisfy the Specific Plan's policy of providing a minimum of 15% affordable housing in each phase of development, Shapell repeatedly has told the County that at least 182 of these apartments (representing 15% of the units in phase one) will be Moderate Income Units.' That is, at least 182 of these units will be rented by Shapell at Moderate Income Rents to Moderate Income Families at the time of initial occupancy.2 Shapell also has sold units in phase one to families with Moderate Incomes, thereby further increasing the Capitalized terms are to have the meanings given to them in the Program. 2 Shapell has agreed with the County for sometime now that such Moderate Income Rents cannot exceed 30%of 100%(as opposed to 120%) of the Mediate Monthly Income, including a utility allowance and depending upon the number of bedrooms in the apartment. ATTORNEYS A T L A \1' 1333 N. California Blvd., Suite 210 San Francisco Palo Alto P.O.Box V Los Angeles Taipei Walnut Creek, CA 94596-1270 Walnut Creek Tel. (925) 937-8000 Fax (925) 975-5390 www.mccutchen.com Debra R. Sanderson August 10, 2000 Page 2 provision of affordable housing in phase one. Shapell is currently gathering and assembling that information for submission to the County. The foregoing plan for providing affordable housing meets exactly what is required by the Program and is exactly what the County determined satisfied the requirements of the Program for the past two years. None of the facts have changed and the County has absolutely no basis for asserting now that Shapell is not in compliance with the Program. Accordingly, Shapell's application is complete. Shapell has proposed a modification to the Program to include restrictions on Moderate Income Units, and recently made such a proposal to the Board of Supervisors. Shapell has asked that the matter be placed on the Board's agenda as soon as possible so that a modified program could be applied to the Falcon Bridge apartments (see Tom Koch's attached letter dated July 19, 2000). However, until such time as the Board and Shapell jointly agree to modify the program, Shapell remains in full compliance with the existing program and the County has no basis upon which to conclude otherwise. Shapell hopes that the foregoing expression of its continued commitment to meet its obligations under the Affordable Housing Program will lead the County to conclude that the Gale Ranch III application is complete. Accordingly, Shapell looks forward to having the application processed and forwarded to DVOC for its review at your earliest opportunity. Sincerely yours, Cecily T,/Talbert cc: Dennis Barry Jim Kennedy Kathleen Hamm Vic Westman Daniel Hancock Chris Truebridge Tom Koch 301296761 3 Policy H-6 of the Program states that"accompanying the initial final development plan/tentative map submittal, there shall be a phasing plan to indicate the delivery of affordable housing." Shapell included that phasing plan with its phase one submittal. Dennis M.Barry,AICP Community Contra Community Development Directo Development Costa Department County County Administration Building 651 Pine Street 4th Floor,North Wing Martinez,California 94553-0095 (9. Phone: (544)33S-1208 July.20, 2000 Mr. Chris Truebridge Shapell Industries of Northern California P. O. Box 361169 Milpitas, CA 95035 Re: Gale III FDP Application, DP998306 Dear Mr. This letter responds to your June 20, 2000 submittal, on behalf of Shapell Industries, of a revised project description for the above referenced proposed project. The Department finds the project application incomplete at this time, since Shapell has not yet demonstrated compliance with the Dougherty Valley Affordable Housing Program. The following paragraphs summarize the basis for this determination. Affordable Housing Program: As background, recall that the Dougherty Valley Specific Plan, Policy H-3 and H- 4, specify a broad range of housing types for a wide range of household income levels, with at least 25% of the units meeting the County's definitions of low, very low and moderate income households. Similarly, the Dougherty Valley Affordable Housing Program, (DVAHP) (Item D, page 23) requires phasing of affordable units as Dougherty Valley is developed. The DVAHP (Item D.La) also allows some flexibility in determining the distribution of Very Low and Low Income Units across the various phases, "subject to the findings of the Compliance Monitoring Report." Item D.3 on that page of the DVAHP further specifies, "Failure to perform with respect to the provision of Affordable Units shall permit the County to find applications incomplete or to otherwise deny . applications for future entitlements (including but not limited to Preliminary Development Plans, Final Development Plans, Tentative Subdivision Maps, and Land Use Permits)." Office Hours Monday- Frday:8:00 a.m.-5:00 p.m. Page 2 Item D.2.c. specifies that, for Moderate Income Units, one phase may omit Moderate Income Units upon a finding of the Director of Community Development that a feasible plan exists for the provision of Moderate Income Units in the next phase." The attached letter from Mr. Jim Kennedy to Mr. Tom Koch presents the Department's analysis of Shapell's Compliance Monitoring Report for the 1999 Project Year, and concludes that Shapell has not yet demonstrated compliance with the DVAHP. Other County Requirements for Affordable Housing: Both the Gale I(DP923010, 1994) and Gale Il(DP953086, 1996) Final Development Plans require compliance with the Dougherty Valley Affordable Housing Program. Gale I Conditions of Approval 108 requires: Gale I, COA 108: The applicant shall provide affordable housing consistent with the Dougherty Valley Affordable Housing Program, adopted by the Board of Supervisors on March 22, 1994 (or as may be amended). Gale II, COA 18: The applicant shall provide affordable housing consistent with the Dougherty Valley Affordable Housing Program, adopted by the Board of Supervisors on March 22, 1994(or as may be amended). Prior to filing each final map, the applicant shall indicate the status of affordable housing provided; and the schedule for future provisions consistent with the affordable housing requirement. In addition, both Development Agreements for the Gale Ranch properties require compliance with the DVAHP -- Development Agreement for Country Club at Gale Ranch (Gale I), January 24, 1995, Item 3.1(e); Development Agreement for Gale Ranch(the remaining phases), April 8, 1996, Item 3.3(c): 3.1(e) Gale I Affordable Housing. Developer shall, in connection with its development of Country Club at Gale Ranch, implement the terms and provisions of the Affordable Housing Program adopted by the Board on March 22, 1994, as such Affordable Housing Program, notwithstanding any County regulations to the contrary, may be amended from time to time, by mutual agreement of the Parties, regarding its application to the Country Club at Gale Ranch Site (the"Affordable Housing Program"). 3.3(c) Gale Ranch (all remaining phases) Affordable Housing: Developer shall, in connection with its development of the Gale Ranch, implement the terms and provisions of the Affordable Housing Program adopted by the Board on March 22, 1994 pursuant to Board Order, (the"Affordable Housing Program"), which requires that a minimum of twenty-five Incomplete Letter-July 20 OO.doc, 1,,77 1 Page 3 percent(25%) of all dwelling units be developed as affordable to low,very low and moderate income households. Gale III Project Background On April 29, 1999, this Department notified Shapell that its Gale III application was incomplete, in part due to the Department's finding that Shapell had not demonstrated compliance with the Affordable Housing Program. In a letter dated May 31, 1999, Shapell responded to the affordable housing issues raised in the incomplete letter. In addition, Shapell submitted its Affordable Housing Compliance Report for the Project Year 1998. With receipt of that report, the Department treated Shapell's compliance with affordable housing requirements as "under review" and notified Shapell on July 9, 1999 that the Gale III application was considered complete. Staff then proceeded with the CEQA analysis. On June 20, 2000, Shapell submitted a revised project description, which initiated another 30-day review period in which the Department must determine if the application is complete. This review period ends today,July 20, 2000. Finding Application Incomplete Since July 9, 1999, the Department has received Shapell's 1999 Affordable Housing Compliance Report, with numerous letters back and forth between Shapell and the Department. As explained in the attached letter(dated July 19, 2000 from Jim Kennedy to Tom Koch), and as discussed at the July 12, 2000 meeting of the Dougherty Valley Oversight Committee, the Department currently concludes that Shapell has not yet demonstrated compliance with the requirements of the Affordable Housing Program. As a result, the Department is notifying Shapell Industries, through this letter, that Shapell's Gale III application is incomplete. This incomplete notice is made pursuant to the provision found in Item D.3 (Page 23) of the Dougherty Valley Affordable Housing Program, which allows the County to deny an application or find it incomplete if developer demonstrates failure to perform with respect to the provisions of the Affordable Units. At this time, the Department has taken no other action concerning other applications under County review -- for either Gale I or Gale II -- as would be allowed by either of the Development Agreements, the DVAHP, or Section 84-66.404.:, of the County Code. By finding the application incomplete, the County and Shapell' will have an opportunity to resolve the issues concerning the provision of affordable housing units before the County evaluates and draws conclusions about the Gale III proposal. Incomplete Letter-July 20 OO.doc, ter, Page 4 The Department recognizes that Shapell Industries has long supported the concept of Affordable Housing in Dougherty Valley, so we look forward to a prompt resolution of this problem. Sincerely, Debra R. Sanderson, Special Projects Manager cc: Dennis Barry Jim Kennedy Kathleen Hamm Project File 99-8306 Incomplete Letter-July 20 OO.doc, RA SHAPELL INDUSTRIES of NORTHERN CALIFORNIA A Division of Shapell Industries, Inc. QQ AUG ,,3 P14 July 19, 2000 Mr. Tun Kennedy Community Development Department Contra Costa County 651 Pine Street Martinez, CA 94513 Dear Tim: This letter is sent to propose to the County a potential change to the Dougherty Valley Affordable Housing Program. Our purpose here is to make formal the concepts that we have discussed informally on numerous occasions. These ideas were also reviewed last week at the Dougherty Valley Oversight Committee. We would request your assistance in putting this matter before the Board of Supervisors for their earliest conveniel:t consideration. The costs of housing in the Bay Area continue to climb at a rapid pace, exceeding evgn the most aggressive projections. Prices in the San Ramon area often exceed$250 per square foot. Homes are sold for more than their listing price and the inventory of available product is near an all-time low. Proximity to excellent employment opportunities, terrific schools and a safe place to raise a family continues to define San Ramon. There is no indication that any of these trends are going to worsen. Accordingly, the probability is strong for continued increases In housing costs in the area around Dougherty Valley. At the same time, Shapell intends to persist in building the highest quality home that %ye can. As directed by the Dougherty Valley Specific Plan, our goal is to build affordable and market rate units as indistinguishable from each other as possible. These factofs further minimize our ability to readily provide affordable housing as called for in the Affordable Housing Prograin. When the DVAHP was adopted in 1994, it seemed possible to meet some of the moderate rate affordability through ownership product. In. fact, without any public policy requirement; we sold townhouses at the intersection of Dougherty Road and Crow Canyon shortly afterward at prices which then met moderate income standards. These same townhouses which sold in the mid 90's for$225,000 now are routinely re-sold for more than $400,000. Homes of Quality Since 1955 P.O.Box 361169, 100 North Milpitas Boulevard,Milpitas,California 95035 Phone:408/946-1550 Fax:408/946-9687 O Mr. Tun Kennedy July 19, 20(10 Page 2 In light of these factors, Shapell now plans to meet most of its moderate rate affordable housing requirements through rental units. Herein is the issue that we would like to bring to the attention of the Board. Currently,the DVAHP requires that moderate rental units rent for no more than 100%Qf median income. However,the same program also makes clear that no term of affordability is required for moderate rate units, with no distinction made between rentpl and ownership units. We propose changes in these two components of the plan. These proposed changes would apply to all of Shapell's portion of Dougherty Valley. First, Shapell requests that for rental units which would meet moderate rate income affordability that a 110%of median income threshold be applied to studio and 1 bedroom units,while a 120%of median threshold for 2 bedroom and larger units. As you are aware,the 120% standard is applicable to ownership units and is the same standard us9d by the state in determining housing element compliance. During our discussions on the topic, you informed me that the 100%concept for rental units is found elsewhere in the County but only in redevelopment areas with concomitant housing set-aside funds In an effort to permanently provide affordability within the moderate rate rental units, Shapell would agree to a perpetual affordability term. We would implement this unique approach with a deed restriction or other comparable device to insure its continuance. ff adopted,this concept would do more to tackle the challenge.of ever-decreasing affordability than perhaps any other provision of the DVAHP. Further, we are unaware of any existing project in Contra Costa with a perpetual affordability_component. The longest term that we are familiar with runs 30 years and carries with it public subsidy. In this case,no subsidy would be required and the term would not lapse. Should any of the foregoing require clarification, I would be happy to meet with you aqd explore the matter further. However,we would request that the matter be placed on the Board's agenda as soon as possible as the proposal we are bringing forth would apply to our 256 unit Falcon Bridge apartments in Phase 1 of Dougherty Valley. These units are nearing completiop. Thank you for your assistance with this matter and for you continued help in working with Shapell to affirmatively achieve the goals of affordable housing in the Dougherty Valley. Z6 - Ko1h Vice President jun pp oo 03: 27a Tom/Katie Koch 510/527-8774 f,. 1 Y SHAPELL INDUSTRIES of NORTHERN CALIFORNA A Divlslon of Shapell Industries,(nc. June 5, 2000 Mr. Jim Kennedy Deputy Director—Redevelopment Community Development Department Contra Costa County 651 Pine Street Martinez, CA 94553 Dear Jim: RE: Dougherty Valley Affordable Housing Program Thank you for your letter of April 18, 2000 responding to our 1999 Annual Compliance Report While your correspondence is helpful, it appears that Shapell and the County continue to disagree on some fundamental aspects of the DVAHP, its terms and timing. It is our hope that through this letter and our planned subsequent meeting, that a true furtherance of our mutual objectives of providing affordable housing in Dougherty Valley can be achieved. However, we feel that some core issues still need to be addressed. We will try to be responsive to your letter of April 18`h on a point-by-point basis. In setting the context of our response,. please consider the following points of view. I) Shapell can not agree your suggested unilateral change in the DVAHP regarding term of moderate rate units. The DVAHP clearly states that no term for moderate rate affordability is assumed.. Quoting from page 22 of the DVAI-IP `The length of time Moderate Income Units must remain affordable is governed solely by requirements of any subsidy source...there is no expectation of public subsidy....the Moderate Income Units are not generally expected to have an affordability term."We tried to make this point in our letter of November 22, 1999. Further, Shapell and the County have entered into a Dcvclopmeut Agreement which prohibits changes to terms of the policies set forth, including those relating to affordable housing, without the mutual consent of the parties. 2) Shapell is faced with a difficult situation regarding the implementation ofaffordability in the Falcon Bridge apartment complex currently under construction. These units were designed assuming a 120%of median income threshold_ We have indicated to you at previous meetings a possible Homes of Quality Silicc 1955 P.O.Boz 36,1169,IN)Wevil,Mil-;—Boulevard,Milnitac r',t:r ...:_ncn�c r>,....... .,�...� Jun Ota 00 09: 27a Tam/Katie Koch 510/527-6774 P, 2 Mr. Jim Kennedy Juno s,2000 Page 2 ameadment to the DVAHP which would provide both the solution to our current challenge at Falcon Bridge and assure the ongoing moderate rate affordability that your letters call for. We look forward to your thoughts on this matter at our meeting on June 3) We are concerned that your sincere desire to help realize affordability as soon as possible may be having the effect of requiring Shapell to accelerate certain aspects of the DVAHP beyond the terms of that policy document_ Specifically,the timing and location of Very Low Income Units appears, from reading your letters,to need determination now. It was not our understanding that such a determination was to be made as soon as two years into the build- out of Dougherty Valley. 4) Shapell remains interested in understanding the specific subsidies and funding/financing options that the County anticipates may be made available to assist with theimplementation of the DVAHP. This.is especially true of the Low and Very Low Income Units. We appreciate.your coasidcration.of the point of view that Shapell brings to these discussions. Although we know it does not match yours, and by implication, that of the County,we trope that it is scca as an attempt to reach consensus with the County in an open and straightforward manner. The following attempts to track your letter of April 180i. 1) Your letter mentions the aced for Income Certification verification forms. Thank you for reminding us of the need to demonstrate the income of buyers who's prewous purchases may qualify based solely on their income, not the price of the unit. Given the time of year,we would ask that we be allowed to retroactively provide your office with this infoonation in the October, 2000 Annual Compliance Report. 2). Your letter asks for Income.for Sale.Puce Calculation data. Shapell does not anticipate meeting moderate rate affordability thresholds through prices on for sale units in the near future- Current market coaditions, the densities caLled for in the approved Bridges at Gate Ranch Tentative Map and other factors contribute to our inability to do so within the next three years. Accordingly,we ask that your consider that your request may not be timely. However,we can confirm that current HOA dues for single-family units in the Bridges area are Jun 00 00 09:2aa Tom/Katie Koch 510/527-0774 P„ Mr. Jim Kennedy June S, 2000 Page 3 Your letter argues that the DVAHP must be changed to require Moderate Income affordability terms of up to 30 years. Shapell's thoughts on this issue have been partially expressed earlier in this letter. Your conclusion at the end of the first paragraph`Wherefore the DVAHP and its implementation needs to change to comply with the Specific Plan_"is understood,but not agreed to. You point out that the original assumption that much of the moderate rate affordability would be handled through for sale units has, for the time being, changed. This is true. however,we do not see how this fact is germane to the question of how tong our Falcon Bridge Apartments must remain affordable? As with the anticipated moderate for sale units, no subsidy has been provided for these apartments. therefore, given the language of the DVABP re: affordability term for moderate units, why should these apartments be treated differently than any other private property? You make the point that the Specific Plan called for"Affordable Units shall be maintained for the maximum period feasible." The DVA.FIP was established 16 months after the adoption of the Specific Plan and was cognizant of the goals of that document. The DVAHP in fact states in its introductory paragraph on Page i that is"designed to provide an implementation structure to the affordable housing requirements and policies of the County General Plan and the Dougherty Valley Specific Plan." Given this language,how can you now assert that the broad goals of the Specific Plan should govern rather than the established detailed policies of the DVAHP? In the DVAHP,The County strikes a balance which related affordability term to the quantity and quality of subsidy provided by itself or other government agencies. Again, at the risk of being repetitive, no such subsidy has been forthcoming. You acknowledge that moderate for sale units are not required to have an affordability term.. We agree., however,is it your position that Shapell as a private property owner of the Falcon Bridge apartments has a different set of obligationsfrights than the anticipated buyer of for-sale, moderate rate home? If so, please explain why. Also, Shapell believes that the Specific Plan's concept of`feasibility"was reflected in the DVA IP's limits on the term of affordability for moderate income units_ Finally,the approach that you're suggesting was included in the circulation draft of September 7, 1993. This draft expressly called for the idea that 20 and 30 year affordability terms be imposed on all affordable units. The final DVAHP, established March 22, 1994, amended the draft to reflect the ultimate policy directive of the County which eliminated the concept that you're now suggesting should be imposed_ 510/527-9774 p. 4 Jun Ota 00 09:20a Tom/Katie Koch Mr. rum Kennedy June 5,2000 Page 4 Absent a resolution on this item with you and your staff on the 8% Shapell does desire to move this issue forward to further deliberation with the appropriate government entities such as DVOChhe Board of Supervisors. We would like to reserve the right to express our position more fully to theta when the issue is placed on an agenda. 4) Your letter indicates that the current Fair Market Rents are attached. Perhaps a teehniealAogistics error took place in sending your letter to us as we did not see the attached FMR's you referenced. We would look forward to reviewing them with you at our meeting of the 8`4. 5) Your letter reiterates the need for further discussion of carriage units. Shapell has been pleased with the market response to the units in the Bridges at Gale Ranch project which have a form of carnage units. Specifically, our largest home in the project provides for an attached unit with a separate entrance,parking, cooking, bathroom and storage facilities. In other words, they may comply wiih the standards you cxpressed in your August 17, 1999 letter. The issues concerning term of these units' affordability relate to the discussion in point 3 of this letter. However, as they are a new concept that we would Like to explore with the County, we would like to continue the discussion of the potential of these units to help achieve the DVAHP goals and any costs associated with them 6) Your letter discusses the potential problem of Very Low Income Units occurring later in the project or perhaps not at all. The Dougherty Valley Specific flan calls for the densest portion of the Shapell portion of the plan to be built at the Village Center. Both the DVAI-' and the Specific Flan were drafted at a time when it was assumed that this portion of the Shapell project would occur toward the end of the build out of Cale Ranch. That assumption is valid today. In fact, the proposals for the Phase II(approved) and Phase al (proposed.)portions of Gale Manch have yet to reach the Village Center area. This phasing program is similar to the approach anticipated when DV was approved. We felt then and we still feel that the Very Low Income units are most likely to be realized in the densest part of Dougherty Valley. While no specific site has been determined, we ask why is this planning eonccpt`not acceptable"as your letter of April I e states? Jun Oil 00 09:20a Tom/Katie Koch 510/527-0774 p. 5 Mr. Jim Kennedy June 5, 2000 Page 5 Your letter continues that "Please be advised that any dcfetral of the affordable housing obligation is subject to review and approval of the County." This statement can easily be read to imply that the County is choosing to alter the intended timing of the very low component of the DVAHP and will review our annual compliance reports with this in mind, threatening to withhold their approval unless we comply with the new tuning. Is this the County's intention with this language? On the more basic question of implementation of the Very Low Income units, Shapell has continued discussions with Ecumenical Associates for Housing (EAI)on this subject and hope to provide more detailed progress by our October, 2000 annual compliance report. Our discussions are focused on ideatifying a suitable site in the latter phases of the project to accommodate- these units with an eye to possibly dedicating that site,to EAH. Shaped certainly agrees with your characterization that further development of Dougherty Valley, or any other project for that matter in this era,is"risky." The regulatory environment that we are working in has caused extraordinary changes to plans that were otherwise settled as far as the local land use agency was concerned. While we understand your desire to eliminate as much of the "risk"as possible from your objectives,we can not agree to a disproportionate shi_Qiag of the"risk"to us as a means of achieving your ends. Finally, your introductory paragraph questions where our one and three year forecasts are for the 1999 report_ Both were included in my letter of November 22nd What I wanted to provide you with was a more legible copy of our analysis for 199R. I apologize that I simply overlooked the need to do so. My assistant Linda Fluken is preparing that document now. It would we helpful.if you could provide us with a disc which has your desired format for that information on it. Recreating that chart has proven to easily exceed my technical prowess! Hence, my method of handwritten responses. I hope the preceding is at least helpful in furthering the needed discussions we must undertake to successfully implement the DVAER We recognize that a number of issues present challenges. We intend to undertake an effort to overcome these challenges in a spirit of cooperation with the County, an open mind,an ackaowledgemeat of our commitment and requirements under the DVAHP and with an"eye on the prize"of helping to provide a broad range of housing within Dougherty Valley for the entire community. Jun 08 00 09:28a Tom/Katie Koch 510/527-8774 p. 6 Mr. rim Kennedy June 5, 2000 Page 6 On behalf of Shapell Industries of Northern Califomia, I look forward to our dicussions on these important matters. Siacer , lhout,at�s J. Koch Vice President Community Contra Comm M. Barry,AICP pme Community Development Director Development Costa Department County County Administration Building s 651 Pine Street 4th Floor,North Wing Martinez,California 94553-0095 Phone: ^orTA.�ai;a J� April 18, 2000 Tom Koch, Vice-President Shapell Industries of Northern California 100 North Milpitas Blvd. Milpitas CA 95035 Dear Tom: RE: Dougherty Valley Affordable Housing Program This is in response to your 1999 Annual Compliance Report for the Dougherty Valley Affordable Housing Program (DVAHP). Your November 22, 1999 letter referenced that your one and three-year program would be forthcoming in a matter of days. We have yet to receive it. Your letter discusses the following issues and sets forth our understanding of the Shapell position, where applicable. This response follows the order of our August 17, 1999 letter. 1. Moderate Income "Purchasers Income Certification" form We have yet to receive a Purchaser Income Certification for any homebuyer. You have previously indicated to us that a few of the homebuyers qualified as moderate-Income. For buyers who have already closed we need a certification from the lender. Without such a certification no credit for this can be provided: We have received nothing to date. Future purchasers by moderate income homebuyers after our August 17 letter must include the- "Purchaser's Income Certification". 2. Moderate Income For-Sale Price Calculation Up to half of the DVAHP Moderate Income obligation that is addressed via home ownership may be done solely on the basis of the buyers income without respect to home price. The remaining half must be subject to income and price restrictions. Paragraph 4 on page 2 of my August-17, 1999 letter is intended to D:\Redev-temp\Letters\KochDVAHPttr.doc Office Hours Monday- Frday:8:00 a.m.-5:00 p.m. eN( __ ._ _1---J'"- �-. ­A 0 r," r-:J...- -L ---L provide you with an understanding of how that moderate income sales price is calculated. You can be of assistance in making sure our model for calculating the Moderate Income Sales Price is accurate by providing current data as requested. 3. Affordability Term-Moderate Income Rental Units Your November 22, 1999 letter incorrectly asserts that both "the Specific Plan and the DVAHP both concluded that no term for moderate income housing would be established". This is incorrect. Policy H-9 in the Dougherty Valley Specific Plan states that "Affordable Units shall be maintained for the maximum period feasible. Target periods shall be a minimum of twenty years for for-sale units and thirty years for rental units". My August 17, 1999 letter recounts the operative expectation back in 1993/1994 when the DVAHP was created, i.e. that for-sale units priced at the market would be the primary, if not exclusive, manner of complying with the moderate income requirements. Given the altered market conditions this operative expectation has changed. Therefore the DVAHP and its implementation needs to change to comply with the Specific Plan. My letter of August 17, 1999 suggested the methodology for accomplishing the required changes clarify the DVAHP and reach closure on a form of Regulatory Agreement that would provide for continuing affordability for the required term. Your November 22, 1999 suggests your firm does not agree with this position. The venue for discussing this difference is the Dougherty Valley Oversight Committee (DVOC), and ultimately the Board of Supervisors. If that is your desire, you should formally set forth your request and the basis for it so that these bodies will have the benefit of your position. 4. Low Income Rents The DVAHP defines the above term. We can provide the Section 8 Fair Market Rent (FMR) levels. The current FMR's are attached, with the current utility allowances permitted. The Low Income Rents are the lesser of: a.) the market rents (less an allowance for tenant-paid utilities); or b.) the FMR's (less an allowance for tenant-paid utilities). S. Carriage Units issues. These issues need to be discussed and resolved as stated in our August 17, 1999 letter. 6. Phasing of Very Low Income Units The essential point of our August 17, 1999 letter was that the incorporation of approaches to deliver very low income in earlier phases must be fully explored. I appreciate your clarification of the Dougherty Valley Settlement Agreement, but the fact remains the final phases are more risky than earlier phases. A 0.\Redev-temp\Letters\KochDVAHPItr.doc development scenario that does not realize very-low income production is not acceptable, and the DVAHP Compliance Reports need to begin to reflect alternative approaches. Please be advised that any deferral of the affordable housing obligation is subject to the review and approval of the County. We look forward to the additional information you suggest is forthcoming this year. I am available to respond to questions you may have on the above matters. I can be reached at (925) 335-1255. Sincerely, JDnp ennedy ty Direct r - Redevelopment Cc: Board or Supervisors Dennis Barry Debbie Sanderson Debbie Chamberlain Kathleen Hamm Dan Hancock, Shapell Chris Truebridge, Shapell Dan Coleman, Lennan Homes File C4.3(b)(1.6)(a) IK/jjr D:\Redev-temp\Letters\KochDVAHPftr.doc 'NOV-23-99 10.01 FROM-LSA ASSOCIATES INC ID.S1023634eo PAGE 3/6 SHAPELL INDUSMES of NORTHERN CALIFORNIA A Division of Shapely IndustetCS. Inc. November 22, 1999 Mr.Tun Kennedy Contra Costa County Redevelopment Department 651 Pine Street Martinez, CA 94553 Dear Tisa: The following is intended to provide Shapell's Annual Compliance Report for the Dougherty Valley Affordable Dousing Program(DVAHP)for 1999. This report was due on October 1, 1999. Please accept our apologies for its lateness. Shapell Judustries remains committed to acbaeving the objectives of the DVA13P and the lousing goals of the County General Plan and the DV Specific.Plau. The policy of providing a broad range of housing near expanding job centers continues to make a great deal of sense. It is quite clear that the failure to do this in other areas of the Bay,Area in general and the County specifically has caused much of the traffic nightmare that we all face.*la this letter,we will offer: 1)context as to the situation the market has placed us in,2)respoiases to your letter of August 17th, 1999 and 3)an updated one year and three year forecast. Concerning our overall program,we have left it unchanged from last year's report although would appreciate continued discussions with staff concerning a number of issues. A more legible version of the same information presented previously will follow in a matter of days. 1999 saw a continuance of development of homes in the first phase of Dougherty Valley. Since the first sales in July of 1998,more than 250 units are now occupied in the project. Demand for housing, even the higher-end housing we are now providbig,remains on a brisk pace. Lotteries for homes,waiting lists and the like are now routine aspects of our sales process This strong demand has also caused home prices to increase dramatically.New homes similar to those sold in the summer of 1998 for$500,000 are now selling for more than $600,000. These factors have made the forecasting of exactly how Shapell vvm meet the DVAHP all the more difcuk to determine. Specifically, it has caused us to look more and more to rectal units as the means of meeting affordability. In your letter of August 17, 1999 you refereoce the aspects of our plan which point to the inc=scd reliance upon rental units. On page 2 of your letter,you discussthe issue of affordability terns for moderate income rental units_ You mention somo aspects of the thinking that went into the crafting of the Specific Plan and the D.VABP and.that both concluded that no term for moderate income housing would be establishe& We agree with the recour p,of the background you offer on this issue. Homes of Quality Since 1955 P.O.Box 361169,100 North Milpitas Boulevard,r•lilpitas,California 195035 Fhone:408/946-1550 Fax:403/916-9687 PIUV-I3-J'J- 1b.bl 1'F2UMLSH HSS'OGIATES INC 1D. 5102363460 PACE 4/6 November 22, 1999 Mr. Tun Kennedy Page 2 However, Shapell does not agree with your conclusion that the DVAHP must be amended to require the same 30 year minimum affordability term that is in fact required for units bunt through government subsidies. Fundamental to the basis for a no term requkement on moderate income units was the notion that term of affordabffity should track the requirements of the subsidies provided. la the case of the rental units that we intend to bring to market as soon as practicable,there is no public subsidy. In fact, any subsidy that may be required to have these units meet affordability standards Will be provided by Shapell_ As you are aware,given the quality of design and amenities provided in them, we do believe that we will be required to subsidize these units in order to generate credit toward our affordable housing obligations. Shapell is unaware of any aspect of the approved Specific Plann or the DVAHP which mandates that we are to be treatod any differently than any other private party regarding this moderate income term issue. Until some assistance is prmided by the County or other governmental agency to subsidize these units,we cannot agree to the unilateral assertion that"AVAHP requirements for maintained affordability should be modified... " Your letterof August 17d'also deals with a number of other issues concerning the DVADP and Sbapell's compliance with it. Fi stly,thank:you for your assistance in providing us with an income certification form for use by our moderate-income buyers. While we have yet to incorporate this form into our escrow procedures,we are in the process of doing so. Accordingly, a supplementary report regarding the number of buyers whose incomes only meet moderate rate affordability will be following in the near future_ Your request for"Additional Information Needed to Confirm Compliance"on page 2 has confused us_ bWlicit in it is the idea that some affordability is being met through the sales prices of moderate income units_ No such units have been constructed/sold as ym However,if your request is more of a`heads-up"about firture information required,we appreciate the focus you've provided us. On page 3 of your letter you discuss the need for more information regardiag low-income rents especially with regard to distinction between:market rents or 100%a percent of Section 8 flair Market bents. We are imaware of the method for determining the FNR levels. Please so advise. Page 4 of your letter discusses the issues associated with the concept of carriage units being implemented to meet affordability requirements. In our 1995 compliance report, we indicated our desire to develop this form of housing along with similar in-law units. You've raised a number of issues that require filrther discussion between Shapell and the NOV-23-99 10.02 FROM-LSA ASSOCIATES INC ID.S102363460 PACE S/6 Mr.run Kennedy November 22, 1999 Page 3 County. We would look forward to m=dng with you at your convenience to work through these questions. Page 5 of your letter discasscs the Phasing.of our very-low income unit requiuremeata You mare the point that the information that we have provided thus far is limited_ We agree. 'fhe dciuscty,design,specific timing of and even the location.o£these units is very speculative at this time. Your letter expresses the conceal that these units might never be implemented at all based on terms,of the DV Seft ement Agmement with San R mon.and Danville. We would like to note that the DVSA does not require a further EM at 8,500 units per sm It does require ongoing analysis of the traffic.in_th,e area_ 1h e 5,500 unit issue only governs in that it is the point at which San Ramon and Danville are no longer required to assist in allowing slay necessary easments,n**tions,etc-in their respective jurisdictions to allow for improved traffic flow. While the tinning.of the very-Iow income units.remain cloudy,we have begun the process of discussing possible partnership with both Northbay Ecumenical Housing and Ecumenical Associates far Housing,both based in Marin.County. Butte of these organizations are well known for their innovative approach to delivering the most deeply affordable units possible_ We.hope to be able to provide more substantial information in next year's report. One Year F-orec4st: All of Shapell's housing.provision within the It=year will occur in Phase 1.of the Dougherty Valley project(The Bridges at Gale Ranch). Shapell is seeking building permits to allow us to construct the Falcon Bridge apartment units. This 256 unit complex will feature one,two and three bedroom units. Our plans have always included this entire rumples aspart of our affordab ility pragrarn- WolL any luck,these units will be built during the frust half of 2000 with occupancy by the fall of next year. Our market forecast indicates that these unitswill rent very gakcldy. Shapell continues to proceed with site work on our 171 unit townhouse project. Last year's compliance.report indicated that as many as 15 of these units.might make moderate income affordability during the 1998-2002 biuld out of Phase 1. As mentioned earlier,Shapell vdE imple.Inent a tirackingsystem for moderate income buyers in accord with the income certification form you provided. We will also bring current the facts concerning those who have already made I?augheny Valley their;home. IVUV-:CJ-L-y 10-02 FRUM.L5A ASSUC;l A1tS 1 N4- 1 U. S 1 01:lU34HO PACE 6/6 Mr. Tian Keauedy November 22, 1999 Page 4 Three Year Forocast: During the next three years, Shapell anticipates that all of the balance of Phase 1 will be const mcted and ocprpicd.. Per the terms of last year's report, this should generate 276 affordable units out of 1,191 or 23.4%. This exceeds thz 15%per phase DVAUP requirement and the specific requirements ofDVABF D.2.A regarding moderate income unit phasing. Concummt with the build-out of Phase 1 will be the she preparation work in Phase 2.We erect this work to begin next year with possible occupancy occurring ring as early as the fall o£2001. Many factors.might delay this start date including physical provision ofpublio utilities. WhHe Phase 2 is exTecxed to build out through 2006 an.d hence beyond the three year forecast required here,its full implementation along with Phase 1 would result in a surplus of seven units of moderate income housing and a shortfall of oialy 5 units of low income housing. The very low income homes would occur somewhat later and more southerly in the Dougherty Valley. We believe that this excellent approximation of the target distribution of affordability demongrates that the Gale Ranch portion ofDV is designed to meet the intent of the DVABR We hope the foregoing has provided the County with the needed information to meet the requirements of the Dougherty Valley Aftordahle Housing Program. It is clear that a number of issues remain.to be resolved and that this project will be fully realized only after the passing of many nears. We also hope that.it is clear that the goals meuraaalized by Contra Costa County both in 1992 and 1994 are on track for implementation. We look forward to youz response and to the oppouwi ity to work with you finther on thL-, most-worthwhile endeavor_ inoere , Thomas J. Koch Vice President Dennis M. Barry. AICP Community Contra Community Development Onector Development Costa Department County County Administration Building *< < 651 Pine Street 4th Floor,North Wing y. Martinez,California 94553-0095 z - Phone: (925) 335-1255 ^T August 17, 1999 Mr. Thomas J. Koch Vice President, Shapell Industries P.O. Box 361169 Milpitas, California 95035 Dear Tom: RE: Dougherty Valley Affordable Housing Program The purpose of this letter is to respond to information submitted by Shapell Industries with respect to the Dougherty Valley Affordable Housing Program (DVAHP), including your June 14, 1999 letter and DVAHP Opportunities Analysis, and a June 2, 1999 letter with attachments from Chris Truebridge to Jennifer Peterson.Based on the information provided, I understand that Shapell is committed to meeting DVAHP requirements for the development of housing affordable to very-low, low and moderate-income households. Although several issues require additional information and discussion, it appears that the overall affordable housing program proposed by Shapell complies with the requirements of the DVAHP as of October 1998. It is anticipated that the outstanding issues will be resolved and additional information provided no later than October of 1999 when the next DVAHP Annual Compliance Report and Opportunities Analysis is due. The following summarizes outstanding issues and additional information needed to implement the Dougherty Valley Affordable Housing Program as proposed by Shapell. AFFORDABILITY— Moderate-income For-sale Units The DVAHP requires that moderate-income homeownership units must be sold to households with incomes at or below 120 percent of the Contra Costa County Area Median Income(AM[) as adjusted for household size. In addition, a minimum of half of the units must be sold to the target population at an affordable price. • Moderate-income Homebuyer Income Certification Per your request, I am forwarding to you a form of income certification to be executed by moderate-income homebuyers and submitted to the County as documentation of income eligibility in accordance with DVAHP requirements. Note that the homebuyer must certify the household's income under penalty of perjury. Furthermore, by signing the income certification form, the household also agrees to (Nfi4`41!-Inure M%nriaii-Frrfa%1•A-00 � m - S•nn permit the County to verify the income information through access to the mortgagor's loan file. It is the intent of the County to monitor these files on a periodic basis to ensure compliance. You have also indicated some concern with respect to confidentiality of homebuyer records and income. While County records are public documents, we have never to my knowledge received a request from a member of the public to view individual homebuyer records maintained for purposes of the County's affordable housing programs. The County maintains mortgage assistance records for several thousand homebuyers. Based on information previously provided by your office, two moderate-income households have already acquired homes in the Dougherty Valley. As stated in the preceding, documentation is required in order to confirm that the households are eligible in accordance with the definition of a moderate-income household. Since these loans have closed, the County will accept the following as documentation: name and address of qualified household; household size; and the lender's certification as to income eligibility. Please note that this will be acceptable for these two households only. In the future, in order to qualify as a moderate-income household under the DVAHP households acquiring homes will be required to provide income certifications as discussed in the above. • Additional Information Needed to Confirm Compliance The maximum allowable sales price for a moderate-income unit according to the DVAHP is the lesser of the current market price and a price taking into account unit and family size, prevailing interest rates, and other conventional loan underwriting criteria. In order to determine the allowable sales price for the price-restricted moderate-income units, additional information is needed concerning proposed unit size/number of bedrooms, target market characteristics (e.g., household size), and assumed underwriting criteria, particularly homeowner association dues. RENTAL UNITS — Moderate and Low-income • Affordability term — Moderate Income Rental Units The DVAHP and Dougherty Valley Specific Plan goals and policies emphasize the need to maintain housing affordability over the long run. Policy H-9 in the Specific Plan states that"Affordable units shall be maintained for the maximum period feasible. Target periods shall be a minimum of twenty years for for-sale units and thirty years for rental units." At the time the DVAHP was approved, it was assumed that the moderate-income affordable housing obligation would be met through the provision of affordable homeownership opportunities at market prices without the need for public subsidy. Due to a lack of specific financial benefit to the buyer (e.g., below-market price, low-interest loan), it was not considered feasible to require moderate-income households to purchase an essentially market-rate unit with an affordability restriction. Consequently, the DVAHP does not currently specify a required term of affordability for moderate-income units. In part as a result of substantial changes in housing market conditions, Shapell is now proposing to satisfy over 80 percent of the total moderate income housing obligation through the production of 876 rental units. In order to accommodate the revised program and remain consistent with Specific Plan and DVAHP housing affordability goals and policies, DVAHP requirements for maintained affordability should be modified to state that rental units intended to satisfy the moderate income housing requirement must remain affordable to and occupied by the target population for a minimum of thirty years. In addition, the developer/owner of the rental units should be required to enter into a regulatory agreement with the County to ensure that the units remain in the affordable housing stock for the required period of time. This approach is fully consistent with affordability requirements for very-low and low- income rental units and with Policy H-9 of the Dougherty Valley Specific Plan and DVAHP. A final form of a regulatory agreement must be prepared, using Appendix I to the DVAHP as a starting point. • Request for Additional Information and Clarification - Moderate and Low-income Rental Units Maximum allowable rents for the moderate-income units are defined as the lesser of the monthly market rent or a monthly rent including an allowance for utilities which does not exceed 30 percent of the monthly area median income for Contra Costa County. Similarly, maximum allowable rents for the low-income units are defined as the lesser of the monthly market rent or 100 percent of the Section 8 Fair Market Rent. (FMR) less an appropriate allowance for utilities. In both cases, rents are adjusted based on the number of bedrooms and assumed household size in a unit. Additional information concerning proposed unit size/number of bedrooms, probable utility configuration and appropriate allowances, and size of target market household is needed in order to determine compliance of the proposed moderate and low-income rents with the requirements of the DVAHP. In a second issue, it appears that the rents for the low-income apartments and rental units have been incorrectly calculated based on 30 percent of the gross monthly income of a household at 80 percent of the area median rather than the FMRs as required by the DVAHP. Depending on the number of bedrooms in a unit, the rents proposed for these units may not comply with the maximum affordable rents for the DVAHP. The rents for these units should be clarified as soon as possible. • Carriage Units - Moderate and Low-income Shapell proposes to meet a portion of the moderate and low-income affordability requirement through the provision of carriage units. In general, carriage units are a separate housing unit located on the same lot and purchased in combination with a single family home. The carriage unit option was not specifically addressed in the 3 DVAHP. Therefore, some clarification in the requirements to be attached to this type of rental housing is appropriate. In order to qualify as an eligible rental unit, the carriage unit must be a separate unit (i.e., separate entrance, kitchen, and bath facilities, separate off street parking). In addition, owners of the carriage units must rent the units to moderate or low-income households at rents including a utility allowance which do not exceed the maximums allowable under the DVAHP for a minimum of 30 years. The specific income group to be targeted for occupancy of the carriage unit (low or moderate income) must be identified at the time the homebuyer enters into a sales agreement. In order to ensure compliance, owners of carriage units will be required to enter into regulatory agreements with the County to be recorded against the property and specifying the affordability requirement. It is not immediately apparent how the DVAHP affordability requirements will affect the demand for and ultimate feasibility of carriage units as affordable rental housing. In addition to the information requested for rental units in general, please provide information concerning the potential market for this type of unit by homeowners and moderate/low income renter households. A second issue with respect to carriage units concerns compliance through the period of required affordability. In general, owners of multifamily rental projects with 20 to 100 or more units each are required to submit periodic reports confirming compliance with County affordability and use restrictions. The County reviews compliance on an ongoing basis. In the event of non-compliance, the County will work with the owner to bring the project back into conformance with the.affordability requirements. Absent corrective action, the County will declare the project in default under the terms of the regulatory agreement. While there are obvious administrative costs associated with monitoring compliance of these projects, these costs are provided for in the regulatory agreement. In contrast, the proposal to use over 300 carriage units, each with a separate owner/landlord, to satisfy a portion of the County affordability requirements involves potentially significant compliance and related administrative costs due in part to a lack of apparent economies of scale. Discussions should be initiated between Shapell and the County to determine an equitable approach to covering these costs. • Low-income Rental Units—Phasing As currently proposed, the majority of low-income units will be produced in Phases Ii and III of the project; none are produced in Phase I. This is allowable under the current DVAHP subject to the findings of the compliance monitoring program. In the next compliance report, please provide the proposed construction timeline for each phase of the project in order to clarify the anticipated time frame for construction of the low-income units. 4 RENTAL UNITS - Very-low Income • Request for Additional Information - Very-low Income Units The information submitted on Shapell's strategy for producing very-low income units is limited. Additional information needs to be provided prior to the next annual report to facilitate assessing the feasibility of this component of the affordable housing program. This information should include: the proposed location with a description of the specific site or sites to be used for very-low income housing (acreage, configuration, significant development and environmental constraints); the type of housing proposed (mixed-use or all affordable, multifamily, senior, unit size/number of bedrooms); range of incomes and household size of target population-, and the relationship of these units to other units in the development. • Development Mechanism and Procedures As one alternative to producing the units themselves, Shapell has proposed meeting the requirement for very-low income housing by dedicating a parcel of land to a non- profit affordable housing developer. This approach is allowable under the DVAHP. Discussions should be initiated to identify proposed procedures and criteria to be employed in selecting a non-profit for this purpose. Given the complexities of affordable housing finance which typically involves multiple funding sources, it is important that this process be initiated early in the development in order to permit adequate time for the nonprofit to design and obtain the necessary financing and planning approvals for the project. • Phasing As currently proposed, all 146 of the very-low income housing units will be produced at the end of the development in Phase IV. While the DVAHP does not require a specific distribution of very-low, low and moderate-income units by phase, incorporation of the very-low income units in the last phase increases the risk that these units will never be built. For example, pending completion of a new or amended EIR, the Dougherty Valley Settlement Agreement with the City of San Ramon and Town of Danville limits the number of units to be built to 8,500 out of the 11,000 units approved by the Board. On a pro rata basis, this would allow Shapell to build a total of 4,505 units. Phases I through III will result in the development of 4,439 units, leaving only 66 to be produced in Phase IV prior to completion of a new EIR. Discussions should be initiated to develop alternative approaches to be followed by the developer to meet the very-low income housing requirement earlier than Phase IV. These alternatives should include the feasibility of building the very-low income units in an earlier development phase. I anticipate that the majority of the issues identified in this letter will be successfully resolved and the additional requested information provided prior to or coincident with submission of the next annual affordable housing program compliance report and 5 opportunities analysis due in October 1999. My staff and I would be happy to meet with you to at your earliest convenience to discuss these issues further. Sincerely, Ji Kennedy D puty Directo —Redevelopment cc: Board of Supervisors Dennis Bam Debbie Chamberlain Kathleen Hamm File C.4.3(bx1.6Xa) KUAi:data/%\orWdrahp1.doc 6 ON .' .- . October 3, 2000 SHAPELL,INDUSTRIES of NORTHERN CALIFORNIA A Division of Shapell Industries. Inc. Mr. James Kennedy W OCr `5 PM S; 00 Community Development Department ;,,I._„ Contra Costa County 651 Pine Street Martinez, CA 94553 Dear Jim: Thank you for your assistance in the ongoing discussions between Shapell and the County regarding the Dougherty Valley Affordable Housing Program. From our point of view, the dialogue has been both illuminating and productive. In our letter of July of this year, Shapcll proposed an arrcnd..:ert to the DVAHP. Specifically, we offered support for a series of changes which would both provide long term affordability through moderate income rental units while changing the allowable rents from 100% for all units to 110% for studios and 1 bedroom units and 120% for 2 and 3 bedroom housing. In the series of phone calls and meetings that have followed since then, it is evident to us that the County's desires, as expressed by staff, include deeper affordability than the amendment that we have brought forth. Accordingly, this letter is sent to inform you that Shapell would support a change to the DVAHP whereby a 30 year term would be in place for all moderate income rental units. All rental units, including 2 and 3 bedroom homes, would be pegged to a maximum of 110% of the median income level by family size. Should the Board of Supervisors support this amendment, two important goals would be achieved. First, a 30 year term would be provided, resolving the dispute concerning the pertinent aspects of the DVAHP. Second, affordable rents targeted to families whose incomes qualify, would be made available. As an example, new 3 bedroom units in Dublin currently rent in excess of$2,700 and are fully leased. In Dougherty Valley, comparable units will rent for approximately $1,800. This provides for nearly an $11,000 per year subsidy per 3 bedroom unit. We look forward to the meeting of the 10`h of October for deliberations with the Board on this important issue. Our annual compliance report as mandated by the Dougherty Valley Development Agreement will follow shortly thereafter. Should you have any questions, please don't hesitate to call me at (408) 946-1550. qm ly, as J. Koch Vice President Shapell Industries of Northern California Homes of Quality Since 1.955 P.O. Box 361169, 100 North Milpitas Boulevard,Milpitas,California 95035 Phone:408/946-1550 Fax:408/946-9687 ATTACHMENT B Legislative History of the Dougherty Valley Affordable Housing Program W:\Personal\\BoardOrders\BOARD.doughertyvalley6.5 Initial Outline of DVAHP May 7, 1993 5n193 Revision OU'T'LINE OF DOUGHERTY VALLEY AFFORDABLE HOUSING PROGRAM I. Intro and Purpose A. Jobs/Housing Balance (see EIR); and B. Affordability In consideration (as mitigation?) for approving a Specific Plan that permits up to 11,000 units in the Dougherty Valley, the County is requiring that at least 2,750 units be affordable to very low, low, and moderate income income households, as further described below. II. Conformance with Programs and Plans A. County General Plan (Table Form) 1. Goals 3-D 6-1 3-K 6-2 3-L 6-4 2. Policies 3-1 6-1.1 3-20 6-2.1 3-21 6-4.1 3-22 3-23 3-24 3. Implementation 3-g 6-1.4 3-h 6-1.5 3 j 6-1.8 3-ab 6-2.0 6-2.2 6-2.3 6-2.4 6-2.5 6-2.11 6-2.12 6-4.2 6-4.3 B. Dougherty Valley Specific Plan Policies H-1 to H-11 LU-6 C. State Housing Element Law/Fair Share Housing Provisions with Emphasis on State HCD Correspondence Relative to Dougherty D. Contra Costa Transportation Authority E. County Comprehensive Housing Assistance Strategy (CHAS) III. Definitions A. Very Low Income B. Low Income C. Moderate Income D. Affordable Rent 1. Very Low Income Unit 2. Low Income Unit 3. Moderate Income Unit - E. Affordable Price 1. Very Low Income Unit 2. Low Income Unit 3. Moderate Income Unit IV. Types of Housing (defined and explained, stressing the need for some innovative approaches and alternative product styles) A. Senior Housing/Congregate Cate/Extended Living/Nursing Home B. Dispersed Duplexes C. Townhomes D. Condominiums E. Affordable Rentals 2 F. Co-housing G. Co-op Housing H. Residential Above Commercial Development Programs (Mixed Use) I. Group Homes V. Affordable Housing Finance Alternatives A. General 1. Home 2. CDBG 3. Housing Trust Funds 4. Redevelopment 5. Employer Assisted Housing 6. Trade Union Assistance 7. Pre-Development Loans 8. Non-Profit Housing Developers 9. CRA/SAMCO 10. FNMA B. Rental Housing 1. MF Bonds 2. Low Income Housing Tax Credits 3. RHCP 4. Other State (?) 5. 202 6. Other Federal (?) 7. Section 8/Vouchers 3 8. Public Housing C. Ownership Housing 1. SF Bonds 2. MCC's 3. Section 235 4. FHA Insurance 5. Other Federal (?) 6. Other State 7. CHFA Construction Loan Programs VI. Dougherty Valley Affordable Housing Program Requirements apply to Shappell and Windemere separately and proportionately A. Targeting - # of Units (restate spatial deconcentration public policy) 1. Income Distribution - minimum threshold level, say 20-20-37 with remainder flexiby assigned 2. Tenure Distribution 3. Specialized Facilities - note this as an alternative to income targeting a. Group Homes b. Nursing Homes C. Other Special Needs Populations B. Term of Affordability 1. Greater of financing program or SAP H-9G C. Phasing 1. SAP H-7 2. Failure to Perform (Debbie to enhance) 4 D. Determination of Compliance 1. SAP H-6 E. Documentation of Affordability Requirements 1. Ownership Projects a. Developer Sales Agreement b. Buyer Agreement 2. Rental Projects a. Regulatory Agreement E. Annual Reports to the Board of Supervisors Individual reports from Shappell and Windemere interests must be combined into one submittal VII. Plan of Finance A. Principles 1. Moderate Income Units are all Unassisted 2. Very Low and Low may Require Public Financial Assistance a. County Best Efforts to: 1. Issue Tax Exempt Bonds 2. Identify and Pursue Other Funds 3. Provide Opportunity of Access for Local Affordable Housing Funds 4. Investigate Intedurisdictional Transfers of Funds 5. Approve Development Projects Consistent with this Program and SAP 6. County will require notification/disclosure of future affordable housing developments 5 b. Developer Best Efforts to: 1. Pursue Investment Grade Rated Credit Enhancement on Market Terms to Permit Viable Tax Exempt Bond Issues 2. Identify and Pursue Other Funds as Identified by the County, or Other Parties 3. Work Creatively and Cooperatively with Non-Profit and For Profit Developers to Develop Feasible Project Financings 4. Development of very low, and low income units may require land contribution, land writedown, or other internal subsidy to accomplish 5. Provide notification/disclosure to buyers regarding future affordable housing developments 3. Amendments a. In recognition of the fluctuating and evolving nature of real estate markets, there is an acknowledged need for continuing review b. The Affordable Housing Program shall be automatically reviewed by the County at the earlier of: 1. Final Development Approval of (5,000?) housing units within the Dougherty Valley SPecific Plan Area; or 2. January 1, 2000 B. Financing Scenarios Scope out our matrix with reference to identified financing alternatives; or Develop alternative scenarios; or Utilize developer generated phasing/schedule data (not yet in hand) to build alternative financing plan around. nc:m snM ara9/avafthig.tc 6 Briefing Memorandum to Board of Supervisors on DVAHP Policy Options June 24, 1993 d/ CONTRA COSTA COUNTY COMMUNITY DEVELOPMENT DEPARTMENT DATE: June 24, 1993 TO: Supervisor Tom Powers, District 1 Supervisor Jeff Smith, District 2 Supervisor Gayle Bishop, District 3 Supervisor Sunne McPeak, District 4 Supervisor Tom Torlakson, stric 5 FROM: Harvey Bragdon, Directo Community Developme e SUBJECT: Dougherty Valley A able Housing Program Attached is the draft Dougherty Valley Affordable Housing Program. The Dougherty Valley Affordable Housing Program has been developed to provide an implementation structure to the affordable housing requirements and policies of the County General Plan and the Dougherty Valley Specific Plan. The draft Dougherty Valley Affordable Housing Program is a mixture of prescriptive measures (for example, the Affordable Housing Program Requirements - Chapter V) that are a derivative of the Dougherty Valley Specific Plan, and recommendations (for example, the Affordable Housing Finance Alternatives - Chapter IV, and the Plan of Finance - Chapter VI). The Board of Supervisors may wish to consider a number of major policy options that would still be consistent with the Dougherty Valley Specific Plan, including: 1. Income Targeting A. Draft Dougherty Valley Affordable Housing Program Chapter V (A)(1) is prescriptive and sets forth specific percentages of Very Low, Low and Moderate Income Targeting that are based on ABAG Housing Needs Determinations (37% of the Affordable Units for Very Low Income, 26% for Low Income, and 37% Moderate Income). B. Policy Options 1. Establish goals with "good faith efforts;" or Members of Board of Supervisors -2- June 24, 1993 2. Prescribe targets using lower percentages for Very Low and Low Income Units. The minimum thresholds could be those specified by the State Department of Housing and Community Development (HCD) in its certification of the County's Housing Element (Chapter II (C) and Appendix Q. The HCD letter states that units in the Dougherty Valley "will be affordable in at least the following ratio: 10 percent (V)ery (Low), 25 percent (L)ow, and 65 percent (M)oderate Income."; or 3. Accept a suggestion of the developers that an alternative be the payment of fees in-lieu of the production of Affordable Units in the Dougherty Valley. The premise for this position is three-fold: (1) that the per unit subsidy cost (public and private) for each Affordable Unit would be less in areas with lower land and infrastructure costs; (2) that the net fiscal effect of Dougherty Valley development with Affordable Units results in opportunity costs, or foregone revenue; and (3) that the fees in-lieu is easier to accomplish than alternatives. This alternative does not address jobs/housing balance, nor does it promote mixed income communities and spatially deconcentrate Lower Income households. The adopted Dougherty Valley Specific Plan explicitly precludes an in-lieu fee option. 2. Number of Affordable Units A. Draft Dougherty Valley Affordable Housing Program Chapter V (A)(1) stipulates that 2,750 units shall be affordable to Very Low, Low, and Moderate Income Households. This number is 25 percent of the 11,000 housing units the Dougherty Valley could accommodate under the Dougherty Valley Specific Plan. B. Policy Options 1. Fix the number of Affordable Units at 2,750 units irrespective of the ultimate number of housing units that can be accommodated or built pursuant to the Dougherty Valley Specific Plan; or 2. Fix the number of Affordable Units as 25 percent of the ultimate number of units that can be accommodated or built pursuant to the Dougherty Valley Specific Plan; or Members of Board of Supervisors -3- June 24, 1993 3. Regardless of the number of Affordable Units fixed, facilitate Second Units as part of the Affordable Housing Program. 3. Tenure Targeting A. Draft Dougherty Valley Affordable Housing Program Chapter V (A)(2) stipulates that no less than 50% of the Affordable Units shall be rental, although the percentage of rental Affordable Units could be higher. The percentage of owner occupied Affordable Units can be no more than 50% of the total Affordable Units; however, it could be less. B. Policy Options The proportion of Affordable Units could arguably be higher or lower than the proportion specified. 1. A higher percentage of rental units could be rational based on the fact that the per unit subsidy costs (public or private) is generally less for rental units, particularly in the Very Low and Low Income categories. Since the draft Affordable Housing Program stipulates at least 63% of the Affordable Units be reserved for Very Low and Low Income Units, a similar percentage for rental units is defensible; or 2. The percentage of rental units in the current Countywide housing stock of 31.7%, and the proportion of rental housing as provided for in the ABAG Housing Needs Determination of 34% would argue for a lower percentage; or 3. Include a specified percentage of Affordable Units to address the housing needs of special populations, e.g., Supportive Housing, Transitional Housing, etc. 4. Types of Housing A. Draft Dougherty Valley Affordable Housing Program No direct stipulations are made with respect to Housing Types defined in Chapter III. The suggestive provisions of Chapter V (A)(3) - Specialized Facilities - provides incentive for that particular type of housing facilities Members of Board of Supervisors -4- June 24, 1993 The minimum 50% for rental units arguably also suggests multi-family units, as does the homeownership provisions (condominiums and townhouses). B. Policy Options 1. All housing types defined in Chapter III could be provided with a minimum percentage. Should this policy option be pursued, the total of all stipulated percentages should be less than 100% to provide some ability to respond to market opportunities and constraints; or 2. The major housing types that exist in the market could be stipulated, i.e., Single Family, Multi-Family, Senior Housing, and housing for special needs populations (handicapped, disabled, supportive care, homeless, etc.). Incentives to facilitate less conventional but potentially valuable housing types (Cooperatives, particularly limited equity, Supportive Housing, Nursing Homes, etc.) could be provided for; or 3. Specify that the Annual Review include a listing of housing types (homeownership, rental, and other specialized housing) produced, and indicate in the one and three year strategic plan how any imbalances noted are to be corrected. 5. Affordability Term A. Draft Dougherty Valley Affordable Housing Program Chapter V (B) is prescriptive and reflects the provisions of the Dougherty Valley Specific Plan. B. Policy Options 1. The specified terms could be higher or lower than currently stated. The minimum terms currently specified are fairly aggressive. 2. The terms could be left to be stipulated by the financing program utilized. The various financing programs identified in Chapter IV and Appendix G are not consistent with respect to required Members of Board of Supervisors -5- June 24, 1993 affordability terms. Some programs do not even have such terms. Should this approach be preferred, a hybrid that includes a relatively low minimum affordability term is suggested. Otherwise windfalls to owners of Affordable Units could result, and the County would realize no long term benefit. 6. Affordable Price/Rent A. Draft Dougherty Valley Affordable Housing Program All Affordable Units are subject to prescriptive rent and price restrictions (Chapter V (C)). B. Policy Option 1. It may be argued that income limitations alone are all that is necessary to control prices and rents. This option permits the developer/owner to set the price/rent at a level that will result in all Affordable Units being sold/rented at affordable levels. 7. Phasing A. Draft Dougherty Valley Specific Plan Chapter V (D) is moderately prescriptive by providing for phasing of the Affordable Units in a manner that permits some limited passage forward of the obligation to future phases (no more than forty percent (40%) of an individual phase Affordable Unit requirement can be passed forward to future phases). The Affordable Unit obligation must be in absolute conformance at two times - at the time 50% of the Dougherty Valley is developed, and at the time 100% of the Dougherty Valley is developed. B. Policy Options 1. A review of compliance with this Affordable Housing Program occurs upon the submittal of applications for future phases. Such applications may be found incomplete, or applications may be denied if non-compliance with the Affordable Housing Program is determined; or Members of Board of Supervisors -6- June 24, 1993 2. The most prescriptive phasing requirement would permit no variance between the proportion of Affordable Units provided and the proportion of all units constructed in the Dougherty Valley. 3. A suggestive alternative would set goals but no mandates, except the final proportion. This option provides maximum flexibility to the developer, but is higher risk with respect to Affordable Housing goals, i.e., they may not be realized until final phases or not at all. 8. Plan of Finance A. Draft Dougherty Valley Affordable Housing Program The suggestive premise of the Plan of Finance (Chapter VI) is that the private developer(s) are responsible for delivering the Affordable Units. The Moderate Income Units are to be delivered without public assistance. The Very Low and Low Income Units may receive public subsidy, but it is limited to offsetting the defined "Affordability Gap" (the amount of financing not supported by income due to the Affordable Unit requirement). Furthermore, the commitment of funds is not guaranteed, but provided for on a best efforts basis. B. Policy Options 1. The explicit commitment of financial resources to fund the "Affordability Gap" is theoretically possible, but legally and politically difficult. This Board of Supervisors cannot commit future Boards of Supervisors on items of discretion. Furthermore, the precommitment of County controlled funds for Affordable Units in the Dougherty Valley could result in cities in the County refusing to enter into cooperation agreements for some of these funding programs, and ultimately result in the County no longer being eligible to receive such funds, e.g., Community Development Block Grants and HOME funds. 2. Public financing of the "Feasibility Gap" (the amount of financing not supported by income at market rents/prices) is an option, however, it may be cost prohibitive. Members of Board of Supervisors -7- June 24, 1993 3. The County could stipulate that the delivery of Affordable Units is to be provided for by the public and quasi-public non-profit sector. Such a position is inconsistent with current public agency fiscal realities, and may be financially inefficient since leverage of private sector financing is foregone or limited. 9. Ongoing Program Management A. Draft Dougherty Valley Affordable Housing Program The presence of affordability terms prescribed in Chapter V (B) suggests an ongoing program management function. For-sale units are subject to recorded deed restrictions (Appendix H) that gives the County or is assignee a right of first refusal to purchase the home in order to maintain its affordability. Rental projects are subject to a regulatory agreement (Appendix I). The regulatory agreement stipulates that the project owner regularly submit documentation that can be monitored by the County to assure compliance. The regulatory agreement is a recorded document. B. Policy Options 1. Ongoing program management functions could be assigned to one or more local non-profit housing development organizations. Non- profits may, if adequately financed, be able to respond more efficiently to a notice of a homeowner intending to sell, and offering the property under a right of first refusal contract. The County has utilized this approach in the past and is implicit in the language of the program documents, e.g., right of first refusal to the "County or its assignee;" or 2. Private firms may be an alternative, however, this option is not well developed in the marketplace at this time. If employer assisted housing develops and expands as an approach to financing affordable housing, or if the number of public sector programs expands, a niche market for program management services (compliance monitoring to transaction execution) could emerge. Some non-profit organizations are beginning to establish for-profit subsidiaries that could serve both public and private sector clients. Members of Board of Supervisors -8- June 24, 1993 Summary and Conclusions This memorandum has summarized the Dougherty Valley Affordable Housing Program and identified the major policy options that are before the Board of Supervisors. The Board of Supervisors should give direction with respect to the following questions: 1. What is the desired forum for discussing the Dougherty Valley Affordable Housing Program? 2. When should these discussions take place? 3. Which of the policy options, including those of the Dougherty Valley Affordable Housing Program, are preferred by the Board of Supervisors? 4. What is the preferred mechanism for contractual agreement to this Dougherty Valley Affordable Housing Program? IIB:nt:lh Attachment cc: County Administrator GMP.DA County Counsel Shappell Industries Windemere Partners ara9ldvalhsg2.mem DOUGHERTY VALLEY AFFORDABLE HOUSING PROGRAM Prepared by the Contra Costa County Community Development Department (Circulation Draft of June 24, 1993) A. Targeting of Units 1. Income Targeting a. At least 2,750 units shall be affordable to Very Low, Low, and Moderate Income Households; b. At least thirty-seven percent (37%) of the Affordable Units shall be reserved for Very Low Income Households, and twenty-six percent (26%) for Low Income Households. No more than thirty- seven (37%)of the Affordable Units shall be for Moderate Income Households. 2. Tenure Targeting No less than fifty percent (50%)of the Affordable Units shall be for rental units. No more than fifty percent of the Affordable Units shall be for owner occupied housing. 3. Specialized Facilities Some housing is physically designed to serve the housing needs of special populations, e.g., housing for the physically disabled. Some housing serves the housing needs of special populations through the provision of on-site support services, e.g., housing for the developmentally disabled. Specialized facilities of this type shall be eligible for inclusion in the Affordable Housing Program as follows: a. Supportive Housing shall be counted as Low Income Housing, with each bedroom equating to 0.5 Low Income Unit; b. Nursing Homes shall be counted as Moderate Income Housing, with each bed equating to 0.5 Moderate Income Unit. Nursing Homes that are licensed for Medi-Cal Patients and commit at least 30% of the beds to Medi-Cal Patients shall be counted as Very Low Income Housing, with each Medi-Cal bed counting as 1.0 units of Very Low Income Unit. C. Transitional Housing shall be counted as Very Low Income housing, with each unit equating to 1.0 Very Low Income Units. -20- B. Affordability Term Affordable Units shall be maintained as such for the following minimum terms: 1. For-sale units shall be maintained as affordable for a minimum of twenty (20) years. Developers providing such units shall enter into a Developer Sales Agreement (form included as Appendix H) with the County at least 90 days prior to filing of a Final Map; 2. Rental projects and specialized facilities with Affordable Units shall be maintained as such for .a minimum of thirty (30) years. Developers/owners of rental projects shall enter into a Regulatory Agreement, the form of which is included as Appendix I, prior to issuance of any building permit required for the development. Nothing in the foregoing shall preclude the achievement of a longer term of affordability as may be negotiated or required by financing sources. C. Affordable Price/Rent Affordable Units are subject to rent and price restrictions. Very Low Income Rents and Very Low Income Sales Price shall apply to units reserved for Very Low Income Households; Low Income Rents and Very Low Income Sales Price shall apply to units reserved for Low Income Households; and Moderate Income Rents and Moderate Income Sales Prices shall apply to units reserved for Moderate Income Households. D. Phasing 1. Each phase established shall be subject to providing Affordable Units. A minimum of fifteen percent (15%) of the units in each phase are to be developed as Affordable Units, i.e., no more than forty percent (40%) of an individual phase's Affordable Unit requirement may be passed forward to future phases; 2. In no case shall the Affordable Units in a future phase exceed fifty percent (50%) of the number of planned units; 3. One phase may omit Affordable Units upon a finding of the County Zoning Administrator that a feasible plan for the provision of the required Affordable Units in the next phase exists; 4. The initial Final Development Plan/Tentative Map shall include a phasing plan indicating the delivery of Affordable Units; and -21- Briefing Memorandum to Board of Supervisors on DVAHP Policy Options September 10, 1993 CONTRA COSTA COUNTY COMMUNITY DEVELOPMENT DEPARTMENT DATE: September 10, 1993 TO: Supervisor Tom Powers, District 1 Supervisor Jeff Smith, District 2 Supervisor Gayle Bishop, District 3 Supervisor Sunne McPeak, District 4 Supervisor Tom Torlakson, District 5 FROM: Harvey Bragdon, Director Community Development Department SUBJECT: Dougherty Valley Affordable Housing Program Attached is the September 7 draft of the Dougherty Valley Affordable Housing Program. This draft is a proposal that is consistent with the Dougherty Valley Specific Plan. The draft provides a framework for the additional policy debate that will occur in setting the ultimate implementation structure to the affordable housing requirements. The draft Dougherty Valley Affordable Housing Program is a mixture of prescriptive measures (for example, the Affordable Housing Program Requirements - Chapter V) that are a derivative of the Dougherty Valley Specific Plan, and recommendations (for example, the Affordable Housing Finance Alternatives - Chapter IV, and the Plan of Finance - Chapter VI). The Board of Supervisors may wish to consider a number of major policy options that would still be consistent with the Dougherty Valley Specific Plan, including: 1. Income Targeting A. Draft Dougherty Valley Affordable Housing Program Chapter V (A)(1)(b) is prescriptive and sets forth specific percentages of Very Low, Low and Moderate Income Targeting that are based on the thresholds specified by the State Department of Housing and Community Development (HCD) in its certification of the County's Housing Element (Chapter 11 (C) and Appendix Q. The HCD letter states that units in the Dougherty Valley "will be affordable in at least the following ratio: 10 percent (V)ery (Low), 25 percent (L)ow, and 65 percent (M)oderate Income." The HCD specified percentages are considered to be a floor that the ultimate program cannot go below. Members of Board of Supervisors -2- September 10, 1993 B. Policy Options 1. Establish goals with "good faith efforts;" or 2. Prescribe targets using higher percentages for Very Low and Low Income Units. For example, following the ABAG Housing Needs Determinations, 37% of the Affordable Units would be for Very Low Income, 26% for Low Income, and 37% Moderate Income; or 3. Accept a suggestion of the developers that an alternative be the payment of fees in-lieu of the production of Affordable Units in the Dougherty Valley. The premise for this position is three-fold: (1) that the per unit subsidy cost (public and private) for each Affordable Unit would be less in areas with lower land and infrastructure costs; (2) that the net fiscal effect of Dougherty Valley development with Affordable Units results in opportunity costs, or foregone revenue; and (3) that the fees in-lieu is easier to accomplish than alternatives. This alternative does not address jobs/housing balance, nor does it promote mixed income communities and spatially deconcentrate Lower Income households. The adopted Dougherty Valley Specific Plan explicitly precludes an in-lieu fee option. 2. Number of Affordable Units A. Draft Dougherty Valley Affordable Housing Program Chapter V (A)(1)(a) stipulates that a minimum of 25% of the total units in the Dougherty Valley shall be affordable to Very Low, Low, and Moderate Income Households. The draft is consistent with the minimum Dougherty Valley Specific Plan requirement (Policy H-4). B. Policy Options 1. Fix the number of Affordable Units at 2,750 units (25% of the currently provided for 11,000 units) irrespective of the ultimate number of housing units that can be accommodated or built pursuant to the Dougherty Valley Specific Plan; or Members of Board of Supervisors -3- September 10, 1993 2. Provide for a higher percentage of Affordable .Units by various alternative mechanisms such as (a) requiring a higher percent, e.g., 35%, of all units to be Affordable; or(b) reserving for public use all unit capacity above the ultimate number up to 11,000 currently provided for in the Plan, without developer obligation and for construction as Affordable Units after the Dougherty Valley is substantially built-out. This alternative assumes that traffic and other performance standards can be met. 3. Regardless of the number of Affordable Units fixed, facilitate Second Units as part of the Affordable Housing Program. 4. Accept a developer suggestion that additional credit against the total obligation be provided for the delivery of Affordable Units in early phases. 3. Tenure Targeting A. Draft Dougherty Valley Affordable Housing Program The draft Affordable Housing Program does not state any tenure requirements. The Dougherty Valley Specific Plan "encourage(s) and promote(s) owner occupied housing, especially for affordable units" (Policy H-9). B. Policy Options 1. The percentage of rental units could be rationally based on the Very Low and Low Income requirement (not less than 35% of the Affordable Units in this draft) because the per unit subsidy costs (public or private) is generally less for rental units, particularly in the Very Low and Low Income categories. Since the draft Affordable Housing Program stipulates at least 35% of the Affordable Units be reserved for Very Low and Low Income Units, a similar percentage for rental units is defensible; or 2. The percentage of rental units in the current Countywide housing stock of 31.7%, and the proportion of rental housing as provided for in the ABAG Housing Needs Determination of 34% would argue for a similar percentage; or Members of Board of Supervisors -4- September 10, 1993 3. Because the need for Affordable rental Units is acute,stipulate that no less than 50% of the Affordable Units shall be rental, although the percentage of rental Affordable Units could be higher. The percentage of owner occupied Affordable Units can be no more than 50% of the total Affordable Units, however, it could be less; or 4. Specify either a minimum or maximum specified percentage of Affordable Units to address the housing needs of special populations, e.g., Supportive Housing, Transitional Housing, Senior Housing, etc. 4. Types of Housing A. Draft Dougherty Valley Affordable Housing Program No direct stipulations are made with respect to Housing Types defined in Chapter III. The suggestive provisions of Chapier V (A)(2) - Specialized Facilities - provides incentive for Supportive Housing (group homes for the mentally or physically disabled, Transitional Housing, etc.), and Nursing Homes, especially those with Medi-Cal beds. B. Policy Options 1. All housing types defined in Chapter III could be provided with a minimum percentage. Should this policy option be pursued, the total of all stipulated percentages should be less than 100% to provide some ability to respond to market opportunities and constraints; or 2. The major housing types that exist in the market could be stipulated, i.e., Single Family, Multi-Family, Senior Housing, and housing for special needs populations (handicapped, disabled, supportive care, homeless, etc.). Incentives to facilitate less conventional but potentially valuable housing types (Cooperatives, particularly limited equity, Supportive Housing, Nursing Homes, etc.) could be provided for; or Members of Board of Supervisors -5- September 10, 1993 3. Specify that the Annual Review include a listing of housing types (homeownership, rental, and other specialized housing) produced, and indicate in the one and three year strategic plan how any imbalances noted are to be corrected. 5. Affordability Term A. Draft Dougherty Valley Affordable Housing Program Chapter V (B) is prescriptive and reflects the provisions of the Dougherty Valley Specific Plan (Policy H-9). B. Policy Options 1. The specified terms could be higher or lower than currently stated. The minimum terms currently specified are fairly aggressive. 2. The terms could be left to be stipulated by the financing program utilized. The various financing programs identified in Chapter IV and Appendix G are not consistent with respect to required affordability terms. Some programs do not even have such terms. Should this approach be preferred, a hybrid that includes a relatively low minimum affordability term is suggested. Otherwise windfalls to owners of Affordable Units could result, and the County would realize no long term benefit. 6. Affordable Price/Rent A. Draft Dougherty Valley Affordable Housing Program Affordable Units are subject to prescriptive rent and price restrictions (Chapter V (C)), except that up to 50% of the Moderate Income Units could be determined solely by the income of the homebuyer. B. Policy Options 1. It may be argued that income limitations alone are all that is necessary to control prices and rents. This option permits the developer/owner to set the price/rent at a level that will result in all Affordable Units being sold/rented at affordable levels. Members of Board of Supervisors -6- September 10, 1993 2. Stipulate that the Moderate Income Units must be evenly split between households earning 80-100% of median and 100-120% of median, with prices set accordingly. 7. Phasing A. Draft Dougherty Valley Affordable Housing Program Chapter V (D) is moderately prescriptive by providing for phasing of the Moderate Income Affordable Units in a manner that permits some limited passage forward of the obligation to future phases (no more than forty percent (40%) of an individual phase Affordable Unit.requirement can be passed forward to future phases). The Very Low and Low Income Units provides for a flexible approach in which one year and three year strategic plans for the delivery of said units are required to be submitted (Chapter V (17))• B. Policy Options 1. A review of compliance with this Affordable Housing Program occurs upon the submittal of applications for future phases. Such applications may be found incomplete, or applications may be denied if non-compliance with the Affordable Housing Program is determined; or 2. The most prescriptive phasing requirement would permit no variance between the proportion of Affordable Units provided and the proportion of all units constructed in the Dougherty Valley. 3. A suggestive alternative would set goals but no mandates, except the final proportion. This option,provides maximum flexibility to the developer, but is higher risk with respect to Affordable Housing goals, i.e., they may not be realized until final phases or not at all. 8. Non-Profit Entities A. Draft Dougherty Valley Affordable Housing Program Section V (E) permits the developers to contract with non-profit entities to construct the Very Low and Low Income Units. The substitution of a non-profit entity may satisfy all or a portion of the developers' Very Low Members of Board of Supervisors -7- September 10, 1993 and Low Income requirement if the property is dedicated to the non-profit. Additional land dedications may or may not be required, dependent on the presence or absence of Surplus Funds from initial Very Low and Low Income developments of the non-profit(s). B. Policy Options 1. Maintain the delivery of Very Low and Low Income Units as a developer responsibility without assignment to non-profits. 2. Permit assignment to non-profits but require land dedications in all cases, i.e., not recognize the possibility of Surplus Funds being available for subsequent Very Low and Low Income projects. 9. Plan of Finance A. Draft Dougherty Valley Affordable Housing Program The suggestive premise of the Plan of Finance (Chapter VI) is that the private developer(s) are responsible for delivering the Affordable Units. The Moderate Income Units are to be delivered without public assistance. The Very Low and Low Income Units may receive public subsidy, but it is limited to offsetting the defined "Affordability Gap" (the amount of financing not supported by income due to the Affordable Unit . requirement). Furthermore, the commitment of funds is not guaranteed, but provided for on a best efforts basis. B. Policy Options 1. The explicit commitment of financial resources to fund the "Affordability Gap" is theoretically possible, but legally and politically difficult. This Board of Supervisors cannot commit future Boards of Supervisors on items of discretion. Furthermore, the precommitment of County controlled funds for Affordable Units in the Dougherty Valley could result in cities in the County refusing to enter into cooperation agreements for some of these funding programs, and ultimately result in the County no longer being eligible to receive such funds, e.g., Community Development Block Grants and HOME funds. Members of Board of Supervisors -8- September 10, 1993 2. Public financing of the "Feasibility Gap" (the amount of financing not supported by income at market rents/prices) is an option, however, it may be cost prohibitive. 3. The County could stipulate that the delivery of Affordable Units is to be provided for by the public and quasi-public non-profit sector. Such a position is inconsistent with current public agency fiscal realities, and may be financially inefficient since leverage of private sector financing is foregone or limited. 10. Ongoing Program Management A. Draft Dougherty Valley Affordable Housing Program The presence of affordability terms prescribed in Chapter V (B) suggests an ongoing program management function. For-sale units are subject to recorded deed restrictions (Appendix H) that gives the County or is assignee a right of first refusal to purchase the home in order to maintain its affordability. Rental projects are subject to a regulatory agreement (Appendix I). The regulatory agreement stipulates that the project owner regularly submit documentation that can be monitored by the County to assure compliance. The regulatory agreement is a recorded document. B. Policy Options 1. Ongoing program management functions could be assigned to one or more local non-profit housing development organizations. Non- profits may, if adequately financed, be able to respond more efficiently to a notice of a homeowner intending to sell, and offering the property under a right of first refusal contract. The County has utilized this approach in the past and is implicit in the language of the program documents, e.g., right of first refusal to the "County or its assignee;" or 2. Private firms may be an alternative, however, this option is not well developed in the marketplace at this time. If employer assisted housing develops and expands as an approach to financing affordable housing, or if the number of public sector programs expands, a niche market for program management services (compliance monitoring to transaction execution) could emerge. Some non-profit organizations are beginning to establish for-profit subsidiaries that could serve both public and private sector clients. Members of Board of Supervisors -9- September 10, 1993 Summary and Conclusions This memorandum has summarized the Dougherty Valley Affordable Housing Program and identified the major policy options that are before the Board of Supervisors. The Board of Supervisors should give direction with respect to the following questions: 1. What is the desired forum for discussing the Dougherty Valley Affordable Housing Program? 2. When should these discussions take place? 3. Which of the policy options, including those of the Dougherty Valley Affordable Housing Program, are preferred by the Board of Supervisors? 4. What is the preferred mechanism for contractual agreement to this Dougherty Valley Affordable Housing Program? HB:JK:lh Attachment cc: County Administrator d MHDA County Counsel Shappell Industries Windemere Partners dvldvafhsg2.mem Briefing Memorandum to Board of Supervisors. on DVAHP Policy Options March 8, 1994 CONTRA COSTA COUNTY COMMUNITY DEVELOPMENT DEPARTMENT DATE: March 8, 1994 TO: Board of Supervisors ' Contra Costa County FROM: Harvey Bragdon, Direc Community Develo nWep SUBJECT: Proposed Dougherty Valley Affordable Housing Program This proposed Dougherty Valley Affordable Housing Program represents a consensus program developed by staff in consultation with the Dougherty Valley developers. The proposed Affordable Housing Program is a mixture of prescriptive measures (for example, the Affordable Housing Program Requirements - Chapter V) that are a derivative of the Dougherty Valley Specific Plan, and recommendations(for example, the Affordable Housing Finance Alternatives- Chapter IV, and the Plan of Finance - Chapter VI). Following is a summary of the items incorporated into this proposed Dougherty Valley Affordable Housing Program. 1. Income Targeting Chapter V (A)(1)(b) is prescriptive and sets forth specific percentages of Very Low, Low and Moderate Income Targeting that are based on the thresholds specified by the State Department of Housing and Community Development (HCD) in its certification of the County's Housing Element (Chapter II (C) and Appendix Q. The HCD letter states that units in the Dougherty Valley "will be affordable in at least the following ratio: 10 percent (V)ery (Low), 25 percent (L)ow, and 65 percent (M)oderate Income." The HCD specified percentages are considered to be a floor that the ultimate program cannot go below. The validity of these income targets has been confirmed by the Gruen Gruen & Associates Jobs/Housing Balance study which found that the income distribution within the lower income ranges approximated these targets (Appendix J, Table II-6). 2. Number of Affordable Units Chapter V (A)(1)(a) stipulates that a minimum of 25% of the total units in the Dougherty Valley shall be affordable to Very Low, Low, and Moderate Income Households. The proposed Affordable Housing Program is consistent with the minimum Dougherty Valley Specific Plan requirement (Policy H-4). Members of Board of Supervisors -2- March 8, 1994 3. Tenure Targeting The proposed Affordable Housing Program does not state any tenure requirements. The Dougherty Valley Specific Plan "encourage(s) and promote(s) owner occupied housing, especially for affordable units" (Policy H-9). It is expected that most of the Very Low and Low Income will be provided as rental units because the subsidy costs are less for rental units (up to 35% of all affordable units), and that most of the Moderate Income units (65% of all affordable units) will be owner occupied. 4. Types of Housing No direct stipulations are made with respect to Housing Types defined in Chapter III. The suggestive provisions of Chapter V (A)(2) - Specialized Facilities - provides incentive for Supportive Housing (group homes for the mentally or physically disabled, Transitional Housing, etc.), and Nursing Homes, especially those with Medi-Cal beds. 5. Affordability Term Chapter V (B) is prescriptive and reflects the provisions of the Dougherty Valley Specific Plan (Policy H-9) for Very Low and Low Income Units. For-sale units require affordability for twenty years, and rental units for thirty years. Moderate Income units are not subject to affordability terms as a result of this Affordable Housing Program. 6. Affordable Price/Rent Very Low and Low Income Units are subject to prescriptive rent and price restrictions (Chapter V (C)). Moderate Income Units are subject to prescriptive rent and price restrictions requirements except that up to 50% of the Moderate Income Homeownership Units may be determined solely by a determinant that the homebuyer is of Moderate Income. 7. Phasing Chapter V (D) is moderately prescriptive by providing for phasing of the Moderate Income Affordable Units in a manner that permits some limited passage forward of the obligation to future phases (no more than forty percent (40%) of an individual phase Affordable Unit requirement can be passed forward to future Members of Board of Supervisors -3- March 8, 1994 phases). The Very Low and Low Income Units provides for a flexible approach in which one year and three year strategic plans for the delivery of said units are required to be submitted (Chapter V (F)). 8. Non-Profit Entities Section V (E) permits the developers to contract with non-profit entities to construct the Very Low and Low Income Units. The substitution of a non-profit entity may satisfy all or a portion of the developers' Very Low and Low Income requirement if the property is dedicated to the non-profit, who must deliver units in a timely fashion. Should the non-profit not perform, the developer may build market rate units on the site, and dedicate a site in a subsequent phase. Any dedication of land to a non-profit may be completed with the non-profit owner assuming its proportionate share of community infrastructure obligations. The assumption of this infrastructure obligation may be by payment of the required developer fee or by the assumption of an assessment and/or special tax. Additional land dedications may or may not be required, dependent on the presence or absence of Surplus Funds from initial Very Low and Low Income developments of the non-profit(s). 9. Plan of Finance The suggestive premise of the Plan of Finance (Chapter VI) is that the private developer(s) are responsible for delivering the Affordable Units. The Moderate Income Units are to be delivered without the expectation of public assistance. The Very Low and Low Income Units may receive public subsidy, but it is limited to offsetting the defined "Affordability Gap" (the amount of financing not supported by income due to the Affordable Unit requirement). Furthermore, the commitment of funds is not guaranteed, but provided for on a best efforts basis. 10. Level of Contribution In determining affordable housing contribution, some consideration needs to be given to the component costs of a lot. The developer contribution becomes better understood and the options more clearly defined once the fixed and incremental costs are provided. The cost per lot enters into the affordability thresholds. To the extent that costs are cut for affordable lots, they are shifted to remaining lots. Members of Board of Supervisors -4- March 8, 1994 11. Jobs/Housing The need to better understand the relationship between job availability in the Tri- Valley area and housing for those employees resulted in a study entitled, "The Effect of the Proposed Dougherty Valley Housing and the Jobs/Housing Balance in the Tri-Valley," by Gruen Gruen & Associates was completed (Appendix J). The findings and conclusions of the study are: • It is forecast that approximately 45,000 new employees will be added to the Tri-Valley work force during the Dougherty Valley time frame. These additional new employees will generate an effective demand for approximately 33,000 new homes. The actual demand is closer to 35,000 new units when factoring in a 5 percent vacancy rate and other considerations. • If the Dougherty Valley is built out as proposed, it will only provide about 31 percent of the total number of units needed to supply all of the projected worker households. 100% of the future Tri-Valley employees will be able to afford housing that is proposed for the Dougherty Valley. • While the income survey indicates that a higher percentage of affordable housing in the Dougherty Valley could be absorbed by local workers, it also shows that the housing proposed can be supported by local workers, thereby improving the jobs/housing balance. • Of the total units demanded in the "Affordable" price range, approximately 5% of the total affordable units are demanded by Very Low Income households, 27% are demanded by Low Income households, and 68% are demanded by Moderate Income households. • It is estimated that approximately 2.5 percent of the future Tri-Valley workers will need housing valued at less than $100,000. 4.5 percent of the housing units proposed for the Dougherty Valley will meet the home pricing requirements of wage earners that fall into this income category. • The overlap between the distribution of prices that would be paid by all- Tri-Valley households with at least one worker in them when each household is assumed to afford only a dwelling whose annual costs equal 30 percent of the income does not overlap perfectly with the price Members of Board of Supervisors -5- March 8, 1994 distribution of the units proposed by the developers. The distribution of prices that can be afforded by the worker households in the population are skewed toward the low side of the housing price categories proposed. Only 60.5% of the two distributions mesh or overlap. This is because 70% of the price categories that can be afforded by employee households are below $200,000, but only about 28 percent of the proposed units would be at prices below this level. • How this 60.5% "mesh" rate effects the jobs/housing balance of the Tri- Valley between 1995 and 2005 depends on the total number of units built, not just the 11,000 units proposed by the Dougherty Valley developers. We estimate that about 35,000 units will have to be added to the supply to meet the demands of the employees expected to be added to Tri-Valley jobs between 1995 and 2005 and also allow for some vacancies and replacement of the existing stock. If this many units or more are built, it is likely that the lack of overlap or mesh between the proposed units ' will avoid creating affordability problems because: • Under competitive conditions, the price of existing units will remain stable or decline in real dollars so as to provide units in the lower end of the range of prices proposed. • Other developers will fill in the price ranges where shortfalls are indicated. • The Dougherty Valley developers will switch their distribution to the lower end in order to sell units. • Gruen Gruen & Associates feels particularly confident that the market reaction of a total increase in demand will have the effect of creating a balance because of the conservative nature of the assumptions in this study. First, although housing prices were assumed to be constant, we have not "grown" the 1993 incomes found in our survey. Secondly, the method used by Gruen Gruen & Associates to forecast household income tends to underestimate household incomes and, as a result, home buying power. This analysis may also understate home buying power by not considering the equity that some homebuyers can bring to their purchases from homes they have previously owned. 12. Ongoing Program Management The presence of affordability terms prescribed in Chapter V (B) suggests an ongoing program management function. For-sale units are subject to recorded deed restrictions (Appendix H) that gives the County or is assignee a right of first Members of Board of Supervisors -6- March 8, 1994 refusal to purchase the home in order to maintain its affordability. Rental projects are subject to a regulatory agreement (Appendix 1). The regulatory agreement stipulates that the project owner regularly submit documentation that can be monitored by the County to assure compliance. The regulatory agreement is a recorded document. Summary and Recommendations This memorandum has summarized the proposed Dougherty Valley Affordable Housing Program. Staff recommends its adoption. Upon its adoption, it is recommended that the Affordable Housing Program be incorporated into the respective Development Agreements for the Dougherty Valley developments. HD:JK:lh Attachment cc: County Administrator GMEDA County Counsel Shappell industries Windemere Partners dv/dva(hsg4.mem ATTACHMENT C Analysis of Capitalized Value — Falcon Bridge Project using three alternative rent formulations. W:\Personal\\BoardOrders\BOARD.dougliertyva I le%.6.S ATTACHMENT C-1 FALCON BRIDGE ANNUAL RENT/CAPITALIZED VALUE ANALYSIS -ALTERNATIVE A UNIT TYPE NUMBER OF UNITS ANNUAL RENTS# (# Bedrooms) 1 104 $1,787,136 2 128 2,474,496 3 24 515,520 256 Gross Annual Rents $4,777,152 Minus Vacancv[@5% (238,858) Minus Operating Expenses(a)33% (1,576,460) Net Income for Debt Service 2,961,834 Cap Rate 8.0% Capitalized Value $37,022,925 #MONTHLY RENTS ARE CALCULATED USING 100%OF MEDIAN INCOME,WHICH RENTS ARE CURRENTLY: ALTERNATIVE A 1 bedroom units $1,432 2 bedroom units $1,611 3 bedroom units $1,790 i W:Tersonall\BoardOrders\BOARD.doughertyva I Iey6.5 ATTACHMENT C-2 FALCON BRIDGE ANNUAL RENT/CAPITALIZED VALUE ANALYSIS - ALTERNATIVE B UNIT TYPE NUMBER OF UNITS ANNUAL RENTS# W Bedrooms) 1 104 $1,965,600 2 128 2,969,088 3 24 618,624 256 Gross Annual Rents $5,553,312 Minus Vacancye5% (277,666) Minus Operating Expenses@33% (1,832,593) Net Income for Debt Service 3,443,053 Cap Rate 8.0% Capitalized Value $43,038,162 #MONTHLY RENTS ARE CALCULATED USING 100%OF MEDIAN INCOME FOR 1 BEDROOM UNITS,AND 120%OF MEDIAN INCOME FOR 2 AND 3 BEDROOM UNITS,WHICH RENTS ARE CURRENTLY: ALTERNATIVE B 1 bedroom units $1,575 2 bedroom units $1,933 3 bedroom units $2,148 W:\Personal''\BoardordenWARD.doug1leny,v a11e�6.5 ATTACHMENT C- 3 FALCON BRIDGE ANNUAL RENT/CAPITALIZED VALUE ANALYSIS - ALTERNATIVE C UNIT TYPE NUMBER OF UNITS ANNUAL RENTS# (# Bedrooms) 1 104 $1,965,600 2 128 2,721,792 3 24 567,072 256 Gross Annual Rents $5,254,464 Minus Vacancy05% (262,723) Minus Operating Expenses@33% (1,733,973) Net Income for Debt Service 3,257,768 Cap Rate 8.0% Capitalized Value $40,722,100 #MONTHLY RENTS ARE CALCULATED USING 100% OF MEDIAN INCOME,WHICH RENTS ARE CURRENTLY: ALTERNATIVE C 1 bedroom units $1,575 2 bedroom units $1,772 3 bedroom units $1,969 W:\Personal\\BoardOrders\BOARD.dongliertN�!al]cN-6.S ATTACHMENT D Proposed Form of Regulatory Agreement and Declaration of Restrictive Covenants W:\Persona I\\BoardOrders\BOAR D.dou glee nN,va I l e N-6.5 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: CONTRA COSTA COUNTY COMMUNITY DEVELOPMENT DEPARTMENT 651 Pine Street,4th Floor, North Wing Martinez,CA 94553 ATTN: Deputy Director-Redevelopment REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS By and Between COUNTY OF CONTRA COSTA and OWNER Dated as of W:personal\documents\Dougherty.vly.re},.ag,ree.6.0l.revised TABLE OF CONTENTS Section 1. Definitions and Interpretation. .............................................................................1 Section 2. Acquisition, Construction, Equipping and Completion of the Project..............4 Section 3. Residential Rental Property.....................................................:.............................5 Section 4. Very Low, Low, Moderate Income Households. ................................................6 Section 5. Indemnification.............................................................................................9 Section6. Consideration.......................................................................................................10 Section7. Reliance...............................................................................................10 Section 8. Sale or Transfer of the Project. ............................................................................11 Section9. Term......................................................................................................................11 Section 10. Covenants to run with the land..........................................................................11 Section 11. Burden and Benefit..............................................................................................12 Section 12. Uniformity; Common Plan..................................................................................12 Section 13. Enforcement..........................................................................................................12 Section 14. Recording and Fili.ng............................................................................................13 Section 15. Payment of Fees. ..................................................................................................13 Section16. Governing Law.....................................................................................................13 Section17. Amendments........................................................................................................13 Section18. Notice....................................................................................................................13 Section 19. Severability 14 Section 20. Multiple Counterparts.........................................................................................14 EXHIBIT A - DESCRIPTION OF PROJECT SITE EXHIBIT B - STATISTICAL REPORT OF COUNTY EXHIBIT C- CERTIFICATE OF HOUSEHOLD ELIGIBILITY EXHIBIT D - CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE EXHIBIT E - COMPLETION CERTIFICATE i- REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (the "Regulatory Agreement") is dated as of ' by and between COUNTY OF CONTRA COSTA, a public body, corporate and politic organized and existing under the laws of the State of California (the "Issuer"), and , (the "Owner"). WITNESSETH: WHEREAS, the Board of Supervisors of Contra Costa County adopted the Dougherty Valley Specific Plan the ("Specific Plan") on December 19, 1996; WHEREAS, the Specific Plan provides for the development of a mixed income community in the Dougherty Valley in order to achieve a jobs-housing balance and address affordable housing needs set forth in the County General Plan-Housing Element; WHEREAS, in furtherance of the Specific Plan's affordable housing goals, the Board of Supervisors adopted the Dougherty Valley Affordable Housing Program ("DVAHP") on March 24, 1994; and WHEREAS, development approvals in the Dougherty Valley are subject to Development Agreements adopted pursuant to Section 65864 et seq. of the California Government Code; and WHEREAS, the Development Agreements incorporate by reference the DVAHP; WHEREAS, the County has approved the project as herein defined, which is subject to the DVAHP; NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the County and the Owner hereby agree as follows: Section 1. Definitions and Interpretation. Capitalized terms shall have the respective meanings given to such terms herein. The following terms shall have the respective meanings assigned to them in this Section 1 unless the context in which they are used clearly requires otherwise: "Adjusted Income" means the adjusted annual income of a person (together with the adjusted income of all persons who intend to reside with such person in one residential unit) as calculated in the manner prescribed in Exhibit B. "Affordable Units" means any one or more of the units reserved for occupancy by Very Low, Low, and Moderate Income Households in the Dougherty Valley. The Dougherty Valley Specific Plan requires that 25% of the units in Dougherty Valley be Affordable Units. "Area" means the Oakland Primary Metropolitan Statistical Area. "Certificate of Continuing Program Compliance" means the Certificate to be filed by the Owner with the County under Section 4(e) hereof, which shall be substantially in the form attached hereto as Exhibit D. "Completion Certificate" means the certificate of completion of the construction of the Project required to be delivered to the County, (if other than the Issuer), pursuant to Section 2 of this Regulatory Agreement, which shall be substantially in the form attached to this Regulatory Agreement as Exhibit E. "Completion Date" means the date of the completion of the construction and equipping of the Project. "DVAHP" means Dougherty Valley Affordable Housing Program. "Housing Act" means the United States Housing Act of 1937, as amended, or its successor. "Income Certification" means a Certification of Household Eligibility in the form attached as Exhibit C hereto or in such other form as may be provided by the County to the Owner. "Lower Income" means generically all households of Very Low, Low, and Moderate Income. "Low Income Households" means households whose annual incomes are from 51 to (and including) 80 percent of the Contra Costa County Median Income, as adjusted for family size and published by the California Department of Housing and Community Development pursuant to Health &Safety Code Sections 50079.5 and 50105. "Low Income Rent" means the lesser of (1) the monthly market rate rent, including a Utility Allowance; or (2) a monthly rent which is no greater than one hundred percent (100%) of the Section 8 Existing Program Fair Market Rents, established in accordance with 24 CFR Part 882, effective at the time of occupancy, less the Utility Allowance then in effect. "Low Income Units" means the units in the project required to be rented to, or held available for occupancy by, Low Income Households. 2 "Managetnent Plan" means a plan developed by the Owner setting forth procedures and forms deemed necessary to comply with the provisions of Section 3 & 4 hereof. A Management Plan conforming with said sections must be subject to the review and approval of the Director of Community Development. "Median Incotne" means the annual median income for the Contra Costa County, adjusted for family size as published by the California Department of Housing and Community Development pursuant to Health &Safety Code Sections 50079.5 and 50105. "Median Monthly Income" means 1/12 of the Median Income. "Moderate Income Households" means households whose annual incomes are from 81 to (and including) 120 percent of the Contra Costa County Median Income, as adjusted for family size and published by the California Department of Housing and Community Development pursuant to Health & Safety Code Sections 50079.5 and 50105. "Moderate Income Rent" means the lesser of (1) the monthly market rate rent; or (2) a monthly rent which is no greater that 30% of 100% of the Median Monthly Income, including a Utility Allowance. Rents for studio units shall be calibrated utilizing the one-person Median Income Household income; one-bedroom units shall use a two-person Median Income Household income; two-bedroom units shall use a three-person Median Income Household-, income, etc. "Moderate Income Units" means the units in the project required to be rented to, or held available for occupancy by, Moderate Income Households. "Owner" means and its successors and assigns, as owner of the project. "Project" means the rental Project Facilities and the Project Site known as and further described as follows: Location: Address: AP No: County File No: "Project Facilities" means all buildings, structures and other improvements to be constructed on the Project Site, and all fixtures and other property of the Owner located on, or used in connection with, such buildings, structures and other improvements constituting the Project. "Project Site" means the parcel or parcels of real property described in Exhibit "A", which is attached hereto and by this reference incorporated herein, and all rights and appurtenances thereunto appertaining. 3 "Qualified Project Period" means the period beginning on the date of the Completion Certificate and ending on the date which is 30 years after the date on which at least fifty percent(50%) of the dwelling units in the Project were first occupied. "Regulatory Agreement" means this Regulatory Agreement and Declaration of Restrictive Covenants. "Utility Allowance" means the allowance for tenant purchased utilities adopted by the Contra Costa Housing Authority and approved by the U.S. Department of Housing and Urban Development for the Section 8 Existing Rent Subsidy/Section 8 Voucher Programs. "Verb Low Income Households" means households whose annual incomes do not exceed 50 percent of the Contra Costa County Median Income for Contra Costa County, as adjusted for family size and published by the State Department of Housing and Community Development pursuant to Health &Safety Code Sections 50079.5 and 50105. "Very Lou) Income Rent" means a monthly rent, which is no greater than 30% of 50% of the Median Monthly Income including a Utility Allowance. Rents for studio units shall be calibrated utilizing the one-person Very Low Income Household income; one-bedroom units shall use a two-person Very Low Income Households income, two-bedroom units shall use a three-person Very Low Income Households income, etc. "Very Loin Income Units" means the units in the project required to be rented to, or held available for occupancy by, Very Low Income Households. Unless the context clearly requires otherwise, as used in this Regulatory Agreement, words of the masculine, feminine or neuter gender shall be construed to include each other gender when appropriate and words of the singular number shall be construed to include the plural number, and vice versa, when appropriate. This Regulatory Agreement and all the terms and provisions hereof shall be construed to effectuate the purposes set forth herein and to sustain the validity hereof. The defined terms used in the preamble and recitals of this Regulatory Agreement have been included for convenience of reference only, and the meaning, construction and interpretation of all defined terms shall be determined by reference to this Section 1 notwithstanding any contrary definition in the preamble or recitals hereof. The titles and headings of the sections of this Regulatory Agreement have been inserted for convenience of reference only, and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof or be considered or given any effect in construing this Regulatory Agreement or any provisions hereof or in ascertaining intent, if any question of intent shall arise. Section 2. Acquisition, Construction, Equipping and Completion of the Project. The Owner hereby represents as of the date hereof, covenants and agrees as follows: (a) The Owner [has/will] commence[d] the construction of the Project and will proceed with due diligence to complete the same. 4 (b) The Owner reasonably expects to complete the construction of the Project by (c) The statements made in the various certificates delivered by the Owner to the County are true and correct. (d) On the Completion Date of the Project, the Owner will submit to the County a duly executed and completed Completion Certificate. (e) The Owner (and any Affiliated Party) will not take or omit to take, as applicable, any action if such action or omission would in any way cause the project to be developed in a manner contrary to the requirements of this Regulatory Agreement. (f) The Owner shall file an annual certification of compliance with the terms of this Regulatory Agreement. Section 3. Residential Rental Property. The Owner hereby acknowledges and agrees that the Project is owned, managed and operated as a residential rental project for a term equal to the Qualified Project Period. To that enol, and for the term of this Regulatory Agreement, the Owner hereby represents, covenants, warrants and agrees as follows: (a) The Project will be constructed for the purpose of providing multifamily.:.. residential rental property, and the Owner will own, manage and operate the Project as a project to provide multifamily residential rental property comprised of a building or structure or several interrelated buildings or structures, together with any functionally related and subordinate facilities. (b) All of the dwelling units in the Project are similarly constructed units, and each dwelling unit in the Project contains complete separate and distinct facilities for living, sleeping, eating, cooking and sanitation for a single person or a family, including a sleeping area, bathing and sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink. (c) None of the dwelling units in the Project will at any time be utilized on a transient basis, or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, rest home or trailer court or park. (d) The Owner shall not take any steps in connection with a conversion to cooperative or condominium ownership or use, other than filing a condominium map and final tract map on the Project and obtaining a Final Subdivision Public Report from the California Department of Real Estate. The Owner will not take any steps in connection with a conversion of the Project to a condominium ownership during the Qualified Project Period. (e) All of the dwelling units [have been/will be] completed and will be available for rental on a continuous basis to members of the general public and the Owner will not give preference to any particular class or group in renting the dwelling 5 units in the Project, except to the extent that dwelling units are required to be leased or rented to [Very Low, Low, Moderate] Income Tenants. (f) The Project Site consists of a parcel or parcels that are contiguous except for the interposition of a road, street or stream, and all of the Project Facilities comprise a single geographically and functionally integrated project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project. (g) No dwelling unit in the Project shall be occupied by the Owner; provided, however, that if the Project contains five or more dwelling units, this subsection shall not be construed to prohibit occupancy of such dwelling units by one or more resident managers or maintenance personnel any of whom may be the Owner. (h) The units reserved for Lower Income Households shall be of comparable quality and offer a range of sizes and number of bedrooms available to other tenants, have substantially the same equipment and amenities, and shall not be geographically segregated from such other units. (i) For the term of this Regulatory Agreement, the Owner will not discriminate on the basis of race, creed, color, sex, sexual orientation, national origin or ancestry, religion, marital status, age, disability, source of income or receipt of public assistance or housing assistance in connection with the rental, use, or occupancy of units in the Project or in connection with the employment or application for employment of persons for operation and management of the Project, and all contracts, applications and leases entered into for such purposes shall contain a nondiscrimination clause to such effect. Section 4. (Very Low, Low, Moderatel Income Households/Rents. Pursuant to the requirements of the Specific Plan and the DVAHP and this Regulatory Agreement, the Owner hereby represents, warrants and covenants - as follows: (a) Commencing on the completion date, [Very Low, Low, Moderate] Income Households shall occupy at least percent (_%) of all completed and occupied units in the Project; and for the Qualified Project Period no less than _% of the total number of completed units of the Project shall at all times be rented to and occupied by [Very Low, Low, Moderate] Income Households. For the purposes of this paragraph (a), a vacant unit which was most recently occupied by a [Very Low, Low, Moderate] Income Households is treated as rented and occupied by a [Very Low, Low, Moderate] Income Households until reoccupied, other than for a temporary period of not more than 31 days, at which time the character of such unit shall be redetermined. Except as otherwise provided herein, (including without limitation, Section 3(e) hereof) the [Very Low, Low, Moderate] Income Units shall be intermingled with all other dwelling units in the Project and shall be of a quality, and offer a range of sizes and number of bedrooms, comparable to those units which are available to other tenants. Tenants in the [Very Low, Low, Moderate] Income Units will have equal access and enjoyment to all common facilities of the Project. 6 (b) The rents for the [Very Low, Low, Moderate Income Units] shall not exceed the [Very Low Income Rent, Low Income Rent, and Moderate Income Rent]. (c) No tenant qualifying as a [Very Low, Low, Moderate] Income Household shall be denied continued occupancy of a unit in the Project because, after admission, such tenant's Adjusted Income increases to exceed the qualifying limit for [Very Low, Low, Moderate] Income Households; provided, however, that should a [Very Low, Low, Moderate] Income Household's Adjusted Income, as of the most recent determination thereof, exceed one hundred forty percent (140%) of the applicable income limit for a [Very Low, Low, Moderate] Income Household of the same family size, the next available unit of comparable or smaller size must be rented to (or held vacant and available for immediate occupancy by) a [Very Low, Low, Moderate] Income Household; and provided further that, until such next available unit is rented to a [Very Low, Low, Moderate] Income Household, the former [Very Low, Low, Moderate] Income Household who has ceased to qualify as such shall be deemed to continue to be a [Very Low, Low, Moderate] Income Household for purposes of the percent (._%) requirement of Section 4(a) hereof until the next available unit of comparable or smaller size is rented to a qualifying [Very Low, Low, Moderate] Income Household. (d) The Owner will obtain, complete, and maintain on file Income• Certifications from each [Very Low, Low, Moderate] Income Household, dated immediately prior to the initial occupancy of such [Very Low, Low, Moderate] Income Household in the Project, and will provide such additional information as may be required to verify eligibility in the future by the County. The Owner will also obtain, complete, and maintain on file an annual Income Certification from each [Very Low, Low, Moderate] Income Household, dated the anniversary of the date of initial occupancy in the Project by such [Very Low, Low, Moderate] Income Household. A copy of the most recent Income Certification for [Very Low, Low, Moderate] Income Household commencing or continuing occupation of a [Very Low, Low, Moderate] Income Unit shall be attached to each report to be filed with the County. The Owner shall make a good faith effort to verify that the income provided by an applicant in an Income Certification is accurate by taking one or more of the following steps as a part of the verification process: (1) obtain a pay stub for the most recent three months, (2) obtain an income tax return for the most recent tax year, (3) conduct a TRW Credit Bureau or other similar search, (4) obtain an income verification from the applicant's current employer, (5) obtain an income verification from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies, or (6) if the applicant is unemployed and does not have an income tax return, obtain another form of independent verification. The Owner shall also engage in a review of bank statements of that tenant for the prior six (6) months. (e) The Owner will maintain complete and accurate records pertaining to the [Very Low, Low, Moderate] Income Units, and will permit any duly authorized representative of the County to inspect the books and records of the Owner pertaining 7 to the Project, including those records pertaining to the occupancy of the [Very Low, Low, Moderate] Income Units. (f) The Owner shall prepare and submit to the County, thirty days after the end of each month until ninety-five percent (95%) of the units in the Project are occupied and will prepare and submit at the end of each calendar quarter thereafter, a Certificate of Continuing Program Compliance in the form of Exhibit D hereto executed by the Owner stating (i) the percentage of the dwelling units of the Project which were occupied or deemed occupied, pursuant to subsection (a) hereof, by [Very Low, Low, Moderate] Income Households during such period, (ii) that either (A) no unremedied default has occurred under this Regulatory Agreement or (B) a default has occurred, in which event the certificate shall describe the nature of the default in detail and set forth the measures being taken by the Owner to remedy such default. (g) The Owner will accept as tenants on the same basis as all other prospective tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing program under Section 8 of the Housing Act, or its successor. The Owner shall not apply selection criteria to Section 8 certificate or voucher holders that is more burdensome than criteria applied to all other prospective tenants. (h) Each lease or rental agreement pertaining to a [Very Low, Low, Moderate] Income Unit shall contain a provision to the effect that the Owner has rehed-, on the income certification and supporting information supplied by the [Very Low, Low, Moderate] Income Household in determining qualification for occupancy of the [Very Low, Low, Moderate] Income Unit, and that any material misstatement in such certification (whether or not intentional) will be cause for immediate termination of such lease or rental agreement. Each such lease or rental agreement shall also provide that the tenant's income is subject to annual certification in accordance with Section 4(d) hereof and that if upon any such certification such tenant's Adjusted Income exceeds one hundred forty percent (140%) of the applicable income limit for a [Very Low, Low, Moderate] Income Tenant of the same family size, such tenant shall, subject to (b) above, cease to qualify as a [Very Low, Low, Moderate] Income Tenant, and such tenant's rent is subject to increase. A lease addendum setting forth procedures for handling changes in tenant status shall be part of each lease agreement. (i) The requirements of this Regulatory Agreement shall be administered and compliance therewith monitored by the County, but the County shall incur no liability hereunder as a consequence thereof. (j) At least twelve months prior to the expiration of the Qualified Project Period the Borrower shall provide the notices set forth by Section 65863.10 of the Government Code. (k) Following the expiration or termination of the Qualified Project Period, except in the event of foreclosure, deed in lieu of foreclosure, eminent domain, or action of a federal agency preventing enforcement, units required to be reserved for occupancy pursuant to Section 4(a) shall remain available to any eligible household occupying a [Very Low, Low, Moderate] Income Unit at the date of expiration or termination, and at 8 a rent not greater than the amount set forth in Section 5 (a), until the earliest of any of the following occurs: (1) the household's income exceeds 140 percent of the maximum eligible income specified in clause (a) above; (2) the household voluntarily moves or is evicted for "good cause" ("good cause" for the purposes of this subsection, means the nonpayment of rent or allegation of facts necessary to provide major, or repeated minor, violations of material provisions of the occupancy agreement which detrimentally affect the health and safety of other persons or the structure, the fiscal integrity of the Project, or the purposes or special programs of the Project); (3) thirty-two years after the date of the commencement of the Qualified Project Period; or (4) the Owners pay the relocation assistance and benefits to tenants as provided in subdivision (b) of Section 7264 of the Government Code. During the three years prior to expiration of the Qualified Project Period, the Owner shall continue to make available to eligible households Affordable Units that have been vacated to the same extent that nonreserved units are made available to noneligible households. (1) All tenant lists, applications and waiting lists relating to the Project shall at all times be kept separate and identifiable from any other business of the Owner and shall be maintained as required by the County, in a reasonable condition for proper audit and subject to examination during business hours by representatives of the Issuer. (m) The Borrower shall not permit occupancy in any unit in the Project by more persons than is permissible under the Section 8 of the Housing Act household size. .. standards. Any of the foregoing requirements of the County may be expressly waived by the County in writing, but (i) no waiver by the County of any requirement of this Section 4 shall, or shall be deemed to, extend to or affect any other provision of this Regulatory Agreement; and i (ii) any requirement of this Section 4 shall be void and of no force and effect if counsel e ° County and the Owner render a written opinion or receive a judgement that any requirement would be in conflict with local, state or federal law. Section 5. Indemnification. The Owner hereby covenants and agrees that it shall indemnify and hold harmless the County and its officers, directors, officials, employees and agents from and against any and all claims by or on behalf of any person arising from any cause, whatsoever in connection with this Regulatory Agreement, and the Project (or the operation thereof), any and all claims arising from any act of omission of the Owner or any of its agents, contractors, servants, employees or licensees in connection with the Project (or the operation thereof), and all costs, counsel fees, expenses or liabilities incurred in connection with any such claim or proceeding brought thereon. The Owner further hereby indemnifies, and agrees to defend and hold harmless, the County, their officers, directors, officials, employees and agents from and against all loss, costs, damages, expenses, suits, judgments, actions and liabilities of whatever nature (including, without limitation, reasonable fees of legal counsel which counsel is reasonably acceptable to the respective indemnified parties, litigation and court costs, amounts paid in settlement, and amounts paid to discharge judgments) directly or indirectly resulting from or arising out of or related to (a) the design, construction, installation, operation, use, occupancy, maintenance, or ownership of the Project (including compliance with laws, ordinances and rules and regulations of public authorities relating thereto); or (b) any written statements or representations with respect to the Owner, made or given to the 9 County, by the Owner, or any of its agents or employees, limited to, statements or representations of information or partnership affairs. In the event that any action or proceeding is brought against the County or any of its officers, directors, officials, employees or agents, with respect to which indemnity may be sought hereunder, the Owner, upon written notice from the indemnified party, shall assume the investigation and defense thereof, including the employment of counsel and the payment of all expenses. The indemnified party shall have the right to employ separate counsel in any such action or proceedings and to participate in the defense thereof, and the Owner shall pay the reasonable fees and expenses of such separate counsel; provided that the indemnified party shall have the right to review and approve or disapprove any compromise or settlement. The rights of the County to indemnification under this Section shall survive termination of this Regulatory Agreement. The Owner also shall pay and discharge and shall indemnify and hold harmless the County from (i) any lien or charge upon payments by the Owner to the County hereunder and (ii) any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges in respect of any portion of the Project. If any such claim is asserted, or any such lien or charge upon payments, or any such taxes, assessments, impositions or other charges, are sought to be imposed, the County, upon actual knowledge thereof shall give prompt notice to the Owner and the Owner shall have the sole right and duty to assume, and will assume, the defense thereof, with full power to litigate, compromise or-. settle the same in its sole discretion. In addition thereto, the Owner will pay upon demand all of the fees and expenses paid or incurred by the Issuer in enforcing the provisions hereof. Section 6. Consideration. The County has approved the project pursuant to the Specific Plan, and the DVAHP, for the purpose, among others, of inducing the Owner to develop the Project Site and, construct, equip and operate the Project. In consideration of these development approvals by the County, the Owner has entered into this Regulatory Agreement and has agreed to restrict the uses to which this Project can be put on the terms and conditions set forth herein. Section 7. Reliance. The County and the Owner hereby recognize and agree that the representations and covenants of the Owner set forth herein may be relied upon by all persons interested in the project. In performing its duties and obligations hereunder, the County may rely upon statements and certificates of the [Very Low, Low, Moderate] Income Households, and upon audits of the books and records of the Owner pertaining to the Project. In addition, the County may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the County hereunder in good faith and in conformity with such opinion. In determining whether any default or lack of compliance by the Owner exists under this Regulatory Agreement, the County may conduct any investigation into or review of the operations or records of the Owner, or may rely solely on any written notice or certificate delivered to it by the Owner with respect to the occurrence or absence of a default unless it knows that the notice or certificate is erroneous or misleading. 10 Section 8. Sale or Transfer of the Project. The Owner hereby covenants and agrees not to voluntarily sell, transfer or otherwise dispose of the Project, or any portion thereof (other than for individual tenant use as contemplated hereunder), without obtaining the prior written consent of the County, which consent of the County shall be deemed given upon receipt by the County of (i) evidence reasonably satisfactory to the County that the Owner's purchaser or transferee has assumed in writing and in full, the Owner's duties and obligations under this Regulatory Agreement, (ii) evidence reasonably satisfactory to the County that either (a) the purchaser or assignee has at least three years' experience in the ownership, operation and management of large mixed-income or affordable rental housing projects, without any record of material violations of discrimination restrictions or other state or federal laws or regulations applicable to such projects, or (b) the purchaser or assignee agrees to retain a property management firm with the experience and record described in subclause (a) above, or (c) the County shall not have any reason to believe that the purchaser or assignee is incapable, financially or otherwise, of complying with, or may be unwilling to comply with, the terms of all agreements binding on such purchaser or assignee relating to the Projects, (iii) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Owner under this Regulatory Agreement and that such obligations and this Regulatory Agreement are binding on the transferee. It is hereby expressly stipulated and agreed that any voluntary sale, transfer or other disposition of the Project in violation of this Section shall be null, void and without effect, shall cause a reversion of title to the Borrower, and shall be ineffective to relieve the Owner of its obligations under this Regulatory Agreement. Section 9. Term. This Regulatory Agreement and all and several of the terms hereof shall become effective upon its execution and delivery. This Regulatory Agreement shall remain in full force and effect for the periods provided herein and shall terminate as to any provision not otherwise provided with a specific termination date at the end of the Qualified Project Period. The terms of this Regulatory Agreement to the contrary notwithstanding, all and several of the terms hereof shall terminate and be of no further force and effect in the event of (A) a foreclosure or delivery of a deed in lieu of foreclosure whereby a third party becomes the owner of the Project or (B) involuntary non-compliance with the provisions of this Regulatory Agreement caused by fire, seizure, requisition, condemnation or a similar event, provided, however, that the preceding provisions of this sentence shall cease to apply and the restrictions contained herein shall be reinstated if, at any time subsequent to the termination of such provisions as the result of the foreclosure or the delivery of a deed in lieu of foreclosure or a similar event, the County or any related person to them obtains an ownership interest in the Project for federal income tax purposes. Upon the termination of the terms of this Regulatory Agreement, the parties hereto agree to execute, deliver and record appropriate instruments of release and discharge of the terms hereof; provided, however, that the execution and delivery of such instruments shall not be necessary or a prerequisite to the termination of this Regulatory Agreement in accordance with its terms. Section 10. Covenants to Run With the Land. The Owner hereby subjects the Project (including the Project Site) to the covenants, reservations and restrictions set forth in this Regulatory Agreement. The County and the Owner hereby declare their express intent that the covenants, reservations and restrictions set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the Owner's successors in title to the 11 Project; provided, however, that on the termination of this Regulatory Agreement said covenants, reservations and restrictions shall expire. Subject to Section 10, each and every contract, deed or other instrument hereafter executed covering or conveying the Project or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instruments. Section 11. Burden and Benefit. The County and the Owner hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that the Owner's legal interest in the Project is rendered less valuable thereby. The County, and the Owner hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by [Very Low, Low, Moderate] Income Tenants, the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the public purposes for which the project was approved. Section 12. Uniformity; Common Plan. The covenants, reservations and restrictions hereof shall apply uniformly to the entire Project in order to establish and carry out a common plan for the use, Project and improvement of the Project Site. Section 13. Enforcement. If the Owner defaults in the performance or observance of any covenant, agreement or obligation of the Owner set forth in this Regulatory Agreement, and if such default remains uncured for a period of 60 days after notice thereof shall have been given by the County to the Owner, then the Issuer shall declare an "Event of Default" to have occurred hereunder, provided, however, that if the default stated in the notice is of such a nature that it cannot be corrected within 60 days, such default shall not constitute an Event of Default hereunder so long as the Owner institutes corrective action within said 60 days and diligently pursues such action until the default is corrected. Following the declaration of an Event of Default hereunder the County may, at its option, take any one or more of the following steps: (i) by mandamus or other suit, action or proceeding law or in equity, require the Owner to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of the rights of the County hereunder; (ii) have access to and inspect, examine and make copies of all of the books and records of the Owner pertaining to the Project; and (iii) take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants and agreements of the Owner hereunder. The Owner hereby grants to the County the option, upon the expiration of 60 days after the giving of the notice to the Owner referred to in the first paragraph of this Section of the Owner's default under this Regulatory Agreement, until the earlier of the remainder of the Qualified Project Period or until any termination of this Regulatory Agreement, to lease-up to percent (_%) of the units in the Project for a rental of $1.00 per unit per year for the purpose of subleasing such units to [Very Low, Low, Moderate] Income Households, but only 12 to the extent necessary to comply with the provisions of Section 4 and Section 5. The option granted in the preceding sentence shall be effective only if the Owner has not instituted corrective action within such 60-day period. The option and any leases to the County under this provision shall terminate with respect to each default upon the achievement, by the Owner or the County, of compliance with the requirements of Section 4 and Section 5 and any subleases entered into pursuant to the County's option shall be deemed to be leased from the County. The County shall make diligent effort to rent [Very Low, Low, Moderate] Income Units to [Very Low, Low, Moderate] Income Households for monthly rental amounts equivalent to those collected from tenants of similar units in the Project, but shall not be required to obtain such rental amounts. Any rental paid under any such sublease shall be paid to the Owner after the Issuer has been reimbursed for any expenses incurred in connection with such sublease. All fees, costs and expenses of the County incurred in taking any action pursuant to this Section shall be the sole responsibility of the Owner. The Owner hereby agrees that specific enforcement of the Owner's agreements contained herein is the only means by which the County may obtain the benefits of such agreements made by the Owner herein and the Owner therefore agrees to the imposition of the remedy of specific performance against it in the case of any default by the Owner hereunder. Section 14. Recording and Filing. The Owner shall cause this Regulatory Agreement—. and all amendments and supplements hereto and thereto, to be recorded and filed in the real property records of the County of Contra Costa and in such other places as the County may reasonably request. The Owner shall pay all fees and charges incurred in connection with any such recording. Section 15. Payment of Fees. The Owner shall pay the County's annual administrative fee in an amount equal the greater of i) $5,000/year; or ii) $75.00/unit/year, payable in i advance in annual installments on each thereafter, commencing until the end of the Qualified Project Period. The annual administrative fee shall increase at the rate of 2% per annum. Section 16. Governing Law. This Regulatory Agreement shall be governed by the laws of the State of California. Section 17. Amendments. (a) This Regulatory Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Contra Costa, California. The parties requesting such amendment shall notify the other parties to this Regulatory Agreement of the proposed amendment. Section 18. Notice. Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery, certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: 13 County: County of Contra Costa County Administration Building 651 Pine Street 41h Floor, North Wing Martinez, California 94553-0095 Attention: Deputy Director-Redevelopment Owner: Notice shall be deemed given three business days after the date of mailing. Section 19. Severability. If any provision of this Regulatory Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. Section 20. Multiple Counterparts. This Regulatory Agreement may be simultaneously executed in multiple counterparts, all of which shall constitute one and the same instrument, and each of which shall be deemed to be an original. 14 IN WITNESS WHEREOF, the County and the Owner have executed this Regulatory Agreement by duly authorized representatives, all as of the date first above written: COUNTY OF CONTRA COSTA By: Deputy Director-Redevelopment Owner: By: I ts: 15 State of California ) ss County of ) On before me, Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) State of California ) ss County of ) On before me, Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) EXHIBIT A DESCRIPTION OF PROJECT SITE [to come] A-1 EXHIBIT B STATISTICAL REPORT OF COUNTY Reporting Period: Date: As of;the date hereof: 1. Of the [Very Low, Low, Moderate] Income Units occupied by [Very Low, Low, Moderate] Income Households: units are occupied by households with children; and units are currently occupied by elderly households with a member of age 62 or over. 2. The number of [Very Low, Low, Moderate] Income Households who terminated their rental agreements during the previous twelve (12) month period is 3. The number of units rented to new [Very Low, Low, Moderate] Income Households during the last twelve (12) month period is 4. The family names of each household currently occupying a [Very Low, Low, Moderate] Income Unit are listed on the schedule attached hereto. 5. The number of two-bedroom [Very Low, Low, Moderate] Income Units is 6. The number of one-bedroom [Very Low, Low, Moderate] Income Units is B-1 8. The number of former [Very Low, Low, Moderate] Income Households whose Adjusted Income has exceeded 140% of the applicable income limit for a [Very Low, Low, Moderate] Income Households of the same family size and have therefore ceased to qualify as [Very Low, Low, Moderate] Income Households is Owner: By: I ts: B-2 EXHIBIT C CERTIFICATION OF HOUSEHOLD ELIGIBILITY RE: [name and address of Project] Apartment Number: Floor Number: Square footage: Number of Bedrooms: Rent: Initial monthly rent: $ Plus utility allowance TOTAL Housing Cost$ I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully and truthfully each of the following questions for all persons who are to occupy the unit in the above apartment Project for which application is made, all of whom are listed below: 1. 2. 3. 4. 5. Name of Members Relationship Social of the to Head of Security Place of Household Household Age Number Employment HEAD SPOUSE 6. The anticipated income of all the above persons during the 12-month period beginning on the later of the date on which the above persons first occupy the apartment or sign a lease with respect to the apartment, including income described in (a) below, but excluding all income described in (b) below, is $ (a) The amount set forth above includes all of the following income (unless such income is described in (b) below): (i) all wages and salaries, over-time pay, commissions, fees, tips and bonuses and other compensation for personal services, before payroll deductions; (ii) net annual income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness). (An allowance for depreciation of assets used in a business or profession may be deducted, based on straight-line depreciation, as provided in Internal Revenue Service regulations. Include any withdrawal of cash or assets from the operation of a C-1 business or profession, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the above persons): (iii) interest and dividends (include all income from assets as set forth in item 7(b) below and include any withdrawal of cash or assets from an investment, except to the extent the withdrawal is reimbursement of cash or assets invested by the above persons); (iv) the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts including a lump-sum payment for the delayed start of a periodic payment; (v) payments in lieu of earnings, such as unemployment and disability compensation, workers' compensation and severance pay; (vi) any welfare assistance: if the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, include as income (a) the amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities, plus (b) the maximum amount that the welfare assistance agency could in fact allow—.. the above persons for shelter and utilities. (If the welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under clause (b) shall be the amount resulting from one application of the percentage); (vii) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (viii) all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household, spouse or other household member whose dependents are residing in the unit; and (ix) any earned income tax credit to the extent it exceeds income tax liability. (b) The following income is excluded from the amount set forth above: (i) Income from employment of children (including foster children) under the age of 18 years; (ii) Payment received for the care of foster children; (iii) Lump-sum additions to household assets, such as inheritances, insurance payments. (including payments under health and accident insurance C-2 and worker's compensation), capital gains and settlement for personal or property losses; (iv) Amounts received by the household that are specifically for, or in reimbursement of, the cost of medical expenses for any household member: (v) Income of a live-in aide; (vi) Amounts of education scholarships paid directly to the student or to the education institution, and amounts paid by the Government to a veteran, for use in meeting the costs of tuition, fees, books, equipment, materials, supplies, transportation, and miscellaneous personal expenses of the student. Any amount of such scholarship or payment to a veteran not used for the above purposes that is available for subsistence is.to be included in income; (vii) The special pay to a household member serving in the Armed Forces who is exposed to hostile fire; (viii) (a) Amounts received under training programs funded by HUD; (b) Amounts received by a Disabled person that are disregarded for a limited time for purposes of Supplemental Security—. income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS); or (c) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out- of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program; (ix) Temporary, nonrecurring or sporadic income (including gifts); or (x) Amounts specifically excluded by any other federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the United States Housing Act of 1937. 7. If any of the persons described in column 1 above (or any person whose income or contributions were included in item 6) has any savings, stocks, bonds, equity in real property or other form of capital investment (excluding interests in Indian trust lands, but including the value of any assets disposed of for less than fair market value (including a disposition in trust, but not in a foreclosure or bankruptcy sale) during the previous two years in excess of the consideration received therefor), provide: (a) the total value of all such assets owned by all such persons: $ , and C-3 (b) the amount of income expected to be derived from such assets in the 12- month period commencing this date: $ We acknowledge that all of the above information is relevant to the status of the subject project and rental unit complying with affordable housing requirements of Contra Costa County as set forth in a Regulatory Agreement and Declaration of Restrictive Covenants between the Owner and Contra Costa County. Date: Head of Household Spouse SUBSCRIBED AND SWORN to before me this day of (NOTARY SEAL) Notary Public in and for the State of My Commission Expires: ....................................................................................................................................................................................................................................................................................................................................... NOTE TO PROJECT OWNER: A vacant unit previously occupied by individuals or a family of Lower Income, may be treated as occupied by individuals or a family of Lower Income until reoccupied for a period not to exceed 31 consecutive days. C-=t I FOR COMPLETION BY PROJECT OWNER ONLY: I. Calculation of eligible income: (A) Enter amount entered for entire household in 6 above: $ (B) If the amount entered in 7(a) above is greater than S5,000, enter: (i) the product of the amount entered in 7(a) above multiplied by the current passbook savings rate as determined by HUD: $ (ii) the amount entered in 7(b) above: $ (iii) line (i) minus line (ii) is less than $0, enter$0): $ (C) TOTAL ELIGIBLE INCOME (Line I(A) plus line I(B)(iii)): $ I1. Qualification as individuals or a family of lower income: (A) Is the amount entered in line l(c) less than [50%., 80%, 120%) of Median Income" for the Area with adjustments for smaller and larger families.* Yes No . (B) If line II(A) is "No", then the household does not qualify as individuals or a family of very low income. III. (Check one) The household does not qualify as individuals or a family of [Very Low, Low, Moderate] income. The household qualifies as individuals or a family of [Very Low, Low, Moderate] income. C-5 IV. Number of apartment unit assigned: (enter here and on page one) Owner * "Median Income for the Area" means median income for the Contra Costa County, adjusted for family size as published by the California Department of Housing and Community Development pursuant to Health &Safety Code Sections 50079.5 and 50105. C-h EXHIBIT D CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE "The undersigned, being the authorized representative of (the "Owner") has read and is thoroughly familiar with the provisions of the Regulatory Agreement and Declaration of Restrictive Covenants with the County of Contra Costa. As of the date of this certificate, the following percentages of completed residential units in the Project (i) are occupied by [Very Low, Low, Moderate] Income Households (as such term is defined in the Regulatory Agreement) or (ii) are currently vacant and being held available for such occupancy and have been so held continuously since the date a Very Low Income Household vacated such unit; as indicated: Occupied by [Very Low, Low, Moderate] Income Households: percent Unit Nos. Held vacant for occupancy continuously since last occupied by [Very Low, Low, Moderate] Income Household: percent Unit Nos. Vacant Units: percent Unit Nos. The undersigned hereby certifies that the Owner is not in default under any of the terms and provisions of the above documents. Owner: By: I ts: D-1 EXHIBIT E COMPLETION CERTIFICATE The undersigned hereby certifies that all portions of the Project were substantially completed and available either for occupancy or use by tenants in the Project as of Owner: By: I ts: E-1 ATTACHMENT E Shapell Industries and Ecumenical Association for Housing Memorandum of Understanding m W:\Personal\\BoardOrders\BOAR D.doughertyva I I ey6.5 MEMORANDUM OF UNDERSTANDING BETWEEN SHAPELL INDUSTRIES OF NORTHERN CALIFORNIA AND EAH, Inc. The purpose of this Memorandum of Understanding (MOU) is to establish the basic terms of an agreement between Shapell Industries of Northern California ("Shapell") and EAH, Inc. or its affiliate (collectively "EAH"), regarding the development, construction and ownership of affordable rental apartments to be built on Shapell's portion of the Dougherty Valley Development known as Gale Ranch located in Contra Costa County ("Project"). These terms will be used as a guide for the development and will be incorporated into future agreements and documents required for construction and ownership of the Project. The Project will be comprised of a series of phases totaling between 390 and 500 dwelling units of very low and low-income rental housing. The total number of very-low and low income units shall be dependent on the total number of units approved by the County of Contra Costa for Gale Ranch. The low and very low income units shall be constructed on parcels integrated throughout the Gale Ranch portion of the Dougherty Valley Development. The Project will be developed in a series of phases ("Phase"). The first and second Phases of the Project will be for approximately eighty(80) units each of low and very-low rental income housing to be constructed within the two hundred thirty-two (232) unit apartment site approved as part of the Gale Ranch II Tentative Map. This two hundred thirty-two (232) unit site is located in the southeast quadrant of the intersection of Bollinger Canyon and Dougherty Roads (see Exhibit "A"). Start of construction for this first and second Phase is currently anticipated for late 2002. The third and fourth Phases will also be approximately eighty (80) units each of low and very-low income housing to be constructed as part of the four hundred fifty(450) apartment unit site that is part of the pending Gale Ranch III Tentative Map application. This four hundred fifty (450) unit site is also located south of Bollinger Canyon Road and adjacent to Alamo Creek (see Exhibit "A"). The next two (2) Phases would each range from eighty (80) to one hundred twenty (120) units of low and very- low income housing. One location for eighty (80) to one hundred twenty (120) units would be in Gale Ranch IV south of the Gale Ranch III elementary school site (see Exhibit"A"). The other location for the final eighty (80) to one hundred twenty (120) unit Phase would be in the Gale Ranch portion of the Dougherty Valley Village Center. The exact location and number of units in a Phase and income levels required by renters will be determined by Shapell, in consultation with EAH. The terms for affordability and requirements for the overall Project are defined in the Dougherty valley Affordable Housing Program established by Contra Costa County for the overall Dougherty Valley Development. After the first 80 unit Phase receives either an allocation of nine percent (9%) Low Income Housing Tax Credits, or an allocation of four percent (4%) Low Income Housing Tax Credits and Tax Exempt Bonds, Shapell and EAH will meet to discuss proceeding with subsequent Phase(s). Should Shapell and EAH mutually agree to proceed with any subsequent Phase, Shapell and EAH shall review this MOU and all other subsequent agreements between Shapell and EAH related to the first Phase, and make changes and/or additions as appropriate prior to proceeding with any subsequent Phase. Subsequent Phases will be timed and sized to best position EAR with applications for tax credits or other forms of subsidized financing, subject to the approval of Shapell. 1. Project Ownership Each Phase of the Project will be owned by a limited partnership ("Partnership"). EAH, or an entity formed by EAH, will be the Managing General Partner for each Partnership for the life of each Partnership. The General Partner will form the Partnership and admit the investor to the Partnership as a Limited Partner. 2. Project Development EAH will act as developer of each Phase. EAH and Shapell will coordinate efforts in order to assure consistency with the overall Gale Ranch project design, and compliance with the intent and specific provisions of the Dougherty Valley Specific Plan, Dougherty Valley Settlement Agreement and Dougherty Valley Affordable Housing Program. EAH will hire members of the development team, after consultation with Shapell. EAH will hire the architect, structural engineer and landscape architect, subject to the approval of Shapell, which shall not be unreasonably withheld, conditioned or delayed. Shapell will select civil, and geotechnical engineering support for the design efforts. Contracts with the Shapell-selected consultants, including the Shapell construction contract, if any, will be assigned to the Partnership for each Phase, subject to the approval of EAH, which shall not be unreasonably withheld, conditioned or delayed. All design, engineering, construction, and other contracts will be entered into by, or assigned to, the Partnership and shall be subject to the approval of the General Partner. EAH will seek predevelopment funding for each Phase from all reasonable sources including Contra Costa County. If, at any time and for any Phase, sufficient County predevelopment funding is not available, Shapell will pay predevelopment expenses until such time that funding becomes available for reimbursement of predevelopment expenses. Any such predevelopment funds advanced by Shapell and not reimbursed as part of the Phase's predevelopment expenses will be reimbursable to Shapell out of initial development funding or, if necessary, will be treated as a residual receipts loan(the "Shapell Subordinate Note #1") repayable only out of residual cash flow, in coordination with repayment requirements imposed by the County or other funding entity for its loan funds. However, at no time shall Shapell be responsible to fund in excess of 75% of predevelopment expenses for any particular Phase. The General Partner will attempt to secure funding sources for each Phase that will include, but are not limited to, the Federal Home Loan Bank's Affordable Housing Program (AHP), Contra Costa County administered HOME and Community Development Block Grant (CDBG) programs, and conventional mortgage loans. Shapell will be responsible for any funds required to complete the Phase. Should a Phase require additional financing backed by Shapell, any such financing shall not exceed that amount that can be reasonably demonstrated as being reimbursable out of development funds and/or residual cash flow. However, at no 2 time shall Shapell be responsible to fund in excess of 510,000 per unit of the funding necessary for the development of a Phase. All funds provided to the Phase by Shapell, not reimbursed during the course of development of the Phase, will be treated as a residual receipts loan and become a part of, should it exist, the Shapell Subordinate Note 'ridescribed above. EAH and Shapell will jointly be responsible for obtaining the remaining local entitlements. This effort will include review by the Dougherty Valley Oversight Committee (DVOC), City of San Ramon and the Contra Costa County Planning Commission. 3. Related Services The Partnership will engage EAH and Shapell for certain services related to the development, construction, and operation of each Phase. EAH will provide development services to the Partnership and be compensated with the Project's developer fee, as allowed by the California Tax Credit Allocation Committee. Shapell will have first right of refusal to enter into a construction contract with the Partnership as the General Contractor for each Phase on terms and conditions acceptable to Shapell and the General Partner. When acting as the General Contractor, Shapell will provide preconstruction value engineering services for the Phase. Shapell will also purchase building materials for any Phase Shapell acts as General Contractor. Shapell will charge the industry norm for profit and overhead for each Phase Shapell acts as General Contractor. Other terms including the form of the construction contract will be formalized in a later agreement. Any contractual relationship between Shapell and the Partnership shall be structured in such a manner as to not invalidate or limit in any way the insurance coverage available to or maintained by or for the benefit of EAH (including any coverage which may be available for the benefit of EAH and the Partnership through the General Contractor's policy) and in the Partnership, or any tax credits or predevelopment financing otherwise available to the Limited Partnership. In any event, Shapell Industries of Northern California will enter into a continuing guarantee to guarantee the terms and conditions of the prime contract with the Limited Partnership. EAH will provide services required for lease-up, property management and partnership management services during the operation of each Phase. The EAH and Shapell services mentioned above shall be provided to the Partnership at costs that are reasonable and competitive in comparison with other potential entities providing similar services. 4. Acquisition of Land The Partnership will acquire the land for each Phase from Shapell at the land's appraised value for multi-tenant residential development. Shapell, at its sole cost, shall be responsible for the subdivision of the land for each Phase. Appraised value shall be determined by a 3 licensed real estate appraiser acceptable to Shapell and EAH; and absent agreement, by a licensed real estate appraiser selected by the Contra Costa Board of Realtors. Title for the land for each Phase will be transferred to EAH or to the Partnership at no less than sixty (60) days prior to the deadline for submittal of an application for Low Income Housing Tax Credits. In order to be competitive under the "Leveraging" tax credit application guidelines, Shapell will donate a portion of the land value to EAH. In as much as EAH is a nonprofit corporation, Shapell may be eligible for tax incentives for having made a contribution to a charitable organization. EAH will in turn sell the land to the Partnership taking back the value of the donated portion of the land in the form of a subordinate land loan ("EAH Subordinate Note"). (According to the current California tax Credit Allocation Committee Regulations, in order to obtain maximum points in the "Leveraging" category the value of donated land must equal a minimum of$12,500 per unit.) Shapell will sell the remaining balance of land value to the Partnership. Should the development funds available to the Partnership for the development of a Phase prove insufficient to pay for the remaining land value Shapell will take back the balance through a subordinated land loan(the "Shapell Subordinate Note #2"). The foregoing land loans are repayable only out of residual cash flow, in coordination with repayment requirements imposed by the County or other funding entities for its loan funds. The priority for the repayment of these loans shall be; first, those funds provided by the County or other funding entity; second, the Shapell Subordinate Note #1 and Shapell Subordinate Note #2; and third, the EAH Subordinate Note. 5. Purchase of Tax Credits At present Shapell is interested in being the tax credit investor for each Phase. Accordingly, Shapell may elect to become the investor through a direct investment or through an affiliated partnership, formed by or on behalf of Shapell. Regardless of the structure of the Partnership, it is anticipated that the Limited Partner will retain up to ninety-nine and ninety-nine one hundredths percent(99.99%) interest in the Partnership with the balance being retained by the General Partner. In recognition of the fact that securing sufficient tax credit equity is essential to the success of the project, EAH and Shapell agree that the syndication price and terms for tax credits must be reasonably competitive when compared with other potential investor proposals. EAH will seek competitive syndication proposals from Shapell, or its related investment entity, as well as other acceptable investors. In order to be selected as the investor, the proposal from Shapell or its related investment entity must be no more than 5% less than the best investment proposal, all other things such as schedule of payments and deal terms being reasonably similar. Shapell will not be permitted to review other proposals before submitting their proposal. 6. Sale of Project After Tax Credit Compliance Period At the conclusion of the 15-year tax credit compliance period, EAE will have the right to purchase the Project, or the Limited Partner's interest in the project, for an amount equal to 4 outstanding debt, and will assume all subordinate loans. EAH will continue to operate each Phase according to its existing management agreements, consistent with all low-income covenants imposed by any of the various funding entities. Further, the property will remain affordable subject to the terms of all affordability requirements of any of the financing source(s). 7. Confidentiality The terms of this MOU are confidential and, absent mutual consent of the undersigned parties, are not to be shared with any parties outside of either Shapell or EAH, with the exception of each organization's respective attorneys. This MOU establishes a basic agreement between the undersigned for the development, construction, management and ownership of affordable rental apartments at Gale Ranch in Contra Costa County. It is anticipated that the parties will amend this MOU from time to time and enter into other more complete and fo rmal agreements at appropriate times in the future. Signed on this A�Iay of EAH, Inc. BY: -6 Z7 Mary Murtagh Its: President Shapell Industries Df North rn lifor is BY: Daniel W. Hanock Its: President 5 too— d l " �. ®� GALE RANCH O�rUs7 w1mcDc" sewn GALE RANCH PHASE If BOLUNGEN _ 180 UNITS p WANDEMERE HIGH SCHOOL GALE RANCH PHASE III 180 UNITS c [ � 0�0zf ` �- All— ch ALE RANCH PHASE IV 80 TO 120 UNITS ti v WINDEMERE ar COMMUN COLLEGE GALE RANCH VILLAGE CENTER 80 TO 120 UNITS GALE RANCH —N— EBWD CAMP PARRB 0 2000 KRr alta woo"I0N Crr7 Or SAN "WON 1 IDLE 2000 IL EXHIBIT A Ruggerl - GALE RANCHensen LOW AND VERY LOW INCOME HOUSING )Azar&Associates LOCATION MAP ;HOo,EOE)ii-Aaisao�,tF>< c°25"iµa300 OCTOBER 10, 2000 wl �.nu ATTACHMENT F Proposed Form of Disclosure of Dougherty Valley Affordable Housing Program W:\Personal\\BoardOrders\BOARD.dougliertwallev6.5 CONTRA COSTA COUNTY DOUGHERTY VALLEY AFFORDABLE HOUSING PROGRAM DISCLOSURE STATEMENT This statement applies to the following area: [Include map of project area or site description.] State Housing Element law requires California jurisdictions to analyze existing and future housing needs for all economic segments of the population and develop specific policies and programs to meet the identified needs. In order to assist the County in meeting the requirements of State Housing Element law, the Contra Costa County Board of Supervisors adopted the Dougherty Valley Affordable Housing Program (DVAHP) in March of 1994. The DVAHP was incorporated by reference into agreements between the County, Shapell Industries of Northern California, and Windemere Ranch Partners-BLC governing the future development of 11,000 housing units in the Dougherty Valley. According to the requirements of the DVAHP, a minimum of 25 percent of all housing units developed within Dougherty Valley must be affordable to very-low, low and moderate-income households. In addition, at least 10 percent of the affordable units must be affordable to very-low income households and 25 percent must be affordable to low-income households. Assuming all 11,000 housing units are developed, the DVAHP will result in the provision of 2,750 affordable housing units in the Dougherty Valley, including 275 affordable to very-low income households, 688 for low-income households, and 1,788 for moderate- income households. While the affordable housing obligation may be met through the development of either rental or ownership housing, current plans indicate that the majority of the affordable units will be apartments. Information concerning the status of the DVAHP including the location of proposed sites for the affordable units may be obtained from Shapell Industries (408/946-1550) and Windemere Ranch Partners (Lennar Communities 925/416-4949). 1 Very-low income households are defined as households with incomes at or below 50 percent of the area median income for Contra Costa County(AMI)as adjusted for household size and defined by the State Department of Housing and Community Development. Low-income households are defined as households with incomes atibelow 80 percent AMI,while moderate income households have incomes at/below 120 percent AMI. For example,in December of 2000,the maximum allowable income for a four person very- low income household was$33,800,the maximum income for a low-income household was$67,600 and 581,100 for a moderate income household. ti Please sign this Disclosure Statement in the space provided below and return it to: Shapell Industries Lennar Communities 100 North Milpitas Blvd. 5960 Inglewood Drive, # 220 Milpitas, CA 95035 Pleasanton, CA 94588 I have read and understand the above Dougherty Valley Affordable Housing Disclosure Statement including provisions that require the provision of housing affordable to very-low, low and moderate-income households in the Dougherty Valley. By: Dated: Signature of Buyer/Renter Print name of Buyer/Renter kkh/w/word/dvahp7 ATTACHMENT G Shapell Industries Annual Report as of October, 2000 W:\Personal\\BoardOrders\BOARD.dougheiiyva 11ev6.S SHAPELL INDUSTRIES of NORTHERN CALIFORNIA A Division of Shapell Industries, Inc. 01 F1"IR 29 Pl°i 2: 35 March 28, 2001 Mr. Jim Kennedy Community Development Department Contra Costa County 651 Pine Street Martinez, CA 94553 Dear Jim: Pursuant to the terms of the Thou-herty Valley Affordable Housing Program (DVAHP), Shapell Industries of Northern California is pleased to present to the County our annual compliance report for the year 2000. As always, thank you for your help in guiding us through the complexities of the reporting process and the varied aspects of providing a broad range of affordable housing in Dougherty Valley. This report has been somewhat delayed by our collective efforts to resolve the issues concerning the Falcon Bridge apartments in Phase I. As you are aware, both formal presentations to the Board of Supervisors and to the Dougherty Valley Oversight Committee (DVOC) as well as numerous discussions with staff have taken place. In light of the failure to reach consensus on possible revisions to the DVAHP and the fact that Falcon Bridge units will be occupied within the next 45 days, Shapell has determined that as of this time, we will rent 182 of the 256 units at Falcon Bridge at no more than 100% of median income based on family size. This figure represents 15% of the total first phase (the Bridges at Gale Ranch) unit count of 1,216. Policy H-6 of the Specific Plan provides for a minimum of 15% per phase affordability. Policy D.2.a. of the DVAHP also reflects this requirement. Since our last report, a good deal of progress has been made with respect to ascertaining where and when we will be able to meet the goals of the DVAHP. As you're aware, Shapell has entered into an agreement with Ecumenical Association for Fkousing (EAI1) to provide low and very-low income units throughout the project. Previous annual reports have indicated that finding a way to finance and provide these units was especially challenging. Your office has been helpful in working with Shapell and EAH in hammering out the details of this part of the plan. Accordingly, we are very happy to report that throughout the remainder of the project, low and very-low income units will be provided. Also, given the nature of competitive financing and the opportunities for tax credits financing for very-low income units, there is a high likelihood that of the 35% low and very-low units (25% + 10% respectively) of the 25% overall affordable units required, there will be a greater ratio of very-low income units than low. Affordability will be deeper and more widespread than we originally had thought and deeper than the DVAHP requires. Homes of Quality Since 1955 P.O. Box 361169, 100 North Milpitas Boulevard, Milpitas,California 95035 Phone:408/946-1550 Fax: 408/946-9687 Mr. Jim Kennedy March 1, 2001 Page 2 With respect to moderate income units, Shapell is exceeding the minimums required for Phase 1. Thus far, five homes have met moderate income requirements based solely on the income of the buyers. Coupled with 182 Falcon Bridge affordable units, we will be certain of 187 in Phase 1. We also estimate than another 20 units will meet income-level moderate thresholds as the remaining 144 Cedar Bridge townhouses are brought to market. As will be true elsewhere in the project, the smaller market-rate units (i.e. townhomes) will likely attract a greater percentage of these type of buyers than the larger homes Gale Ranch started with. As you will recall provision C on page 22 of the DVAHP allows up to half of our moderate income requirements to be met through incomes only. It's unlikely that we'll ever even approach such a ratio. We estimate that at buildout of Phase 1, there will be 207 moderate income units, exceeding Phase 1's requirement of 198. Because of initial project costs, low and very low income units were never planned for Phase 1. Low and very low income project requirements are being met in Phase 2 and 3 through the EAH program. Shapell in working diligently to finalize all permit requirements for Phase 2. We are hopeful that needed federal and state authorizations are forthcoming and we plan to begin grading the site this Spring. As was directed in the Specific Plan, Phase 2 is a denser, more varied and, hence, more affordable area than Phase 1. The same is true to an even greater degree in Phase 3. Phase 2 will include 1,825 units with a wide-range of product types. Included are 232 apartments of which 160 are allocated to low and very-low income units provided by EAH. The remaining 72 will all meet moderate-income requirements at 100% of median. Neighborhood 10 calls for 93 townhouses, all of which we plan to sell meeting moderate- income thresholds at 120%. Another 146 townhouses may provide further chances for sale and income based affordability. The high ratio of attached product, including the 256 courtyard units, will further allow for income-based qualification. Therefore, we estimate that another 60 units of income-based qualifiers will live in Phase 2. Phase 2 has a target of 296 moderate rate units. By totaling the 9 carried over from Phase 1, the 72 at the apartments, the 93 at the townhouses and the 60 additional income- qualifiers, we reach a level of 234 or 62 short of the goal. However, this figure exceeds the minimums allowed for on page 23, section 2a of the DVAHP which equate to 178. This section requires that the shortfall of moderate-income units need to be made up in the next phase. Phase 3 is designed to do just that. Mr. Jim Kennedy March 1, 2001 Page 3 Phase 3 is a proposed tentative map under review by County staff. It calls for a still- denser area of 1,433 homes on 130 net acres or an average of 11 units per net acre. 423 apartments are planned of which EAH will work on 160 for low and very-low units. The remaining 263 can all provide moderate or even some additional low-income homes. There are 374 townhouses proposed at densities that will allow both sale and income based qualification. 147 innovative Cottage Homes of between 2,600 and 3,100 square foot lot sizes are included further enhancing affordability. In fact only 289 of the 1,433 units are traditional, single-family lot units typically found in suburban areas. Therefore, 80% of Phase 3 provides the type of housing that allows affordability to be realized and for a greater variety in product choice. The attached tables quantify the spread of units throughout the project through Phase 3. Additional low and very-low income units in 2 pods of up to 120 units each are part of the program with EAH located in Phase 4 and the Village Center. This could bring our total to 560 low and very-low units, exceeding the 510 called for in the DVAHP. Once again, its is likely that the majority of these units would be very-low income instead of the roughly 70% to 30% ratio in favor of low that the DVAHP sets forth. Thank you for your help. On behalf of Shapell Industries of Northern California, I look forward to our ongoing collective efforts to bring affordable housing to the Tri-Valley area. Sincerely,: Thomas J. Koch Vice President Shapell Industries of Northern California d � d ,ti ntn og � � co ° coo pro, I t0 o — 8b o �.. � o Soo .A••� A /� 00 •,j�C'1 "rty1 C� O Pj ON C:r 'r� r�"p' x•cf U t7 oo Gt„ a rnn�'� n .-• pr C. v ,man to >it 00 .� r+• p c -WNLh rn 7 -n^n n 11t 6r c ibml N © 'fix N �• e•+ � .. f 0WigCJ ; a ., ACU, �' ►-3 ..1 *d �" Aa roxa it �• it x o � ° o a , 0 o oNio c x no °• Ed w w5 o' * g * f w �ro w r+ 7 "Ar� oZ opo * � B * Lo 0n Eos � A5 � �," * roo 0w r�i * Co, * �O * co n * o * -� *co oo * G fD + * Co 5 ~ * + + • N * Ilt 11 r 101, 'Qe �n•n •o � � 08 � :9. a° 01 w r'b ° `� M D � Oo oa Cl. n �. o ,� c� ttA pr Q o (4 0 i ATTACHMENT H May 22, 2001 Letter of Tri-Valley Interfaith Poverty Forum W;iPersonal\\BoardOrdem\BOARD.doughcn�•a l leN,6.5 Memo May 22, 2001 To: Contra Costa Board of Supervisors From: Tri-Valley Interfaith Poverty Forum P.O. Box 1652 San Ramon,CA 94583 Maurine Behrend, coordinator Tom Kirk, Danville Contact 961 Maricaibo Place 524 Norfolk Place San Ramon, CA 94583 Danville,CA 94506 Phone: (925)820-0758 (925)7363626 Fax: (925)838-2483 Email: mbehrend@home.com Email: TEKIRK@aol.com We want to offer our services to you to help you keep monitor the compliance of the affordable housing agreement in Dougherty Valley. As concerned citizens involved in serving low-income people in the tri-valley,we are aware of the crisis in affordable housing in the bay area;and of the human cost. These are not just numbers to us,these are people we know who are suffering. We are also aware that the affordable housing agreement in Dougherty can do much to alleviate this problem, but we are concerned about compliance. Please direct your planning staff to answer the following questions. 1. How many units are occupied in Dougherty Valley to date? 2. How many of those units are affordable to very low, low and moderate income levels? 3. How do these numbers align with the agreement? Any other information that will help us monitor this agreement would be appreciated. REQUEST TO SPEAR FORM 01 (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before LLaddressing the Board. Name: CA 6 �Y< < ��? r`'e� Phone: F c J A ,/� 1 Address: Jam`7� S�II-C� �l City: elct we)iv I am speaking for myself or organization: (name of organization) CHECK ONE: I wish to speak on Agenda Item # .-A) rD Date: �- My comments will be: general for against ��// I wish to speak on the subject of -T ,- I do not wish to spe k but leave these comments for the Board to consider: (� seal 15;t& of no J4 &A-az -r o •tet, 0 0 6 r' SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2 . You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4 . Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAR FORM :D-3 (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. r- Name: JC Phone: Address..-5 City: Sq KJ /7/3 7d�/ I am speaking for myself or organization: (name of organization) CHECK ONE: I wish to speak on Agenda Item # I✓ ✓ Date: My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2. You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4 . Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . I am here today to shed some light on the subject of affordable housing in San Ramon. C&LvdA Until yesterday, our neighborhood in San Ramon was very Aff='aGle. Now, it is considered undesirable due to the actions of the Dougherty Valley Developers and the City of San Ramon. It is now a neighborhood referred to by the Dougherty Valley Developers as "Little Miami"! The groundwork was laid in 1995 by the County, the Developers and the City of S Ramon when they signed an agreement which gave away the rights of the homeowners in this afWA4ab4oe area. It was an agreement which will allow an 18 million gallons per day sewer transfer line to be laid in our neighborhood by the Central Contra Costa Sanitary District. This decision was made in 1995, but the residence were not notified until the end of 1999. At our first meeting in January 2000 we were told by Central San it was a done deal. When someone asked why not have the pump station in the Dougherty Valley, we were told you can't have people driving up to Club Sport and see the pump station or smell the sewer. In our neighborhood there are houses where real people live, not just exercise for an hour and leave. We cure about our neighbor even if our house will not sell for 800 or 900 thousand dollars. If the Dougherty Valley Developers promised to build affordable housing,they should be held accountable for their commitments and promises. The Dougherty Valley Devleopers do not care about the City or the people of San Ra-non. All they care about is how much profit they will make when they sell a house. It is up to you, our elected officials, to see to it that the people who elected you are treated fairly. When a candidate is voted into office, it is because the people have placed their trust and lives in your hands. Please support everyone fairly regardless of race or status of income. REQUEST TO SPEAR FORM . 3 (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: 1�.) 1, f�o��n��.,n�► Phone: T37-4"I crg Address: do S��,n� f ���,�,�"hy CaK��' City: PZY7V JJ,,--, I am speaking for myself or organization: (name of organization) CHECK ONE: I wish to speak on Agenda Item Date: a 1 My comments will be: general for X against I wish to speak on the subject of 5La4w C� � ►gin em ' I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2 . You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4. Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAR FORM (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressi g the Board. Name: A A ` Phone: Address: City: C.y/�J� r- I am speaking for myself or organization: T,, , -- buf (name of organization) CHECK ONE: , I wish to speak on Agenda Item # �- Date: O- My comments will be: general for X against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2. You will be called on to make your presentation. Please speak into the microphone at the podium. 3 . Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4 . Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAR FORM (THREE (3) MINUTE LIMIT) 5- Complete this form and place it in the box near the speakers' rostrum betore addressing the Board. Name: Phone: Address: `�Z� City: I am speaking for myself or organization;—!_ID I ep -1y(i��� (name of organization) CHECK/ONE: 7 V I wish to speak on Agenda Item # _ Date: My comments will be: general for x �ainst I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2 . You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4. Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . lir WUZ5T TO SPEAK FORM (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers � rostrum before addressing the Board. Name: � � < Phone: Address: .� Y N D�- City: I am speaking for myself T organization: (name of organization) CHECK ONE: I wish to speak on Agenda Item # Date: My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2. You will be called on to make your presentation. Please speak into the microphone at the podium. 3 . Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4 . Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating coiainents made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAR FORM (THREE (3) MINUTE LIMIT) complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: &I ✓L :O- S Phone: W 6� ,:?y��PY6� QJ Address: Q YID (e city I am speaking for myself or organization: cu o1- �od-e-rs 6 , (name of organization) CHECK ONE: V I wish to speak on Agenda Item # r�D Date: My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2. You will be called on to make your presentation. Please speak into the microphone at the. podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4. Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAR FORM (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum. ore addressing the Board. (� q Name: %�kv� YYU r-k Phone: 6 °2 D 1 Address: ` hh�°` �Q City: 00-- (-,- I am speaking for myself or organization: ust;,Q 61U (name of organization) CHECK O : J�'A ,�e 14-pQ5,7- �ss� I wish to speak on Agenda Item # Date: My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2 . You will be called on to make your presentation. Please speak into the microphone at the podium. 3 . Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4. Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAK ORM C/ PEA F 3 (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near th�Aaykerfl' rostrum before addressing the Board. Name: d r�0- Phone: 313 a z 6 43 C�trdoW)4 Address: city: ;,o r 7 I am speaking for myself or organization: L'�, 1� ("o (name of organization) CHECK ONE: / I wish to speak on Agenda Item # L Date: �T My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. . 2;. You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4. Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . tcZWur;al' 1'U tfYKAK FORM (THREE (3) MINUTE LIMIT) �d Complete this form and place it in the box near the spec ers' rostrum before addressing the Board. Name: .�.w�.YJ Phone: C�2s��33 'y� oL6 Address: °�,1 �� � - 7 ,� City: �t.MuV`ty� I am speaking for myself _� or organization: (name of organization) CHECK ONE: I wish to speak on Agenda Item # Date: .-C) My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2. You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4 . Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAR FORM J (9* (THREE (3) MINUTE LIMIT) ✓✓<< Complete this form and place it in the box near the speakers' rostrum before addressing the Board. � G Name: -DEMIVl� y l� � Phone: Address: 25 AfAg L y �* City: 54 0 V4/-tOA I am speaking for myself or organization: 6e7Mt-FLAtJ FW16r21-) Gp(U M66lD (name of organization) CHECK ONE: J / I wish to speak on Agenda Item # Date:' �( 7( b / My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2. You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4. Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAR FORM (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. o Name: �D�-) n�+q I C' l��'�/ Phone: q�J�dHCl 7 1 Address: - �s I�L6aj1ay),Jq -D( 4Q City: I am speaking for myself _ or organization: (name of organization) CHECK ONE: I wish to speak on Agenda Item # 3 Date: 947 1/d/ My comments will be: general X- for against I wish to speak on the subject of 8EfEe)� I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2 . You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4 . Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAR FORM 4 i3 (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: tq ��&v► Phone: U5_' ( 33—&-030 Address: � 7T /)71UVW V&A . 4-vc--• City: I am speaking for myself or organization: 1 144 T'G►r' ( bft ej o/��C� .LAA ICU D Y-t_.5 i (name of organization) CHECK ONE: I wish to speak on Agenda Item # Date: 7 igl My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2. You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4 . Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAR FORM :D5 (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. cc Name: awim �� Phone: 0070-a7Sb n0, �oq //io SZ J Address: 9(0 l !��«��� �l City: ea*x� I am speaking for myself or organization: (name of organization) CHECK ONE: / l� I wish to speak on Agenda Item # Date: My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2. You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4. Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) . REQUEST TO SPEAK FORM (THREE (3)MINUTE LIMIT) Complete this form and place /- it in the /box near the speakers' rostrum before addressing thhe�Board. Name: Ax al l l� 1 �i'/�/ Phone: Address: City: Ii'/K6'/4 I am speaking for myself or organization: Oo Fo ?"y jvt. (name of organization) CHECK ONE: I wish to speak on Agenda Item# Date My comments will be: general for against I wish to speak on the subject of � - I do not wish to speak but leave these co for th Board to Consider: ents SPEAKERS 1. Deposit the"Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered 2. You will be called on to make your presentation. 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Name: . )bhV tf /OV Phone: Address: �o1214 City: I am speaking for myself V/ or organization: (name of organization) CHECK ONE: I wish to speak on Agenda Item # Date: My comments will be: general for-3 d aaainst I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: 30 � SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered.. 2. You will be called on to ;make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4 . Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made' by previous speakers. 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OF iS r ills I'III a August 7, 2001 Writer's Direct Dial Number (925) 242-0811 ffRECEIVED The Honorable Donna Gerber Supervisor 01 Contra Costa County Board of Supervisors CLERK'BOARD AOFOSU CO.ISORS 309 Diablo Rd. Danville, CA 94526 Re: Dougherty Valley Affordable Housing Dear Supervisor Gerber: We understand that the Board of Supervisors will consider today means of resolving ongoing difficulties relating to the interpretation of the Dougherty Valley Affordable Housing Program (DVAHP). In particular, the Board will address the required affordability term for moderate rate rental units under the DVAHP. In response to your query, this is to inform you that Windemere BLC Land Company, LLC, has taken no particular position on this particular issue and will abide by whatever final resolution is reached, provided that resolution is applied uniformly within the Dougherty Valley and generally makes sense within the context of Windemere's proposed affordable housing program. See attached July 13, 2001 letter to Debbie Sanderson. Although Windemere would expect to participate in any proceeding seeking a judicial interpretation of the DVAHP (given that any such proceeding could affect the nature of Windemere's obligations), Windemere does not itself plan to initiate any such proceeding as a result of today's hearing. If you have any questions, please call. rs trul and A. Petersen we-58218 3130 Crow Canyon Place, #310, San Ramon, California 94583 — (925) 242-0811 RIM FILE COPY July 13, 2001 Ms. Debra R. Sanderson CDD Compliance Monitor County of Contra Costa Community Development Dept. 651 Pine St., 2nd Fl., No. Wing Martinez, CA 94553 Dear Debbie: Condition No. 19 of the conditions of approval to Subdivision 7976 (Windemere Phase I) requires Windemere BLC Land Company, LLC ("Windemere") to provide affordable housing consistent with the Dougherty Valley Affordable Housing Program ("DVAHP") adopted by the Board of Supervisors on March 22, 1994. Condition No. 19 further requires Windemere to demonstrate to the County's Zoning Administrator, prior to the filing of each final map, how this will be accomplished. This condition is intended to implement the provisions of the Dougherty Valley Specific Plan (the "DVSP") relative to affordable housing and Section 3.05 of Windemere's development agreement with the County (the "Development Agreement"). As background, on November 19, 1996, the County of Contra Costa approved a vesting tentative subdivision map and final development plan for "Windemere Phase I," which will include 2249 residential units. Windemere is now seeking large-lot final map approval for Windemere Phase 1, including the multi-family area located west of Bollinger Canyon Road (the "Multi-Family Area"). As required by Condition 19, this letter describes Windemere's affordable housing program for Windemere Phase I. As you know, the DVAHP requires twenty-five percent (25%) of the units within the Windemere Project to be affordable to households of moderate, low and very low incomes. Of this twenty-five percent (25%), sixty-five percent (65%) are to be affordable to moderate-income households and twenty-five percent (25%) and ten percent (10%) to low- and very low-income households, respectively. Accordingly, the construction of 2249 units in Windemere Phase I will generate an obligation on Windemere's part to construct 562 affordable units, as follows: 3130 Crow Canyon Place, #310, San Ramon, California 94583— (925) 242-0811 Debra R. Sanderson July 13, 2001 Page 2 of 3 365 Moderate Income 141 Low Income 56 Very Low Income 562 Total Although the DVAHP permits Windemere to defer the construction of some portion of these units to later phases, Windemere will in fact provide in Phase I almost tivice the number of affordable units required for Phase I, as follows: 650 Moderate Income 250 Low Income 100 Very Low Income 1000 Total The construction of these proposed 1,000 affordable housing units in Phase I will satisfy Windeinere's affordable housing obligation for all dwelling units that may be built by Windemere up to its 3995-unit share of the 8500-unit traffic checkpoint established under the 1994 Settlement Agreement between the County, Windemere, Shapell, the Town of Danville and the City of San Ramon (the "Settlement Agreement"), as follows: 3995 Units x 25% =998.75 Total Required Affordable Units. 650 Moderate Income 250 Low Income 100 Very Low Income 1000 Total All of these units, which will be rental units, will be constructed in the "Multi- Family Area" (See Attachment A) on 3 parcels totaling approximately 35 net acres and at a density (28.57 /acre) consistent with the "Multi-Family High" land use designation of this area as shown on the DVSP. Based upon the current demand for rental housing in the San Ramon area (Tri-Valley vacancy rates are less than two percent (2%) at this time), and the availability of this site for construction, we believe it is feasible to have all 1000 units of affordable housing available within the next three years. BLC is now soliciting proposals from one or more apartment builders for the construction and management of the proposed 1,000 affordable units. Any sale would include contractual provisions to facilitate the delivery of these affordable units and, in . furtherance of this goal, the County's approval of a "Transfer Agreement" would be sought as anticipated by Section 13 of the Development Agreement. Windemere Debra R. Sanderson MI-F-T TO-i T r ORI July 13, 2001 Page 3 of 3 expects that the "Low" and "Very-Low" components of this program will be satisfied through dedications to a non-profit entity as provided for in the DVAHP. Design and site plan review (in the form of a final development plan amendment as anticipated by Condition 7 of Windemere's 1996 approvals) will be submitted to reflect this program following selection by Windemere of its apartment builders. As indicated in earlier correspondence with your office, no specific plan amendment will be required to satisfy the density limitations included in the Dougherty Valley Specific Plan. The County's prompt approval of Windemere's proposed final map is, of course, absolutely required to assure completion of the foregoing affordable housing goals. We understand that the Board of Supervisors will, on August 7, 2001, consider potential solutions to the outstanding "affordability term" problem relating to the Dougherty Valley's moderate-rate rental units. To ensure that any continued delays in the resolution of this problem do not hinder Windemere's ability to subdivide its parcels for delivery to affordable housing builders. We are prepared to meet with you on August 8 to resolve any issues remaining following the Board's decision. We respectfully request your concurrence that the aforementioned program is acceptable to the County and that Windemere has satisfied the requirements of Condition No. 19. We look forward to working with you further to secure the County's approval of Windemere's final map -- consistent with the County's "diligent processing" obligations under Section 6.01(3) of the Development Agreement -- and delivering the affordable housing so clearly needed for the Tri-Valley. Very truly yours, Richard A. Petersen Windemere's tentative map and final development plans for Phase I were subject to a condition (No. 7)that the Multi-Family Area would be subject to some redesign (without reducing unit counts) and a subsequent final development plan amendment. n C�Z to i A z s ; � t x n2 � ' F Cy i EAST BRANCH CREEK 1 7n� J ' J AUG 0 7 LUU1 0 PS To:Contra Costa Board of Supervisors 651 Pine St. Martinez, CA 94553 Dear Board of Supervisors, It has come to our attention that the developer, Shappell, of the Dougherty Valley Housing Units, is trying to wriggle out of the original agreement he had when this .—__ao.,-I-,,,,,o„*_.x,.ap-_.,la,,,,Pd rhar_rhere would_be.a_30 vear term on the agreement to keep i ` j 1 � � l .... '. - 1 _ .. .t !: � 1 .. • - ..�1 _ , N v 0 to �o d G CD N .o L v 0 r o�� Z �4 ca � G ANO i� f ,'� ' , 1 •. �'. �•� ��� `. • \� ,\ .�, �`\ !� \ /r+ _ � \ f /: s CONSIDER b 4"iTH_ RECEIVED AUG 0 6 2001 CLERK BOARD OF SUPERVISOR'S CONTRA COSTA CO. August 1, 2001 Contra Costa Board of Supervisors Clerk of the Board 651 Pine Street Martinez, CA 94553 Dear Board Members - This letter is to state my very deep concern that on August 7 you vote to hold Shapell Industries to the requirement that 25% of their Dougherty Valley development be set aside for affordable housing FOR THE 30 YEARS . AGREED UPON. In a time of impending recession and in an area of mobility such as ours, the idea that initial renters would be permanent enough to assure . maintaining affordable housing availability is to be honest visionary- and impractical.. Within a short period of time, if Shapell's plan is allowed, very little of the 25% affordable housing will be accessible. As a citizen of the County and an active . participant in issues of homelessness/housing through my church, Interfaith and other civic -organizations, I really am concerned that if you allow Shappell to opt out of their original agreement, it will set a disastrous precedent for future housing in the County. I.urge you to vote responsibly. Respectfully, Dorothy W. ance 1164 Lincoln Ave. 4x253 Walnut Creek, CA 94596 Phone 925-938-9286 _# «;. � . . •; .; _ �. � t '� � . �. ,• , .. t - . Z , \ � . - . S CD V--4 � cn 04 Ln A PIZ ® t \ 4 Q k E-Aiz tn Q § \ o E-4 4A ® ► i Q ¢ \ r a - � � . E-A � r-A � to / g a |� � � \ q \ Al 2% ' ¥ \ � � 1 � CONSIDER WITH� - DAnv�,E August 1, 2001 Hon. Gayle Ulkema, Chair Contra Costa County Board of Supervisors 651 Pine Street Martinez, CA 94553 Dear Chair Ulkema and Members of the Board: At your June 24 meeting, I urged the Board to require Shapell to comply with the Dougherty Valley Affordable Housing Agreement--specifically as it related to term of affordability. I mentioned that what your staff is recommending isn't breaking new ground Regulatory agreements, reporting and monitoring systems for apartments and for-sale units, and twenty or.thirty year requirements for affordability aren't that unusual in the San Ramon Valley. Since 1990 Danville has processed twenty-two residential subdivisions of varying size that were subject to inclusionary housing requirements. In each project, a range of 10%, to 25% of the units had an affordability component for low or moderate-income households. Danville policy requires that the units be constructed, rather than the Town accepting in-lieu fees. The units have been built, and are required to remain affordable over time--for at least twenty years. There are also regulatory, reporting, and monitoring agreements in place. Chair Ulkema requested documentation related to term of affordability. In response, I have attached a memo from Danville Chief of Planning Kevin Gailey which includes three different affordability agreements. Thank you for the opportunity to provide this information. Either Kevin (314-3305) or I (837-3231) would be happy to answer further questions. Sincerely, Millie Greenberg Councilmember, Town of Danville 510 La Gonda Way• Danville,California 94526-1740 (925)314-3300 I r MEMORANDUM DAIYVII,LE . July 31, 2001 To: Councilmember Greenberg From: Kevin J. Gailey, Chief of Planning Re: Term of affordability for affordable housing units This memorandum summarizes the term of affordability imposed on affordable housing units developed in Danville in conjunction with the Town's inclusionary housing efforts. The Town's Inclusionary Housing Ordinance regulations have been imposed on a total of nineteen projects, with an affordable housing component having been established within each of these projects. Inclusionary housing regulations contained within Community Redevelopment Law (applies to Danville's Redevelopment Area) have been implemented by Danville on three projects within the downtown area. An affordable housing agreement ("Agreement") has been required for each of these twenty-two projects. The term of affordability is established by each Agreement, in each case running for a period of twenty years. To date there have been three ways that projects have addressed the requirements of the inclusionary ordinance. A sample for each approach is summarized below. A copy of the recorded housing agreement for each of the three examples is also provided. The language in each Agreement that speaks to term of affordability for the affordable units developed in the project is highlighted for your review. A. Greentree Apartments — an example of a for-rent residential project subjected to inclusionary housing requirements that mandated the creation of moderate income housing for-rent units with a 20-year term of affordability. The Danville Town Council approved the Greentree Manor Apartment project in October 1997. The approvals provided the applicants (Intrepid Partners, LLC) authorization to construct and operate a 38-unit apartment/condominium project. The subject property was a 2.33+/- acre site located at the northwest corner of the intersection of San Ramon Valley Boulevard and Podva Road, just south of Danville's downtown area. Project conditions linked the approval to the provision of either for-rent or for-sale affordable housing units. The affordable housing agreement ("Agreement") for this project is attached as Exhibit A of this memorandum. The Agreement established the requirements for the designation, set aside and.retention of six for-rent moderate-income units 'for a twenty-year term, which commenced with the recordation of the Agreement. 510 La Gonda Way- Danville,California 94526-1740 (925)314-3300 Pursuant to the provisions contained in the Agreement, as long as the project is operated as a rental project, it will be deemed an affordable-by-design project if the initial schedule of rents makes all units in the project affordable to households earning 100% or less of the published area median income. The affordable-by-design designation for the project will be retained until such time that the rent schedule is adjusted upward to take the asking rental rate for vacant units or occupied units to a price that would be higher than could be afforded by households earning 110% of the published area median income. If and when this situation occurs, provisions in the Agreement will come into play to require the apartment project owner/operator to observe limits on the maximum rent charged for a minimum of 15% of the units in the project (i.e., six of the 38 project units). Specifically, the owner/operator would be required to identify which six units in the project are designated as the affordable housing units (for moderate income households earning no more than 110% of the published area median income — adjusted for household size). Additionally, the owner/operator would then need to abide to .specific administrative and reporting requirements verifying household income levels for tenants in the affordable housing units and verifying that rents charged for these units do not require more than 30% of the gross household income of the tenants. B. Quail Gardens — an example of a for-sale project subjected to inclusionary housing requirements that mandated the creation of moderate income housing for-sale units with a 20-year term of affordability. The Danville Town Council approved the 40-unit single family residential Quail Garden project in the Old Blackhawk Road Specific Plan Area in February 2000. Project conditions of approval for the project required the developer (Trident Construction) to provide four for- sale units having sale prices that do not exceed the maximum price affordable to a four- person household earning 110% of the published area median income. The four affordable units were required to be located amongst the market-rate for-sale single family units in the project. The affordable housing agreement ("Agreement") for this project is attached as Exhibit B of this memorandum. The Agreement establishes the requirements for the designation, set aside and retention of four for-sale moderate-income units for a twenty-year term, which commences with the sale of the four respective units. The Agreement establishes limits for the maximum sales price for these units and sets the maximum allowable household incomes for buyers of these units. These controls apply both to initial sales and for resale situations. There is no provision in the Agreement that establishes a first right of refusal for the Town to purchase the unit or that releases the owner of the unit from the provisions of the Agreement if the Town does not purchase the unit when offered in sale. C. Victoria Place — an example of a for-sale project subjected to inclusionary housing requirements mandating the provision of for-rent below market rate second dwelling units into five of the 19 units in the project with a 20-year term of affordability. The Danville Town Council approved the 19-unit single family residential Victoria Place project in the Old Blackhawk Road Specific Plan Area in January 1998. Project conditions of approval for the project required the developer (Davidon Homes) to incorporate for-rent below market rate second dwelling units into five of the 19 units developed in the project (i.e., into 25% of the units in the project). The for-rent below market rate second dwelling units, when rented, are required to be made available to low income households (i.e., a one- or two-person household earning no more than 72% of the area median income). The affordable housing agreement ("Agreement") for this project is attached as Exhibit C of this memorandum. The Agreement established requirements for the occupancy, sale and resale of the for-rent below market rate second dwelling units established in the project for a twenty year term, which commenced with the recordation of the Agreement. L4 :,..:- llll iil Ili!lil ll illi{li Illi i ll lilil i Illi!li I Ilii! CONTRA COSTA Co Recorder Office Recording Requested By, STEPHEN L. WEIR, Clerk-Recorder Town of Danville DOC— 2001-0011159-00 Check Number Return to: Wednesday, JAN 17, 2001 08:100:00 FRE 50.00 Cir'clerk Ttl Pd $0,00 Nbr-0000224656 Town of Danville ka+/R511-13 510 La Gonda Way Danville,CA 94546 Document Title(s) Affordable Housing Agreement Between the Town of Danville And Intrepid Partners,LLC. Pertaining to the Op eration of Greentree Manor as a For-Rent Apartment Project DAnyILLE January 12, 2001 Contra Costa County Recorder's Office - P.O. Box 350 Martinez, CA 94553 Re: Affordable Housing Agreement Enclosed is an Affordable Housing Agreement between the Town of Danville and Intrepid Partners, LLC. — Pertaining to the Operation of Greentree Manor as a For-Rent Apartment Project. Please record and return the original recorded document to our office. If you have any questions, please feel free to contact our office at (925) 314-3388. Thant: you. Sincerelv. r' Rochelle Flotten Assistant to the Town Manager :rf Enclosure ;10 la Gonda �%a% • Danville, California 9.3526-1740 (925)314-3300 RECORDING REQUESTED BY: Town Manager. Town of Danville WHEN RECORDED. RETURN TO: Town of Danville 510 La Gonda Way Danville. CA 94526 Attention: Kevin Gailev Chief of Planning AFFORDABLE HOUSING AGREEMENT BETWEEN THE TOWN OF DANVILLE AND INTREPID PARTNERS. LLC. - PERTAINING TO THE OPERATION OF GREENTREE MANOR AS A FOR-RENT APARTMENT PROJECT This .Affordable Housing Agreement ("Agreement") is entered into as of I lam- - 200 . by and bet-ween the Town of Danville. a municipality ("Danville") and Intrepid ners. LLI. r ("Developer" or "Apartment Manager''), the developer of certain real propem? in the Town of Danville. Contra Costa County California. RECITALS A. Developer is developing that certain 38-unit apartment i condominium project in the Town of Danville commonly referred to as "Greentree Manor". Subdivision 8014. and more particularly described in Exhibit 1 attached hereto and incorporated herein (the "Propem-"). The Property is a 2.33=/- acre site located at the northwest corner of the intersection of San Ramon Vallev Boulevard and Podva Road. The Town approved the development of the Property pursuant to Council Resolution No. 77.A-97 and Council Ordinance No. 97-04. B. Project conditions of approval imposed through the adoption of' Council Resolution No. 77A-97 linked the project approval to the provision of either for-rent or for-sale affordable housing units. Specifically. project Condition of Approval #1.8 requires Developer to address the inclusionan, housing requirements applicable to the project pursuant to the Town's Inclusionan- Housine Ordinance. Ordinance No. 94-06 (as amended by Ordinance No. 98-04). As it is the intent of the Developer to construct and operate the project as a rental project, the Developer is requesting authorization to meet said requirements by assuring that a minimum of 15% of the units in the project (i.e.. six units) are available as for-rent moderate income units (each a "for-rent MIU"). This Agreement establishes the requirements for the designation. set 1 aside and retention.of the six.for-rent MIUs for the twenty.(10) year term of the..agreement. Which commences with the recordation of this Agreement. C. The Town has made a commitment to comply with State law and to provide safe and decent housing for all economic segments of the community and the project will assist the Town in attaining this Boal and. as such. both parties desire to provide the for-rent MIUs for the residents of Danville under the terms and conditions set forth herein. D. The purpose of this Agreement is to implement the project conditions of approval by providing suitable mechanisms for establishing and insuring the continued viability of the Tor- rent MIU program. as agreed between the parties. - E. This is an integrated agreement and it is intended that the entire Agreement -,\-ill be recorded to encumber the Property for the term specified within. At such time that the project`s for-rent MIU program is proposed for conversion to a for-sale MIU program (i.e.. the Developer records a condominium plan for Subdivision 8014 and the 38 units in the project are made available for individual ownership). a Revised and Restated Affordable Housing Agreement shall be executed and recorded for the Propem,. The Revised and Restated Affordable Housing Agreement utilized for the for-sale MIU program shall be subject to review and approval by the Town and shall be substantially consistent with the draft Revised and Restated Affordable Housing Agreement provided as Exhibit 3 of Attachment A of Agenda Item =5 of the Danville Town Council meeting of March ?. 1999. In the case of conversion to a for- sale MIU program. the Revised and Restated Affordable Housing Agreement shall be recorded as an individual restriction against each of the six designated for-sale MIUs.. NOW. THEREFORE. the parties hereto agree as follows: AGREEMENT I. .-AFFORDABLE HOUSING RESTRICTION If operated as a for-rent MIU project. the project will be deemed an affordable-by-design rental project in terms of the pro.iect's inclusionan- housing requirement it' the initial schedule for market rental rates. adjusted for household size. is such that all the units in the project will be available for rent at rates that make them affordable to households earning 100% or less of the currently published area median income. Status as an affordable-by-design rental project shall be retained until such time that the schedule for market rental rates is modified for vacated units and or occupied units. if extrapolated forward to the entire project. such that the rental rates would no longer make all the units in the proiect affordable to households earning 1 10% or less of the currently published area median income. If and when this situation occurs. the Apartment \4anaaer shall be obligated to initiate and conform to the provisions of this Agreement as they pertain to restrictions on maximum rental rates for 1_59'o of the project's units (i.e.. six of the 38 units in the project). restrictions on maximum household income levels for the tenants in those units and associated administrative and reporting requirements. In addition. the .Apartment `,lanager shall designate the six required .for-sale MIUs in the project and shall adequately document that the current tenants for the occupied for-rent tiIIUs. or inure tenants of vacant ior- rent %•IIUs. observe the maximum gross household income qualifications established in this .agreement. A. Initial schedule for market rental rates - affordable-by-design designation. :As stated above. to be deemed an affordable-bv-design rental project. the initial schedule for market rental rates must be set at a rate such that all the units in the project will be available for - rent at rates that make them affordable to households. adjusted for household size. earning 1009,0 or less of the currently published area median income. The published 2000 median household incomes for one, two, three- and four-person households (i.e.. households earning I OO°`o of the area median income) for the Contra Costa and Alameda Counties area are detailed in Exhibit 2 of this Agreement. attached hereto and incorporated herein. The corresponding Maximum Allowable Median Rents that may be charged under the initial schedule for market rental rates shall be as listed Exhibit 2. These rental rates reflect a S35/month credit towards utilities and observe the requirement that no more than 309/'0 of cross household income shall be assigned to housing costs. B. Increase to schedule for market rental rates - loss of affordable-b"Aesign designation. As the units in the project are vacated. the Apartment Manager may. at his discretion. raise rents. The project will retain the affordable-by-design rental project designation until such time that the Apartment Manager makes an upward adjustment to the schedule for market rental rates which takes rental rates for vacant units and/or for occupied units to a price that would be higher than can be afforded by households. adjusted for household size. earning 110% of the currently published area median income (with rents set at ')01/'0' of the respective maximum gross household income - after the S33/month credit towards utilities). Exhibit 2 indicates Maximum Allowable Gross Household Incomes for Qualified Inclusionary Moderate Income Tenants (i.e.. household incomes. adjusted for household size. that are set at 110% of the published area median incomes for 2000). The maximum rental rates that may be charged to retain the affordable-bv-desi gn rental project designation. adjusted for household size. shall be as shown on Exhibit 2 ("Maximum Allowable Inclusionary Moderate Income Rent"). 2. LEASING REQUIREMENTS The following requirements must be obsen•ed by the .Apartment Manager in the event the project loses its designation as an affordable-by-design rental project. A. Income and Rental Requirements. Once the proiect loses its designation as an affordable-bv-design rental project. the Apartment Manager shall designate six units in the proiect as MIUs. The Apartment Manager shall lease or rent the MIUs only to Qualified Inclusionary Moderate Income Tenants. "Qualified Inclusionary \Moderate Income Tenant" is a tenant whose gross annual household income does not exceed 110°/6 of the most currently published Priman_, Metropolitan Statistical .area "Median Income". as published by the U.S. Department of' Housing and Urban Development ('HUD"). for Contra Costa and Alameda Counties. ';'Median.Income" is the area- wide median gross household yearly income in Alameda and Contra Costa Counties. adjusted for household size. as established from time to time by HUD. In the event that such income determinations are no longer published or are not updated for a period of at least 18 months by HUD. Median Income shall mean the area-wide median iaross income for households in Alameda and Contra Costa Counties. adjusted for household size. as published from time to time by the California Department of Housing and Community Development ("HCD"). In the event that such income determinations are no longer published. or not updated for a period of at least 18 months. the Town shall provide the Apartment Manager with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HUD or HCD. Before leasing the individual for-rent I IIUs to Qualified Inclusionary Moderate Income Tenants. the Apartment Manager must first determine that the proposed tenant's income is within the allowable income range. adjusted for household size. The process of verifying incomes shall be effected by obtaining a statement from the proposed tenant certifying: (1 ► amount of the tenant's current Gross household income (based on pay check receipts for the most recent txvo-month period): (') the amount of the tenant's gross household income for the most recent complete calendar year period (as reported on tenant's most recent federal tax return). and (3) employment or income source. The Apartment Manager shall not be.responsible for verifying the truth or accuracy of the statements contained in the foreeoine certificate. B. Maximum Allowable Gross Household Income of a Oualified Inclusionary Moderate Income Tenant. The "Nlaximum Allowable Gross Household Income of a Qualified Inclusionary Moderate Income Tenant". using published income information for 2000. is set forth in Exhibit 2. The maximum allowable rent to be received from a Qualified Inclusionary N,Ioderate Income Tenant (hereinafter referred to as. "Maximum Allowable Inclusionary Moderate Income Rent") is also set forth in Exhibit 2. "Maximum Allowable Inclusionary Moderate Income Rent" is a monthly rental rate set at 30% of 1/12th of the maximum allowable gross household income (i.e... income of a household. adjusted for household size. earning 110% of the currently published area median income) for a Qualified Inclusionary Moderate Income -1 Tenant - less a monthly utilit- allowance of S35. The maximum allowable rent actually paid by an individual Qualified Inclusionary Moderate Income Tenant shall be determined on a tenant- by-tenant basis by the Apartment Manager and shall be the lessor of the following: ( 1 ) the Maximum Allowable Inclusionary Moderate Income Rent. as established above. or (2) 30%' of 1. 12th of the actual gross household income for the Qualified Inclusionan- Moderate Income Tenant - less a monthly utility allowance of S3�. The Ton shall notifTownthe Apartment Mana¢er on an annual basis of a change. if any. to the Maximum Allowable Gross Household Income for Qualified Inclusionary kloderate Income Tenants and the Maximum Allowable Inclusionan- ititoderate Income Rent levels for Qualified Inclusionan* Moderate Income Tenants. C. Reporting Requirements. Upon leasing a for-rent MIU to a Qualified Inclusionary Moderate Income Tenant. the Apartment Manager shall promptly supple to the Town the follovying for-rent MIU tenant information Ion a Town-supplied form): ( I ( The names) of Qualified Inclusionary Moderate Income Tenant: Rent to be received from the Qualified Inclusionan• Moderate Income Tenant. Gross household income of the Qualified Inclusionary Moderate Income Tenant: (-I) Gross household income for the most recent tax period for the Qualified Inclusionary Moderate Income Tenant (as reported on the tenant's most recent federal tax return): and (5) Term of the lease. The Apartment Manager shall self-report any changes to the market.rental rate schedule for the project (using a Town-supplied reporting form; as they occur. 3. TERM AND TERMINATION A. Term of Agreement. The term ("Term") for the for-rent MIU program shall run throuah Februan-. 2020. B. Termination. The restrictions contained herein will automatically terminate. without the necessity of any further acts by either pam• hereto. twenty years after the Agreement is recorded or upon termination of the .Agreement following Town approval of a permanent waiver or release of these restrictions. executed by the Town and recorded in the Official Records of the County or upon termination of the Agreement following Town approval of a Revised and Restated Affordable Housina Agreement for a for-sale MIU program (which is to be executed and recorded in the Official Records of the Countv). 4. EtiFORCE.MENT A. The provisions of this Agreement shall apple to all agents. successors. and assignees of Developer. If the Town determines that Developer is not in compliance with the terms of this Agreement. Developer shall be notified in writing. Developer shall be allowed 90 days within Developer's receipt of written notice from the Town to comply with the terms of the Agreement. If Developer remains in non-conformance with the terms of this Agreement for more than 90 days after its receipt of such notice from the Town. the Town Manager or his or her designee may suspend or revoke any building permit or approval for the Pro.ect. or withhold any funds owing from the Town to Developer until such default is cured by Developer. B. In the event it is determined that rents in excess of those allowed by ooeration of this Agreement have been charged to a Qualified Inclusionary Moderate Income Tenant residing in a for-rent MIU. the Town may take the appropriate legal action. as authorized by Sections 31- 73.12 and 32-73.13 of the Danville Municipal Code. to recover excess rent Land a corresponding penalty if deemed necessary or appropriate by the Town). The Developer shall be obligated to pay to the tenant. or to the Town in the event that the tenant cannot be located. any excess rents charged, or any other appropriate legal remedies. Additionally, in the event it is determined that the tenant of a for-rent MIU does not meet the definition of a Qualified Inclusionary Moderate Income Tenant. the Town may take the appropriate legal action. as authorized by Sections 32- 73.12 and 32-73.13 of the Danville Municipal Code. to address such non-compliance with the terms of this agreement. RELIEF FROM RESTRICTIONS A. Waiver. relaxation or amendment of the restrictions contained in this Agreement may be granted by the Town Council upon a showing of diligent efforts by the Developer to comply with the provisions of this Agreement and undue hardship. Requests to waive. relax and/or amend these restrictions shall be placed on a regularly scheduled Town Council meeting within 90 days of receipt of such request. B. In the event the Developer defaults on the Project mortgage. resulting in a foreclosure or acceptance of a deed in lieu of foreclosure. the Project will not be subject to any restrictions set forth herein. It is further understood that a mortgage lender would not be required under this Agreement to send a notice of default or foreclosure to anv third pain, (including the zoning authority or local jurisdiction). For record keeping purposes. the escrow officer shall notif<r the Town of Danville Planning Division of the default during the property reconveyance process. 6 b. NOTICES All notices sent pursuant to this Agreement shall be sent by certified mail return receipt requested to the following addresses: Danville: Town of Danville 10 La Gonda Way Danville. CA 94526 Attention: Town Manager Developer: Intrepid Parnters. LLC Ann.: Thomas A. Baldacci 12885 Alcosta Blvd.. Suite A San Ramon. CA 94583 7. MISCELLANEOUS: A. Recitals Incorporated: The recitals are expressly incorporated in and made part of this Aereement. B. Binding Effect: Except as provided for elsewhere in this Agreement. the obligations of this Agreement shall run with the land and be binding on and inure to the benefit of all heirs. administrators. executors. successors. assigns. transferees. designees or agent of the parties for the term of the Agreement. C. Attornevs' Fees and Costs: If am action is brought to enforce or interpret the terms of this Agreement. the prevailing partshall be entitled to reasonable attorneys' fees and costs. D. Controlling Agreement: Developer represents that Developer has not and will not execute any other agreement ,vith provisions contradicton? to or in opposition to the provisions of this Agreement. and that. in anv event. this Agreement is controlling as to the rights and obligations between and among Danville. Developer and their respective successors. E. Limits on Liability: Danville shall not be liable to the Developer or any individual tenant occupying a for-rent MIU as a result of the Developer's failure to comply with the terms of anv agreement for the operation and rent of any for-rent MIU in the project. F. %Mormagee Protection: This Aereement shall be subordinate to any mortgage. deed of trust or other secured interest on the project. and the priority of the secured interest holder's rights to an,,- hazard insurance settlement or condemnation award shall be preserved. G. Independent and Several Provisions: If any one or more of the provisions contained in this Agreement shall for any reason is held to be invalid. illegal or unenforceable in any respects. then such provision or provisions shall be deemed severable form the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid. illegal or unenforceable provision had never been contained herein. H. Captions and Paragraph Headings: Captions and paragraph headings used in this :Agreement are for convenience only and shall not be used to interpret anv of its provisions. I. State Lary: The terms of this Agreement shall be interpreted and eniorced under the laws of the State of California. . IN WITNESS WHEREOF. the parties have executed this Agreement on the date first written above. Danville: Developer: T wn of Danville Intr".,, ,Partner� By: 8,,-: Tow ana7erDate 1l� x'00 Dated: l2 5 1000 Approved as to form: By: Town Attornev 8 EXHIBIT l LEGAL DESCRIPTIOti OF THE PROPERTY Lot 1. as shown on the Map of Subdivision 8014. Contra Costa. State of California. filed April 28. 1999. Map Book 409. Pages 25 and 26 Contra Costa Count-v Records. 9 EXHIBIT 2 MAXEMUM ALLOWABLE NCLUSIONARY MODERATE rNCO1%,1E RENTS - May. -1000 The published median household incomes for 2000 for one, two-. three- and four-person households for the Contra Costa and Alameda Counties area are indicated below (i.e.. households. shown by household size. earning 100% of the currently published area median income for this area). Maximum allowable rental rates listed in the next rove reflect a S35imonth credit towards utilities and observe the requirement that no more than 30%of gross household income shall be assigned to housing costs. The subject project will be deemed as an atfordable- bv-design project if the initial schedule for market rental rates makes all units in the project affordable to households. adjusted for household size. earning 100% or less of the currentl, published area median income. 1-person 2-person 3-person 4-person Household Household Household Household Median Income March. 2000 HCD figures:S47.300.001-vr S54.I 00.00/vr S60.800.00/vr S67.600.00-NT 30%' income assignment to housin_s: S 14.190.00/yr S 16.230.00/vr S 18.240.00AT S20 280.00/\T Maximum monthly housing costs: S 1.182.50/mo S 1.352.50/mo S 1.520.00imo S 1.690.00.mo Allowance for utilities: S 35.00/mo S 35.00/mo S. =5.00/mo S =5.00 mo Maximum allowable low income rent: S 1.147.50/mo S 1.317.50imo S 1.485.00/mo S 1.655.00imo The project will retain the affordable-by-design rental project designation until such time that the Apartment Manager makes an upward adjustment to the schedule for market rental rates which takes rental rates for vacant units and/or for occupied units to a price that would be higher than can be afforded b,\,- households. adjusted for household size. eaming 110% of the currently published area median income (with rents set at 3000 of the respective maximum gross household income - after the S35/month credit towards utilities). Listed below are income levels for households earning 1 10% of the currently published area median income levels (adjusted for household size) and the corresponding maximum allowable rents that can be charged for the respective households (again adjusted for household size). If the project loses its affordable-bv-design designation. the Apartment Manager shall be required to designate a minimum of six units in the project as for-rent MIUs and shall rent these units to households with gross household incomes at. or below. 110% of the currently published area median income (adjusted for household size) for a rental rate that does not exceed 30% of the cross household income after a S35/month credit towards utilities - as provided for by the Agreement. I-person 2-person 3-person 4-person Household Household Household Household Median Income March.2000 HCD figures:S47.300.00iyr 554.100.00/vr 560.800.00/vr $67.600.00rvr 1 10°,b of median: S52.030.00hTS59.5 10.00/yr $66.880.00/�,TS74.360.00/vr 30010 income assignment to housing: S I5.609.00.vr S 17.S53.00/vr S20.064.00/vr S22.308.00/%T Maximum monthly housin_costs: S 1.300.11 5 mo S 1.487.75-mo S 1.672.00/mo S 1.859.00.;mo Allowance for utilities: S =i.00-mo S . _;.00imo S 35.00imo S 35.00!mo Maximum allowable low income rent: S 1.265.7�,mo S 1.4,"2.75imo S 1.637.00/mo S 1.824.00imo 10 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of //---T r ``• /I L County of On I ),_—Qc, I L�r_ %1 Z;w"n , before me. T'. Date Name ano Title of Officer te.g..-Jane Doe.Notary Puol,c' - personally appeared l Nametsi or S,onertsl , X personally known to me-OR--- .Proved to me on the basis of satisfactory evidence to be the persons s i whose name(s) isiare subscribed to the within instrument and acknowledged to me that he/she/they executeo the same in his/her/their authorized capacity(ies). and that by his/her/their signature(s) on the instrument the oerson(s). or the entity upon behalf of which the person(s) acted. CAROLS 1•TEMPS executed the instrument. + Commission# 1162155 Crib County Z hi Contra ontrY Public-Couy WITNESS my hand and official seal. C MVCarnet.Ex�iesNov2D.?ml � --• Signa!Ur of NOtary Pubuc OPTIONAL Thougn the information below is not reaufred by law it may prove valuable to bersons relying on the document ano Gourd orevenr fraudulent removal ana reattachment of this form to another document. Description of Attached Document Title or Type of Document: L -�,,�,1 / ,, /SOL C�; �� --� �i�Y i ��✓ 1 Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) i Signer's Name: Signer's Name: - Individual - Individual - Corporate Officer - Corporate Officer Title(s): Title(s): - Partner— - Limited - General ! - Partner— - Limited - General - Attorney-in-Fact ! - Attorney-in-Fact - Trustee - Trustee - Guardian or Conservator *I Guardian or Conservator - Other: ToD of;sumo nere - Other: ioo o,'".urr.c^ere I Signer Is Representing: Signer Is Representing: + =J 1994 National NOtarV Association•8236 Remmet Ave..P.O.Box 7184•Canoga ParK.CA 91309.7184 Proo.No.5907 Reorder:Call Toll-Free 1.800.876-6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT . .... -- •------� •- - -•--•--�---�-��._�...-----------•— - -`t`t"'.crcrt...�,.,,,�^c• ,�,,. .cam-cr. - - - State of California ss. Countv of Contra Costa On �'LI' oeforeme, Rochelle A. Flotten Notary Public male Name and Title of Cribber le.g.'Jane Doe.Notary Public') personally appeared Joseph A. Calabrigo ,r Name1 s)of S)gnen s) :�fkpersonally known to me _ proved to me on the basis of satisfactory evidence to be the person( whose name() Gare .37 subscribed to the within instrument and acknowledged to me that toshe/they executed c C-QTY Ir the same in < is/her/their authorized capacity(*), and that by t0her/their signature04 on the instrument the person(Vd, or the entity upon behalf of which the person(, acted, executed the instrument. WITNE851my hand and official seal. =lace Notary Seal Above F Signature of Notary PubAc OPTIONAL Though the information below Is not required by law it may prove valuable to persons relying on the document ano could prevent fraudulent removal ana reattachment of this form to another document. Description of Attached Document affordable Housing Agreement Title or Type of Document: Between Town of Danville and Intrepid ParLner.S Document Date: January 12 , 2001 Number of Pages: 10 Signer(s) Other Than Named Above: Thomas A. Baldacci Capacity(ies) Claimed by Signer Signers Name: Joseph A. Calabriao Individual for)of tnumo nere Corporate Officer—Title(s): Partner—._ Limited – General Attorney in Fact Trustee Guardian or Conservator �x Other: Town Manager Sinner Is Reoresentmg: Town of Danville 1997 National Nolary Association•9350 De Soto Ave PO.Box 2402•Cnatswonn CA 91313-2402 Prod.No.5907 Reorder.Call Toll-Free 1.800-876-6827 .. _ .: ,, 1���� �'� Illllll III I III II II IIII II I IIIIII�I III IIIII I III I I � III RECORDING REQUESTED BY: CONTRA COSTA Cc Recorder Office Town Manager STEPHEN 1, WEIR, Clerk-Recorder Town of Danville DDC— 2001-0126973-00 Acct 12- Placer Title Monday, MAY 14, 2001 08:00:00 HEN RECORDED. RETURN TO: FRE $0.00 Town of Danville Ttl Pd $@,@@ Nbr-0000359 -12 510 La Gonda Wav Danville, CA 94526 Attention: Kevin J. Gailey, AICP Y� Chief of Planning RESALE RESTRICTION AGREEMENT This Resale Restriction Agreement (the "Agreement") is entered into as of S 2001. by and between the Town of Danville, a municipality ("Danville") and TriAnt Associates. LLC, the owner/developer ("Developer") of certain real property in the Town of Danville, Contra Costa County, California, commonly referred to as Subdivision 8332 — "Quail Garden' and described more specifically in Exhibit "1" attached hereto (the "Property"). RECITALS 1. Danville approved the development of the Property pursuant to Town Council Resolution No. 6-2000. 2. As a condition of such approval, four (4) units in the Property must be designated, set aside and retained as Moderate Income Units ("M[IUs") for twenty (20) years. The MIUs are described in Exhibit "2" hereto. This.Agreement affects the MIUs only, and no other portion of the Property. y 3. Both parties desire to provide such MIUs for the residents of Danville. 4. The purpose of this Agreement is to implement the conditions of approval by providing suitable mechanisms for establishing and insuring the continued viability of the MIU program as agreed between the parties. 5. The intent of Danville is to preserve the affordabilitv of the MIUs for persons of moderate income, while leaving ownership for federal income tax purposes in the owners of the MIU. 6. This is an integrated agreement and it is intended that all or portions hereof will be recorded to�encuml er the MIUs for the term specified herein. These shall be recorded as individual restrictions against the MIUs in the project. -1- i8 rT 13 ' D - 126973 7. The terms "Owners" or "Buyers" shall include the owner or owners and the purchaser or purchasers of the individual MIUs as they are first sold and transferred and all subsequent purchasers or transferees of the respective MIUs. 8. The term "Developer" includes Developer, above, and any subsequent purchaser or purchasers of the MIUs sold and transferred prior to completion of the MIU dwelling units. AGREEMENT The parties agree as follows: 1. TWENTY-YEAR TERM: The term for which the MIUs` shall be held for and restricted to Moderate Income Housing shall. be twenty (20) years. The term for each respective MIU shall commence upon the date of the first close of escrow on that MIU in the sale by Developer of a completed dwelling unit thereon (the "First Closing Date"). The "close of escrow" is when the deed conveying title to the respective 'MIU is recorded in the Official Records of the Countv. y a. TERMINATION: The term shall expire and all restrictions will terminate as to the MIUs upon any of the following: (i) The date that is twenty (2 0) years after the First Closing Date on the MIU; or (ii) A permanent waiver or release of these restrictions on the MIU is executed by Danville and recorded in the Official Records of the County. 2. INITIAL SALES PRICE: The sales price upon the initial,transfer by Developer to a Buyer on the First Closing Date will be the actual base sales price but not to exceed two hundred eighty-sit thousand, five hundred and fifty dollars ($286,550) (the "Initial Sales Price"). Exhibit "3" of this Agreement is :the schedule of maximum base sales prices, shown as a function of possible down payments. The resale price for each MIU on a subsequent transfer is limited pursuant to Paragraph 3.c of this Agreement.) The Initial Sales Price shall include the cost of any optional items or upgrades purchased by the buyers of the MIU, up to a maximum value of $15,000, who close escrow on the First Closing Date defined below (the "First Buyers"), and any financial incentive that Developer may grant to the First Buyers, including, but not limited to, payment of non-recurring closing costs, loan points or buy-downs. The Initial Sales Price is the maximum actual base sales price determined as of the date of this Agreement, and the maximum actual base sales price will be increased by an amount equal to the Initial Sales Price multiplied by a fraction whose numerator is -2- Itisg:3 equal to the difference between the Index (defined below) last published immediately before the date of this Agreement and the Index last published immediately before the date on which such Developer closes escrow in the First Buyers' purchase of the MIU (the "Initial Index"), and whose denominator is the Previous Index. The First Buyers . must also meet the requirements of and comply with Paragraphs 3.a, 3.b and 3.e. 3. BUYER ELIGIBILITY; PERMITTED USES OF THE MIU; RESALE RESTRICTIONS: a. PRINCIPAL RESIDENCE / BUYER INCOME LIMITATIONS: The MIU may be sold and transferred only to a buyer or buyers ("Buyers"), including the First Buyer, who agrees in writing to personally occupy the MIU as the principal residence of such Buyers and whose annual household income (combined, if applicable), for both the then current calendar year and the two most recently completed calendar years, does not exceed 110% of the applicable median household income for a family of four, as published by the California Department of Housing and`Community Development, U.S. Department of Housing and Urban Development, for the Oakland Primary Metropolitan Statistical Area, most recently before the date of such sale. Buyers must, within thirty (30) days after the close of escrow, apply for, execute and file a Homeowner's Property Tax Exemption with the Assessor of the County and, within fifteen (15) days after such form is so filed, to provide ;a copy of such completed, signed form to Danville with written confirmation of such filing with the Assessor. b. OWNER OCCUPIED: The MIU shall be used as a single-family/owner- occupied residence only and for no other purpose. No portion of the MIU may be rented or leased or used in any trade or business or for any commercial purpose whatsoever. This restriction is not, however, intended to preclude the use of the MIU as provided by the Danville Municipal Code for home occupation uses. c. OWNI ERS' RESALE PRICE RESTRICTION: The Owner may sell Owner's MIU without being in violation of this Agreement only if. (i) Owners give Danville written notice of intent to sell the MIU. (Upon receipt of notice of the Owners' intent to sell, Danville will provide written confirmation of the maximum allowable resale price for the MIU). (ii) The base purchase price received by such Owners ("Owners' Selling Price") shall not exceed the base purchase price for the MIU paid by those Owners when they bought the MIU (the "Owners' Purchase Price"), adjusted as follows: (1) Owners' Purchase Price may be increased by an amount equal to the Owners' Purchase Price multiplied by a fraction whose numerator is equal to the difference between the Index (defined below) last published immediately before the date of the -3- formation of the Purchase Contract and the Index last published immediately before the date on which such Owners closed escrow in Owners' purchase of the MIU the "Previous . Index"), and whose denominator is the Previous Index. The "Index" is the median household income published by the California Department of Housing and Community Development, U.S. Department of Housing and Urban Development (HUD) for the Oakland Primary ivletropolitan Statistical area, Median Familv Income for a family of four. If HUD no longer publishes the Index at the time of the formation of the Purchase Contract, Danville may use any other recognized method of computing the Median Family Income for a family of four in place of the Index. (2) Owners' Purchase Price may, in addition, may be increased by an amount equal to the fair market value added to the MIU, as determined by an appraisal approved by Danville, for any capital improvements to the MIU, made since the Owners' acquisition of the MIU, which: (i) have a useful life of greater than five (5) years after the date of the sale by such Owners pursuant to the Purchase Contract; and (ii) have been constructed with . all required building permits and other governmental approvals. (3) Owners' Purchase Price shall be decreased by an amount equal to the amount spent, or reasonably estimated to need to be spent, to repair anv damage (excepting normal wear and tear) to the MIU, or to put the MIU in sellable condition, as reasonably determined by Danville or a State-Certified Inspector, excluding general painting, cleaning or replacing floor coverings and window coverings, but including reasonably necessary structural, mechanical, electrical, plumbing and fixed appliance repairs. The purchaser or purchasers under the purchase contract qualify as a Buyers under Paragraph 3.a (Principal Residence / Buyer Income Limitations) and 3.b. (Owner Occupied). (iv) Upon opening an escrow, the selling Owners shall give Danville written notice of the name, address, phone number and escrow number of any escrow agent involved in the sale of MIU. (v) Upon opening of an escrow, the selling Owners shall instruct the escrow agent to disclose to Danville the terms of sale in the escrow and -4- �269�3 the proposed closing date, as the same may be amended from time to time. (vi) The selling Owners shall, within ten (10) days after the close of escrow, give Danville a true copy of such Owners' escrow final closing statement, certified by the escrow agent, and the address or addresses of the residence or residences of each such selling Owners after such close of escrow. (vii) The closing costs and title insurance shall be paid pursuant to the custom and practice in Contra Costa County. The selling Owners shall bear the expense of providing a current, written report of any inspection by a licensed structural pest control operator. All work recommended in said report to repair damage caused by infestation or infection of wood-destroying pests or organisms found and all work to correct conditions that caused such infestation or infection shall be done of the expense of the selling Owners. d. EXCESS SALES PRICE: If, at the close of escrow, Owners' Sales Price exceeds the amount determined by Paragraph 3.c, Danville shall have the right anytime within one (1) year after being advised such close of escrow to commence an action to recover from such buying Owners an amount equal to 125% of the difference between the actual Owners' Selling Price and the maximum allowable Owners' Selling Price determined by Paragraph 3.c. e. EXECUTION OF STATEMENT AGREEING TO COMPLY: All Buyers who acquire title to the MIU shall at their close of escrow execute a statement under penalty of perjury and deliver. the same to Danville, certifying such Buyers' intent to comply with the provisions of Paragraphs 3.a, 3.b, 3.c and 3.d. f. DEFAULT: If Danville learns of any default under this Agreement, Danville may declare the defaulting party in default by giving such party and any known escrow agent involved in the sale of the MIU, written notice, specifying the nature of the default, including, but not limited to, any transfer or proposed transfer that is or will-be in violation of this Agreement. If the default is not cured to the reasonable satisfaction of Danville within thirty (30) days after such notice (or as may be extended by Danville to reasonably cure such default) or two days before the date set for the close of escrow on the MIU by the defaulting party, whichever occurs first, Danville may apply to a court of competent jurisdiction for a restraining order or injunction to enjoin the transfer of the MIU that would be in violation of this Agreement, or for such other relief as may be appropriate. Nothing contained in this Agreement shall defeat the estate or title acquired in an MIU by a bona fide purchaser for value without notice of such default. -5- Q. This Agreement shall be subordinate to the mortgage on the unit estate; and the priority of the mortgage holder's rights to any hazard insurance settlement or condemnation award shall be preserved. 8. RELIEF FROM RESTRICTIONS: Waiver, relaxation or amendment of the restrictions contained in this agreement may be granted by the Town Council upon a showing of diligent efforts by Owners to comply with the provisions of this Agreement and undue hardship. Requests to waive. relax and/or amended these restrictions.shall be placed on a regularly scheduled Town Council meeting within 45 days of receipt of such request. In the event of Owners default on the mortgage resulting in a foreclosure or acceptance of a deed in lieu of foreclosure, the MIU will not be subject to any resale restriction. It is farther understood that a mortgage lender would not be required under this Agreement to send a notice of default or of foreclosure to any third party (including the zoning authority or local jurisdiction). For record keeping purposes, the escrow officer shall notifv the Town of Danville Planning Division of the default during the property reconveyance process. 9. NOTICES: All notices sent pursuant to this Agreement shall be sent by certified mail return receipt requested to the following addresses: Danville: Town of Danville 510 La Gonda Way Danville, CA 94526 Attention: Town Manager Developer: Trident Associates, LLC 12885 Alcosta Blvd., Suite A San Ramon, CA 94583-1355 Attention: Thomas A Baldacci Owner: [To Owner named in the recorded deed] [At the address of the MIU] Danville, CA 94526 10. MISCELLANEOUS: a. RECITALS INCORPORATED: The recitals are expressly incorporated in and made part of this Agreement b. BINDING EFFECT: This Agreement shall run with the land (the MIU) and be binding on and inure to the benefit of all heirs, administrators. 'executors, successors, assigns, transferees, designees or agent of the parties for the term of the Agreement. -6- Zzs�;3 C. ATTORNEYS' FEES AND COSTS: If any action is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and costs. d. CONTROLLING AGREEMENT: Developer represents that Developer has not and will not execute any other agreement with provisions contradictory to or in opposition to the provisions of this Agreement. and that. in any event, this Agreement is controlling as to the rights and obligations between and among Danville, Developer and their respective successors. e. LIMITS ON LIABILITY: Danville shall not be liable to any Owners or become obligated in any manner to any Owners because of such Owners' failure to comply with the terms of any agreement or escrow for the sale of the MIU. f. INTENT AND VALIDITY: The intent of this Agreement is to preserve the affordability of the MIU for persons of moderate incomes, while leaving ownership for federal income tax purposes in the Owners. To that end; if and for so long as the MIU is subject to this Agreement, any portion of this Agreement determined to deprive the Owners of ownership of the MIU for federal income tax purposes shall be invalid and have no force or effect with respect to the IVIIU or the Owners. Cr. INDEPENDENT AND SEVERAL PROVISIONS: If anv one or more of the provisions contained in this Agreement shall for any reason is held to be invalid. illegal or unenforceable in any respects, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. h. CAPTIONS AND PARAGRAPH HEADINGS: Captions and paragraph headings used in this Aareement are for convenience only and shall not be used to interpret any of its provisions. i. STATE LAW: The terms of this Agreement shall be interpreted and enforced under the laws of the State of California. -7- The parties have executed this Agreement on the date first written above. Danville: Developer: The Town of Danville Trident Associates, LLC Bv: By. To�� Tanager Tomas A. 1 acc , President I i Approved as to form: By: Town Attorney STATE OF CALIFORNIA} l COUNTY OF On�z /G oc , before me, I 4,4T/.✓ �. /�i9ttY/e✓p' a Notary Public in and for said State. personally appeared 7f�.a.gs �. E3�elo•9cc�i personally known to me e) to be the person(&} whose named is4we subscribed to the within instrument and acknowledged to me that he!skeftkey executed the same in his/hen't1i authorized capacity and that by his/4@9;h4&r signature44 on the instrument the person() or the entity upon behalf of which the person44 acted, executed the instrument. WITNESS my nd an fficial seal. M. A. MARTINO M COMM. 1206438 m M NOTARY PUBLIC-CALIFORNIA CONTRA COSTA COUNTY I My Comm.Expires Jan 1 2003 NOT PUBLIC -8- CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California r ss. County of Contra Costa On Maz 1 , 2001before me, Rochelle A. Flotten, Notary Public .' Date Name and Tale of Officer(e.g..'Jane Doe.Notary Public') r personally appeared Joselon A. Calabritgo Name(s)of Signer(s) 4_X_ personally known to me proved to me on the basis of satisfactory evidence to be the person whose name�6s?are subscribed to the within instrument and --=A.; =N cc�.� to+�o7 acknowledged to me tha�/she/they executed .• �. Z the same in <62/her/their authorized > n y - capacity(t<s), and that by f t0'her/their '_ ` - n`;,=•~ E=;.'es 26,E signatureX) on the instrument the person;(<s), or the entity upon behalf of which the person acted, executed the instrument. WIT y hand and official seal. Place Notary Seal Above j Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document:Resale Restriction .agreement SD 8332 Quail Garden Document Date: May 1 , 2001 Number of Pages: 11 Signer(s) Other Than Named Above: Thomas A. Baldacci Capacity(ies) Claimed by Signer U. Signer's Name: Joseph A. Calabrigo _ C Individual Top of thump here Corporate Officer—Title(s): C Partner—- Limited El General Attorney in Fact C Trustee Guardian or Conservator X'X Other: Town Manager Signer Is Representing: Town of Danville 1997 National Notary Association•9350 De Soto Ave.P.O.Box 2402-Chatsworth.CA 91313-2402 Prod.No.5907 Reorder:Call Toll-Free 1-800-876-6827 �s9=� EXHIBIT "2" LEGAL DESCRIPTION OF MODERATE INCOME UNITS /AMENDED Lots 15,30,31 and 38 as shown on the Map of Subdivision 8332 Contra Costa, State of California,filed /`�-, /0 2001, in Map Book Pages IF,ZS� ,Contra Costa County Records. -11- EXHIBIT "I" LEGAL DESCRIPTION OF THE PROPERTY Lots 1 through and including 40, as shown on they, ap T?ubdivision 8332 Contra Costa, State of California, filed �� 2001, in Map Book x/30 Pages Contra Costa County Reco ds. -10- 1Z69o3 EXHIBIT "3" Four-Person household: Maximum allowable initial sales prices for Moderate Income Units —March 2000 4-person household x Median Income March 2000 HCD figures: $ 67,600/yr x 110% of median: v $ 74,360/vr x 35% income assignment to housing costs: $ 26,026ivr x Maximum allowable monthly to housing costs: $ 2,169/mo Calculation A- 15% Down Pavment Assumption x Net available for housing costs: $ 2,169/mo x Monthly property tax allowance: $ 298.50/mo x Insurance: $ 125/mo x Homeowners' Association fees: $ 125/mo x Net available for principle & interest: $ 1,620.50/mo x Present value of loan (7.0% -..30 yr) $ 243,570 x 15% down payment: $ 42,980 x Maximum Allowable Initial Sales Price: $ 286,550 Calculation B - 10% Down Pavment Assumption x Net available for housing costs: $ 2,169/mo x Monthly property tax allowance: $ 284.37/mo x Insurance: $ 125/mo x Homeowners' Association fees: $ 125/mo . x Net available for principle & interest: $ 1,34.63/mo x Present value of loan (7.0% - 30 yr fixed): $ 245,695 x 10% down. payment: $ 27,299 x Allowable Initial Sales Price: $ 272,995 Calculation C - 5% Down Payment Assumption x Net available for housing costs: $ 2,169/mo x Monthly property tax allowance: $ 271.52/mo x Insurance: $ 125/mo x Homeowners' Association fees: $ 125/mo x Net available for principle & interest: $ 1,647.48/mo x Present value of loan (7.0°o - 30 yr fixed): $ 247,628 x 5% down payment: $ 13,033 x Allowable Initial Sales Price $ 260,660 N 260,660 N0- O- OCUMENT -12- . 1 RECORDING REQUESTED BY: Town ?�Iana�er Town of Danville III II IIII III III IIIIIII I IIII I IN 1111 IIII III III I II WHEN RECORDED. RETURN TO: CONTRA COSTA Co Recorder Office STEPHEN L. WEIR, Clerk-Recorder Town of Danville DOC— 2001-0106334-00 5 10 La Gonda Way acct 11- Old Republic Title Danville. CA 9426 Thursday, APR 26, 2001 08:00:00 FRE $0.00 Tt l Pd $0.00 Nbr-0000335�a4 Attention: Kevin Galley emb/RZ/1-14 Chief of Planninp- and Building oZ-14 41' 4.1 AFFORDABLE HOUSING AGREEMENT BETWEEN THE TOWN OF DANVILLE AND AUTUMN CREEK ASSOCIATES, L.P. This Affordable Housing Agreement (the "Agreement") is entered into as of 2001a, by and between the Town of Danville. a municipality ("Danville") and Autumn Creek Associates. a California Limited Partnership.. the owner/developer ("Developer") of certain real property in the Town of Danville. Contra Costa Count- California, commonly referred to as Subdivision 8283 ("Autumn Creek West" and.described more specifically_ in Exhibit "1" attached hereto (the "Property"). RECITALS 1. Danville approved the development of the Propert. pursuant to Town Council Resolution No. 30-2000. 2. As a condition of such approval, Developer is required to comply with the requirements of the Town's Inclusionary housing Ordinance. Ordinance No. 94-06 (as amended by Ordinance No. 98-04). Developer is requesting authorization to meet said requirements by establishing for-rent below market rate (BMR) second units (as such terms are defined in the Inclusionary Housing Ordinance) in two (2) of the ten (10) primary units to be constructed on the Property. The for-rent BMR second units are to be designated; set aside and retained as low income rental units for a term of twenty (20) years. 3. The Town has made a commitment to provide safe and decent housing for all economic segments of the community and the project will assist the Town in attaining this goal and as such, both parties desire to provide the for-rent BPAR second units for the residents of Danville under the terms and conditions set forth herein. 4. The purpose of this Agreement is to implement the conditions of approval by providing suitable mechanisms for establishing and insuring the continued viability of the for-rent BN/IR second unitprogram, as agreed between the parties. 1 166334 This is an integrated agreement and it is intended that all or portions hereof will be recorded to encumber the affected primary units and their respective for-rent BMR second units for the term specified herein. These shall be recorded as an individual restriction against each affected primary unit/for-rent BMR second unit pairing in the project. AGREEMENT 1. AFFORDABLE HOUSING RESTRICTION A. Construction of Lots. Developer agrees to construct two primary residential units in the project which are paired on a one-to-one basis with a for-rent BMR second - unit. These primary residential unit/for-rent BMR second unit pairings shall be established on Lots 2 and 10 of the Property (as depicted on the Final Map for SD 8283). Each affected primary residential unit shall be referred to herein as a "Restricted Lot")(see Exhibit "T'). The proposed architecture of the for-rent BMR second units, consisting of a studio-type unit consisting of approximately 656 square feet of space. shall be subject to review and approval by the Town prior to issuance of building permits for the Restricted Lots. The project architecture shall be modified from the plans reviewed in conjunction with the approval of Town Council Resolution No. 30-2000 to ensure that the units remain affordable and available to the lower income market segment. Specifically, the floor plan for the for-rent BMR second units shall be revised to include kitchen lavout modifications to physically discourage any possible future attempt to directly incorporate the second unit into the primary residential unit as additional living space for the primary residence (i.e., the design shall be modified to place a more substantial barrier between the shared wall of the for-rent BMR second unit's kitchen and Bedroom ; of the primary residential unit). Notwithstanding the foregoing, Developer may, at its sole option, designate alternative unsold lots within the Property to be restricted by this Agreement at anv time prior to the recordation of a deed conveying a then-Restricted Lot by Developer that is to be relieved of the restrictions (as to each Restricted Lot, the "First Closing Date"). In such event, a then-restricted lot will be relieved of the restrictions provided in this Agreement and the parties agree to execute and record in the Official Records of the County an amendment to this Agreement providing for the new lot designation in place of such Restricted Lot. B. Lot Restriction. An owner of a Restricted Lot ("Restricted Lot Owner") shall not be obligated to lease or rent its for-rent BMR second unit, but in the event a Restricted Lot Owner chooses to do so, the Restricted Lot Owner shall lease or rent its for-rent BMR second unit only to a "Qualified Low Income Tenant" under the terms and conditions set forth in this Agreement. A "Qualified Low Income Tenant" is a tenant whose gross annual household income ("Gross Household 106334 Income") is between ;1°% and 72% of the current Primary Metropolitan Statistical Area "Median Income". as published by the U.S. Department of Housing and Urban Development ("HUD") for Contra Costa and Alameda Counties. "Median Income" is the area-wide median Bross household yearly income in Alameda and Contra Costa Counties. adjusted for household size. as established from time to time by HUD. In the event that such income determinations are no longer published or are not updated for a period of at least 18 months by HUD, Median Income shall mean the area-wide median Bross income for households in Alameda and Contra Costa Counties, adjusted for family size, as published from time to time by the California Department of Housing and Community Development ("HCD"). In the event that such income determinations are no longer published, or not updated for a period of at least 18 months. the Town shall provide the Restricted Lot Owner with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HUD or HCD. C. Sale of Lots. On or before the first "First Closing Date" of each Restricted Lot. Developer shall obtain from the purchaser a statement and deliver the same to the Town. certifying purchaser's receipt of this agreement and purchaser's intent to comply with the provisions of this Agreement. In addition. each deed conveying title to a Restricted Lot shall be made expressly subject to the terms of this Aereement. Developer's obligations under this Agreement with respect to each Restricted Lot shall terminate as of the First Closing Date for such Restricted Lot. ?. LEASING REQUIREMENTS A. Income and Rental Requirements. Restricted Lot Owners of the for-rent BMR second units are not required to continuousiv market and rent the for-rent BMR second units. The Restricted Lot Owners may, at their discretion, leave the for- rent BINIR second units vacant, .may use them as ancillary living space to the primary unit or allow them to be occupied by a family member on a non-rental basis. The following requirements must be followed in the event the Restricted Lot Owner chooses to market and rent the for-rent BMR second units. Before leasing the for-rent BMR second unit to a Qualified Low Income Tenant, the Restricted Lot Owner must first determine that the proposed tenant's income is within the allowable income range. adjusted for household size. This process shall be effected by obtaining a statement from the proposed tenant certifying: (1) the amount of the tenant's current Gross Household Income calculated based on pay check receipts for the most recent two-month period: (2) the amount of the tenant's Gross Household Income for the most recent complete calendar year period as reported on tenant's most recent federal tat return: and (3) employment or income source. The Restricted Lot Owner shall not be responsible for 106334 verifying the truth or accuracy of the statements contained in the foregoing certificate. The maximum allowable Gross Household Income of a Qualified Low Income Tenant, published for 2000, is set forth in Exhibit "4", attached hereto. The maximum allowable rent to be received from a Qualified Low Income Tenant (hereinafter referred to as, "Maximum Allowable Low Income Rent") is also set forth in Exhibit "4". "Maximum Allowable Low Income Rent" is a monthly rental rate set at 30% of 1/12th of the maximum allowable Gross Household Income (i.e., income of a household earning 72% of the published Median Income) for a Qualified Low Income Tenant - less an utility allowance of $35/month. The maximum allowable rent actually paid by an individual Qualified Low Income Tenant shall be determined on a tenant-by-tenant basis by the Restricted Lot Owner and shall be the lessor of the following: (1) the Maximum Allowable Low Income Rent, as established above. or (2) 30% of 1/12th of the actual Gross Household Income for the Qualified Low Income Tenant - less an utility allowance of$35/month. The Town shall notifv the Restricted Lot Owners on an annual basis of a chance. if any, to the Maximum Gross Household Income and Maximum Allowable Restricted Low Income Rent requirements for Qualified Low Income Tenants. B. Reportinu Requirements. Upon leasing a for-rent BMR second unit to a Qualified Low Income Tenant, the Restricted Lot Owner must promptly certify to the Town the following: (i) The name(s) of Qualified Low Income Tenant; (ii) Rent to be received from the Qualified Low Income Tenant; {iii) Gross Household Income of the Qualified Low Income Tenant; (iv) Gross Household income for the most recent tax period for the Qualified Low Income Tenant as reported by the tenant; and . (v) Term of the lease. The Restricted Lot Owner shall self-report the status of the for-rent BMR second unit (using a Town-supplied reporting form) on a once-a-year calendar-year basis (this self-reporting to include indication of when the for-rent BMR second unit is not rented). If the Town determines that the for-rent BMR units in the subject development have substantially met the occupancy goal and intent of the Inclusionary Housing Ordinance, then the Town may eliminate the requirements for reporting outlined in this section. 4 106334 3. TERM AND TERMINATION A. Twentv Year Term. The term ("Term") for which the for-rent BMR second units shall be held and restricted for rental to Qualified Low Income Tenants shall be twenty (20) years. The Term for each Restricted Lot shall commence upon the First Closing Date for that Restricted Lot. B. Termination. The Term of this Agreement shall expire and all restrictions contained herein will automatically terminate as to anindividual Restricted Lot, without the necessity of any further acts by either party hereto, upon the first to occur of the following: (i) The date which is twenty (20) years after the date of the First Closing Date of that Restricted Lot; or (ii) The date of a permanent waiver or release of these restrictions on that Restricted Lot is executed by the Town and recorded in the Oficial Records of the County. 4. ENFORCEMENT A. The provisions of this Agreement shall apply to all agents, successors, and assignees of Developer. If, prior to the First Closing Date as to each Restricted Lot, the Town determines that Developer is not-in compliance with the terms of this Agreement, Developer shall be notified in writing. Developer shall be allowed 90 days within Developer's receipt of written notice from the Town to comply with the terms of the Agreement. If Developer remains in non- conformance with the terms of this Agreement for more than 90 days after its receipt of such notice from the Town, the Town Manager or his or her designee may suspend or revoke any building permit or approval for the Autumn Creek West project, or withhold any funds owing from the Town to Developer until such default is cured by Developer. B. In the event it is determined that rents in excess of those allowed by operation of this Agreement have been charged to a Qualified Low Income Tenant residing in a for-rent BMR second unit, the Town may take the appropriate legal action, as authorized by Sections 32-73.12 and 32-73.13 of the Danville Municipal Code, to recover excess rent (and a corresponding penalty if deemed necessary or appropriate by the Town). The Restricted Lot Owner shall be obligated to pay to the tenant, or to the Town in the event that the tenant cannot be located, any excess rents charged, or any other appropriate legal remedies. Additionally, .in the event it is determined that the tenant of a for-rent BMR second unit does not meet the definition of a Qualified Low Income Tenant, the Town may take the appropriate legal action, as authorized by Sections 32-73.12 and 32-73.13 of 5 106334 the Danville Municipal Code, to address such non-compliance with the terms of this agreement. 5. RELIEF FROM RESTRICTIONS A. Waiver, relaxation or amendment of the restrictions contained in this Agreement may be granted by the Town Council upon a showing of diligent efforts by a Restricted Lot Owner to comply with the provisions of this Agreement and undue hardship. Requests to waive, relax and/or amend these restrictions shall. be placed on a regularly scheduled Town Council meeting within 45 days of receipt of such request. B. In the event a Restricted Lot Owner defaults on its mortgage resulting in a foreclosure or acceptance of a deed in lieu of foreclosure, the Restricted Lot will not be subject to any restrictions set forth herein. It is further understood that a mortgage lender would not be required under this Agreement to send a notice of default or foreclosure to any third party (including the zoning authority or local jurisdiction). For record keeping purposes, the escrow officer shall notify the Town of Danville Planning Division of the default during the property reconveyance process. 6.. NOTICES All notices sent pursuant to this Agreement shall be sent by certified mail return receipt requested to the following addresses: Danville: Town of Danville 510 La Gonda Way Danville, CA 94526 Attention: Town Manager Developer: Autumn Creek Associates, L.P. 3675 Mt. Diablo Boulevard, Suite 350 Lafayette, CA 94549 Attention: Curt Blomstrand Restricted Lot Owners: [To Owners named in the recorded deed] [at the addresses of the for-rent BMR second units] Danville, CA 94526 7. MISCELLANEOUS: A. Recitals Incomorated: The recitals are expressly incorporated in and made part of this Agreement. 6 ioG, 34 B. Binding Effect: This Agreement shall run with the land (of each Restricted Lot) and be binding on and inure to the benefit of all heirs, administrators, executors. successors, assigns, transferees, designees or agent of the parties for the term of the Agreement. C. Attorneys' Fees and Costs: If any action is brought to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and costs. D. Controlling Agreement: Developer represents that Developer has not and will not execute any other agreement with provisions contradictory to or in opposition to the provisions of this Agreement, and that, in any event, this .Agreement is controlling as to the rights and obligations between and among Danville. Developer and their respective successors. E. Limits on Liability: Danville shall not be liable to any Restricted Lot Owners or become obligated in any manner to any Restricted Lot Owners because of such Restricted Lot Owners' failure to comply with the terms of any agreement or escrow for the sale of Restricted Lot or the use and/or occupancy of any for-rent BMR second unit. F. Mortgage Protection: This Agreement shall be subordinate to any mortgage, deed of trust or other secured interest on a Restricted Lot, and the priority of the secured interest holder's rights to any hazard insurance settlement or condemnation award shall be preserved. G. Independent and Several Provisions: If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respects, then such provision or provisions shall be deemed severable form the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. H. Captions and Paragraph Headings: Captions and paragraph headings used in this Agreement are for convenience only and shall not be used to interpret any of its provisions. I. State Law: The terms of this Agreement shall be interpreted and enforced under the laws of the State of California. 7 1��334 IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above. Danville: Developer: Autumn Creek Associates, a California Limited Partnership Lenox Homes, LLC General Partner Focus The Town of Danville Realty Services, Inc. Manager J� t: 2 By:r Ab n 2 Dated: 4*Zk, t o 200C, Approved as to form: Town Attorney 8 106334 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT y�.arcrcrccs,�rcccrerercrccti�.�rcrrr,�-�.crcrcr,�;cscr,Grcr- - - - _<.- - ,crc�•: - - - ,��. - .. �,,�� State of California S ss. County of Contra Costa On ` a before me, Rochelle A. Flotten, Notary Public S Date Name and Title of Officer(e.g.,"Jane Doe.Notary Public") �. personally appeared JOSEPH A. CALABRIGO S (,5 Name(s)of Signer(s) vpersonally known to me r 17 proved to me on the basis of satisfactory T evidence �5 r� to be the person whose name) Aare subscribed to the within instrument and n _ _.-.,•.: r.2n= :�= =�% - acknowledged to me that Q/she/they executed r�=•�-��. -')a the same in la/her/their authorized S capacity(i�, and that by [ /her/their ti i =:. ;nom:. signature on the instrument the person,(a), or S the entity upon behalf of which the person(k) hacted, executed the instrument. S h t� WITNESS my hand and official seal. Place Notary Seal Above / Signature of Notary Public OPTIONAL nThough the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document r, r Title or Type of Document: Affordable Housing Agreement Re Autumn Creel S S Document Date: Number of Pages: 13 Signer(s) Other Than Named Above: Curt BlomStr Arid Capacity(ies) Claimed by Signer Signer's Name: Joseph A. Calabrigo �i 0 Individual (5 Top of thumb here 0 Corporate Officer—Title(s): C Partner—0 Limited 0 General 0 Attorney in Fact 0 Trustee O Guardian or Conservator S��Other: Town Manager Signer Is Representing: Town of Danville , t 0 1997 National Notary Association•9350 De Soto Ave..P.O.Box 2402•Chatsworth.CA 91313-2402 Prod.No.5907 Reorder.Call Toll-Free 1-600-876-6827 106334 STATE OF CALIFORNIA } i COUNTY OF CONTRA COSTA } On11/16/00 before me.Mar!�iaret Ann Ri e-h q ra Notary Public in and for said State. personally appeared Curt Blomstrand personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)whose names)is/are subscribed to the within instrument and acknowledged to me that he/she/thev executed the same in his/heritheir authorized capacity and that by his/her/their signature(s) on the instrument the person(s)or the entity upon behalf of which the person(s)acted,executed the instrument. WITNESS my hand and off ial seal. MARGARET ANN RIESBERG � �� COMMISSION 1282261 NOTARY PUB C d . NOTARYPUBLIC•CALIFORNIA a CONTA COSTA COUNTY R. MY CWvvssion exps.Nov 12.2004 STATE OF CALIFORNIA } COUNTY OF } - On before me, a Notary Public in and for said State. personally appeared personally known to me (or proved to me on the basis of satisfactory evidence)to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity and that by his/her/their signature(s) on the instrument the person(s)or the entity upon behalf of which the person(s)acted,executed the instrument. WITNESS my hand and official seal. NOTARY PUBLIC STATE OF CALIFORNIA } i COUNTY OF } 9 106334 EXHIBIT "1" LEGAL DESCRIPTION OF THE PROPERTY Lots I though and including 10, as shown on the Map of Subdivision 8283, Contra Costa, State of California, filecf)ecember $,2000_, in Map Book426 , Pages a.�.--42 Contra Costa County Records. Exhibit 1 of Attachment B 1®6334 EXHIBIT "2" LEGAL DESCRIPTION OF RESTRICTED LOTS (i.e., LOTS CONTAINING FOR-RENT BELOW MARKET RATE SECOND UNITS) Lots 2 and 10, as shown on the Map of Subdivision 8283, County of Contra Costa, State of California, filed December 8 , 2000 ,_ in Map Book 42L, Pages 3_-4�?, Contra Costa County Records. Exhibit 2 of Attachment B EXHIBIT "Y' 106334 TOWN OF DANVILLE STAFF STUDY DEPICTING REQUIRED DESIGN MODIFICATIONS TO BE MADE TO FOR—RENT BELOW MARKET RATE SECOND UNITS —REFINEMENTS TO APPLICANT'S PLANS FOR"PLAN 3274" A TWO—STORY 3,950+/— SQUARE FOOT RESIDENCE WITH A THREE—CAR GARAGE 6L9" 5'-9 112° 41-8" 3028'FX BEL W 00 BEDRM. 3 < v CARPET 9' CLG. ® T .609 161- .58 �t _ X\I' 19 P cl 61-0" O 3'-0„ 3Lo INYL X 118 9' CLG. " .o 1 Q 39 N ISER I x N 2J ° 16 17 I m � 15 11 I as R AT 96. II coK. VINYL 2 w VINYL 21 9' CLG. w I 9' CLG. i m ��- N I I 37 I i I 10''6n I 2,-50 4L6" i I 2'-3 11211 11-3 1 2°0 ! I I 1 I � I I i SECOND DWELLINGS UNIT CARPET 9' CLG. I I • I I O D I O I i N �O 1 w O 3041 SH 304Q SH Exhibit 3 of Attachment B r 4 EXHIBIT "4" 106334. MAXIMUM ALLOWABLE LOW INCOME RENT November, 2000 1-person 2-person Household Household Median Income March,2000 HCD figures: $47,300.00/yr $54,100.00/yr 72%of median: $34,056.00/yr $38,952.00/yr • 30%applied to yearly housing costs: $10,216.80/yr $11,685.60/yr Maximum monthly housing costs: $ 851.40/mo $ 973.80/mo Allowance for utilities: $ 35.00/mo $ 35.00/mo Maximum allowable low income rent: $ 816.40/mo $ 938.80/mo END OF DOCUMENT Exhibit 4 of Attachment B