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Report regarding a resolution authorizing the City's acquisition of the Below Market Rate (BMR) unit at 2210 Gellert Boulevard, Unit 5107 (APN 104-470-070), and approving Budget Amendment Number 27.002. (Elia Moreno, Housing Management Analyst I)
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RECOMMENDATION
Recommendation
Staff recommends that the City Council adopt a resolution authorizing the City's acquisition of the Below Market Rate (BMR) housing unit located at 2210 Gellert Boulevard, Unit 5107 (APN 104-470-070) using the City's Commercial Linkage Fee Fund (Fund 823), and approving Budget Amendment Number 27.002.
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BACKGROUND
The City of South San Francisco's (City) Inclusionary Housing Ordinance (Municipal Code Chapter 20.380) creates Below Market Rate (BMR) housing units within both ownership and rental developments. This ordinance serves to increase the amount of housing affordable to low and moderate-income households in South San Francisco. When for-sale BMR units are newly constructed and undergo their initial sale, each unit's initial sale price is calculated based on a complex formula. Specifically, this initial pricing process takes into account the Area Median Income (AMI) level the unit is targeted at, the current interest rate expected on a 30-year, fixed-rate mortgage, a 5% to 10% down payment, private mortgage insurance rates, homeowners' insurance, and homeowners' association dues. When BMR units are resold, the sale price is calculated much more simply and intended to provide the seller with some modest equity earnings. In the case of resales, the new sales price is indexed to the change in AMI since the unit was last sold.
The City controls the resale price and resale procedures of for-sale BMR units through resale restriction agreements and rights of first refusal, documents which are executed between the BMR owner and the City and recorded against the property. These documents give the City opportunities to buy the unit upon the owner's intention to sell the uni...
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