HomeMy WebLinkAboutReso 142-11 Rental Policy BMR UnitsRESOLUTION NO. 142 -11
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
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MODIFYING AND EXTENDING THE TEMPORARY POLICY FOR THE RENTAL OF BELOW
MARKET RATE OWNERSHIP UNITS BY OWNERS UNABLE TO SELL THEIR UNITS
AT THE RESTRICTED RESALE PRICE
WHEREAS, the City of Dublin's ("City") Inclusionary Housing Program requires
purchasers of Below Market Rate Units that are for sale ("BMR Sale Units") to execute and
record a Resale Restriction Agreement with Option to Purchase ("Resale Agreement") with the
City; and
WHEREAS, the Resale Agreement prohibits Owners from selling their BMR Sale Units at
greater than a price as specified in the Resale Agreement; and
WHEREAS, due to the re-set of the economy which began several years ago, many
BMR Sale Unit Owners are having difficulty finding qualified buyer~ willing to purchase their
Units at the restricted resale price because in many instances, such price is so close to market
price that qualified buyers would rather purchase Market Rate homes free of resale restrictions;
and
WHEREAS, Owners who are unable to sell their BMR Sale Units would like the ability to
rent their BMR Sale Units to qualified renter at restricted rents; ard
WHEREAS, the Resale Agreement prohibits the rental of BMR Sal~ Units without the
prior written consent of the City; and
WHEREAS, on August 19, 2008, the City Council adopted a"Temporary Policy for the
Rental of Below Market Rate Ownership Units by Owners Unable to Sell Their Units At The
Restricted Resale Price" ("Temporary Policy"), effective through August 19, 2010; and
WHEREAS, due to insufficient improvement in real estate market conditions, on May 18,
2010, the City Council extended the Temporary Policy through August 19, 2012; and
WHEREAS, City Council received a report from Staff of suggested modifications to the
Temporary Policy to address local real estate market conditions, and feedback from several
BMR Sale Unit Owners and real estate professionals, and is of the opinion that it is unlikely that
as of August 19, 2012, the local real estate market will have improved sufficiently for BMR Sale
Unit Owners who wish to sell their homes to find qualified buyers willing to accept resale
restrictions; and
WHEREAS, City Staff is further of the opinion that qualified potential renters of BMR Sale
Units are unwilling to rent from BMR Sale Unit Owners due to the short term of the Temporary
Policy, as extended; and
WHEREAS, City Council was desirous of extending the Temporary Policy two more
years past the date of expiration to August 14, 2014.
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NOW, THEREFORE, the City Council of the City of Dublin does hereby resolve as
follows:
1. Adoption. This Temporary Policy supersedes the Temporary Policy adopted by the City
Council on August 19, 2008 and extended on August 19, 2010.
2. Current Leases. Rentals of BMR Sale Units under the prior Temporary Policy shall
continue in effect pursuant to the terms and provisions thereof, until the expiration of such
leases. Lease renewals and new leases entered into on or after the Effective Date of this
Resolution shall be subject to and governed by the terms and provisions of the amended
Temporary Policy.
3. Conditions. A BMR Sale Unit Owner who wishes to rent his or her Unit must, at
minimum, meet all of the following conditions:
(a) Submission to the City of a market analysis prepared by a City-approved real
estate professional, demonstrating that the Adjusted Resale Price is greater than
the market price for a similar unit;
(b) Execution of a recordable Affordable Housing Rental Regulatory Agreement and
Declaration of Restrictive Covenants ("Rental Regulatory Agreement") with the
City for a term of not more than five (5) years from the date executed;
(c) Qualification of the prospective tenant as an Eligible Household in the same
income category as the BMR Sale Unit;
(d) City approval of the form of lease;
(e) A monthly rental payment that does not exceed the lesser of the maximum rent,
calculated per Chapter 4.11.3 of the City's Guidelines to the Inclusionary Zoning
Ordinance Regulations for the applicable income category and household size; or
the total monthly household cost of the Unit;
(fl Submission of a copy of the lease to the City within five (5) days of its execution by
the Owner and tenant(s);
(g) Owner's agreement that Owner shall not live in the BMR Sale Unit during the term
of the lease; and
(h) Owner's acknowledgement that compliance with the provisions of the Policy are
and shall be applicable to each proposed lease of Owner's BMR Sale Unit.
4. Definitions. The following definitions shall apply to this Policy:
(a) The term of the Rental Regulatory Agreement shall not exceed five (5) years from
the date executed ("Term").
(b) Capitalized terms not defined herein shall have the meaning ascribed to such
terms in the Resale Agreement.
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(c) Total Monthly Household Cost of the Unit shall mean the cost of an Owner's
monthly mortgage payment, taxes, homeowners' association fees and insurance
for the BMR Sale Unit, but shall not include the cost of utilities or maintenance.
5. Rent and Household Size. The monthly rental payment for the BMR Sale Unit shall not
exceed the definition of Affordable Rent for the applicable income category in the Rental
Regulatory Agreement entered into between the Owner and the City. The household
size for each BMR Sale Unit may not exceed two people for each bedroom and may not
be less than one person per bedroom. The chart below contains the household size
permitted for each BMR Sale Unit based on the number of bedrooms:
One-bedroom units
Two-bedroom units
Three-bedroom units
Four-bedroom units
1-2 people households
2-4 people households
3-6 people households
4-8 people households
6. Lease. The lease shall clearly state: (1) the term of the lease; (2) the monthly rental
payment; (3) that the BMR Sale Unit is an affordable unit subject to certain restrictions
imposed by the City; (4) that the tenant may be required to submit income documentation
to the City upon request; (5) that the lease term will expire no later than five (5) years
from execution of the lease; (6) that the City is a third party beneficiary to the lease with
the right, but not the obligation, to enforce the terms of the lease; and (7) that the tenant
will be required to vacate the Unit when the fease expires, and will not be eligible for any
form of relocation benefits or assistance.
7. Authority of City Manager. The City Manager or his or her designee shall have the
authority and responsibility for the implementation of this Policy, including the authority to
enter into Rental Regulatory Agreements and other implementing documents with the
BMR Sale Unit Owners in a form approved by the City Manager and the City Attorney.
8. Effect of Violation. City's approval of a lease shall be based on a BMR Sale Unit Owner's
compliance with the Policy. Therefore any BMR Sale Unit Owner who violates this Policy
shall be deemed to be in default under both the Owner's Rental Regulatory Agreement
~ and Resale Agreement.
9. Severability Clause. The provisions of this Resolution are severable and if any
provision, clause, sentence, word or part thereof is held illegal, invalid,
unconstitutional, or inapplicable to any person or circumstances, such illegality,
invalidity, unconstitutionality, or inapplicability shall not affect or impair any of the
remaining provisions, clauses, sentences, sections, words, or parts thereof of this
Resolution or their applicability to other persons or circumstances.
10. Effective Date. This Resolution shall take effect immediately.
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NOW, THEREFORE, BE IT FURTHER RESOLVED that this Temporary Policy will expire
unless renewed by the City Council on August 19, 2014.
PASSED, APPROVED, AND ADOPTED this 16th day of August, 2011, by the following
votes:
AYES: Councilmembers Biddle, Hart, Hildenbrand, Swalwell, and Mayor Sbranti
NOES: None
ABSENT: None
ABSTAIN: None
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Mayor
ATTEST:
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City Clerk
Reso No. 142-11, Adopted 8-16-11, Item 4.6 Page 4 of 4