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Report regarding a resolution approving 1) the acquisition of a Below Marker Rate (BMR) unit at South City Lights, 2) approving the use of $350,000 from the City's Affordable Housing Trust Fund (Fund 205) for the preservation and sale of the BMR unit, 3) authorizing the City Manager to execute documents in connection with such preservation. (Deanna Talavera, Management [DT1]Analyst II)
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RECOMMENDATION
Recommendation
It is recommended that the City Council adopt a resolution approving 1) the acquisition of a Below Marker Rate (BMR) unit at South City Lights, 2) approving the use of $350,000 from the City's Affordable Housing Trust Fund (Fund 205) for the preservation and sale of the BMR unit, 3) authorizing the City Manager to execute documents in connection with such preservation.
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BACKGROUND
On January 9, 2002, the City Council adopted ordinance 1306-2002 approving a Development Agreement for the Marbella Housing Development, now known as South City Lights. The Development Agreement required the developer to sell 70 below market rate ("BMR") units to families of low-, median-, and moderate-incomes.
The BMR units in the first three City Lights buildings successfully sold out. In 2007, the housing market began to slow and it became increasingly difficult to sell the moderate-income (120% Area Median Income) units in the development. Consequently, the City released 28 units and an additional two units were lost to foreclosure. Only 40 deed restricted BMR units remain in the South City Lights development. The subject unit is one of those 40 BMR units.
The subject unit was sold to its current owner in 2007 and the owner and City entered into a Resale Restriction and Right of First Refusal Agreement (Attachment 1). These agreements were recorded with the County of San Mateo so that they appear on any title search for the property. This provides a safeguard in the event that the owner later sells or otherwise loses possession of the resid...
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