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HomeMy WebLinkAboutMINUTES - 03221994 - H.3 (2) 1 H. 3e . • Contra TO: BOARD OF SUPERVISORS �� = Costa FROM: HARVEY E. BRAGDON County DIRECTOR OF COMMUNITY DEVELOPMENT `40 DATE: March 9 , 1994 �QUN SUBJECT: Consideration of the Affordable Housing Program for the Dougherty Valley Specific Plan Area SPECIFIC ST(S) OR RECOMMENDATIONS) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Adopt for implementation the Affordable Housing Program for the Dougherty Valley Specific Plan area, as presented by staff. FISCAL IMPACT None. BACKGROUNDIREASONS FOR RECOMMENDATIONS The Dougherty Valley Specific Plan was adopted on December 11, 1992, which requires at least 250 of the units to be affordable to very low, low and moderate income residents. The program details how this requirement will be met along with guidelines for its implementation. 1' � l a a CONTINUED ON ATTACHMENT: YES SIGNATURE RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S) : ACTION OF BOARD ON March 22, 1994, APPROVED AS RECOMMENDED x OTHER x See Addendum A for Board action. VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT TRUE AND CORRECT COPY OF AN AYES: 3 .5 , 4 NOES: 2 ACTION TAKEN AND ENTERED ON THE ABSENT: none ABSTAIN: 1 MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact:Debbie Chamberlain - 646-2031 Orig: Community Development Department ATTESTED, March 22 1994 cc: Public Works Department PHIL BATCHELOR, CLERK OF Redevelopment Agency THE BOARD OF SUPERVISORS A COU T ADMINISTRATOR BY , DEPUTY ADDENDUM A On March 15, 1994, the Board of Supervisors continued to this date the consideration of the affordable housing program for the Dougherty Valley Specific Plan area. Val Alexeeff, Director, Growth Management and Economic Development' Agency, presented the staff report and commented on responses provided to concerns raised on March 15, 1994, including the nursing home credits . Supervisor McPeak commented that the development plan could contain the requirement that there be the inclusion of at least one nursing home in the commercial area, and it could be referenced in the affordable housing program, but not to give all the affordable housing credits away in nursing home beds . Supervisor Bishop commented that the nursing home issue should not be referenced in the affordable housing program. Pat Boom, Councilmember with the City of San Ramon, spoke in support of the affordable housing document . Tom Koch, representing Shapell Industries, commented on a joint letter from Shappell and Windemere that had been submitted in response to concerns raised. The Board discussed concerns including the issue of subsidy. Supervisor Powers expressed concern with adopting the affordable housing program before approving the rezoning matters but he commented that the Board could do it with the understanding that if things were changed, the Board may have to come back and change the affordable housing. Supervisor McPeak moved approval of the affordable housing program as was originally presented to the Board dated March 8, 1994 with the following changes : First, that there is explicitly no prohibition on increasing the percentage of 25 percent should the developers, landowners, and County agree and there is no requirement unless there is voluntary agreement to increase above 25 percent; Second, that there will not be a credit provided for nursing home beds against the very low, and low units; and Third, that the plan would allow flexibility in the design and amenities and size related to the very low, low and affordable units in order to achieve affordability. Supervisor Torlakson seconded the motion. Supervisor Smith advised that he would be voting against the motion advising it would be better to wait and consider this with the entire program if the entire program is to go through. Supervisor Bishop advised that while she would not be supporting the additional entitlements, she would be supporting the affordable housing. Supervisor Powers advised he would be abstaining because he felt this was premature . IT IS BY THE BOARD ORDERED that the Affordable Housing Program for the Dougherty Valley Specific Plan area as amended is ADOPTED. CONTRA COSTA COMMUNITY DEVELOPMENT DEPARTMENT DATE: March 22, 1994 TO: BOARD OF S FROM: Ji Senn eputy Dire or - edevelopment SUBJECT: Dough e y ley Affordable Housing Program This responds to comments/questions/concerns regarding the Dougherty Valley Affordable Housing Program. 1. Examples of Affordable Housing Projects At your March 14 , 1994 hearing on the above, Board members requested examples of affordable housing projects one could expect to see in the Dougherty Valley. A binder of photographs of affordable housing developments has been assembled for your review. 2 . Subsidy Costs The subsidy costs associated with the Dougherty Valley Affordable Housing Program can be estimated with certain assumptions being made with respect to the housing affordability analysis (Exhibit A) and the tenure of the Affordable Units. Under the assumption that all Very Low Income (50% of median) and Low Income (80% of median) units are rental (a total of 963 units) the subsidy costs would be $32 , 461, 000 in 1994 dollars. Appendix G to the Dougherty Valley Affordable Housing Program describes currently available public subsidy sources. Subsidy costs increase significantly if the Very Low and Low Income units are to be delivered as homeownership units (Exhibit B) . If all 963 Very Low and Low Income units were for homeowners, the subsidy costs are in excess of $113 million. A 50/50 tenure split would require almost $73 million in subsidy to accomplish. 3 . Income Targeting Supervisor McPeak suggests (see March 17, 1994 memorandum - Exhibit C) affirmative language regarding the possibility for increasing the percentage of Affordable Units above the prescribed 25% of the total. The proposed Dougherty Valley Affordable Housing Program states that "at least 25% of the total units" are to be Affordable Units, therefore, Supervisor McPeak's proposal would be consistent with the present language. r 7 TABLE 4: AFFORDABLE HOUSING FINANCE ALTERNATIVES Income and Tenure Targeting FINANCE PROGRAM RENTAL OWNER OTHER(a) Very LOW Moderate Very LOW Moderate Very Low Moderate Low Income Income LOW Income Income Law Income Income Income Income Income RENTAL OR OWNERSHIP HOUSING Community Development Y' Y N' Y Y N Y Y Y(b) Block Grant HOME Investment Y Y N Y Y N Y Y N Partnership Program Housing Trust Funds Depends on programs adopted by Board of Supervisors. Redevelopment Agency Y Y Y Y Y Y Y Y Y Housing Set-Aside Funds Predevelopment Loan Y Y N Y Y N Y Y N Program(State) Employer-Assisted Varies with individual programs, Housing Programs Trade Union and Retire- Varies with individual programs. ment Fund Assistance Community Reinvestment Y Y Y(C) Y Y Y(c) Y Y Y(c) Act Programs Federal Home Loan Bank of Y N N Y Y Y(d) Y N N San Francisco Affordable Housing Program Bay Area Local Initiatives Support Corporation Y Y N Y Y N Y Y N Northem California Commun- Y Y N Y Y N Y Y N Ity Loan Fund Low-Income Housing Fund Y Y N Y Y N Y Y N Federal National Mortgage Y Y Y(c) Y Y Y(c) Y Y Y(c) Association RENTAL HOUSING ONLY Multifamily Mortgage Y Y Y N N N Y Y Y Revenue Bonds(MRBs) Tax-Exempt Multifamily MRBs Y Y Y N N N Y Y Y Low-Income Housing Tax Y Y(e) N N N N Y Y(e) N Credits Rental Housing Construction Y Y N N N N Y Y N Program Family Housing Demonstra- Y N N N N N Y N N Von Program Section 202 Supportive N N N N N N Y N N Housing for the Elderly Section 811 Supportive N N N N N N Y N N Housing for the Disabled Mcianney Act Supportive N N N N N N Y N N Housing Programs for the Homeless -16- r � IV. Affordable Housing Finance Alternatives The provision of affordable housing is fundamentally a financing challenge. A variety of alternative affordable housing finance programs currently exist. Financing affordable housing has been characterized as a "Dagwood sandwich" with multiple layers of financing and subsidy. The average for-profit market rate development will have 3-4 funding sources, while affordable housing projects will often have double that number. The availability of such programs is likely to change during build-out of the Dougherty Valley. Table 4 lists current finance program alternatives and the income realms in which they can be used. The programs are more fully described in Appendix G. Affordable housing finance alternatives will evolve over time; therefore, Table 4 and Appendix G may be modified over the life of this Dougherty Valley Affordable Housing Program. -15- f "Shared Living" ,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.. "Transitional Housing" is housing that is typically provided in combination with supportive services to assist homeless individuals and families in achieving economic independence and moving to permanent housing within 24 months. -14- r "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. "Nursing Home" means a health facility which provides continuous skilled nursing and supportive care to patients on a 24 hour basis. Services include physicians, skilled nursing, dietary, pharmaceutical services, and an activity program. "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. -13- r � "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. -12- 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. -11- f C. State Housing Element Law All cities and counties in the State of California must include a Housing Element as part of its adopted General Plan (Government Code Section 65302(c)). Housing Element requirements are quite detailed (Section 65580 et. seq.) and unlike other General Plan components, Housing Elements are subject to review and approval of the State Department of Housing and Community Development (Section 65585(h)). On December 15, 1992, the County Board of Supervisors adopted an amended Housing Element to the General Plan. The State Department of Housing and Community Development (HCD) has found that the County's Housing Element complies with state law (see Appendix C for April 30, 1993 HCD letter). The Housing Element incorporates, among other things, land use changes reflecting the December 22, 1992 Dougherty Valley General Plan Amendment. Table 6-1.6 in the Housing Element lists all vacant and underdeveloped residential sites in the unincorporated County, including the Dougherty Valley. Discussion in Section 6.7 of the Housing Element concludes that there are sufficient sites in the unincorporated County to address the housing needs of Very Low, Low and Moderate Income households (see Section III below) in part by acknowledging the .Dougherty Valley Specific Plan Policy H-4, which states the 25% inclusionary requirement for affordable units in the Dougherty Valley. The State HCD certification _letter makes explicit reference to the Dougherty Valley Affordable Housing Program as a means by which the County is to accommodate identified housing needs, and stipulates that "application of the County's inclusionary ordinance to the Dougherty Valley so that 2,750 units will be affordable in at least the following ratio: 10 percent Very Low-, 25 percent Low-, and 65 percent Moderate Income." The certification letter states that the County's compliance with State Housing Element Law is predicated on the availability of sites in the Dougherty Valley. D. Contra Costa Transportation Improvement and Growth Management Program (Measure C) In November, 1988 the voters in Contra Costa County approved Measure C-The Contra Costa Improvement and Growth Management Program. Measure C established a program to finance transportation improvements through the levy of a 1/2 cent sales tax. To receive local improvement funds, local jurisdictions must adhere to a Growth Management Program adopted pursuant to Measure C. Among the stipulated requirements is an affirmative obligation to provide housing opportunities for persons of all incomes. This housing obligation has evolved to mean compliance with State Housing Element Law. By virtue of the State HCD certification of the County's Housing Element, the County complies with the Measure C Growth Management Program requirement for housing opportunities. The importance of the previously stated (Section II.0 above) relationship between the Dougherty Valley sites and the State's approval of the County Housing Element is underscored in this context. -10- l Policy H-10: Encourage the development of innovative single family and multiple family higher. density housing which addresses housing affordability needs. Policy H-11: Provide for the development of senior housing within Dougherty Valley. Policy LU-6: Take measures to ensure a viable mixture of retail, civic, office, higher density residential, recreational and transit uses within the Village Center. Source: Dougherty Valley Specific Plan,Chapter 5(adopted December 22, 1992 by Contra Costa County Board of Supervisors) -9- r TABLE 3 DOUGHERTY VALLEY SPECIFIC PLAN - AFFORDABLE HOUSING GOALS AND POLICIES Housing Goal: Provide a wide range of housing types and densities to meet the diverse needs of all age groups and household sizes. Housing Policies: Policy H-1: Encourage a fine grain mixture of residential densities within neighborhoods. Policy H-2: Ensure that the majority of the homes in Dougherty Valley are single family residences consistent with the character of surrounding areas. Policy H-3: Provide for a strong, affordable single family and multiple family housing program for a wide range of household income levels in Dougherty Valley. Policy H-4: Develop a minimum of 25 percent of all dwelling units as affordable to low, very low and moderate income households as defined by the County. At the discretion of the County Board of Supervisors, flexibility will be allowed in determining the distribution and relative values of unit types and qualifying income levels in determining compliance with this policy. Policy H-5: Provide for the development of higher residential densities to increase housing opportunities for diverse income groups. Policy H-6: Accompanying the initial final development plan/tentative map submittal, there shall be a phasing plan to indicate the delivery of affordable housing. Policy H-7: Each phase established shall be subject to an inclusionary housing requirement. A minimum of 15% of the units in each phase shall be.developed as affordable units (i.e., no more than 40% of an individual phase's "affordable housing obligation" may be passed forward to future development). In no case shall the affordable housing obligation for future phases be increased to.exceed 50% of the number of planned units. One phase may omit affordable housing, but those affordable units must be picked up in the next phase being applied for. Policy H-8: The use of an in-lieu affordable housing fee to secure relief from the requirement to deliver affordable housing is expressly prohibited. Policy H-9: Encourage and promote owner occupied housing, especially for affordable units. 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. Speculative activities relating to affordable units will be discouraged. -8- B. Dougherty Valley Specific Plan Specific Plans, under California law, provide a greater level of specificity than does the general plan. Specific Plans are often used for sites of special interest or value. The Dougherty Valley Specific. Plan, adopted by the Board of Supervisors on December 22, 1992, sets forth a farsighted vision for this new community, including affordable housing goals and policies that have influenced this Dougherty Valley Affordable Housing Program. Primary in this vision is the development of a balanced community including households of all incomes. This vision is implemented by the inclusion of an aggressive requirement that at least 25% of all units developed in the Dougherty Valley be affordable to Very Low, Low, and Moderate Income Households. The Dougherty Valley Specific Plan Affordable Housing goals and policies are set forth in Table 3. -7- r Distributed by tenure, approximately 66% of the need is for owner-occupied housing, and 34% for renters. To partially address this responsibility, the County of Contra Costa approved a Specific Plan that could accommodate up to 11,000 units in the Dougherty Valley, with a requirement that at least 25% of the units (2,750 units) be affordable to Very Low, Low, and Moderate Income Households. Organization This Dougherty Valley Affordable Housing Program is organized to present the policy context (Section II), and the implementation detail (Sections III-VI). Section III provides a definition of terms and concepts that are used throughout; Section IV provides a review of affordable housing finance alternatives, Section V details the affordable housing requirements, and Section VI outlines the principles of the public/private financing requirements, and the outline of a financing plan that reflects development phasing. II. Conformance with Adopted Plans The Dougherty Valley Affordable Housing Program has been developed to be consistent with adopted County goals, policies and implementation measures, as set forth in the adopted General Plan (particularly the Land Use Element - Chapter 3, and the Housing Element - Chapter 6). This Affordable Housing Program implements policy guidance of the Dougherty Valley Specific Plan. In addition, the process of gaining State of California approval of the County's Housing Element provides additional structure to this Affordable Housing Program, as does the Growth Management Program of the Contra Costa Transportation Improvement and Growth Management Program (a.k.a. Measure C), which has been actualized in the County General Plan Growth Management Element. A. Relationship to County General Plan The Contra Costa County General Plan contains broad goals and policies, and specific implementation measures which guide decisions on future growth, development, and the conservation of resources. The General Plan represents the hopes and concerns of County residents in terms of defining and preserving a "quality of life." A critical feature of this "quality of life" is providing for the housing needs of all segments of the community. The Dougherty Valley Affordable Housing Program was prepared so as to be consistent with adopted plans and policies. Both the Land Use Element and the Housing Element provide direction. Appendix A presents the General Plan Goals/Policies that have directly affected the Dougherty Valley Affordable Housing Program, while Appendix B summarizes specific implementation measures that influenced this Affordable Housing Program. -6- Housing Element Requirements State Housing Element Law (commencing with Section 65580 of the Government Code) requires that all cities and counties identify and analyze existing and projected housing needs, and develop a set of goals, policies, quantified objectives, and scheduled programs to address identified housing needs. Contra Costa County's (unincorporated) projected housing need for the time period 1988-1995 is 6,447 units. The Housing Element must identify adequate sites for housing, and must make adequate provision for the housing needs of all economic segments. The County's Housing Element, adopted on December 15, 1992, has been found to be in compliance with State Housing Element Law by the California Department of Housing and Community Development (Appendix C), with the assumption that the County will apply inclusionary requirements on the Dougherty Valley developments so that 2,750 units will be affordable to Very Low, Low, and Moderate Income Households, with at least 10% Very Low Income, 25% Low Income, and 65% Moderate Income. Summarized in Table 2 are the projected housing needs for the County, the Town of Danville, and the City of San Ramon. The total projected housing need for the three jurisdictions exceeds 16,000 housing units, of which over 8,200 are to be affordable to Lower Income Households. TABLE 2 Projected Housing Needs - 1988 to 1995 Lower Income Sub-Total Total Very Low Low Moderate Lower Above Projected Jurisdiction Income Income Income Income Moderate Need Contra Costa County 1289 903 1289 3481 2966 6447 Town of Danville 391 293 440 1124 1320 2444 City of San Ramon 1227 920 1457 3604 4065 7669 Totals 8,209 16,560 Source: ABAG Housing Needs Determinations (January, 1989); Contra Costa County Housing Element;Town of Danville Housing Element;and City of San Ramon Housing Element -5- • 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. -4- T • 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 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 27 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. -3- A number of public policies can be adopted and implemented to improve the jobs/housing balance. The most important concept is that job growth needs to be accomlanied at the same time by appropriate and adequate residential development, and vice versa. New employment growth must be accompanied by an adequate amount of housing development, and the housing needs to be of a type and price that is appropriate to those who will hold the new jobs. ABAG (Jobs/Housing Balance for Traffic Mitigation, I-680 and I-580 Corridor Study, November, 1985) suggests that local government take a combination of actions to improve the jobs/housing balance and reduce the length of the commute trip, including: • increasing the supply of housing close to employment centers; • encouraging the production of affordable housing; • phasing housing construction with job growth; • improving access to transit for home-to-work trips; • encouraging commercial developers to locate near existing affordable housing; and • increasing the employment of local residents in new jobs. Substantial employment growth in the Tri-Valley Area has been occurring, and this trend is expected to continue over the next 15 years. Much of the employment growth is expected to occur in employment centers near the Dougherty Valley (Bishop Ranch Business Park in San Ramon, Hacienda Business Park in Pleasanton, and a planned business park in Dublin). The occupational mix in the Tri-Valley includes a substantial amount of "back office" functions such as accounting, data.processing, and credit. This type of employment mix results in an employment base characterized by households with incomes in the '$25,000 to $75,000 range. The Dougherty Valley Affordable Housing Program is designed to assure that this segment of the population is adequately served. To better understand the jobs/housing relationship, a Gruen Gruen & Associates study entitled, "The Effect of the Proposed Dougherty Valley Housing on the Jobs/Housing Balance in the l Tri-Valley," was completed (Appendix J). The Gruen Gruen study developed two analytical measures to assess the potential of the Dougherty Valley developments to balance jobs and housing growth in the Tri-Valley. The study included a survey of employee income data developed from seven major employers in the Tri- Valley. The major findings of the study were: • 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. -2- I. Introduction and Organization The Dougherty Valley project promises to provide a substantial new addition to the housing stock of the Tri-Valley region of Contra Costa and Alameda Counties that could help address important jobs/housing balance considerations and deliver part of the region's need for housing affordable to Very Low, Low and Moderate Income Households. This Dougherty Valley Affordable Housing Program 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. Jobs/Housing Balance "Jobs/housing balance" is a qualitative concept which occurs if people live in housing affordable at the wages they earn, and travel minimum distances to their jobs and the services they use. An overly simplistic statistic that is. commonly used to measure jobs/housing balance is the ratio of jobs to employed residents. The Association of Bay Area Governments (ABA G) estimated that the Bay Area has a ratio of 0.97, or almost one job for each employed resident (ABAG "Projections '87"). The ratio is expected to rise to 1.04 by the year 2005. Sub-areas of the Bay Area vary dramatically with respect to this jobs/housing balance measure - from a high of 1.44 jobs for each local worker in San Francisco County to a low of 0.68 jobs per worker in Contra Costa County. Contra Costa is low because it developed primarily as a bedroom community with a relatively small job base. Examples of jobs/employed residents for selected sub-areas of Contra Costa County are shown in Table 1. TABLE 1 Jobs/Employed Residents - Contra Costa County and Tri-Valley 1985 1990 1995 2000 2005 Route 4 Corridor' 0.46 0.44 0.44 0.42 0,44 North I-680 Corridor' 0.85 0.94 0.96 1.01 1.05 Route 24 Corridor' 0.46 0.47 0.47 0.48 0.48 1-80 Corridor 0.66 0.65 0.67 0.70 0.72 South 1-680 Corridors 0.57 0.71 0.75 0.78 0.86 I-580 Corridor 0.77 0.93 0.99 1.03 1.02 Total Tri-Valley' 0.69 0.84 0.89 0.93 0.96 Source: Association of Bay Arne Governments, Projections '87 1 Antioch, Brentwood, Pittsburg and East County 2 Clayton, Concord, Martinez, Pleasant Hill and Walnut Creek 3 Lafayette, Moraga and Orinda 4 El Cerrito, Hercules,Pinole, Richmond, Rodeo-Crocken and San Pablo S Alamo-Blackhawk, Danville and San Ramon 6 Dublin, Livermore and Pleasanton 1 7 South -680 Corridor and 1-580 Condor _1_ Appendix Title Appendix A County General Plan Relationship - Goals and Policies Appendix B County General Plan Relationship - Implementation Measures Appendix C HCD Housing Element Certification Letter Appendix D Low Income Sales Price Appendix E Moderate Income Sales Price Appendix F Very Low Income Sales Price Appendix G Affordable Housing Finance Alternatives Appendix H Developer Sales Agreement/Buyers Purchase Agreement Appendix I Regulatory Agreement Appendix J "The Effect of the Proposed Dougherty Valley Housing on Jobs/Housing Balance in the Tri-Valley," Gruen Gruen & Associates (February, 1994) -ii- DOUGHERTY VALLEY AFFORDABLE HOUSING PROGRAM Table of Contents Chapter Title P_ aae I Introduction and Organization 1 • Jobs/Housing Balance • Housing Element Requirements • Organization II Conformance With Adopted Plans 6 • Relationship to County General Plan • Dougherty Valley Specific Plan • State Housing Element Law • Contra Costa Transportation Improvement and Growth Management Program III Definitions 11 IV Affordable Housing Finance Alternatives 15 V Dougherty Valley Affordable Housing Program Requirements 18 0 Targeting of Units 0 Affordability Term Affordable Price/Rent Phasing ! Annual Reports VI Plan of Finance 26 0 Financing Principles 0 Operational Guidelines Appendices 31 -i- DOUGHERTY VALLEY AFFORDABLE HOUSING PROGRAM Prepared by the Contra Costa County Community Development Department (Public Hearing Draft of March 8, 1994) 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 n. 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. HB:JK:lh Attachment cc: County Administrator GMEDA County Counsel Shappell Industries Windemere Partners dv/dvafhsg4.mem 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 k I 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 -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 ora 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. -t I , 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 : .1 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 h 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). 3. We concur that the affordable units shall be built compatible with market rate housing however innovative housing forms shall be considered. As stated above, any changes to the numerical assumptions in the DVAHP as proposed by Supervisor McPeak would require additional analysis to determine the fiscal effect of these changes to the County as well as to the development. At this point, until we know theexact terms of any settlement and of the Development Agreements, it is impossible to evaluate the financial consequences of the numerical changes proposed for the DVAHP. The DVAHP proposed by Staff is already far more comprehensive than any program we know of in California and is in fact a meaningful way to deal with the jobs/housing question. Inasmuch as the project is already burdened with expensive infrastructure and a high level of public amenities, to agree to additional restrictions on affordable housing at this stage would be fiscally irresponsible. Sincerely Daniel Hancock Shapell Industries F. Allan Chapman Windemere Ranch Partners cc: Supervisor Gayle Bishop Supervisor Sunne McPeak Supervisor Jeff Smith Supervisor Tom Torlakson Val Alexeeff RECEIVED MAR 2 2 1994 March 22, 1994 CLERK BOARD OF SUPERVISORS CONTRA COSTA CO. Chairman Tom Powers Contra Costa County Board of Supervisors 651 Pine Street, Room 106 Martinez, CA 94553 RE: Dougherty Valley Affordable Housing Program Dear Supervisor Powers: Please accept this joint letter from Shapell Industries and Windemere Ranch Partners as a response to Supervisor McPeak's letter to Val Alexeeff dated March 17, 1994. The comments included herein represent a joint response to the issues outlined in Supervisor McPeak's letter that request changes to the proposed Dougherty Valley Affordable Housing Program (DVAHP). As you know, the DVAHP currently proposed by Staff represents a consensus agreement between County Staff and both of the Dougherty Valley developers. As the developers, we find ourselves in the position of agreeing on the biggest and most critical financial issue facing the project. Although we are sympathetic to Supervisor McPeak's requests, we cannot accept her suggested changes as written. Any fundamental change of the proposed terms/percentages of the DVAHP would require considerable additional analysis and review. However, although the following additions/changes are not insignificant, they would not require additional analysis and could be considered: 1. if necessary, both the Affordable Housing Program and any ultimate settlement agreement may include a stipulation that the Cities cannot prevent the landowners/developers from voluntarily agreeing to increase the total percentage of affordable units above 25 percent. This statement should in no way be interpreted as a commitment to increase the total above 25%. 2. We feel incentive should be provided for nursing homes and we agree with Staff's current proposal, however, we do not have any strong views as to whether they can be used as credits for affordable units. We strongly object to the requirement that at least one nursing home be built in the commercial area, as this would result in an additional subsidy that the project cannot financially afford. EXHIBIT E Health and Safety► Code. Section 50053 50053. (a) For any rental housing development which receives assistance prior to January 1, 1991, and a condition of that assistance is compliance with this section, "affordable rent" with respect to lower income households shall not exceed the percentage of the gross .income of the occupant person or household established by regulation of the department which shall not be less than 15 percent of gross income nor exceed 25 percent of gross income. (b) For any rental housing development which receives assistance on or after January 1, 1991, and a condition of that assistance is compliance with this section, "affordable rent," including a reasonable utility allowance, shall not exceed: (1) . For very low income households, the product of 30 percent times 50 percent of the area median income adjusted for family size appropriate for the unit. (2) For lower income households whose gross incomes exceed the maximum income for very low income households, the product of 30 percent times 60 percent of the area median income adjusted for family size appropriate for the unit. In addition, for those lower income households with gross incomes that exceed 60 percent of the area median income adjusted for family size, it shall be optional for any state or local funding agency to require that affordable rent be established at a level not to exceed 30 percent of gross income of the household. (3) For moderate income households, the product of 30 percent times 110 percent of the area median income adjusted for family size appropriate for the unit. In addition, for those moderate income households whose gross incomes exceed 110 percent of the area median income adjusted for family size, it shall be optional for any state or local funding agency to require that affordable rent be established at a level not to exceed 30 percent of gross income of the household. (c) The department's regulation shall permit alternative percentages of income for agency- assisted rental and cooperative housing developments pursuant to regulations adopted under subdivision (f) of Section 50462*. The department shall, by regulation, adopt criteria defining and providing for determination of gross income, adjustments for family size appropriate to the unit, and rent for purposes of this section. These regulations may provide alternative criteria, where necessary, to be consistent with pertinent federal statutes and regulations governing federally assisted rental and cooperative housing. The agency may, by regulation, adopt alternative criteria, and pursuant to subdivision (f) of Section 50462*, alternative percentages of income may be adopted for agency- assisted housing developments. For purposes of this section, "area median income," "adjustments for family size appropriate to the unit," and "moderate income household" shall have the same meaning as provided in Section 50052.5*. 03-iB-1994 09:45AM FROM aiAPMAN & WILSON TO 6461599 P.03 EXHIBIT D p2of2 March 15, 1994 Chairman Tom Powers Page two 2. The Program currently defines"Very Low Income Rent" as a rent which is no greater than 30%v of SO% of the Median Monthly Income- Because the "Very Low Income Sales Price"is based an 33% of 50% of Median Income. . we sagest the Vea 1nw Income Rent reflect the same percentages as the Veer Low Income Sales Price and be adjusted to 33% of 50% of Median Income. {Page 12) 3. The Program currently defines a minimum term for which Very Low and Low sales and rental units must remain affordable. We sug�st,� that rather than an arbitrary term lirgiL the length of time any Yery Low or Low unit mast remain affordable should be governed solely by the regmwements of a subsidy soul&In additiom if nn suh t�source c;dgl the Developer Sales Agreement(Appendix ED and the Reguiatory Agreement fAppendt 1) should not be kM*ed_(,Paan 221 �T 4. The Program currently states that if a Very Low or Low income site is dedicated to a non-profit entity, that entity"may"be obligated to pay for the parcel's proportionate share of infrastructure costs. Because of the financial burden on market rate gaits if a parcel does not_ aY its "fair share" the man profit should be oblipjgd to pay the parcel's associated infrastructure costs. We suggest that the word "may"be char ed to "shahage 241 Thank you for your assistance in this matter. Sincerely, F. Allan Chapman cc. Supervisor Gayle Bishop Supervisor Sunne IVMcPeakv Supervisor Jeff Smith Supervisor Tom Torlakson Val AJexeeff-Contra Costa County Vic 'Wessman - Contra Costa County Dan Hancock - Shapell industries TOTAL P.03 03-JB-i994 09:45PM FROM CHAPMAN & WILSON TO 6461599 P.02 - EXHIBIT D p 1 of 2 l March 15, 1994 Chairman Tom Powers Contra Costa County Board of Supervisors 651 Pine Street, loom 106 Martinez, CA 94553 RE: Dougherty Valley Affordable Housing WORM Dear Supervisor Powers: As you know,we have had extensive negotiations with the County regarding the Dougherty Valley Affordable Housing Program CProgram"}. 'Ile document presented to you today is based on mutual consensus between County staff and the developers. The Program mymdes the basis far the Property Tax mates used in both the QVital Inrovement Prop guff maucial Analysis 'CIF Aand the Tax Sharing Ageement with San Ramon. restrictive char gg in the pia -gam would result in chances in the Property.Tax motes. If the Affordable Housing requirement increases, either in the percentage required or in the restrictions for development, Property Tax revenue will decline for botb the County and the City of San Ramon (assuming annexation). In addition, auy.restrictive chapge m the proceed Program will take tome to anabM and negotiate. We have spent the last year working with County staff to evaaluate the impaci of the proposed Program on development and the generation of tax revenue. Changes to the Program which result in less tax revenue would require additional analysis and negotiation with San Ramon for the Tax Sharing Agreement. We urge the County to approve the Program as it exists with four minor changes for clarification: 1. The Program currently defines "Moderate Income Rent' as a rent which is no greater than 30% of 100% of the Median Monthly Income. Because the "Moderate Income Sales Price" is based on 33% of 120% of Median Income we surest the Moderate Income Rent reflect the same vercentages as the Moderate Income Sales Price and be adjusted to 33% of 120% of Median Income. P(_„age 1Z) EXHIBIT C p 2of2 Val Alexeeff March 17, 1954 Page 2 The CLP/FA needs to be explicit (as all parties agreed) to allowing for an animal shelter of approximately five acres to be located within the open space area of the Dougherty 'Valley plan. Under the 'traffic/transportation sections of the CIP/FA, there must be explicit mention of the dedicated HdV/bus lane on all arterials throughout Dougherty Valley. Affordable Hcusinz Plan The Affordable Housing Plan should contain the following provisions (with absolutely no erosion; of the required 25 percent as specified in the existing Development Agreements and HCD approval of our Housing Element): Both the Affordable Housing Program and settlement agreements should stipulate that nothing shall prohibit the county and landowners/developers from both voluntarily agreeing to increase the total percentage of affordable units above 25 percent. This provision would allow for identification of additional resources to assist with affordability. Nursing home beds shall not be used as credits for affordable units, but at least one nursing home shall be required in the commercial area. The first priority for increasing affordability shall be for-sale homes in the moderate range(80-120 percent median income), particularly for first-time homebuyers. This policy priority is based on the profile of jobs being generated in the vicinity and the desire to optimize the jobs-housing balance. Very low, low and moderate income homes shall be compatible in architectural style but shall be modified in size, design and amenities to maximize affordability. At least 40 percent of the homes shall be priced at $300,000 or below or 200 percent of median income or below, whichever is greater. (The Gruen and Gruen report Indicates--and Susan Collins confirmed on Tuesday--that current developer projections are for 60 percent of the units to meet this criteria. Forty percent to well below that but gives us some guarantees) If the developers do not like this approach, we should at least reference the page in the Gruen and Gruen report as the best intentions of all parties today which should be kept in mind as we move forward with subsequent approvals. After the 5000th unit, the county shall have the right to require an additional five percent of the units to all be affordable in the moderate range (80-120 percent median income), increasing the total from 25 to 30 percent for the remainder of the project, provided the county can implement a first-time homebuyer program (fors at least one third of these units) for workers in the area. SWM:ksm ce: Members, Board of Supervisors Shapell f: 406-946-9687 Windemere f: 933-1404 EXHIBIT C pi of SUNNE WRIGHT McPEAK (' �.� Board of Sueerrisors Supervisor, District Four Contra 2301 Stanwell Drive Costa Concord Caiifomia 94524 �����` , (610)646-8763 �!( (510)646-5767(FAX) FAXED TO ADDRESSEE ' TO: Val Alexeeff, GMEDA Dire AMID ALL CCS FROM; Sunne Wright McPeak DATE: March 17, 1994 RE. Dougherty Valley Settlement and Approvals Here are my comments for amendments regarding the various documents related to the settlement.of the Dougherty Valley lawsuits and the pending approvals on the entitlements. Property Tax Sharing Ammement The property tax sharing agreement needs to be strengthened (as per my written comments to County Counsel) such that there are strong guarantees and/or sanctions that prevent San Ramon from ever seeking more than 4 percent of the property tax allocation. Further, we need sharing of other revenues in some manner and a guarantee that all revenues generated within the Dougherty Valley remain within the Daugherty Valley and that San Ramon provides ongoing verification of that fact. This has all been shared with San Ramon in past discussions; and while they were.not enthuslastia, they acknowledged that these provisions were ones they could live with. After ail, they are consistent with their stated Intent. There must also be explicit language in either the property tax sharing agreement or settlement agreement which ensures that the residents of the area annexed.to San Ramon from the Dougherty Valley do not and cannot oppose further approvals (the NIMBY syndrome). For example, the deeds of all homes sold should contain notification about the potential ultimate number of units and commercial space that may be located there, and the contract of sale should contain an agreement not to sue the county or city over future approvals consistent with the General Plan, Specific Plan or settlement. There must be a clause that covers the potential for increased tax allocations to. Dougherty Valley tax code areas that derive from any action or act of law (state or local) such that one half of it shall be used to assist or augment service provision in Dougherty Valley and one half of it shall be deposited in an affordable housing trust fund (to be administered jointly by the county and San Ramon) that shall be used in the Dougherty VaUey to increase the number of affordable housing units In the moderate range (80-120 percent median Income) above the 25 percent. CIF/FA The CIP/FA must ensure dedication of a comparable amount of revenue on a per unit basis from Dougherty Valley to fire service without locking in a percentage of the property tax allocation. The CIP(FA is to be referenced in our next approvals of Dougherty Valley and in the settlement documents. EXHIBIT B 3/19/94 SUBSIDY COSTS - DOUGHERTY VALLEY AFFORDABLE HOUSING PROGRAM • All Very Low Income units rental = $32,461,000 • 50% of Very Low Income and Low Income units rental = $16,231,000 50% of Very Low Income and Low Income units owner = 56,646,000 $72,877,000 • All Very Low Income and Low Income units owner = $113,292,000 • All very Low Income units rental = $17,325,000 50% of Low Income units rental 7,568,000 50% of Low Income units owner 34,187,000 $59,080,000 1JK2/jb/hsgaford.tb1 (0 c) CD O 4. 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The Affordability term for Very Low and Low Income units has been suggested to be the limit governed by the subsidy source, not the "arbitrary" 20/30 year minimum requirement for For Sale/rental units respectively (reference Windemere comment #3) . The adopted Dougherty Valley Specific Plan stipulates the required term of affordability (Policy H-9) . C. The final comment of the Windemere Partners (reference Windemere comment #4) has to do with the proposed Dougherty Valley Housing Program language permitting non-profits to assume a fair share of infrastructure costs. The Developer wants the language to be the prescriptive "shall" , rather than the permissive "may" . Staff submits that the language was crafted to make explicit that an offer of dedication could include an assumption of such an obligation and still be a valid dedication offer. Because we do not know the financing environment that will exist in the future, staff suggests the continued use of the permissive and more flexible term "may" . 1JK2/jb/dvafdhsg.mem To facilitate a better balance of jobs (household incomes) and housing (sales price) , Supervisor McPeak suggests that first priority for additional targeting be for Moderate Income First Time Homebuyers. Supervisor McPeak suggests that the identification of additional resources may be necessary to accomplish this additional affordability. The proposed Dougherty Valley Affordable Housing Program states that the delivery of "Moderate Income Units shall be accomplished by the private developers without anticipation of public assistance;" however, "Moderate Income Units could be eligible for some public assistance. " 4. Above Moderate Income Targeting To facilitate a better balance of jobs and housing, Supervisor McPeak has also suggested that at least 40% of the homes be priced at the greater of $300, 000 or a price affordable to households at 200% of median income or below. (That would compute to a home price of $420, 000 using the same methodology as Exhibit A. ) Should the additional targeting approach not prove acceptable, Supervisor McPeak suggests referencing the Gruen and Gruen report as the expression of best intentions of all parties. 5. Nursing Homes Supervisor McPeak further suggests that no credit be provided for Affordable Units in the delivery of a nursing home, but that at least one nursing home be required in the commercial areas. Additional alternatives could include modifying the manner in which nursing homes count as credits (e.g. , credit against Moderate Income requirement only) , or cap the number of units to which any crediting could apply (e.g. , stipulate that no more that 25 Affordable Units could be accomplished via a nursing home alternative. 6. Developer Suggestions In a letter dated March 15, 1994 (Exhibit D) the Windemere Partners request changes to the proposed Dougherty Valley Affordable Housing Program. A. That Affordable Rents be computed using 33% of monthly income rather than 30% of monthly income (reference Windemere comments 1 & 2) . Section 50053 of the California Health & Safety Code stipulates use of a 30% of income assumption in calculating Affordable Rent (Exhibit E) . To staff' s knowledge, all public subsidy programs utilize a 30% of monthly income stipulation in determining Affordable Rents. TABLE 4(Continued) FINANCE PROGRAM RENTAL OWNER OTHER(a) Very Low Moderate Very LOW Moderate Very LOW Moderate Low Income Income LOW Income Income LOW Income Income Income Income Income RENTAL HSG. (Cont) Section 8 Certificates and Y N N N N IN Y N N Voucher's Public Housing Y Y N N N N N N N Housing Opportunities for N N N N N N Y Y N. People with AIDS HUD Mortgage insurance for N N N N N N Y Y Y Elderly and Handicapped Housing HUD Mortgage insurance for N N N N N N Y Y Y Nursing Homes,Intermedi- ate Cam,and Board and Care Facilities HUD Mortgage Insurance for Y Y Y N N N Y Y Y Rental Housing Savings Association Mort- gage Corporation Y Y N N N N Y Y N California Community Rein- Y Y N N N N Y Y N vestment Corporation OWNERSHIP HOUSING ONLY Single Family Mortgage N N N N Y Y(C) N N N Revenue Bonds Mortgage Credit Certificates N N N N Y Y N N N Federal Housing Administra- N N N N Y Y N N N tion insurance Veterans'Administration N N N Y Y Y N N N Loan Guarantees *Y=Yes;N=No. (a) 'Other'Includes supportive housing for the elderly,mentally and physically,disabled,battered women and children, and other special needs populations,as well as emergency shelters and transitional housing for the homeless. (b)Under federal reguiatons,the elderly and selected special needs populations(e.g.,disabled)are assumed to be low income and,therefore,automatically quality for CDBG assistance without having to meet specific income require- ments. However,under Contra Costa County's CDBG Program,priority has been assigned to projects serving VeryAmw and Low income elderly and special needs populations with Incomes which are verified as less than the maximums for each income category. (c)Up to 115 percent of the area median Income. (d)up to 100 percent of the area median income. (a)up to so percent of the area median income. Source: Contra Costa County Community Development Department(KH/K51DV1.WQ1). Jun-93 -1.7- r V. Dougherty Valley Affordable Housing Program Requirements The Dougherty Valley Specific Plan could accommodate up to 11,000 housing units. The Dougherty Valley is currently under the ownership of two development entities - Shapell Industries of Northern California and Windemere Partners (Figure 1). Approximately 53% of the dwelling units permitted for the Dougherty Valley are in the Shapell portion of the Specific Plan (5,830 units), with the remaining 47% in the Windemere portion (5,170 units). The Affordable Unit portion of Table 5 reflect the targeting requirement of this Chapter V (A)(1). The requirements, stipulated in this section of the Dougherty Valley Affordable Housing Program apply separately and proportionately to the Shapell and Windemere portions. -18- ((S N m f0 ° C) W J2 c� 0m m o c °'t° © > d 11' .' t r^ I � i'e 1 ' T ,l,. •J'R4y ,• �� ..,,«n, �'gyp � wi r. ku cy tu C4 U.1 cc s 1,. wt a >'=rte cc Ott i yr ` 1k3W3Sa3, ,�►r--s�„d'` y- 1+d cr oil ul ..� 'z,j i,� - �Yy }�t;'� ,7� rte,' ~j ��'1+►fi N Ull. Lt \ •v f.' fry.-Zy I'ct'�a} `�•�r.3�'� .r � t. o> TABLE 5 DOUGHERTY VALLEY PHASING/AFFORDABLE UNIT PLAN SUMMARY Total Affordable Unit Requirement Total Affordable --------------------------- Dwelling Dwelling Very Lown Low Moderate PROJECT Unite Unita Income Income Income ------- ------- ------- ------- ------- WINDEMERE 5170 1293 129 323 840 SHAPELL 5830 1458. 146 364 947 TOTAL DOUGHERTY VALLEY 11000 2750 275 688 1788 Source: Shapell Industries of Northern California, Windemare Partners, 6 Contra Coat& County Community Development Department JR:dvaffhsg(o15O) -20- A. Targeting of Units 1. Income Targeting a. At least 25% of the total units in the Dougherty Valley shall be affordable to Very Low, Low, and Moderate Income Households; b. At least ten percent (10%) of the Affordable Units shall be reserved for Very Low Income Households, and twenty-five percent (25%) for Low Income Households. No more than sixty- five (65%) of the Affordable Units shall be for Moderate Income Households. The provision of additional Very Low and Low Income Households is encouraged. C. The development of Very Low Income Units in excess of the 10% requirement can substitute and reduce the requirement for Low Income Units. 2. 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 Low Income Housing, with each bed equating to 0.5 Low Income Unit. Nursing Homes that are licensed for Medi-Cal Patients shall count each Medi-Cat bed as 1.0 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. d. When determining Dougherty Valley Specific Plan unit counts, each unit of Supportive Housing and Transitional Housing shall count as one housing unit. e. When determining Dougherty Valley Specific Pian unit counts, Nursing Homes shall be considered commercial developments and not counted as a housing unit. -21- i B. Affordability Term 1. Very Low and Low Income Units Very Low and Low Income Units shall be maintained as such for the following minimum terms: a. 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; b. 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. 2. Moderate Income Units The length of time Moderate Income Units must remain affordable shall be governed solely by requirements of any sub'sidy source. Since the Dougherty Valley Affordable Housing Program has been developed such that there is no expectation of public subsidy, the Moderate Income Units are not generally expected to have an affordability term. Moderate Income Units are subject to Affordable Price/Rent limitations at the time of initial occupancy (Section V(C) below). 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, except up to 50% of the Moderate Income Homeownership Units may be determined solely by a determination that the homebuyer is of Moderate Income. -22- 7 1 D. Phasing 1. Very Low and Low Income Units a. Consistent with the Dougherty Valley Specific Pian (Policy H-4), flexibility will be permitted in determining the distribution of Very Low and Low Income Units, subject to the findings of the Compliance Monitoring Program. b. The dedication of parcel(s) to non-profit entities pursuant to . Section V(E) shall result in a finding of compliance with the Very Low and Low Income requirements for the development phase(s) up to the number represented by the Very Low and Low Income Unit capacity of the dedicated site(s). 2. Moderate Income Units f a. Each phase established shall be subject to providing Moderate Income Affordable Units. A minimum of sixty percent (60%) of the required Moderate Income Units in each phase are to be developed as Moderate Income Units in the phase, i.e., no more than forty percent(40%) of an individual phase's Moderate Income Unit requirement.may be passed forward to future phases. b. In no case shall the Moderate Income Units in a future phase exceed fifty percent (50%) of the number of planned units. C. 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. 3. 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 Perliminary Development Plans, Final Development Plans, Tentative Subdivision Maps, and Land Use Permits). E. Non-Profit Entities 1. Windemere and Shapell, or their successors and assigns, may contract with one or more non-profit entities to construct the Very Low Income and Low Income Units. 2. The substitution of a non-profit entity may satisfy all or a portion of the developer's Very Low and Low Income Unit requirement. To qualify for this substitution, the developer shall create a parcel or parcels of adequate size and density to satisfy the Very Low Income and Low Income Unit requirements. Upon recordation, the initial improved parcel shall be -23- offered for dedication to a non-profit entity for Affordable Unit development. Such offer of dedication may include the assumption, by the non-profit, of a proportionate share of community infrastructure obligations (whether by fee or assessment). 3. Non-profit entities offered a dedication parcel must obtain a financing commitment(s) necessary to proceed with development within three years of acceptance of an offer for dedication. This time period may be extended at the mutual consent of the parties. Should the non-profit entity fail to perform, the private developer may build Moderate Income and/or market rate units on the site, and dedicate a site in a subsequent phase. 4. Surplus Funds (net project revenues after debt service, reasonable reserves, and reasonable and typical operation and maintenance expenses, including management fees) from the initial Affordable Housing development of the non-profit entity shall be held in trust and shall be used to construct additional Very Low and Low Income Units at additional sites in the Dougherty. Valley, until such time as the Affordable Units required herein have been constructed, at which time Surplus Funds may be used to produce Affordable Units within Contra Costa County generally. 5. Should the availability. of Surplus Funds not be sufficient to undertake subsequent Very Low Income and Low Income Housing Developments necessary to comply with the requirements of Section (V)(A)(1), the Windemere and Shapell developers, as appropriate, shall have additional parcel dedications. If Surplus Funds are adequate, Windemere and Shapell may sell Affordable Unit parcels at Fair Market Value. 6. Windemere and Shapell shall assure that dedication parcels, and the development of units thereon, are included in development phases (tentative maps), which are adequately covered by environmental documentation, prior to dedication. F. Compliance Monitoring 1. An annual report reflecting the Shapell and Windemere (or their successors in interest) portions respectively of the Dougherty Valley shall be reviewed on an annual basis by the County Board of Supervisors. The report by each developer shall be submitted to the Community Development Department on or before the first business day of October of each year and shall summarize progress made with respect to provision of Affordable Units and provide a one year and three year strategic plan for the provision of Affordable Units. -24- 2. With respect to the Very Low and Low Income Units, the developer may submit to the Community Development Department such information as is�:appropnate to determine the feasibility of Very Low and Low Income Developments. Such information may include the adequacy of public financing in amount, terms and availability. If the Director of Community Development determines that public financing is insufficient, or other factors are inadequate to permit the development of Very Low and Low Income developments, then the Director of Community Development may require: a. That the site remain vacant until such time as funds are available to permit construction of the Very Low and Low Income Units; or b. Permit the site to be used for Moderate Income Units, and require the developer to dedicate an alternative site in a subsequent phase for the Very Low and Low Income Units. -25- VI. Plan of Finance The Dougherty Valley represents a significant opportunity for the provision of affordable housing in healthy, diverse neighborhoods. The achievement of these Affordable Units will only be possible by securing proper financing. Affordable housing, particularly housing affordable to Very Low and Low Income Households, generally creates an "Affordability Gap" or the amount of financing not supportable by project income due to the Affordable Unit requirements. The "Affordability Gap" tends to be larger for projects with units that are highly targeted, i.e., which are targeted to the Very Low and Low Income realms, or have a larger percentage of Affordable Units. Public/private partnerships to develop affordable housing are common and generally necessary to its accomplishment. This Plan of Finance is intended to set forth (1) the financing principles under which the Affordable Unit requirements of this Dougherty Valley Affordable Housing Program can be met; and (2) the operational guidelines that will govern evaluation of individual projects which may be proposed. A. Financing Principles 1. Moderate Income Units All Moderate Income Units shall be accomplished by the private developers without anticipation of public assistance. Moderate Income Units may be eligible for some public assistance programs; however, the delivery of such units shall not be determined by the availability of public assistance. 2. Very Low and Low Income Units Very Low and Low Income Units may result in an Affordability Gap that requires additional financial . assistance from public or quasi-public sources. a. The County will use best efforts to: i. Issue tax exempt bonds that meet standards of credit- worthiness; ii. 'Identify and pursue other public, quasi-public, or private funds available to address an affordability gap; iii. Provide the Dougherty Valley developers, or their successors, with an equal opportunity to access affordable housing funds controlled by the County; iv. Investigate and implement, where feasible, - the inter urisdictional transfer of funds for affordable housing; -26- i V. Support Affordable Housing developments consistent with this Program and the Dougherty-Valley Specific Plan; and vi. Require adequate notification/disclosure to future Dougherty Valley residents of these Affordable Housing requirements and Affordable Housing developments proposed and/or approved pursuant to this Dougherty Valley Affordable Housing Program and the Dougherty Valley Specific Plan. Notification shall include both disclosures to individual residents upon the purchase or rental of dwelling units, and a general disclosure as part of a sales or rental program for individual developments. vii. Provide adequate densities on dedicated sites to enable them to be feasibly developed as Very Low and Low Income developments. viii. Encourage the provision of Affordable Units in an economically efficient manner by considering relaxed design guidelines, fee waivers, and expedited processing. b. The Developers will use best efforts to: i. Pursue investment grade rated credit enhancement on market terms to permit viable tax exempt bond issues; ii. Identify and diligently pursue other funds as identified by the County or other parties; iii. Work creatively and cooperatively with non-profit and for- profit developers in order to achieve feasible project financing plans; iv. Provide adequate notification/disclosure to future residents of the Dougherty Valley of these Affordable Housing requirements and Affordable Housing developments proposed and/or approved pursuant to this Dougherty Valley Affordable Housing Program and the Dougherty Valley Specific Plan. Notification shall include both disclosure to individual residents upon the purchase or rental of dwelling units, and a general disclosure as part of a sales or rental program for individual developments. 3. Amendments In recognition of the fluctuating and evolving nature of real estate markets and real estate finance, including the financing of units affordable to Very Low and Low Income Households, and the extended build-out period of -27- the Dougherty Valley Specific Plan, there is an acknowledged need for. flexibility. and continuing review. The Dougherty Valley Affordable Housing Program shall be automatically reviewed by the County at the earlier of: • Final Development Plan Approval of 5,500 housing units within the Dougherty Valley Specific Plan area; or • July 1, 2000. This review by the County will be subject to a fee to cover County costs payable by the developers. B. Operational Guidelines In order to ensure that the Affordable Housing Program requirements of Section V are met while administering an efficient and prudent program, these operational guidelines have been developed. These guidelines would allow individual projects to be considered, evaluated, pursued or rejected in terms of the overall Dougherty Valley Affordable Housing Program objectives. In particular, these guidelines can be valuable in assuring the suitability of projects, the most efficient use of resources, and the long term -integrity of the Dougherty Valley Affordable Housing Program. As indicated in Section IV, most programs for affordable housing development have specific requirements regarding affordability, eligibility, occupancy and terms. In the financing of affordable housing for homeownership or rental housing, any local resources must be leveraged or combined with other private and public resources. The most efficient and productive local programs are those with requirements that blend efficiently with other resources. In general, there are a number,of ways in which communities have assisted homeownership and rental housing. The following are models which illustrate some approaches which may be adapted for the revenue sources that could ultimately beselectedfor the Dougherty Valley Affordable Unit requirement. 1. Homeownership Fixed Unit Program. In the Dougherty Valley, the County has required the construction of affordable units through its land use regulations. Fixed Unit Programs do not always occur as a result of inclusionary requirements. Public and private financial participation may be necessary for Very Low and Low Income Units, and may be in the form of land cost write downs, gap loans, etc. The units are preserved as affordable through deed restrictions and covenants. Through resale price restrictions and purchaser income limitations, these programs have the advantage of providing a stock of housing that is affordable to a certain income household for a number of years. -28- Second Mortaag_ a Programs. These programs include a variety of second mortgages for first-time homebuyers combined with below market rate first mortgages made with single family mortgage revenue bonds or the combination of Mortgage Credit Certificates with conventional mortgages. Additionally, these programs are combined with programs such as the Federal National Mortgage Association's (Fannie Mae) Community Homebuyer Program that allow for more lenient underwriting. The primary use of second mortgages is to reduce the principal loan amount through a deferred payment second mortgage. The second mortgage is secured by a trust deed on the property. Second mortgage programs do not regulate the unit purchased (as do fixed unit programs) but they do create a renewable financial resource. Homeownership Opportunities. Consistent with the intent of the Daugherty Valley Specific Plan to provide for a balance of jobs and housing in the Tri-Valley area, the Affordable Housing program should provide homeownership opportunities for persons employed in the Tri- Valley area, and elsewhere in Contra Costa County. These programs must be developed to be consistent with Fair Housing and Equal Opportunity requirements of federal and state law. 2. Rental Housing Programs Local government financial resources are generally used in three ways: * Predevelopment loans, which cover such costs as surveys, architecture, _ engineering, title reports, development application fees, etc.; « Site/Acquisition loans, which pay for land and/or building acquisitions; and * Gap loans, which provide debt financing for housing construction. Federal, state and conventional sources of rental financing, including Multi-Family Mortgage Revenue Bonds, and various Community Reinvestment Act (CRA) sources are generally used as the primary source of debt financing. Rental projects must be financially leveraged with other resources in order to be feasible. Following are the guiding principles that will generally govern any local rental loan program: * Maximize leveraging of local funds by requiring investment in the project by the developer, private lenders, and/or state and federal agencies; -29- + Use limited local dollars only to fill the "Affordability Gap • Loan, rather than grant, local funds; Use local resources as the catalyst for investment of private and other public moneys; • Provide financial assistance only to those projects that are economically sound (considering the subsidy) and where the developer has the experience to carry out the type and scale of project proposed; * Use of the funds are limited to financing the residential component of the project; commercial and social services must be funded with other sources; • Require that terms of repayment of local funds be clearly spelled out in a loan agreement, and the affordability requirements be contained in a Regulatory Agreement; • The term of affordability is as specified in Section V (B) (1)(b); • Affordable rents are as specified in Section V (C); • Non-profit developers and developments are encouraged (as are partnerships between non-profit/public entities and private developers) as a means of enhancing access to additional funding sources, and enhancing opportunities for long term affordability. -30- APPENDICES A=ndix Title Appendix A County General Plan Relationship - Goals and Policies Appendix B County General Plan Relationship - Implementation Measures Appendix C HCD Housing Element Certification Letter Appendix D Low Income Sales Price Appendix E Moderate Income Sales Price Appendix F Very Low Income Sales Price Appendix G Affordable Housing Finance Alternatives Appendix H Developer Sales Agreement/Buyers Purchase Agreement Appendix I Regulatory Agreement Appendix J The Effect of the Proposed Dougherty Valley Housing on Jobs/Housing Balance in the Tri-Valley (Gruen Gruen & Associates-, January 1994) -31- APPENDIX A COUNTY GENERAL PLAN RELATIONSHIP - GOALS AND POLICIES Goal/Policy Reference Goal/Policy Statement Chapter 3 - Land Use Element Goal 3-D To provide for a range and distribution of land uses that serve all social and economic segments of the County and its subregions. Goal 3-K To develop a balance between job availability and housing availability with consideration given to wage levels, commute distance and housing affordability. The individual characteristics of the several subregions of the County and their interaction with other regions shall be considered when establishing criteria for delivering that balance. Goal 3-L To safeguard the County's obligations to provide its fair share of safe, decent affordable housing. Policy 3-1 Housing infill shall be supported and stimulated where the jobs/housing ratio shows an overabundance of jobs to housing. Policy 3-3 As feasible, areas experiencing rapid urban growth shall be developed so as to provide a balance of new residential and employment opportunities. Policy 3-20 The predominantly single family character of substantially developed portions of the County shall be retained. Multiple family �housing shall be dispersed throughout the County and not concentrated in single locations. Multiple family housing shall generally be located in proximity to facilities such as arterial roads, transit corridors, and shopping areas. A-1 Goal/Policy Reference Goal/Policy Statement Policy 3-21 Housing opportunities for all income levels shall be created. Fair affordable housing opportunities should exist for all economic segments of the County. Policy 3-22 A diversity of living options shall be permitted while ensuring community compatibility and quality residential development. Policy 3-23 Housing opportunities shall be improved through encouragement of distinct styles, desirable amenities, attractive design and enhancement of neighborhood identity. Policy 3-24 Innovation in site planning and design of housing developments shall be encouraged in order to upgrade quality and efficiency of residential living arrangements and to protect the surrounding environment. Chapter 6 - Housing Element Goal 6-1 Housing Production: To provide housing to meet the present and future needs of residents in the County of Contra Costa, and to aim at providing a fair share of the market area housing needs, within identified governmental, market, economic and natural constraints. Goal 6-2 Housing Affordability: To provide housing to meet the needs of all income groups in the County, and to provide the fair share allocations by income category within the identified governmental, market, economic and environmental constraints. Goal 6-4 Special Housing Needs: To address the housing needs of senior citizens, physically disabled, homeless, large families, farmworkers and female- headed households. A-2 Goal/Policv Reference Goal/Policy Statement Policy 1.1 Fair Share Housing Production: On a Countywide basis, attempt to increase the number of housing units to meet the need for additional housing during the 1990-1995 period. Contra -Costa County's unincorporated quantified objective is based on ABAG's determination of Contra Costa County's fair share of housing by income groups as illustrated below: UNINCORPORATED CONTRA-COSTA CouNTy QuANTmED oBjEenw BASED ON REGIONAL NEEDS: 1988-1995 Total New Very Low LOW Moderate Above Moderate Construction Income Income Income Income ABAG's Determination 6,447 1,289 903 1,289 2,966 1988-1995 Annual Share 921 194 129 184 424 J Policy 2.1 Affordable Housing Opportunities: The County shall implement programs to increase affordable housing opportunities, preserve the existing stock of affordable rental housing, including the 105 units of subsidized rental housing subject to conversion to market rate housing, and promote alternative housing types. A-3 APPENDIX B COUNTY GENERAL PLAN RELATIONSHIP - EMPLEMENTATION MEASURES r. Implementation Reference Implementation Measure Chapter 3 - Land Use Element 3-g Adopt land use regulations which allow mixed use developments as a mechanism for achieving a jobs/housing balance. 3-h Require staff reports on development applications for residential developments of 104 or more units to address the impact of that development upon the subregional jobs/housing balance. 3-j Provide incentives to encourage the construction of affordable housing in areas where few such opportunities exist and significant employment centers exist or are proposed. 3-ab Periodically review and update the Housing Element of this General Plan, to ensure that it accommodates a variety of housing types and prices throughout the County. Chapter 6 - Housing Element 6-1.3 Second Units: Publicize the revised Secondary Unit Program to increase public awareness. 1991 amendments include priority processing and potential for parking variances. 6-1.4 Change All Residential Zoning Categories to Planned Unit Development (P-1) in Conformance with General Plan: County will initiate zone changes for residential sites. Will streamline entitlement process for development applications. B-1 I I Implementation Reference Implementation Measure 6-1.5 Encourage Use of Planned Unit Development (P-1) Zoning: Publicize P-1 program parameters. 6-1.8 Establish Minimum and Maximum Densities for All Residential Districts: As part of 1991 General Plan update, Land Use Element was modified to include minimum and maximum . densities for each residential land use category. 6-2.0 New Construction: Direct private and nonprofit housing developers to County for HOME and the CDBG Program funds. Where applicable, use County Redevelopment Agency set-aside funds. - Program funds can be used . to facilitate new development and special housing needs for very low and low income households by financing predevelopment, site acquisition,site improvements, and by providing first time homebuyer assistance. 6-2.2 Funding For Housing Trust Fund: Convene Housing Trust Fund Task Force to consider revenue generating options for affordable housing. Evaluate recommendations for inclusionary zoning ordinance and in-lieu fee and issuance of general obligation bond. 6-2.3 Non-Profit and Affordable Housing Developer Outreach: Meet with local non-profit and private developers to promote the affordable housing programs outlined in the Housing Element. Provide interested developers with the inventory of vacant sites, and explain procedures for utilizing the programs. Further, allocate minimum of 15 percent of HOME funds ($240,000 for 1992-1993) to community housing development organizations. Develop standards for the issuance of 501(c)(3) non-profit bonds. 6-2.4 Fee and Permit Waiver: Discretionary waiving of all or a portion of planning fees for nonprofit developers of projects affordable to very low and low income households. B-2 6-2.5 Mortgage Credit Certificate Program (MCC): Undertake County MCC Program to enhance the affordability of both new and existing homes for first time low to moderate income homebuyers. Implement lender training program and widely publicize program in local newspapers. 6-2.6 Density Bonus: Promote the utilization of the County's density bonus policy. The ordinance specifies that a developer shall be granted a bonus of at least 25 percent, and an additional incentive, for the provision of 20 percent of the units for lower income households, or 10 percent for very low income households, or 50 percent of the units for senior citizens. 6-2.11 First Time Homebuyers Program: Utilize$200,000 in HOME funds from 1992-1993 application for first time homebuyers. program for low and moderate income households. Issue single family bonds and Mortgage Credit Certificates (MCCs). Establish an equity sharing first time homebuyer program- 6-2.12 Negotiate Affordable Housing as Part of Development Agreements: Large scale residential projects requesting a Vesting Development Agreement should provide a minimum of 25 percent of the units for moderate income households, or 10 percent for low income. If revisions to existing development agreement are sought, specify that a portion of the units be reserved for very low and low income housing or a contribution be made to the County's Housing Trust Fund. Negotiate comparable affordable housing component with other Development Agreements. 6-4.2 Design Flexibility for Elderly .Projects: Allow techniques such as smaller units sizes, parking reduction, common dining facilities and fewer required amenities for senior projects. 6-4.3 Encourage the Development of Family Housing: Expedite approvals for affordable housing for larger family households. B-3 APPENDIX C HCD HOUSING ELEMENT CERTIFICATION LETTER V , ATE OF CAUFORNIA-BUSINESS.TRANSPORTATION AND MOUSING AGENCY PETE WILSON.Go emor EFARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT 'VISION OF HOUSING POUCY DEVELOPMENT 00 TMD STREEI,Room 430 7 BOX 952053 `f ;;• .. '' * .CR.�1%=STO.Cl 94:5:-2053 16)323.3176 FAX(916) 373."25 April 30, 1993 Ips. Phil Batc elor County Administrator Contra Costa County County Administration Building 651 Pine Street Martinez, California 94553 Dear Mr. Batc-elor: RE: Review of the County of Contra Costa' s Adopted Rousing Element Thank you for submitting the County of Contra Costa' s housing element,, adopted on December 15, 1992, and received for ,our review on De_a_*nber 31, 1992 . As you 3=cw, we are required. to review adopted housing elements and report our findings to. the locality (Gcve=....rent Code Sec:ion 65385 (h) ) . We congratulate the County for establishing an ambitious schedule of program actions to facilitate the development of housin5 in Contra ' Costa County. As you know, our December 14, 1992 review letter found the County' s draft element adequately addressed the statutory requirements of housing element 'law, provided certain revisianz necessary to accommodate the County's new construction need for lower-income households were included in the element.- The adopted element includes the necessary chances. We are therefore ple=sed to find that the County' s adopted housing element also com_alies with State housing element law (A~6ic1e 10 .6 of the Government Code) , including requirements regarding the preservation of assisted multifamily housing at risk of converting to non-low-income uses pursuant to Chapter 1451, Statutes of 1989 . Our finding of co=liance is based on the County' s continued commitment to accommodate its share of the regional housing need for lower-income households . The County is planning to achieve this objective by the following methods: by per=titting multifamily cons==,zction at densities sufficient to C-1 M-. Phil Batchelor Pace 2 •facilitate the develcioment of lowe_-income housing need, by the County' s continued facilitation of the development of some 11, 000 total units, including some 2, 308 high density multifamily units in the Dougherty Val''iey, and by application of the County' s inclusionary ordinance to the Dougherty Valley so that 2,750 units will be afforcable in at least the following ratio: 10 percent very low ZS percent_.low- and 65 percent moderate- income. We stronaly encourage the County to promote the early development of lower-income units in the Dougherty Valley. Failure by the Countv to ' facilitate the availability of the Dougherty Valley hien density sites would leave the County with a lack of sites for lower-income households . -If these sites do not become available as `',planned, the County should amend the element to include additional sites for lower-income housing sufficient to meet Contra Costa County' s regional share nee=. We look forwar4 to following the County' s progress in i=lementinc the housing program when progress reports are filed with the Department ;pursuant to Government Code Section 63400. As you may know, Chapter 889 , Statutes of 1991, now requires an annual submittal of these reports to this Department. We wish you continued success in implementinca your housing program. If we can assist the County in this eff ort, please contact Robert Maus of our staff at (916) in accordance with their requests pursuant to the Public Records Act, we are,,, forwardinc a copy of this letter to the individuals listed below. Sincerely, Thomas B. Cook Deputy Director C-2 Mr. Phil Batchelor Page 3 cc: James Kennedy, Contra Costa County Dennis Barg, Contra Costa County Matt. Tomas, Contra Costa County Laura Blair, Sedway and Associates Miye Goishe, Contra Costa Legal Services Foundation Nancy Stroh? , Contra Costa Legal Services Foundation Gen Fujioka, Asian Law Caucus Charles Klinge, Attorney at Law David Booher, California Ecusing Council Sue Nestor, Attorney at Law Gary Hambly, Building Industry Association Rolf Penda" , Bay Area Council Revan A.F. T_ranter, Association of Bay Area Governments Kathleen Mikkelson, Deputy Attorney General Bob Cervantes, Governor' s Office of Planning and Research Dwight Hanson, California Building Indusry.Association Ker:y Harrington Morrison, California Association of Realtors Marc Brown, California Rural. Legal Assistance Foundation Rob Wiener, California Coalition for Rural Housing Susan DeSantis, The Planning Center C-3 APPENDIX D LOW INCOME SALES PRICE APPENDIX D MAXIMUM PRICE OF A HOME AFFORDABLE FOR A LOW INCOME HOUSEHOLD HOUSING AS 338 OF INCOME Apr-93 LOWER INCOME $27,800 $31,750 $35,750 $39,700 $42,900 $46,050 $49,250 $52,400 FAMILY SIZE 1 2 3 4 5 6 7 8 INTEREST RATE 6% $103,200 $120,100 $137,200 $154,100 $167,700 $181,200 $194,900 $208,300 78 $94,500 $110,000 $125,600 $141,100 $153,600 $165,900 $178,400 $190,800 88 $86,900 $101,100 $115,500 $129,700 $141,200 $152,600 $164,100 $175,400 98 $80,200 $93,300 $106,600 $119,700 $130,400 $140,800 $151,400 $161,900 108 $74,300 $86,500 $98,800 $110,900 $120,800 $130,500 $140,300 $150,000 118 $69,100 $80,400 $91,900 $103,200 $112,300 $121,300 $130,500 $139,500 128 $64,500 . $75,100 $85,700 $96,300 $104,800 $113,200 $121,800 $130,200 138 $60,400 $70,300 $80,300, $90,200 $98,200 $106,100 $114,-100-$121,900 148 $56,800 $66,000 $75,400 $84,700 $92,200 $99,600 $107,200 $114,600 158 $53,500 $62,200 $71,100 $79,800 $86,900 $93,900 $101,000 $108,000 168 $50,600 $58,800 $67,200 $15,400 $82,100 $88,700 $95,400 $102,000 ASSUMPTIONS 1. LOWER INCOME BASED ON STATE DEPARTMENT OF HOUSING & COMMUNITY DEVELOPMENT PUBLISHED ESTIMATES OF MEDIAN INCOME FOR CONTRA COSTA COUNTY. 2. DOWN PAYMENT OF 108 3. MONTHLY HOUSING EXPENSE COST OF 338 OF MONTHLY INCOME. 4. TAXES ARE CALCULATED AT 1.258 OF THE MARKET PRICE OF THE ROME. HOMEOWNERS ASSOCIATION DUES ARE ESTIMATED AT $100 MONTHLY. S. MORTGAGE INSTRUMENT IS A 30 YEAR FIXED RATE MORTGAGE. 6. APPROPRIATELY SIZED UNITS ARE AS FOLLOWS: # PERSONS 1 2 3 4 5 OR MORE UNIT SIZE STUDIO I SEDRM 2 BEDRM 3 BEDRM 4 BEDRM c:\data\qp\denbo\93db331w.wkl D-1 APPENDIX E MODERATE INCOME SALES PRICE APPENDIX E MAXIMUM PRICE OF A HOME AFFORDABLE FOR A MODERATE INCOME HOUSEHOLD HOUSING AS 338 OF INCOME Apr-93 LOWER INCOME $44,050 $50,300 $56,600 $62,900 $67,950 $72,950 $78,000 $83,050 FAMILY SIZE 1 2 3 4 5 6 7 8 INTEREST RATE 68 $172,600 $199,300 $226,200 $253,200 $274,700 $296,100 $317,700 $339,200 78 $158,100 $182,600 $207,200 $231,800 $251,600 $271,200 $290,900 $310,700 88 $145,400 $167,800 $190,500 $213,200 $231,300 $249,300 $267,500 $285,600 98 $134,200 $154,900 $175,800 $196,800 $213,500 $230,100 $246,900 $263,600 108 $124,300 $143,500 $162,900 $182,300 $197,800 $213,200 $228,800 $244,300 118 $115,600 $133,500 $151:500 $169,500 $184,000 $198,300 $212,700 $227,200 128 $107,900 $124,600 $141,400 $158,200 $171,700 $185,100 $198,600 $212,000 238 $101,100 $116,700 $132,400 $148,200 $160,800 $173,300 $186,000 $198,600 148 $94,900 $109,600 $124,400 $139,200 $151,100 $162,800 $174,700 $186,600 158 $89,500 $103,300 $117,300 $131,200 $142,400 $153,500 $164,600 $175,800 168 $84,600 $97,600 $110,800 $124,000 $134,600 $145,000 $155,600 $166,100 ASSUMPTIONS 1. MODERATE INCOME BASED ON STATE DEPARTMENT OF HOUSING & COMMUNITY DEVELOPMENT PUBLISHED ESTIMATES OF MEDIAN INCOME FOR CONTRA COSTA COUNTY. 2. DOWN PAYMENT OF 108 3. MONTHLY HOUSING EXPENSE COST OF 338 OF MONTHLY INCOME. 4. TAXES ARE CALCULATED AT 1.258 OF THE MARKET PRICE OF THE HOME. HOMEOWNERS ASSOCIATION DUES ARE ESTIMATED AT $100 MONTHLY. 5. MORTGAGE INSTRUMENT IS A 30 YEAR FIXED RATE MORTGAGE. 6. APPROPRIATELY SIZED UNITS ARE AS FOLLOWS: # PERSONS 1 2 3 4 5 OR MORE UNIT SIZE STUDIO 1 BEDRM 2 BEDRM 3 BEDRM 4 BEDRM c:\data\qp\deabo\93db33mo.wkl E-1 r r APPENDIX F VERY LOW INCOME SALES PRICE. APPENDIX F MAXIMUM PRICE OF A HOME AFFORDABLE FOR A VERY LOW INCOME HOUSEHOLD HOUSING AS 33% OF INCOME Apr-13 - LOWER INCOME $18,350 $20,950 $23,600 $26,200 $28,300 $30,400 $32,500 $34,600 FAMILY SIZE 1 2 3 4 5 6 7 8 INTEREST RATE 6% $62,900 $74,000 $85,300 $96,400 $105,400 $114,300 $123,300 $132,300 78 $57,600 $67,700 $78,100 $88,300 $96,500 $104,700 $112,900 $121,100 88 $52,900 $62,300 $71,800 $81,200 $88,700 $96,300 $103,800 $111,400 98 $48,800 $57,500 $66,300 $74,900 $81,900 $88,900 $95,800 $102,800 108 $45,300 $53,300 $61,400 $69,400 $75,900 $82,300 $88,800 $95,200 118 $42,100 $49,500 $57,100 $64,600 $70,600 $76,600 $82,600 $88,600 128 $39,300 $46,200 $53,300 $60,200 $65,900 $71,500 $77,100 $82,700 138 $36,800 $43,300 $49,900 $56,400 $61,700 $66,900 $72,200 $77,400 148 $34,600 $40,700 $46,900 $53,000 $57,900 $62,900 $67,800 $72,700 158 $32,600 $38,300 $44,200 $50,000 $54,600 $59,300 $63,900 $68,500 168 $30,800 $36,200 $41,800 $47,200 $51,600 $56,000 $60,400 $64,800 ASSUMPTIONS 1. VERY LOW INCOME BASED ON STATE DEPARTMENT OF HOUSING & COMMUNITY DEVELOPMENT PUBLISHED ESTIMATES OF MEDIAN INCOME FOR CONTRA COSTA COUNTY. 2. DOWN PAYMENT OF 108 3. MONTHLY HOUSING EXPENSE COST OF 338 OF MONTHLY INCOME. 4. TAXES ARE CALCULATED AT 1.258 OF THE MARKET PRICE OF THE ROME. HOMEOWNERS ASSOCIATION DUES ARE ESTIMATED AT $100 MONTHLY. S. MORTGAGE INSTRUMENT IS A 30 YEAR FIXED RATE MORTGAGE. 6. APPROPRIATELY SIZED UNITS ARE AS FOLLOWS: # PERSONS 1 2 3 4 5 OR MORE UNIT SIZE STUDIO 1 BEDRM 2 BEDRM 3 BEDRM 4 BEDRM c:\data\qp\denbo\93db33vl.wkl F-1 APPENDIX G AFFORDABLE HOUSING FINANCE ALTERNATIVES I. GENERAL - RENTAL AND HOMEOWNER HOUSING A. Community Development Block Grant (CDBG) Funding agency - U.S. Department of Housing and Urban Development (HUD) allocates CDBG funds by formula to Urban Counties forjuse in supporting eligible activities . Contra Costa is the ' Urban County for all of Contra Costa with the exception of" Antioch, Concord, Richmond andWalnut Creek. Funds are allocated by the County through a competitive application process. Forty-seven percent of the County's annual CDBG allocation is reserved for housing projects. Target population - Very-Low and Low Income Households earning 80 percent or'lless of area median income as defined by HUD and special needs populations, including the elderly,, mentally and/or physically disabled, battered women and children, homeless individuals and families, the illiterate, and migrant farmworkers. Eligible housing activities - Site acquisition, site clearance and demolition, site improvements (publicly owned land only) , housing rehabilitation, costs of disposing of real property acquired with CDBG funds, relocation assistance, new construction and first-time homebuyer assistance. CDBG funds are typically,provided as loans with financial terms dependent on the feasibility of the project. Loans include affordability restrictions. Eligible applicants For-profit and non-profit entities, local government (e.g. , cities, redevelopment agencies) . With the exception? of homeless shelters and supportive housing for disabled populations, new construction activity is limited to neighborhood-based nonprofit organizations . Annual funding - FY 1993/94 funding for housing $2 mil. B. HOME Investment Partnerships Program (HOME) Funding agency - HUD allocates funds by formula to Participating„ Jurisdictions (PJs) . Contra Costa County has been designated as a PJ for the Urban County. The County allocates HOME funds to eligible activities through a competitive application process. Target population - Very-Low and Low Income Households earning 80 percent or,, less of area median income as defined by HUD. G-1 Eligible housing activities Acquisition, rehabilitation and new construction of rental housing affordable to the target population; housing rehabilitation loans for very-low and low- income homeowners; and first-time homebuyer assistance for very-low and low-income households . Funds are typically provided as loans with terms dependent on the feasibility of the project. Occupancy And affordability restrictions apply. Eligible applicants - Non-profit and for-profit entities, local government agencies; must have experience in affordable housing development and project related areas . Annual funding - FY 1993 funding level $1 ,miilion. C. Housing Trust Funds Contra Costa, County is proposing to establish a Housing Trust Fund for purposes of financing affordable housing in Contra Costa. Eligible activities will include the provision of first-time homebuyer assistance for Low and Moderate Income Households and projects and programs to increase the supply of rental housing affordable to Very-Low Income Households . Proposed funding sources include a general obligation (GO) bond and an inclusionary housing program with an in lieu fee component. The Board of Supervisors has appointed an Interim Advisory Board to develop an implementation strategy for the proposed revenue sources, work with the Board to establish the Trust Fund as a legal entity, and recommend specific policies, programs, and criteria to be used in the allocation of Trust Fund revenues . Funding levels will depend on the specific financial characteristics of the proposed funding alternatives . D. Redevelopment Agency Housing Set-Aside Funding agency - Redevelopment Agencies (RDAs) are required to set-aside 20 percent of their tax-increment revenue for the development of affordable housing. Target population - Very-Low, Low, and Moderate Income Households. Eligible applicants - Non-profit and for-profit entities . In addition, the RDA may undertake housing development directly. Annual funding - Redevelopment agencies in the Tri-Valley jurisdictions generate an estimated $540,000 in annual housing set-aside funds, including $300,000 from Livermore, $90,000 from Danville, and $150,000 from San Ramon. Changes to state law would be required to permit an interjurisdictional transfer of Redevelopment housing funds from these areas to the Dougherty Valley. In addition, the five Contra Costa G-2 County Redevelopment Areas generate an estimated $800, 000 annually and could, with required legal findings of relationship,':, transfer funds to other locations in the unincorporated County. However, making the necessary legal findings to accomplish this transfer would be problematic because a finding of benefit to the Redevelopment Area must be made. Proximity is the most plausible basis for such a finding. None of the County's Redevelopment Project Areas are near the Dougherty Valley E. Predevelopment Loan Program Funding Agency - Predevelopment Loan Program (PLP) funds are distributedthrough the State Housing and Community Development Department through an open window application process . Eligible Projects and Target Population - The Predevelopment Loan Program!pprovides 3-year loans at 7 percent interest for predevelopment expenditures associated with Very-Low and Low- Income housing projects . Eligible expenditures include site control, site acquisition, engineering studies, architectural plans, application fees,. legal services, permits, bonding, and site preparation. Eligible Applicants - Local government agencies and nonprofit corporations',. - Annual Funding - The Predevelopment Loan Program is a revolving fund program and, therefore, the level of funding available on an annual basis depends on loan repayments . Historically, HCD has been able to provide 20 to 25 loans ranging in size from $100,000 to $1 million. F. Employer Assisted Housing Employer financed and provided programs designed to assist employees in obtaining affordable housing within reasonable proximity ofj the workplace. Programs may include mortgage assistance (low-interest loans, mortgage guarantees, interest- rate buy-downs) , rent subsidies, and other forms of assistance designed to,° enable the employee to acquire marketplace housing, as well as programs to increase the overall supply of affordable housing in the surrounding area through acquisition and new construction. Employer sponsored programs may take the form of„ joint ventures with other employers, public agencies and'/or nonprofit affordable housing organizations . Incentives for employers focus on the ability to attract and retain a qualified workforce. G-3 G. Trade Union and Retirement Fund Assistance The AFL-CIO has established a Housing and Building Investment Trust to provide take-out financing for affordable housing projects built with union labor. In addition, the California Public Employees Retirement System has agreed to invest $225 million in the financing of entry-level, single-family home construction in the state. H. Private Sector Financing for Affordable Housing 1. Community Reinvestment Act The Community Reinvestment Act (CRA) requires federal regulatory agencies to consider a financial institution' s record of meeting the credit needs of its entire community ( including Very-Low, Low, and Moderate Income neighborhoods) in evaluating lender requests for federal approval of applications for a government charter, proposed mergers, relocation or creation of additional branch offices, and acquisition of additional holdings . As a result of the CRA, many lending institutions have created special programs to provide below-market rate loans for the purchase, construction, or rehabilitation of owner-occupied and rental housing for households whose incomes do not exceed 115 percent of the median income for the area. The CRA establishes an additional priority for assistance to very-low (50 percent or less of area median income) and lower income households (80 percent or less) . Individual lender programs differ with regard to program focus, specific loan criteria, and terms . Applications are made through each lending institution. 2 . Federal Home Loan Bank (FHLB) of San Francisco Affordable Housing Program The FHLB Affordable Housing Program provides below market rate loan and grant funds for the following purposes: to finance the acquisition, construction and/or rehabilitation of owner-occupied housing for Very-Low, Low and Moderate Income Families; or to finance the purchase, construction or rehabilitation of rental housing, where at least 20 percent of the units will be occupied by and affordable to Very-Low Income Households . FHLB member institutions work with project -developers to prepare and submit applications to the FHLB of San Francisco in two funding cycles (April and October of each year) . Preference is given to nonprofit and local government agency project sponsors. Approximately $3 million in funds were made available for projects in the Eleventh District (California, Nevada, and Arizona) in the most recently completed application cycle. G-4 3 . Bay Area LISC The Bay Area Local Initiatives Support Corporation (LISC) provides predevelopment and equity loans to nonprofit organizations for housing projects affordable to and occupied!! by Very-Low and Low Income households . Contra Costa County is an eligible project area for LISC. Affordability restrictions are generally required. Since 1981, Bay Area LISC has been the catalyst for the production of more than 3,000 units of affordable housing in the 9-County Bay Area Region. 4 . Northern' California Community Loan Fund Northern'iCalifornia Community Loan Fund is a nonprofit investment fund which provides loans of up to $100,000 to nonprofit organizations which have limited access to financing from conventional lending institutions . All projects; must be ' located in Northern California, and include 'I' a significant affordable housing component targeted to Very-Low and Low Income Households . Low interest loans are available for predevelopment, new construction, rehabilitation, acquisition, interim financing, and refinancing. Income and rent restrictions- apply to'" all loans . 5. Low-Income Housing Fund (LIHF) The LIHF,','IIis a nonprofit financial intermediary and lender for the development of housing affordable to Very-Low and Low Income Households . LIHF provides loans and technical assistance to affordable housing developers and acts as an intermediary to assist nonprofit organizations in obtaining funding from other sources . Direct loans of up to $150,000 are available through LIHF' s revolving loan fund for one to three years at below-market interest rates . Funds may be used for predevelopment, site acquisition, construction, and rehabilitation. Eligible projects'Jinclude multifamily rental housing, SRO hotels, group homes, transitional housing, limited equity housing cooperatives, and shelters for victims of domestic violence. 6 . Federal National Mortgage Association (Fannie Mae) Fannie Mae generally assists in the development of affordable housing for Low and Moderate Income Households (up to 115 percent of area median income) through the provision of permanent financing for residential mortgages . Fannie Mae accomplishes this by operating in the secondary mortgage market to purchase single and multifamily mortgage loans from the lending institutions G-5 that originate them, and by issuing and guaranteeing Mortgage-Backed Securities (MBS) backed by loans originated by mortgage lenders . Together, these two mechanisms increase the total pool of resources available for residential mortgages . Fannie Mae will acquire first mortgages on properties with a second, lease-purchase mortgage loans, and community land trust mortgage loans . Additional programs offered by Fannie Mae to assist in affordable housing development and acquisition include the following: Community Homebuyer Program Fannie Mae's Community Homebuyer Program provides mortgage financing with a downpayment of '3 to 5 percent for Low and Moderate Income homebuyers who represent good credit risks but who cannot qualify for mortgages under standard underwriting guidelines . Standard underwriting criteria require a housing expense 'to income ratio of no more than 28 percent and a total monthly obligations to income ratio of no more than 36 percent. The Community Homebuyer's Program permits a housing expense ratio of 33 percent and a total monthly obligations ratio of 38 percent. To qualify for financing under this program, borrowers must have incomes which do not exceed 115 percent of the area median and participate in a pre-purchase homebuyer education program. Public Finance Activities - Fannie Mae purchases single and multifamily mortgage revenue bonds directly from state and local housing finance agencies, reducing borrowing costs and resulting in lower cost mortgages than would otherwise be available. In addition, Fannie Mae provides credit enhancement for mortgage revenue bonds, thereby lowering the cost of borrowing and interest rate for mortgages funded by the bonds . Multifamily Forward Commitment - Fannie Mae will issue forward commitments for up to 24 months to buy or securitize permanent financing made to developers of low and moderate income multifamily rental projects by Fannie Mae approved lenders. This commitment enables borrowers to obtain loans for the construction and rehabilitation of rental housing. Rental Housing Equity and Venture Fund Investments - Fannie Mae encourages the development of low income rental housing through direct equity investments and investments in equity funds that invest directly in projects that qualify as affordable under the federal tax credit program. Qualified projects provide affordable G-6 rental housing for individuals and families earning 60 percent or less of the area median income. II . RENTAL HOUSING A. Multifamily Bonds Multifamily housing revenue bonds are private activity bonds issued to finance the development of multifamily rental housing by private developers . The bonds are limited obligations o,f the issuer payable from loan payments and other securities pledged by the borrower. Advantages to developers include access to fixed or variable rate financing at below market interest rates. Loan funds may be used for construction as well as take-out financing. owners of multifamily bond financed projects are automatically eligible for a Low Income Housing Tax Credit of 4 percent (see Section II .0 below) . Eligible Issuing Agents Multifamily housing revenue bonds may be issued by cities, counties, housing authorities, redevelopment agencies and the State (California Housing Finance Agency) for projects owned and operated by nonprofit and for-profit developers. The County has financed over 3,000 rental units ,,;with the sale of multifamily bonds . To issue multifamily housing revenue bonds, a prospective issuer must apply to the California Debt Limit Allocation Committee (CDLAC) for a portion of the State allocation. Eligible ProJects and Target ' Population - Affordability requirements for multifamily housing revenue bonds generally require that20 percent of all units build be reserved for Very-Low and Low Income Households at Very-Low Income Rents. (Federal tax law does provide for alternatives .' Projects must maintain" the affordability for at least 15 years . Annual Funding - Multifamily bond authority is part of the State volume cap for private activity bonds ( 1993 amount is $1,543,350,00,0) . Affordable housing projects are given priority for receiving authority. B. Section 501(d) (3) Multifamily Housing Revenue Bonds Section 501(d) (3) Bonds are a special class of mortgage revenue bonds used to finance affordable multifamily housing projects owned and operated by nonprofit organizations. In 'In order for bonds to be tax-exempt, federal law requires that projects financed with City and County bonds must either reserve 40 percent of all units for households with incomes less than or equal to 60 percent of area median income or reserve 20 percent of the units for Very-Low Income Households. G-7 order to qualify, participating nonprofits must be designated as tax-exempt under Section 501 (c) (3) of the federal tax code by the Internal Revenue Service. The major advantages of Section 501 (c) ( 3) bonds are that they are not subject to the State cap limiting the total amount of private activity bonds which can be issued in a given year, and interest on these bonds is not subject to the Alternative Minimum Tax, resulting in an interest-rate advantage. Finally, under some circumstances, projects funded with Section 501(c) (3) bonds are not subject to federal or state affordability requirements, with the result that the issuing agency has greater flexibility in negotiating affordability requirement which are appropriate to individual projects ., A limitation of 501(c) (3) bonds is the statutory preclusion to using them in combination with Low Income Housing Tax Credits . Eligible Issuing Agents - Section 501(c) (3) multifamily housing revenue bonds .may be issued by cities, counties, and the State for projects owned and operated by nonprofit organizations . Eligible Activities and Target Population - Policies adopted by the Contra Costa Board of Supervisors require that projects financed by tax-exempt bonds issued by the County must have a minimum of 20 percent of the units occupied by and affordable to Very-Low Income Households for a period of 30 years . This policy is consistent with federal requirements for tax-exempt issues . Annual Funding - As indicated previously, Section 501(c) (3) multifamily revenue bonds are not subject to the State cap limiting the amount of bonds which can be issued in a given year. The annual level of funding will depend on the existence of feasible, qualified projects interested in pursuing this type of financing. C. Low Income Housing Tax Credits The Low. Income Housing Tax Credit Program provides tax credits to . owners and investors in Very-Low and Low Income rental housing based on the costs of development and the number of qualified low income units. The tax credit rate is approximately 4 percent for acquisition costs and 9 percent for new construction costs . Credits are reduced if the project has other federal subsidies or tax-exempt financing. Multifamily bond financed projects automatically receive a tax credit authorization not to exceed 4 percent. Funding Agency - California Tax Credit Allocation Committee awards tax credits through competitive application process. G-8 1 I Eligible Projects and Target Population - A project must have . a minimum of 'either 20 percent of its units occupied by Very Low Income Households or 40 percent of its units occupied by Low Income households (incomes of 60 percent or less of area median income) . In addition, rents must be Very-Low Income Rents or otherwise below specified maximums (typically 30 percent of the maximum income for the target population, including an.,allowance for utilities) . Projects must remain affordable for a minimum of 15 years. Funds may be used for acquisition, rehabilitation, and new construction of rental housing. Eligible Applicants - Nonprofit and for-profit affordable housing developers. Annual Funding - Approximately $35 million in Tax Credit Authority was available in California in 1992 . Continuation of this program is contingent on Congressional renewal. D. Rental Housing Construction Program (RHCP) Funding Agency - RHCP funds are distributed through the State Housing and Community Development Department (HCD) through a competitive application process . Eligible Projects and Target Population - The Rental Housing Construction Program provides low-interest, fully deferred 30- year loans for the new construction of rental housing affordable to Very-Low and Low-Income Households . Projects must have at least five units on one or more sites . The number of assisted units in each project must be at least 30 percent of the total units . In addition, at least two-thirds of the assisted units must be affordable to and occupied. by Very-Low Income Households . Rent restrictions apply to all assisted units . Eligible Applicants - Nonprofit and for-profit corporations, local government agencies, and individuals. Annual Funding - HCD is in the process of allocating all remaining funds available through this program. Additional program activity is contingent on approval of additional General Obligation Bond issues by the voters . Propositions are periodically before California voters (the next issue is likely to be on the November 1994 ballot) . E. Family Housing Demonstration Program Fundinq Agency, - Family Housing Demonstration Program (FHDP) funds are distributed through the State Housing and Community Development Department through a competitive application process . G-9 Eligible Projects and Target Population FHDP funds are available for the development of new affordable rental or cooperative housing that provides onsite support services for Very-Low Income Households . Twenty to 40-year, 3 percent interest, deferred payment loans are available for new construction, rehabilitation, or acquisition and rehabilitation of community housing (20 or more units) and congregate housing (multi-bedroom structure occupied by two to ten households) . The number of assisted units in a project must . be at least 30 percent of the total units, and all assisted units must be occupied by Very-Low Income Households. In addition, at least 20 percent of the assisted units must be available for elderly persons, with the remaining occupied by families with children. Onsite support services must include child care, community rooms, community laundry facilities, job training, and employment opportunities . Eligible Applicants - Local government agencies and nonprofit housing development organizations . Annual Funding - HCD is in the process of committing all remaining funds available under this program. Future funding will depend on additional allocations provided by the State. F. Section 202 Supportive Housing for the Elderly Funding Agency - Funds are distributed by the U.S. Department of Housing and Urban Development through a competitive application process. Eligible Projects and Target Population - The Section 202 Program provides capital advances combined with rental assistance to finance the new construction or rehabilitation of a structure to be used as supportive housing for Very-Low Income Elderly Households . This assistance may also cover the cost of real property acquisition, site improvement, conversion, demolition, relocations and other expenses necessary to provide supportive housing for the target population. Projects must be designed to meet the special physical needs of elderly persons and provide appropriate supportive services. _ Eligible Applicants - Private nonprofit organizations and nonprofit consumer cooperatives may apply for Section 202 funds . Annual Funding - In May 1993, HUD issued a Notice of Funding Availability for the Section 202 . Program indicating an allocation of $94 .7 million for projects providing an additional 1,290 supportive housing units for the elderly in Region IX (California, Nevada, Arizona, and Hawaii) . G-10 G. Section 811 Supportive Housing for Persons with Disabilities : Funding Agency - Funds are distributed by the U.S . Department of Housing and Urban Development through a competitive application process . Eligible Projects and Target Population - The Section 811 Supportive Housing Program provides capital advances and contracts for rental assistance to finance the acquisition and/or rehabilitation, and new construction of supportive housing for Very-Low Income Households in which at least one person is an adult (over age 18) with a disability. Disabilities„ may include physical, mental or emotional impairments which are expected to be of a long-term nature and which impair the ability of the individual to live independently. Eligible types of housing include group homes, independent living facilities, dwelling units in multifamily housing developments, , condominiums, and cooperative housing projects . Allowable expenditures include real property acquisition, site improvement, conversion, demolition, relocation, and other expenses necessary to expand the supply of housing for persons with disabilities . Eligible Applicants - Nonprofit organizations . Annual Funding - In May of 1993, HUD issued a Notice of Funding Availability for the Section 202 Program indicating an allocation of $22 million to provide 326 units of supportive housing for the disabled in Region IX. H. McKinney Act Supportive Housing Program Funding Agency - Funds are distributed by the U.S. Department of Housing ;and Urban Development through a competitive application process . Eligible Projects and Target Population - The Supportive Housing Program provides funds for: transitional housing and support services designed to facilitate the movement of homeless individuals and families into permanent housing; permanent housing that provides long-term housing for homeless persons with ;disabilities in combination with support services designed to enable this population to live as independently as _ possible in a permanent setting; and housing projects that represent innovative or alternative methods of meeting the immediate and long-term needs of homeless individuals and families . Funds may be used for acquisition, rehabilitation, new construction and leasing of buildings to be used for supportive housing. Additional funds are available for support services and operating costs associated with the provision of supportive housing. G-11 Eligible Applicants —State and local government agencies and nonprofit organizations . Annual Funding - In March of 1993, HUD issued a Notice of Funding Availability for the Supportive Housing Program indicating $100 million for projects located throughout the nation. I . Section 8/Certificates and Vouchers Funding Agency - U.S. Department of Housing and Urban Development. Eligible Activities and Target Population - The Section 8. Program provides rent subsidies to enable Very-Low Income Households to obtain affordable housing at market rents . Certificates and vouchers are provided to qualifying households who may use the subsidy to rent an appropriate housing unit of their choice. In addition, the certificate program can be used to provide payments directly to private owners, 'who then lease their units to very-low income households . In all cases, the amount. of assistance provided is equal to the difference between 30 percent of the household' s gross monthly income and the unit 's fair market rent. Eligible Applicants - Public Housing Agencies apply to HUD for Section 8 Vouchers and are responsible for local administration of this program. Annual Funding - During FY 1992, the Contra Costa County Housing Authority applied for and received an addition 100 Section 8 certificates for use in assisting very-low income households in Contra Costa. Currently, the Housing Authority provides Section 8 vouchers and certificates to 4,790 Very-Low and Low-Income Households . J. Public Housing Development Funding Agency HUD allocates funds to local Public Housing Agencies annually through a competitive application process . Eligible Activities and Target Populations - Public Housing Development Funds may be used to provide new public housing through acquisition and new construction or rehabilitation of existing projects. Ninety-five percent of all new public housing units must be occupied by Very-Low Income Households; the remaining 5 percent may be occupied by Low Income Households . r i � Eligible Applicants Public Housing Agencies which have the , authority to finance, develop and own a housing project are eligible applicants under this program. Annual Funding - Annual funding levels vary depending on federal appropriations process . HUD has not issued a NOFA for this program in the current year. K. Housing Opportunities for People with AIDS (HOPWA) Funding Agency - HUD allocates funds by formula to eligible metropolitan statistical areas . Contra Costa County participates in this program in a pass-through arrangement with the City of Oakland and Alameda County. Contra Costa County allocates its share of HOPWA funds in a competitive application process. Eligible Activities and Target Population - HOPWA funds may be used for the acquisition, rehabilitation, new construction, conversion, and leasing of housing together with the provision of support services for persons with AIDS . Contra Costa County has further targeted the use of HOPWA funds by establishing, a priority for Very-Low and Low Income individuals with AIDS. Eligible Applicants - Nonprofit and for-profit affordable housing developers with experience in providing supportive housing for 'persons with AIDs . Annual Funding - Contra Costa County received an allocation of $200,000 to support the development of housing for people with AIDS. L. HUD Mortgage Insurance for Elderly and Handicapped Housing (Section 231) Financing Agency - HUD provides mortgage insurance (maximum of 40 years) through approved private lending institutions . Process requires preapplication conference with HUD Field Office staff". Eligible Activities and Target Population The Section 231 Program provides mortgage insurance for rental housing projects (new construction of five or more units) occupied by elderly or handicapped households. Projects must not provide meal services or contain central dining facilities and each unit must contain at least minimal kitchen facilities . There are no income requirements for occupants. Eligible Applicants - For-pr6fit and nonprofit individuals, partnerships, corporations, public agencies and other entities as approved by HUD. G-13 M. HUD Mortgage Insurance for Nursing Homes, Intermediate Care, and Board and Care Facilities (Section 232) Financing Agency - HUD provides mortgage insurance (maximum of 40 years) through approved private lending institutions . Process requires preapplication conference with HUD Field Office staff . Eligible Activities and Target Populations - The Section 232 Program provides mortgage insurance for new construction and rehabilitation of board and care homes (minimum of 5 bedrooms) , nursing homes, and intermediate care facilities (minimum of 20 beds) . Insured mortgages are provided at competitive fixed rates and may be for terms of up to 40 years. Eligible Applicants - Corporations, trusts, partnerships, individuals, or other qualified legal entities . Insured Loan Amount - The minimum insured loan amount is $3 million; there is no maximum. Insured loans may not exceed 90 percent of the property value. N. HUD Mortgage Insurance for Rental Housing for Moderate Income Families (Section 221) Financing Agency - HUD provides mortgage insurance (maximum of 40 years) through approved private lending institutions . Process requires preapplication conference with HUD Field Office staff. Eligible Activities and Target Population - Section 221 provides mortgage loan guarantees for projects to provide housing for moderate-income households, including projects designed for the elderly and Single-Room Occupancy Projects for the homeless . Insured Loan Amount - A 221(d) guaranteed loan can be used to provide construction funds with permanent take-out financing, and can cover up to 100 percent of construction costs . O. Saving Association Mortgage Company (SAMCO) Saving Association Mortgage Corporation is a CRA lending consortium created to assist member institutions in meeting their CRA obligations . SAMCO provides long-term permanent financing for multifamily properties with five or more units in which a minimum of 51 percent of the units will be affordable to and occupied by Very-Low and Low Income Households . Loans up to a maximum of $5 million are provided at below-market interest rates for terms ranging from 15 to 30 years . Project sponsors may be non-profit or for-profit G-14 developers . Applications are accepted on an- open-window basis . Following approval by the loan committee, projects are presented to SAMCO members for selective participation. Since 1971, SAMCO , has provided financing for more than 10,000 affordable housing units in California. P. California Community Reinvestment Corporation (CCAC) CCRC is a nonprofit lending consortium of member banks created to provide permanent fixed-rate financing for the development of multifamily rental housing (five or more units) affordable to and occupied by Very-Low and Low Income Households . Ten to 30 year loans are available at interest rates based on treasury bond yields with a maximum loan amount of $15 million. Projects must satisfy one of the following criteria: a minimum of 51 percent of all units must be occupied by and affordable to Low-Income Households;. a minimum of 40 percent of all units must be occupied by and affordable to households earning 60 percent or less of area median income; or a minimum of 20 percent of all units must be affordable to/occupied by Very-Low Income Households . Forward loan commitments are available for up to 18 months at fixed interest rates . III . OWNERSHIP HOUSING A. Single Family Mortgage Revenue Bonds Single family mortgage revenue bonds (MRBs) are issued for the purpose of assisting Very-Low, Low and Moderate Income Households to acquire homes by providing mortgage loans with below-market` interest rates . The bonds are limited obligations of the issuer payable from mortgage loan payments. Continuation of this program is contingent on Congressional reauthorization. Eligible Issuing Agents - Cities, counties, redevelopment agencies, housing authorities, and the State (through the California Housing Finance Agency) may issue single family MRBs . The issuing/administering agent must secure a private activity bond allocation from the California Debt Limit Allocation Committee prior to issuance. The County has issued bonds sufficient to finance over 4,000 mortgages. Eligible Projects and Target Population - In a typical project, bond proceeds are used to acquire mortgage loans (or mortgage backed securities) originated by one or more pre- approved lenders to eligible First-Time Homebuyers acquiring a residence in specified developments. In addition, homebuyers must agree to occupy the residence as their principle place of residence, and have incomes which do not exceed 100 percent of the area median income for one and two G-15 person households and 115 percent of the median for households with three or more persons . In addition, the acquisition cost of the home must not exceed 90 percent of the average purchase price in the area (currently $206,300 in Contra Costa County) . Annual Funding - Single family bond authority is part of the State volume cap for private activity bonds ( 1993 amount is $1,543, 350,000) . Affordable housing projects are given priority for receiving authority. B., Mortgage Credit Certificates (MCCs) Funding Agency - The California Debt Limit Allocation Committee is responsible for allocating MCC authority among California jurisdictions through a competitive application process . Eligible Activities and Target Population - Mortgage Credit Certificates subsidize the mortgage. costs associated with the purchase of new and existing housing by Very-Lowi Low and Moderate Income Households by providing federal income tax credits for qualified First-Time Homebuyers. The credit is equal to 20 percent of the annual interest paid on the borrower's mortgage. In order to qualify, households must meet the same criteria and housing prices must be below the maximums previously specified for the single family mortgage revenue bond program. Eligible Applicants Qualifying households meeting program requirements apply for MCCs through private lending institutions authorized by the local jurisdiction (the County in Contra Costa County) . MCCs may also be reserved for the acquisition of units in specific housing developments by qualified households . The County has issued nearly 1,000 MCC's for First-Time Homebuyers since 1991. Annual Funding - MCC authority is part of the State volume cap for private activity bonds ( 1993 amount is $1,543,350,000) . Affordable housing projects are -given priority for receiving authority. C. Federal Housing Administration (FHA) Insurance FRA, insures lenders against losses due to default on mortgage payments for loans to first-time homebuyers. As a result of FHA insurance, lenders can offer loans to borrowers who would not otherwise qualify. In addition, FHA insured loans require a smaller downpayment (5 to 7 percent) than conventional loans ( 10 to 20 percent) , thus increasing affordability for households who are unable to meet conventional loan requirements . There is no maximum income for participating households . However, the maximum loan amount must be less G-16 than the current FRA loan limits ($151,725 in Contra Costa , County) . D. Veterans • Administration Loan Guarantees Funding Agency - The Federal Veterans Administration (VA) provides loan guarantees for mortgages made by private lenders to qualified veterans. Veterans must be able to qualify for loan payments under standard underwriting criteria Eligible Applicants and Target Population - Participants must be veterans of the U.S. Military forces and be able to qualify for the loan using standard underwriting criteria. Guarantees may be provided for loans of up to $184,000 to acquire and/or build a residence to be owned and occupied by a household with at least one member who is a veteran. The provision of loan guarantee enables the veteran to obtain a mortgage at below market interest rates (historically, approximately 0 .5 percentage points below prime) . Each qualified veteran is normally entitled to one VA loan in his or her lifetime. kh/kl/DV2 G-17 APPENDIX H DEVELOPER SALES AGREEMENT/BUYER'S PURCHASE AGREEMENT When Recorded, Mail To: Contra Costa County Community Development Dept. 651 Pine Street, 4th Floor/N. Wing Martinez, CA 94553 ATTN: Senior Housing Planner DEVELOPER AGREEMENT This Developer Agreement (this "Agreement") is made and entered into as of by and among the County of Contra Costa, a political subdivision of the State of California; and ( "the Owner") , and is dated as of WITNESSETH: This agreement is predicated on the following facts : 1. Owner is owner of property located at (Parcel Number ) . Owner proposes to develop the property by constructing and selling a maximum of homes (the proposed "Project") , subject to County approval. 2 . On , the Board of Supervisors approved a General Plan JAmendment changing the land use designation of the Project from to (Contra Costa County Board of Supervisors Resolution No. 3. On , the Board of Supervisors approved the Final Development Plan and Tentative Map for the Project (reference file: ) . This approval contains a number of conditions, including those which are reflected in this Agreement. Owner has indicated his willingness to accept conditions imposed on the use of the property by the County. It is the purpose of this Agreement to set forth th'e conditions under which the County approved the General Plan. Amendment, the Final Development Plan, and the Tentative Map for the Project, and to impose enforceable restrictions; on the use and occupancy of the property. Both parties recognize that the General Plan Amendment and the Project would not have been approved without the assurance that this Agreement would be executed by owner. 4 . Conditions on the Project include all of the following: l a. Not less than percentof the housing units constructed by the Owner on the Project site must be affordable to and occupied by low and moderate income households as their principal place of residence. For purposes of this H-1 r i condition, the following definitions apply: i. Low income households - Households earning 80 percent or less of area median income for Contra Costa County as adjusted for family size and defined in Section 50093 of the California Health and Safety Code; ii. Moderate income households - Households earning 80 to 120 percent of area median income for Contra Costa County as adjusted for family size and defined in Section 50093 of the California Health and Safety Code; and ii. Affordable Sales Price - The maximum initial sales price for the affordable units shall not exceed $ b. Owner shall be responsible for designating the affordable housing units and for assuring that these units are spatially dispersed throughout the proposed Project in a manner which reflects their overall proportion in the total Project. Prior to filing a Final Map, the Owner shall submit a plan setting forth the proposed location of affordable units to the Zoning Administrator for review and approval. c. Affordable units shall be comparable in size and quality to the market rate units. d. Affordable units shall be made available in a timely manner equivalent to the production and sale of the market rate units. 5 . The County finds that Owner' s Project will benefit the County by providing housing for low and moderate income households . 6. The Owner hereby represents, warrants and covenants that it will cause this Agreement to be recorded in the real property records of Contra Costa County, California, 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. 7. With this Agreement, Owner hereby agrees to include and require each Low and Moderate Income Household acquiring an affordable units to execute a Buyer's Purchase Agreement for Affordable Units ("Purchase Agreement") as part of the purchase process . 8. Owner shall cause said Purchase Agreement to be recorded in the real property records of Contra Costa County, California. IN WITNESS WHEREOF, the County and the Owner have executed this Developer Agreement by duly authorized representatives, all on the H-2 I I date first above written. By (OWNER/Name) (Title/Corporation) By (Name) (Title) COUNTY OF CONTRA COSTA kh/k6/DA4 H-3 BUYER'S PURCHASE AGREEMENT FOR AFFORDABLE UNITS When recorded, mail to: County of Contra Costa Community Development Department 651 Pine Street, 4th Floor, North Wing Martinez, CA 94553 Attn: Senior Housing Planner This agreement is between and his/her/their successors and assigns (hereafter referred to collectively as "Owner") and (Developer) for the primary benefit of the County of Contra Costa ("County"), for the purpose of implementing County's goal of creating, preserving, maintaining and protecting housing in Contra Costa County for persons of low or moderate income. Owner's execution of this agreement is a condition of Owner's purchasing the real property located at and described in Exhibit A, attached hereto and incorporated herein by this reference. This Agreement governs the right of Owner to sell, convey, encumber, transfer or dispose in any way Owner's interest in said property. A. Owner Occupancy Owner covenants his/her intent to occupy the home covered herein as their principal place of residence, and to maintain said home as the owner's principal place of residence for the term of this Agreement. B. Right of First Refusal Owner hereby grants and gives to the County a first right to purchase the above described real property conveyed hereby and any improvements thereon (the "Premises") under conditions hereinafter set forth. County may assign its right of first refusal to any other governmental or nonprofit organization. County or its assignee may assign this right to an individual private buyer who meets the County's eligibility qualifications. After the exercise of said right by County or its assignee in the manner hereinafter'prescribed, County or its assignee may assign said right to purchase to any substitute individual private buyer who meets the County's eligibility requirements and is approved by the County, provided, however, that such subsequent assignment shall not extend any time limits contained herein. H-4 C. Procedure on Sale Whenever Owner no longer desires to own said Premises, Owner shall notify County in writing to that effect. Such notice shall be personally delivered or deposited in the United States mail, postage prepaid, first class, certified, addressed to County or its assignee. County or its assignee shall then have the right to exercise its right to purchase said Premises by delivery of written notice, by personal delivery or certified mail, to Owner at any time within sixty (60) days from the receipt by County of such written notice from Owner of intent to sell or dispose of the Premises. Failure by County to provide Owner with such written notice shall not constitute a waiver of County's right to purchase or relieve Owner of his/her obligations under the terms of this Agreement. If the County or its assignee exercises its right to purchase said Premises, close of escrow of said purchase shall be within ninety (90) days of the opening of such escrow by either party. Escrow may be extended an additional thirty (30) days at the request of either party or for additional periods upon mutual agreement. Said- escrow shall be opened upon delivery to Owner of written notice of the exercise of the option or as soon thereafter as possible. In the event County decides to assign the right to purchase provided herein, County may postpone opening of escrow until selection of such assignee, or as soon there- after as possible, provided that the opening of the escrow shall not be postponed longer than ninety (90) days after the Owner is notified of the County's exercise of its right to purchase. Closing costs and title insurance shall be paid pursuant to the custom and practice in the County of Contra Costa at the time of the opening of such escrow. Owner shall bear the expense of providing a current written report of an 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 at the expense of Owner. Any work to correct conditions usually deemed likely to lead to infestation or infection of wood-destroying pests or organisms, but where no evidence of infestation or infection is found with respect to such conditions, is not the responsibility of Owner, and such work shall be'"done only if requested by the Buyer and then at the expense of the Buyer. The Buyer shall be responsible for payment of any prepayment fees imposed by any lender by reason of the sale of the premises: The purchase price shall be paid in cash at the close of escrow or as may be otherwise provided by mutual agreement of Buyer and Owner. The purchase price of the Premises shall be fixed at the lower amount arrived at via the following two methods. 1. The County or its assignee shall have an appraisal made to establish a rate of appreciation in comparable market rate homes in the general area. The owner may also have an appraisal made by an MAI appraiser of Owner's choice to establish a rate of appreciation in comparable homes in the general area. If agreement cannot be reached, the average of the two rates of appreciation shall be established. The original purchase price paid plus the amount of any closing costs paid by the Owner, H-5 plus an amount reflecting appreciation rates established pursuant to the foregoing shall determine purchase price; provided, however, that the price shall in no event be lower than the original purchase price paid by the Owner. 2. The original purchase price paid by the Owner plus the amount of any closing costs paid by Owner at the time Owner- purchased the Premises (base price), plus an amount, if any, to reflect appreciation as measured by the East Bay (Alameda and Contra Costa Counties) Market Trend Index published by the Real Estate Research Council of Northern California (herein after "the Index"). For that purpose, the Index prevailing on the date of the purchase by the Owner ( on 199_} shall be compared with the latest Index available on the date of receipt by County of Notice of Intent To Sell. The percentage increase in the Index, if any, shall be computed and the base price shall be increased by that percentage; provided, however, that the price shall in no event be lower than the purchase price paid by Owner when he purchased the Premises. This adjusted price shall be increased by the value of any substantial structural or permanent fixed improvements which cannot be removed without substantial damage to the Premises or substantial or total loss of value of said improvement, and by the value of substantial appliances, fixtures, or equipment purchased to replace appliances, fixtures, or equipment which were originally acquired as part of the Premises by Owner; provided that such price adjustment for replacement appliances, fixtures, or equipment shall be allowed only when the expenditure is necessitated by the non-operative or other deteriorated condition of the original appliance, fixture, or equipment. If at the time of replacement the original .appliance, fixture or equipment had in excess of twenty percent (20%) of its original estimated useful life remaining, Owner shall document to the County's satisfaction the condition of the appliance, fixture, or equipment which necessitated its replacement. No such price adjustment shall be made significantly in excess of the.reasonable cost to replace the original appliance, fixture, or equipment with a new appliance, fixture, or equipment of comparable quality as hereinafter provided. No such adjustment shall be made except for improvements, appliances, fixtures, or equipment made or installed by Owner. No improvement, appliance, fixture, or equipment shall be deemed substantial unless the actual initial cost thereof to Owner exceeds one percent (1.0%) of the purchase price paid by Owner for the Premises; provided that this minimum limitation shall not apply in either of the following situations: (a) Where the expenditure was made pursuant to .a mandatory supplemental assessment levied by the Homeowner's association for the development in which the Premises are located, whether levied for improvements or maintenance to the Premises, the common area, or related purposes. H-6 (b) Where the expenditure was made for the replacement of appliances, fixtures, or equipment which were originally acquired as part of the Premises by Owner. No adjustment shall be made for the value of any improvement, appliance, fixture, or equipment unless the Owner shall present to the County valid written documentation of the cost of said item. The value of such item by which the sale price shall be adjusted shall be determined as follows: (a) The value of any improvement, appliance, fixture, or equipment, the original cost of ,which was less than Five Thousand Dollars ($5,000), shall be the depreciated value of the improvement, appliance, fixture or equipment calculated in accordance with principles of straight-line depreciation applied to the original cost of the improvement, appliance, fixture or equipment. (b) The value of any improvement, appliance, fixture, or equipment, the original cost of which was Five Thousand Dollars ($5,000) or more shall be the appraised market value of the improvement, appliance, fixture or equipment when considered as an addition or fixture to the premises (i.e., the amount by which said improvement, appliance, fixture or equipment enhances the market value of,,,the premises) at the time of sale. Said value shall be determined in the same manner as the market value of the premises in method 1 above. (c) On April 1, 1994, and every two years thereafter, regardless of the date of execution or recordation hereof, the amount of Five Thousand Dollars ($5,000) referred to in paragraphs (a) and (b) immediately above shall be automatically adjustedilfor the purpose of those paragraphs in the following manner. On each adjustment date, the Consumer Price Index for the San Francisco-Oakland area published by the U.S. Department of Labor, Bureau of Labor Statistics prevailing in January, 1993, shall be compared with the Index prevailing on the date','of recordation of this deed. The percentage increase in the Index, if any, shall be computed and the sum of Five Thousand Dollars ($5,000) shall be increased in the same percentage. In no event shall the sum be reduced below Five Thousand Dollars ($5,000). (d) No price adjustment will be made except upon presentation to County of written 'documentation of all expenditures made by Owner for which an adjustment is requested. The Purchase Price Determination Worksheet, provided as Appendix A, shall be used to calculate the adjusted sales price. H-7 Any Purchase price shall be adjusted by decreasing said price by an amount to compensate for deferred maintenance costs other than normal wear and tear, which amount shall be determined as follows: Upon receipt of notice of Owner's intent to sell, County or its assignee shall be entitled to inspect the Premises. County or its assignee shall have an opportunity to determine whether all plumbing, electrical, and heating systems are in working order; whether any violations of applicable building, plumbing, electric, fire, or housing codes exist; whether all appliances which were originally furnished to Owner as part of the Premises, or any replacements thereof, are in working order; whether walls, ceilings and floors are clear and free of holes or other defects (except for holes typical of picture hangers); whether doors, windows, screens and similar appurtenances are cracked, broken or torn; and whether carpets, drapes and similar features which were originally furnished to Owner as part of the premises, or any replacement thereof, are clean and free of holes, tears or other defects. In the event deficiencies are noted, the Real Property Administrator of County shall obtain estimates to cure the observed deficiencies. The Owner shall cure the deficiencies in a reasonable manner acceptable to County or its assignee within sixty (60) days of being notified of the results of the inspection, but in no event later than close of escrow. Should Owner fail to cure such deficiencies prior to the scheduled date of close of escrow, at the option of County or its assignee escrow may be closed, title passed and money paid to the selling Owner subject to the condition that such funds as are necessary to pay for curing such deficiencies (based upon written estimates obtained by County) shall be withheld from the money due to Owner and held by the escrow holder for the purpose of curing such deficiencies. County or its assignee shall cause such deficiencies to be cured and upon certification of completion of work by County, escrow holder shall utilize such funds to pay for said work. Any remaining funds shall be paid to Owner. No other payment shall be due to Owner. In no event shall County become in any way liable to Owner, nor become obligated in any manner, by reason of the assignment of its right to purchase, nor shall County be in any way obligated or liable to Owner for any failure of County's assignee to consummate a purchase of the Premises or to comply with the terms of any purchase'and sale agreement. Until such time as the County's right to purchase is exercised, waived, or expired, the Premises and any interest in title thereto shall not be sold, leased, rented, assigned, or otherwise transferred to any person or entity without the express written consent of County or its assignee, which consent shall be consistent with the County's goal of creating, preserving, maintaining, and protecting housing in Contra Costa County for persons of low and moderate income. This provision shall not prohibit the encumbering of title for the sole purpose of securing financing; however, in the event of foreclosure or transfer by deed in lieu of foreclosure, the provisions of Section C of this instrument shall govern. H-8 M The following transfers of title or any interest therein are not subject to the right of first refusal provisions of this Agreement: transfer to Owner's spouse or issue by gift, devise, or inheritance; taking of title by surviving joint tenant; transfer of title to spouse as part of divorce or dissolution proceedings; acquisition of title or interest therein in conjunction with marriage; provided, however, that these covenants shall continue to run with the title to said Premises following said transfers. D. Waiver of Right of First Refusal If the County waives its right of first refusal in writing, Owner may sell the property on the open market at the prevailing market price. (NOTE: include any requirements for loan repayments upon sale, such as CDBG, HOME, or RDA funds.) E. Termination of Right of First Refusal ,11 The provisions set .forth in this agreement relating to County's right to purchase shall terminate and become void automatically (a) twenty (20) years following the date of recordation of this deed; or (b) ten (10) years following the date of recordation of this deed if occupied continuously by one low to moderate income family. F. eI� fault Owner covenants to cause to be filed for record in the Office of the Recorder of the County of Contra Costa a request for a copy of any notice of default and of any notice of sale under any deed of trust or mortgage with power of sale encumbering said Premises pursuant to Section 2924 of the Civil Code of the State of California. Such request shall specify that any such notice shall be mailed to County at the address specified in Section H of this Agreement. Any notice of sale given pursuant to Civil Code Section 2924 shall constitute a notice of intent to sell hereunder and County may exercise its preemptive right prior to any trustee's sale, judicial foreclosure sale, or exercise its preemptive right prior to any trustee's sale, judicial foreclosure sale, or transfer by deed in lieu of foreclosure. In the event Owner fails to file such request for notice, County's right to purchase shall run from the date County obtains actual knowledge of a sale or proposed sale. In the event County elects not to exercise its right to purchase upon default, any surplus to which Owner may be entitled pursuant to Code of Civil Procedure Section 727 shall be paid as follows: That portion of surplus (after payment of encumbrances), if any, up to but not exceeding the net amount that Owner would have received after payment of encumbrances under the formula set forth above had County exercised its right to purchase the property on the date of the foreclosure sale, shall be paid to Owner on the day of the.foreclosure sale; the balance of surplus, if any, shall be paid to Developer or its successors or assigns. H-9 G. Distribution of Insurance and Condemnation Proceeds In the event that the Premises consist of a unit in a condominium project and the condominium project is destroyed and insurance proceeds are distributed to Owner instead of being used to rebuild, or in the event of condemnation, if proceeds thereof are distributed to Owner, or in the event of termination of the condominium,liquidation of the association and distribution of the assets of the association to the members thereof, including Owner, any surplus of proceeds so distributed remaining after payment of encumbrances of said Premises shall be distributed as follows: That portion of the surplus up to but not to exceed the net amount that Owner would have received under the formula set forth above had County exercised its right to purchase the property on the date of the destruction, condemnation valuation date, or liquidation,shall be distributed to Owner,and the balance of such surplus, if any, shall be distributed to the County or its successors or assigns. H. All notices required herein shall be sent to the following addresses: COUNTY: Contra Costa County Community Development Department 651 Pine Street, 4th Floor, North Wing Martinez, CA 94553 Attn: Deputy Director - Redevelopment DEVELOPER: OWNER.: x-10 By acceptance of this Agreement, Owner accepts and agrees to be bound by the covenants contained herein. Owner's acceptance is demonstrated by the following signature(s). Owner's Signature Date Owner's Signature Date Forms lrb/afordhsg.agr H-11 I 1 APPENDIX A PURCHASE PRICE DETERMINATION WORKSHEET A. Original Purchase Price with closing costs $ B. Adjustment for appreciation as determined bychange in East Bay Real Estate Market Trend Index ("Index") over loan period: 1. Index on date of purchase - $ 1 . 2. Index on date of receipt by County .of Notice of Intent to Sell = $ Date Notice received by County: 3. Percent increase in Index = (B.2 - B.1)/B. 1 = . 4 . Appreciation in original purchase price = A x B.3 = $ C. Identify all structural or permanent fixed improvements undertaken by Owner with an actual initial cost greater than 1 percent of the original purchase price: 1. One percent of the original purchase price listed in A above = $ 2. Structural/permanent fixed improvements with an actual initial cost greater than C. l: a. Improvement: i . actual initial cost: $ b. Improvement: i.. actual initial cost:. $ C. Improvement: i. actual initial cost: $ d. Improvement: i. actual initial cost: $ Use additional sheets of paper for more than four improvements . D. Current value of structural/permanent fixed improvements. Use the depreciation method (Section D.2) to calculate the current value of all structural/permanent fixed improvements listed in C.2 with an original cost less than $5,000 adjusted for H-12 i inflation as ,;,of the completion date of the improvement. Use the appraised market approach (Section D.3) to calculate the current value of all improvements listed in C.2 with an original cost greater than or equal to $5,000 adjusted for inflation as of the improvement completion date. 1. To determine which method to use for each improvement, calculate the inflation adjusted value of $5,000 using the SF/Oakland Consumer Price Index as specified below: a. CPI for SF/Oakland effective January 1993 = b. CPI for SF/Oakland on improvement completion date = C. CPI increase = D. l.b - D. l.a . d. Percent increase in CPI - D.l.c/D. l.a. _ $. e. Adjusted value of $5,000 on improvement completion date = $5,000 + ($5,000 x D. l.d) = $ 2. Depreciation method to determine current value of structural/permanent fixed improvements listed in C.2 with an original cost less than $5,000 adjusted for inflation as of the completion date of the improvement. a. Improvement: i. Completion date: ii. Adjusted value of $5,000 calculated according to D. l.e: $ iii. Original cost of improvement: $ iv'. Life expectancy of improvement: years . V. Percent depreciation per year: 100/D.2 .a.iv = vi. Number of years in place - current year minus completion year = years . vii . Depreciation = (D.2 .a.v x D.2 .a.vi) x D.2 .a.iii = $ viiii.Depreciated value of improvement = D.2 .a. iii - D.2 .a.vii = $ Calculate depreciated value of additional improvements on separate sheets to be attached to worksheet. Provide depreciated value of each improvement below: b. Improvement: i. Depreciated value of improvement: $ C. Improvement: i. Depreciated value of improvement: $ d. Improvement: i . Depreciated value of improvement: $ H-13 e. Depreciated value of all improvements with a value below $5,000 = D.2 .a.viii + D.2 .b.i + D.2 .c.i + D.2 .d.i = $ 3. Appraised value method for calculating current value of structural/permanent improvements listed in C.2 with an original cost of $5,000 or more adjusted for inflation as of improvement completion date. a. Improvement: i. Completion date: . ii. Adjusted value of $5,000 calculated according to D. l.e: $ iii. Original cost of improvement: $ iv. Appraised market value as addition to the home $ . b. Improvement: i. Completion date: ii. Adjusted value of $5,000 (D. l .e) : $ iii. Original cost of improvement: $ iv. Appraised market value as addition to the home C. Improvement: i. Completion date: ii. Adjusted value of $5,000 (D. l .e) : $ iii. Original cost of improvement: $ iv. Appraised market value as addition to the home d. Improvement: i. Completion date: ii . Adjusted value of $5,000 (D. l .e) : $ - iii. Original cost of improvement: $ iv. Appraised market value as addition to the home e. Appraised value of all improvements with a value of $5,000 or more adjusted for inflation as of improvement completion date = D.3.a.iv + D.3 .b.iv + D.3 .c.iv + D.3 .d.iv - $ E. Current value of replacement appliances, fixtures, or equipment originally acquired as part of the premises : 1. Replacement item: a. Life. expectancy for type of _ item replaced: years. b. Age at replacement: years . If E. l.a exceeds E. l .b by more than 20 percent, document H-14 reason for replacement: C. Cost of replacement: $ d. Current age of replacement: years. e. Current value of replacement = E. l.c x ( (E. l.a - E. l.d)/E. l.a) _ $ Calculate current value of additional replacement appliances, fixtures or equipment (E. l.a through e) on separate sheets to be attached to worksheet. Provide current value below: 2 . Replacement item: a. Current value of replacement $ 3. Replacement item: a. Current value of replacement = $ 4 . Replacement item: a. Current value of replacement $ 5. Current value of all replacement items E. l.e + E.2 .a + E.3 .a + E.4 .a = $ F. Purchase Price Calculation: The purchase price on sale equals the original purchase price (A) plus an amount to reflect appreciation as measured by the East Bay Real Estate Market Trend Index plus the depreciated value of all structural, permanent fixed improvements with an original cost less than $5,000 (D.2.e) plus the appraised value of structural, permanent improvements with an original cost of $5,000 or more (D.3.e) plus the current value of replacement appliances, fixtures and equipment (E.5) . Original purchase price in A $ plus Original purchase price appre- ciation adjustment in B.4 $ plus Depreciated value of structural improvements in D.2.e $ plus appraised value of structural improvements in D.3.e $ plus value of replacement items in E.5 $ equals new Purchase Price on sale $ Wkh/loan2b H-15 APPENDIX I REGULATORY AGREEMENT AQpe-d ; x l A ?p ray o � ReS�lc}ori WHEN RECORDED RETURN TO: A,,r e c c REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS by and among THE COUNTY OF CONTRA COSTA and Owner dated as of I-1 REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS TABLE OF CONTENTS SECTION 1 - DEFINITIONS AND INTERPRETATION . . . 2 SECTION 2 - APPROVAL AND COMPLETION OF THE PROJECT 5 SECTION 3 - RESIDENTIAL RENTAL PROPERTY6 SECTION 4 - LOWER-INCOME, LOW TO MODERATE INCOME AND SENIOR CITIZEN TENANTS 7 SECTION 5 - AGREEMENT TO RECORD . . . . . . . . 8 SECTION 6 ADDITIONAL COUNTY REQUIREMENTS . . . . . . . . 8 SECTION 7 - RELIANCE . . . . 10 SECTION 8 - PROJECT WITHIN THE JURISDICTION OF THE COUNTY . . . . . . . . . . 10 SECTION 9. - SALE OR TRANSFER OF THE PROJECT . . . . . . . 10 SECTION 10 - TERM . . . . . 10 SECTION 11 - BURDEN AND BENEFIT . . . . . . . . . . 11 SECTION 12 - UNIFORMITY; COMMON PLAN . . . . . . . . . 11 SECTION 13 - ENFORCEMENT ii . 11 SECTION 14 - ESTOPPEL CERTIFICATE . . . . . . . . . . 12 SECTION 15 - GOVERNING LAW . . . . . . . . . . . 12 SECTION 16 - AMENDMENTS 12 SECTION 17 - NOTICE 12 SECTION 18 - SEVERABILITY 13 SECTION 19 - MULTIPLE COUNTERPARTS . . . . . . . . . . 13 SECTION 20 - AMENDMENTS . . . . . . . . 13 EXHIBITS "A" LEGAL DESCRIPTION OF PROJECT SITE "B" CERTIFICATION OF TENANT ELIGIBILITY "C" COMPLETION CERTIFICATE "D" DESIGNATION OF BELOW MARKET RATE UNITS "E" CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE I-2 • t REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (this "Agreement") is made,; and entered into as of by and among the COUNTY OF CONTRA COSTA, a political subdivision of the State of California (County); and ("the Owner") . WITNESSETH: This agreement is predicated upon the following facts: 1. Owner is the owner of property located at Owner intends to develop the property by constructing a [# of units] unit [Type of Projectl ("the project") , subject to County approval . 2. Owner's property will be rezoned to P-1 and is designated (units per acre) by the General Plan. Existing County Ordinances would require, among other things, that: a. [List requirements for which variances are b. being granted as a part of this contract. c. (density, area required for P-1 zoning, etc. )] 3. Owners proposed project is for units. [Explain # of units reserved for lower income - moderate income - senior citizens etc.] These restrictions will be in effect for years. 4. The County finds that Owner's project will benefit the County by providing housing for [senior citizens - persons of lower income - persons of low or moderate income] . County also finds that [indicate 'finding for any variances to be granted]. 5. On 0 198_, the Board of Supervisors - Plannin Commission' approved the P-1 rezoning Preliminary - Final] Development Plan for the project subject to certain conditions, including ;:those reflected in this Agreement. Based upon Owner's assurances in this Agreement, the County has agreed to: a. approve a "density bonus" (under Government Code Section 65915 or 65913) ; permitting Owner to construct, (instead of as allowediby the General Plan) ; and (b) {indicate any variances]. 6. Owner has 'indicated his willingness to accept conditions imposed on the use of the property by the County. It is the purpose of this Agreement to set forth the conditions under which the County has approved the project and to impose enforceable restrictions on the I-3 use and occupancy of the property. Both parties recognize that the project would not have been approved by the County without the assurance that this agreement would be executed by Owner. 7. This Agreement implements the Housing Element of the Contra Costa County General Plan. The Owner will rent or lease or will hold available for rent or occupancy at least % of the completed dwelling units in the Project to individuals or families of [lower income - low and moderate income - senior citizens], as herein defined, all for the public purpose of assisting such individuals and families to afford the costs of decent, safe and sanitary housing; 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 I - DEFINITIONS AND INTERPRETATION Capitalized terms used herein shall have the following meanings unless the context in which they are used clearly requires otherwise. County means the County of Contra Costa. Affordable Rents - Low to Moderate Income Households and Senior Citizens means a monthly rent which is no greater than the lesser of market rents payable for any comparable unit in the Project or a monthly rent which is equal to (100%) of the Section 8 Existing Program Fair Market Rents (FMR) , established in accordance with 24CFR Part 882, effective at the time of occupancy, less the utility allowance then in effect. Adjustments to the FMR rent levels shall be made as follows: (i ) if occupied by a Section 8 Existing Certificate Holder, by an amount not to exceed that calculated pursuant to an .annual adjustment factor as adopted by the County and approved by the Department of Housing and Urban Development for the County and (ii ) if occupied by a non-Section 8 Existing Certificate Holder, by an annual amount not to exceed any subsequently established Section 8 Existing Program Fair Market Rent less the utility allowance then in effect. In no event shall an increase in these Affordable Rents occur prior to the twelve-month anniversary date of occupancy by a Lower Income Tenant. In the event that the Section 8 Housing Assistance Program - Existing Housing ceases to exist, Affordable Rents shall be associated with a successor program; or, in the event that no successor program is enacted, commencing with the first anniversary of the last determination of Affordable Rents under the Section 8 Housing Assistance Program - Existing Housing, or its successor, Affordable Rents shall be increased by the lesser of: (i) the annual percentage increase for all urban consumers in the residential rent component of the Consumer Price Index for the Oakland Primary Metropolitan Statistical Area, or (ii) the annual percentage increase in the Contra Costa County median income as defined in Section 50079.5 of the California Health and Safety Code. (Section 50079.5 income limits are equivalent to qualifying limits per Section 8 of the United States Housing Act of 1937) . I-4 f Affordable Rents,; - Lower Income Household means a monthly rent which is no greater than 30% of 50% of the median monthly income for Contra Costa County as adjusted for family size. These rents shall be adjusted no more than once every 12 months and in no event within the first 12 months of occupancy by a lower income household. Rent adjustments shall be by a factor equivalent to adjustments in Contra Costa Median Income. Certificate of Completion or Completion Certificate means the certificate of completion of the Project required to be delivered to the County, by the Owner pursuant to Section 2. Completion Date, means the date of the completion of the acquisition, .construction, purchase, reconstruction and equipping, as the case may be, of the Project, as that ;I date shall be certified as provided in Section 2. Lower-Income Tenants means individuals or families who certify that they meet the qualifications for eligibility set forth below in this definition and as set forth in Part III of the Certification of Tenant Eligibility attached hereto as Exhibit "B" and incorporated by reference herein, and who certify that their income does not exceed eighty percent (80%) of the median gross household income for Contra Costa County as defined in Section 50079.5 of the Health and Safety Code of the State of California. If all the occupants of a housing unit in the ,,Project are students (as defined under Section 151(e) (4) of the Internal Revenue Code) , no one of whom is entitled to file a joint return under Section 6013 of the Internal Revenue Code, such occupants shall not qualify as Lower'` Income Tenants hereunder. Determination of the status of an occupant of a unit as a Lower Income Tenant shall be made upon initial occupancy of a unit in the Project by such occupant, upon January 1 of each even-numbered year and a new determination shall be made upon the initial occupancy by such occupant of any other unit in the Project. Low to Moderate Income Tenants means individuals or families whose household income is "'between 80% and 120% of current median household income for Contra Costa County as defined in Section 50093 of the Health and Safety Code of the State of+i California. . "Median Gross Income for the Area" means the median income for Contra Costa County as defined in Section 50079.5 of the Health and Safety Code of the State of California. Lower-Income Units means the dwelling units in the Project designated for occupancy by Lower-Income Tenants pursuant to Section 4A. Low to Moderate Income Units means the dwelling units in the Project designated for occupancy by Low to Moderate Income Tenants pursuant to Section 4A. Owner means and its successors and assigns, and any surviving, resulting"' or transferee entity. Owner Representative means the person or persons (who may be employees of the Owner) designated from time to time to act hereunder on behalf of the Owner in a written certificate furnished to the County, containing a specimen I-5 signature of such person or persons and signed by the Owner or on behalf of the Owner by a duly authorizer representative of the Owner. Project means the Project Facilities and the Project Site. Project Facilities means the buildings, structures and other improvements to be constructed on the Project Site, and all equipment, fixtures and other property owned by the Owner and located on, or used in connection with, such buildings, structures and other improvements and all functionally related and subordinate facilities. Project Site means the parcel of real property described in Exhibit "A" which is attached hereto, and incorporated by reference herein, and all rights and appurtenances thereunto appertaining. Qualified Project Period means the period beginning on the first day on which ten percent of the dwelling units in the Project are occupied and ending on the date which is at least fifteen years after the date on which fifty percent of the dwelling units in the Project are occupied. Regulatory Agreement means this Agreement and Declaration of Restrictive Covenants, dated as of between the County and the Owner. Required Rental Period means, with respect to any unit, the Qualified Project Period. Senior Citizen Household means a household in which the head of household is 62 years of age or older, or 55 years of age or older in a senior citizen housing development. Senior Citizen Housing Development means a residential development that is available only to households in which the head of household is 55 years of age or older and consists of at least 150 dwelling units. Unless the context clearly requires otherwise, 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. All the terms and provisions hereof shall be construed to effectuate the purposes set forth in this Agreement and to sustain the validity hereof. The titles and headings of the sections of this Agreement have been inserted for convenience of reference only, 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 document or any provision hereof or in ascertaining intent, if any question of intent shall arise. I-6 SECTION 2 - APPROVAL AND COMPLETION OF THE PROJECT NOW, THEREFORE, the parties agree: 1. Purpose. The purpose of this Agreement is to set forth the conditions under which the Board of Supervisors agrees to approve Owner's project. 2. Property subject to agreement. The property which is the subject of this Agreement is that located at and described in Exhibit "A", and the buildings to be constructed thereon. 3. Benefit. Owner agrees that the approval of the project will materially benefit his property and that the restrictions imposed by this Agreement are necessary to comply with the development site plan approval _ conditions imposed by the County as a requirement of the development of the property. 4. Reference to other documents. Reference is made to the following additional documents and proceedings relating to the project which are on file at the County offices and to which reference is made for further details: [Reference should be made to any resolutions approving the project, including any conditions of approval , and minutes of related proceedings] 5. County's approval proceedings for project. On 198_, Planning Commission approved a development site plan for the property. This is described in proceedings designated on file in the County offices. The development site plan provides for development of the property with a R rental unit] housing project. The development is referred to in this Agreement as the "project". 6. Specific restrictions on the property. In addition to County zoning restrictions, the following specific restrictions shall govern the use of the property: a) [Describe restrictions relating to number of units reserved for lower income, low to moderate income or senior citizen households] b) The rental rates of these units shall be as established by this agreement. c) The specific restrictions in this Agreement shall remain in effect for the qualified project period. d) Notwithstanding the restrictions in a) , b) and c) above, this Agreement shall remain in effect only: so long as the property is used for residential purposes or the building constructed under this Agreement remains on the property. This Agreement terminates if the County approves any non-residential use at the property or if the building project is removed. I-7 7. Completion Certificate. The Owner hereby represents, warrants and covenants that upon completion of the Project and all Project Facilities, the Owner will submit to the County, the Trustee and the Lending Institution a Certificate of Completion, in substantially the form of the "Completion Certificate" attached hereto as Exhibit "C" and incorporated by reference herein. SECTION 3 - RESIDENTIAL RENTAL PROPERTY The Owner hereby represents, warrants and covenants as follows: A. The Project will be acquired and constructed for purposes of providing multifamily rental housing and the Owner shall own, manage and operate (or cause the management and operation of) the Project as a project to provide multifamily rental housing comprised of a -building or structure or several interrelated buildings or structures, each consisting of more than one dwelling unit and facilities functionally related and subordinate thereto, and no other facilities. As used herein facilities functionally related and subordinate to the Project shall include facilities for use Ify the tenants, including, for example, swimming pools, other recreational facilities, parking areas, and other facilities which are reasonably required for the Project, for example, heating and cooling equipment, trash disposal equipment or units for resident managers or maintenance personnel . B. All of the dwelling . units in the Project will be similarly constructed, and each dwelling unit in the Project will contain facilities for living, sleeping, eating, cooking and sanitation for a single person or a family which are complete, separate and distinct from other dwelling units in the Project and will include a sleeping area, bathing and sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink. C. Owner will not knowingly permit any of the . dwelling units in the Project to be used on a transient basis and will not rent any of the units for a period of less than thirty (30) consecutive days and none of the dwelling units in the Project will at any time be leased or rented for use as a hotel , motel , dormitory, fraternity house, sorority house, rooming house, hospital , nursing home, sanitarium, rest home or trailer court or park. D. No part of the Project will at any time be owned or used by a cooperative housing corporation. E. The Project Site consists of a parcel or parcels that are contiguous (parcels are contiguous if their boundaries meet at one or more points) except for the interposition of a road, street or stream, and all of the Project Facilities and the Project comprise a single geographically and functionally integrated project for multifamily rental housing, as evidenced by the common ownership, management, accounting and operation of the Project. F. During the Required Rental Period, once available for occupancy, each unit in the Project must be rented or held available for rental on a continuous basis and may not be converted to condominium, owner-occupied or other nonrental use. I-8 G. Within thirty ('30) days after th-a date on which ten percent (10%) of the units in the Project are first occupied and within thirty (30) days after the date on which fifty percent (50%) of the units in the Project are first occupied, the Owner shall prepare and mail to the County, return receipt requested, a certificate identifying such date. The Owner may record a copy of each such certificate in the Office of the County Recorder of the County of Contra Costa. H. The requirements of this Section shall apply for a term of at least 15 years. SECTION 4 - LOWER-INCOME, LOW TO MODERATE INCOME AND SENIOR CITIZEN TENANTS The Owner hereby represents, warrants and covenants as follows: A. At least [ten percent (10%) - twenty-five percent (25%) - or percent ( %)] of the completed dwelling units in the Project will be reserved for occupancy by [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants on a continuous basis. For the purposes of this paragraph, a dwelling unit occupied by an individual or family who at the commencement of the occupancy was a [Lower-Income - Low to Moderate Income - Senior Citizen] Tenant is treated as occupied by a [Lower-Income - Low to Moderate Income - Senior Citizen] Tenanti, during their occupancy of such dwelling unit, even though they subsequently cease to be qualified as a [Lower-Income - Low to Moderate Income - Senior Citizen] Tenant. The Owner will not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent ,that dwelling units are required to be occupied by [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants and as provided for in Section 6(B) . Tenants in the Below Market Rate Units will have equal access to enjoyment of all common facilities of the Project. All of the dwelling units iin the Project shall be leased or rented, or available for lease or rental , to the general public and the Owner will designate the dwelling units in the Project reserved for occupancy by [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants, and will advise the County by delivery of a certificate in writing of such designation and, on a monthly basis, until 100% occupancy is achieved (thereafter, quarterly) of any revisions thereof. Such certificate shall be in substantially the form of the "Designation of Below "' Market Rate Units" attached hereto as Exhibit "D". Units so designated shall be intermingled with all other dwelling units and shall be of comparable quality and offer a range of sizes and number of bedrooms comparable to 'units in the Project as they exist in the project as a whole. B. During the Qualified Project Period, the Owner will rent or lease the Lower-Income - Low to Moderate Income - Senior Citizen] Units to [Lower-Income - Low to' Moderate Income - Senior Citizen Tenants and, if at any time the Owner is unable to rent or lease the [Lower-Income - Low to Moderate Income - Senior Citizen] Units to [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants, the Owner will hold the unrented Lower-Income - Low toiiftderate - Senior Citizen] Units vacant pending rental or lease to [Lower-Income - Low to Moderate - Senior Citizen] Tenants. C. The Owner will obtain and maintain on file Certifications of Tenant Eligibility from each [Lower-Income - Low to Moderate - Senior Citizen] Tenant I-9 substantially, in -the form attached hereto as Exhibit "B". Such Certifications shall be filed with the County, by attachment to the "Designation of Below Market Units" required pursuant to Subsection A and are subject to independent investigation and verification by the County. D. The Owner will maintain complete and accurate records pertaining to the Below Market Rate Units, and will permit any duly authorized representative of the County to inspect the books and records of the Owner pertaining to the incomes of [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants residing in the Project. E. After the Development is available for occupancy and until 100% of the Units are occupied, the Developer shall , on or before the fifth day of each . month, file with the County a Certification of Continuing Program Compliance, in substantially the form of Exhibit E hereto, setting forth for the prior month the information required to be provided in such certification. Thereafter, during the term of this Regulatory Agreement, such certification shall be filed on or before the fifth working day of each quarter and shall set forth the required information for the preceding quarter. F. The Owner will accept as tenants, on the same basis as all other prospective tenants, [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants who are recipients of federal certificates for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937 or its successor, and shall not apply selection criteria to Section 8 certificate holders that are more burdensome than the criteria applied to all other prospective tenants. G. The requirements of this Section shall apply for the Qualified Project Period. H. The Owner will maintain a waiting list of any persons interested in occupying Below Market Rate Units and who meet the income requirements. SECTION 5 - AGREEMENT TO RECORD The Owner hereby represents, warrants and covenants that it will cause this Regulatory Agreement to be recorded in the real property records of Contra Costa County, California, 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 6 - ADDITIONAL COUNTY REQUIREMENTS A. 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 which is unrelated to the Project and shall be maintained in a reasonable condition for proper audit and subject to examination during business hours by representatives of the County, such examination to be preceded by at least three Business Days; notice thereof to the Owner. Failure to keep such lists and applications or to make them available to the 'County will be a default hereunder. I-10 B. The [Lower-Income - Low to Moderate - Senior Citizen] Units shall be offered on a priority basis to recipients of federal certificates for rent subsidies pursuant to Section 8 of the United States Housing Act of 1937, or its successor ("Section 8") who have applied to the Owner for the rental of units in the Project and who meet the Owner's tenant selection criteria before such units are offered to prospective tenants who are not Section 8 certificate holders. At least seven (7) days before renting any such unit to. any prospective tenants who are not Section 8 certificate holders, the Owner shall notify the County or its designee of the availability of such units; provided, however, that the seven (7) days notice requirement may be waived in writing by the County. C. The Owner " shall not discriminate on the basis of race, creed, religion, color, sex, age or national origin in the lease, use, or occupancy of the Project or in connection with the employment or application for employment of persons for the operation and management of the Project. D. The Owner shall utilize an occupancy standard not less than that required by Section 8, i .e. , a maximum of four individuals for a two-bedroom unit and a maximum .of five individuals for a three-bedroom unit, for density bonus units. E. (a) The monthly rental for the Lower-Income Units occupied by Lower-Income Tenants shall not exceed the applicable Affordable Rents. (b) The monthly rental for the Low to Moderate Income Units occupied by Low to Moderate Income Tenants or Senior Citizens shall not exceed that so defined as Affordable Rents - Low to Moderate Income Households and Senior Citizens. F. The Owner shall not apply, or permit the application of, management policies or lease provisions with respect to the Project which have the effect of precluding occupancy of Units by holders of Section 8 certificates. The County acknowledges that it is the Owner's responsibility to screen and select tenants for desirability and credit worthiness, and that such selection is within the Owner's discretion. If written management policies exist, or exist in the future, with respect to the Project, the County may review such written policies and may require changes in such policies, if necessary, so that they comply with the requirements of the Section 8 Program as set forth in the first paragraph of this subsection F. The Owner has reviewed the addendum to the form of lease for the Project prepared by the County, and agrees that its management policies will not conflict with the provisions in such addendum. The Owner agrees to include the provisions of such addendum in its leases with holders. of Section 8 certificates. G. All leases for [Lower-Income - Low to Moderate - Senior Citizen] Tenants shall contain clauses, among others, wherein each individual lessee: (i) certifies the accuracy of the statements made in the Income Certification and (ii ) agrees that the family income and other eligibility requirements shall be deemed substantial and material obligations of his tenancy, that he will comply promptly with all requests for information with respect thereto from the Owner, or the County, and that his failure to provide accurate I-11 information in the Income Certification or refusal to comply with a request for information with respect thereto shall be deemed a violation of a substan- tial obligation of this tenancy and shall constitute cause for termination thereof. SECTION 7 - RELIANCE The County and the Owner hereby recognize and agree that the representa- tions and covenants set forth herein may. be relied upon by County and the Owner. In performing their duties and obligations hereunder, the County may rely upon statements and certificates of the Owner and [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants, and upon audits of the books and records of the Owner pertaining to occupancy of the Project. In performing its duties hereunder, the Owner may rely on the Certificates of Tenant Eligibility unless the Owner has actual knowledge or reason to believe that such Certificates are inaccurate. SECTION 8 - PROJECT WITHIN THE JURISDICTION OF THE COUNTY The Owner hereby represents and warrants that the Project will be located entirely within the unincorporated territorial boundaries of the County of Contra Costa, State of California. SECTION 9 - SALE OR TRANSFER OF THE PROJECT The Owner hereby covenants and agrees not to 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 shall be conditioned solely upon receipt by the County of (i ) reasonable evidence satisfactory to the County that the Owner's purchaser or transferee has assumed in writing and in full , and is reasonably capable of performing and complying with, the Owner's duties and obligations under this Agreement, and (ii ) an opinion of counsel of the transferee that the transferee has duly assumed the obligations of the Owner under this Regula- tory Agreement, and that such obligations and this Regulatory Agreement and said other documents are legal , valid and binding obligations of the transferee. The Owner shall request in writing such consent of the County and provide to the County all evidence, documentation and opinions required by this section. It is hereby expressly stipulated and agreed that any 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 Owner, and shall be ineffective to relieve the Owner of its obligations under this Regulatory Agreement. SECTION 10 - REGULATORY FEE In consideration of the County assuming monitoring responsibility relative to this agreement, the Owner agrees to pay the following annual Regulatory Fees, I-12 due in advance beginning with the date on which ten percent of the dwelling units in the Project are occupied, for the term of the Qualified Project Period: Total 'Units in Annual Regulatory Project Fee <20 $ 500 20-50 $1,000 50-100 $2,500 100+ $5,000 SECTION 11 - TERM This Regulatory Agreement shall become effective upon its execution and delivery. This Regulatory Agreement shall remain in full force and effect for a term and period equal to the longest of terms of the requirements of Sections 3 and 4. The terms ,,,of this Agreement to the contrary notwithstanding, this Agreement, and all and several. of the terms hereof, shall terminate and be of no further force and effect in the event of involuntary noncompliance with the provisions of this Regulatory Agreement caused by fire, seizure, or requisi- tion, or change in a Federal or State law or an action of a Federal or State agency after the date hereof which prevents the County from enforcing the pro- visions hereof, or condemnation or similar event. Upon the termination of all and several 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 de- livery of such instruments shall not be necessary or -a prerequisite to the termination of this Regulatory Agreement in accordance with its term. 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 and run with the Project Site in that the Owner's legal interest in the Project is rendered less valuable thereby. The County and the owner hereby declare their understanding and intent that the covenants, '�reservations and restrictions set forth herein directly benefit the land (i) by enhancing and increasing the enjoyment and use of the Project by certain [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants, and (ii ) by furthering the public purposes of providing housing for [Lower Income - Low to Moderate Income - Senior Citizen] households. The County and the Owner hereby declare that the covenants and conditions. contained herein shall bind and the benefits shall inure to, respectively, the Owner and its successors and assigns and all subsequent owners of the Project or any interest therein, and the County and its successors and assigns, all for the Required Rental Period. The Owner further covenants to include the requirements and restrictions contained in this Regulatory Agreement in any documents transferring any interest in the Project to another person to the end that such transferee has notice of, and is bound by, such restrictions, and to obtain the agreement from any transferee so to abide. I-13 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, development 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 such default remains uncured fora period of thirty (30) days after notice thereof is given by the County to the Owner, then the County on its own behalf may take any one or more of the following steps: A. By mandamus or other suit, action or proceeding at law or in equity, require the Owner to perform its obligations under this Regulatory Agreement, or enjoin any acts or things which may be unlawful or in violation of the rights of the County hereunder; it being recognized that the beneficiaries of the Owner's obligations hereunder cannot be adequately compensated by monetary damages in the event of the Owner's default. B. Have access to, and inspect, examine and make copies of, all of the books and records of the Owner pertaining to the Project. C. 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 under this Regulatory Agreement. The Owner hereby grants to the County the option, upon Owner's default under this Regulatory Agreement, (i ) for the Qualified Project Period to lease up to [ten percent (10%). - twenty-five percent (25%) - fifty percent (50%)] of the units in the Project for a rental of $1.00 per unit per year for the pur- pose of subleasing such units to [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants, but only to the extent necessary to comply with the provi- sions of Section 4. The County shall make diligent effort to rent [Below Market Rate - Senior Citizen] Units to [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants for a monthly rental amount equivalent to monthly rental amounts collected from tenants of similar [Below Market Rate - Senior Citizen] units in the Project. Any rental paid under any such sublease shall be paid to the Owner after the County has been reimbursed for any expenses .incurred in con- nection with such sublease. The County may terminate its lease of the units in the project upon determination that the owner is no longer in default pur- suant to this agreement. SECTION 14 - ESTOPPEL CERTIFICATE The County agrees, upon the request of the Owner or its successor in in- terest, to promptly execute and deliver to the Owner or its successor in in- terest or to any potential or actual purchaser, mortgagor or encumbrancer of the Project, a written certificate stating if the same be true, that the County has no knowledge of any violation or default of the Owner of any of its covenants hereunder, or if. there are such violations or defaults, the nature of the same. I-14 SECTION 15 - GOVERNING LAW This Regulatory Agreement shall be governed by the laws of the State of California, except to the extent such laws conflict with the laws of the United States or the regulations governing federal savings and loan associations, or would restrict activities otherwise permitted in relation to the operation of federal savings and loan associations. SECTION 16 - AMENDMENTS 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 Contra Costa County, California. SECTION 17 - NOTICE All notices, certificates or other communications shall be sufficiently given and shall be deemed given on the second day following the date on which the same have been mailed by 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: If to the County: County of Contra Costa Community Development Department 651 Pine Street North Wing, Fourth Floor Martinez, California 94553 Attn: Director of Community Development If to the Owner: name address SECTION 18 - 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 19 - 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 . I-15 SECTION 20 - AMENDMENTS 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 record of Contra Costa County, California. MF:jn dns:agr&dec.dns I-16 IN WITNESS WHEREOF, the County and the Owner have executed this Regulato- ry Agreement by duly authorized representatives, all on the date first above written. COUNTY OF CONTRA COSTA By (Owner Name) By I-17 STATE OF CALIFORNIA ) ss COUNTY OF CONTRA COSTA ) On this day of 19 before me, the un- dersigned, a Notary Public in and for said County and State, personally ap- peared personally known to me (or proved to me on the basis of satisfactory evidence) to be a California corporation, the corporation that executed the within instrument. WITNESS my hand and official seal . Notary Public in and for said County and State I-18 State of California ) ss County of Contra Costa ) On this day of 19_, before me the under- signed, a Notary Public, personally appeared personally known to me as the for the County of Contra Costa, and to be the person who executed the within instrument. WITNESS my hand and official seal I-19 EXHIBIT W DESCRIPTION: All that real property situated in the County of Contra Costa, State of California, described as follows: I-20 Exhibit "B" CERTIFICATION OF TENANT ELIGIBILITY Part I -- General Information 1. Project Name 2. Project Location 3. No. of Total Units 4. Name of Lender 5. Owner's Name 6. Manager's Name and Telephone No. Part II -- Unit Information_ 7. Apartment 8. Number of 9. Monthly 10. Number of Address Bedrooms Rent Occupants Part III -- Affidavit of Tenant Iand I, as applicants for rental of a Below Market Rate Unit in the above-described Project, do hereby represent and warrant as follows: A. (My/Our) adjusted income (anticipated total annual income) does not exceed: Check if accurate: (i) [eighty, percent (80%)-One hundred and twenty percent (120%)] of the median gross income for the Oakland Primary Metropolitan Statistical' Area, determined in a manner consistent with determinations of median gross income made under the leased housing program established under Section 8 of the United States Housing Act of 1937, as amended which (I/We) understand to be $ ; I-21 t (ii) the qualifying limits for lower income families of a like size in said Area as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, or in the event such. federal standards are discontinued, persons and families meeting the definition of "lower income households" under Section 50079.5 of the Health and Safety Code; in each case adjusted for family size for families less than four, and revised annually. The following computation includes all income (I/We) anticipate receiving for the 12-month period beginning on the date (I/We) execute a rental agreement for a Below Market Rate Unit or the date of which (I/We) will initially occupy such unit, whichever is earlier. 1. For the tenant and all members of the household include for the 12-month period beginning this date anticipated income from the following sources: (a) the full amount, before any payroll deductions, of wages, salaries, overtime pay, commissions, fees, tips, bonuses and other compensation for personal services, and payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay and any earned income tax credit to the extent it exceeds income tax liability (a) (b) net income from operations of a business or profession or net income of any kind from real or personal property (for such purposes, without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance for depreciation of capital assets) (b) (c) interest and dividends (c) (d) the full amount of periodic payments received from social security, annuities, pensions, retirement funds, insurance policies, disability or death benefits and and other similar types of periodic receipts, alimony, child support, and regular contributions or gifts from persons not residing in the unit (d) (e) the maximum amount of public assistance available (e) I-22 (f) regular and;ispecial pay and allowances of a member of',armed forces (whether or not living in the dwelling) who is head of the Al family or spouse (f) (g) with respect to any member of the household or any person whose income or contributions were included in 1(d) or (f) , above, set forth the amount of savings, stocks, bonds, equity in real property, or other form of capital investment (excluding interests in Indian trust lands) if such amounts, when added together, exceed $5,000. (i) Multiply the amount in (i ) , above, , by the current passbook savings rate as determined by HUD (ii) If (i) , above, is greater than zero, list the amount of income expected to be derived from the assets described above Line (ii ) minus Line (iii ) (if less than $0, enter $0) (g) Subtotal (a) through (g) Less: ( portion of above items which are income of a member of thelhousehold who is less than 18 years old. ( ) Total Eligible Income Note: The following items are not considered income: casual , sporadic or irregular gifts; amounts specifically for or in reimbursement of medical expenses; lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's I-231 compensation) ; capital gains and settlement for personal or property losses; educational scholarships paid directly to the student or educational institution; government benefits to a veteran for use in meeting the costs of tuition, fees, books and equipment (but in either case only to the extent used for such purposes); hazardous duty pay to a member of the household in the armed forces who is away from home and exposed to hostile fire; foster child care payments; value of coupon allotments for purpose of food under Stamp Act of 1977; relocation payments under Title II of Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act; income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; payments on allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program; payments received from the Job Partnership Training Act; income derived from the disposition of funds of the Grand River Band of Ottawa Indians; the first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission of the Court of Claims or from funds held in trust for an Indian tribe by the Secretary of Interior. 2. As of the first day of occupancy of the unit which (I/We) propose to rent (a) either (myself/ourselves) or at least one other occupant of the units is not an individual enrolled as a full-time student during each of five (5) calendar months during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional or farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof or (b) if all of the occupants of the unit will be individuals described in (a) , either (myself/ourselves) or one other occupant of the unit is a husband or wife entitled to make a single return jointly of Federal income taxes. 3. Neither (myself/ourselves) nor any other occupant of the unit (I/We) propose to rent is the owner of the rental housing project which includes the unit (hereinafter the "Owner") . 4. This affidavit is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility and (I/We) warrant that all information set forth in this Part III is true, correct and complete and based upon information (I/We) deem reliable and that the estimate contained in paragraph 1 is reasonable and based upon such investigation as the undersigned deemed necessary. 5. (I/We) will assist the Owner in obtaining any information or documents required to verify the statements made in this Part III. I-24 6. (I/We) acknowledge that (I/We) have been advised that the making of any misrepresentation or misstatement in this affidavit will constitute a material breach "'of (my/our) agreement with the Owner to lease the unit and will entitle the Owner to prevent or terminate (my/our) occupancy of the unit by institution of an action for ejection or other appropriate proceedings. (I/We) do hereby swear under penalty of perjury that the foregoing statements P Y P J Y 9 9 are true and correct. Date Applicant SUBSCRIBED AND SWORN to before me this day of (Notary Seal ) Notary Public in and for the State of My Commission Expires: I-25 INCOME VERIFICATION (for employed persons) The undersigned employee has applied for a rental unit located in a .project approved under the Density Bonus Program for County of Contra Costa, multifamily rental housing development for persons of Low to Moderate Income and/or Senior Citizens income. Every income statement of a prospective tenant must be stringently verified. Please indicate below the employee's current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. . Signature Date Title I hereby grant permission to disclose my income to in order that they may determine . my income eligibility for rental of an apartment located in their project which has been approved under the Density Bonus Program for the County of Contra Costa multifamily rental housing development. Signature Date Please send to: I-26 INCOME VERIFICATION (for self-employed persons) I hereby attach copies of my individual federal and state income tax returns for the immediately preceding calendar year for which such income tax returns could have been filed (or, if not filed, were not required to be filed), and certify that the information shown in such income tax returns is true and complete to the best of my knowledge and that any income tax returns not filed were not required to be filed. Signature Oate I-27 Exhibit "C" COMPLETION CERTIFICATE WITNESSETH that on this day of 1986, the undersigned, having received approval from the County of Contra Costa for the purpose of developing and constructing a multifamily rental project with a density bonus, does hereby certify that (1) the "Project" and all "Project Facilities" as those terms are defined in the Regulatory Agreement and Declaration of Restrictive Covenants were completed on ; (2) ten percent (10%) of the dwelling units in the Project were occupied on and (3) fifty percent (50%) of the dwelling units were occupied on (Owner) By: I-28 U Exhibit "D" DESIGNATION OF BELOW MARKET RATE UNITS The following dwelling units are hereby designated as Lower-Income Units: Unit #s Number Total Units in the Project Total Units occupied to date Total Units occupied by [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants Total Units available for rent to [Lower-Income - Low to Moderate Income - Senior Citii.en] Tenants Certifications of Tenant Eligibility are attached hereto for all new [Lower-Income - Low uto Moderate Income - Senior Citizen] Tenants who have moved into such multifamily project since the filing of the last Designation of Below Market Rate "Units. The same are true and correct to the best of the undersigned's knowledge and belief. (Owner) By: Date I-29 Exhibit "E" CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE WITNESSETH that on this day of 1986, the undersigned, having received approval from the County of Contra Costa for the purpose of developing and constructing a rental housing project with a density bonus, does hereby certify that (1) the "Project" as that term is defined in the Regulatory Agreement and Declaration of Restrictive Covenants executed by the undersigned and filed in the official public records of Contra Costa County, California is in continuing compliance with the Agreement (including the requirement that all units be and remain rental units) and that no default has occurred thereunder; and (2) during the past year no less than percent ( %) of the dwelling units in the Project have been occupied by [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants or held vacant and available for occupancy by [Lower-Income - Low to Moderate Income - Senior Citizen] Tenants. (Owner) By: I-30 APPENDIX J THE EFFECT OF THE PROPOSED DOUGHERTY VALLEY HOUSING ON JOBS/HOUSING BALANCE IN THE TRI-VALLEY (by Gruen Gruen & Associates, January 1994) JK:lh dv/dvgenpl2.rpt THE EFFECT OF THE PROPOSED DOUGHERTY VALLEY HOUSING ON JOBS/HOUSING BALANCE IN THE TRI-VALLEY A Report to the Contra Costa County Growth Management and Economic Development Agency i from GRUEN GRUEN + ASSOCIATES Urban Economists and Market Analysts February 1994 C816 01994 Gruen Gruen + Associates. Do not reproduce without written permission of Gruen Gruen +Associates. This document has been prepared and discussed solely in connection with an offer to compromise pending litigation. Accordingly, its contents are confidential and fully protected by the provisions of Evidence Code Sections 1152 and 1154. 0 00—ft Gruen Gruen +Associates J-1 564 Howard Street San Francisco, CA 94105-3402 Tel: (415)433-7598 FAX: (415)989-4224 Acknowledgements Gruen Gruen + Associates would like to thank the following individuals who provided their time and assistance. While the analysis was improved by their assistance, the authors take responsibility for the contents and conclusions. Bounty of Contra Costa Valentin Alexeeff, Director, Growth Management & Economic Development Agency Jim'Cutler,.Assistant Director,Comprehensive Planning,Community Development Jim Kennedy, Deputy Director-Redevelopment, Community Development Bishop Ranch and Hacienda Business Park Firms LouAnn Falkenstein, Manager, Human Resources, GTE-Mobilnet Greg Smith, Personnel Manager, Safeco Credit Company Judith Marshall, Computerland Corporation Lourdes Receno, Compensation Specialist, Computerland Corporatation Hank Reading, Facility Manager, Chevron Debrah Cook, Chevron Dennis Lowrey, Director, Compensation, Pacific Bell Rose Eggleston, Compensation Specialist, Pacific Bell Vicki Winship, Senior Vice President, San Francisco Federal Savings Jeri Cardon, Compensation and Benefits Analyst, San Francisco Federal Savings Kim Edson, Human Resources Specialist, Metropolitan Life Bishop Ranch and Hacienda Business Park Management Staff Kathy Edevane, Bishop Ranch Transportation Centre Karen Fraser-Middleton, Hacienda Owners Association Patrick O'Brien, Hacienda Owners Association James Paxon, Hacienda Owners Association Developers Thomas J. Koch, Shapell Industries of Northern California Susan E.M. Collins, Chapman & Wilson, Inc. Dan Coleman, Chapman & Wilson Association of Bay Area Governments (ABAG) Michael Armijo, Association of Bay Area Governments Janet McBride Authors of This Report Dr. Claude Gruen, Principal Economist, Project Director Nat Bottigheimer, Senior Planner/Economist, Principal Researcher, Stuardt-Mikhail Clarke, Support 3-2 Gruen Gruen + Associates I TABLE OF CONTENTS TABLE OF CONTENTS PSr age 1 SUMMARY OF PURPOSE AND CONCLUSIONS . . . . . . . . . . . 1 Summary of Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Organization of Report . . . . . . . . . . . . . . . . . . . . . . . . . . 4 11 FORECAST OF HOUSING AFFORDABILITY FOR FUTURE TRI-VALLEY EMPLOYEES AND EFFECTIVE DEMAND GENERATED BY TRI-VALLEY WORKER HOUSEHOLDS . . . . . . 5 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Survey Method and Results . . . . . . . . . . . . . . . . . . . . . . . . . 5 Conversion of Employee Income Data Into Forecasts of Household Incomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Estimation of Number of Households Comprised by Tri-Valley Workers Surveyed . . . . . . . . . . . . . . . . . . . . . . 8 Estimates of Household Incomes for Tri-Valley Workers Surveyed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Conversion of Household Income Data Into Housing Affordability Projections . . . . . . . . . . . . . . . . . . . . . . . . . . 16 ' Forecast of Housing Affordability for Tri-Valley Workers Surveyed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 111 AFFORDABILITY OF DOUGHERTY VALLEY HOUSING PRICE MIX TO FUTURE TRI-VALLEY EMPLOYEES AND THE EFFECTIVE DEMAND GENERATED BY TRI-VALLEY WORKER HOUSEHOLDS . . . . . . . . . . . . . . . . . 23 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Employment Growth Forecast . . . . . . . . . . . . . . . . . . . . 24 i J-4 Gruen Gruen + Associates