Agenda

Return

C.53

To:	Board of Supervisors
From:	Catherine Kutsuris
Date:	November 15, 2011

Contra

Costa

County

Subject:

Allow Property Rental located at 362 Karelian Street in Danville

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 11/15/2011

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Gayle B. Uilkema, District II Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor

ABSENT:

Mary N. Piepho, District III Supervisor

Contact:

Alicia Smith 335-7217

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: November 15, 2011
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

APPROVE and AUTHORIZE the Director of Conservation and Development, or designee, to allow the rental of property owned and currently occupied by Rong Shen and located at 362 Karelian Street in Danville, for up to two (2) years. Monthly rents shall not exceed current mortgage payments, property taxes and hazard insurance.

FISCAL IMPACT:

No General Fund Impact.

BACKGROUND:

On July 9, 2002, the Board of Supervisors approved the Camino Tassajara Affordable Housing Program (CTAHP). The CTAHP sets forth requirements to be met by the Camino Tassajara developers (Shapell, Braddock and Logan, and Ponderosa Homes). On January 9, 2006, Shapell and the County entered into a Developer Sales Agreement (Agreement). This Agreement placed conditions on the 127 unit townhome development known as Willow at Alamo Creek. All 127 units were required to be sold to moderate income homebuyers.

BACKGROUND: (CONT'D)

In addition, the Agreement stated that all buyers must enter into a Buyer’s Resale Restriction Agreement (Resale Agreement) with the following requirements:

• The units would have 20 year resale restrictions;
• The homes must be sold at a restricted price to an income eligible buyer (“Eligible Purchaser”); and
• The units must be owner occupied for 20 years

Willow owners may sell their home at any time. The resale restriction includes a maximum sales price. There is also a minimum marketing period. If the units cannot be sold, then the County may release the resale requirement. The home can then be sold at market price to any buyer. The County will receive 94% of any profit over the restricted price. This provision is to prevent windfall profits to the seller. In the event of a sale, funds are provided to the County Housing Trust Fund to use for other affordable housing activities. The built in flexibility in the resale restriction allows the County to respond to market conditions when the owner wishes to sell on a case by case basis. The stated policy preference of the Board with respect to these inclusionary units has been to retain them as affordable whenever possible.

Rong Shen purchased her property in August, 2007, at which time she signed the Resale Agreement. In view of the applicable deed restrictions, the owner is seeking authorization from the County to rent the unit.

The term of this temporary rental shall be for up to two (2) years. Monthly rents shall not exceed current mortgage payments, property taxes and hazard insurance. A review of current apartment and townhome rents in the Danville and the Alamo Creek area indicate that market rents are affordable to moderate income renters (i.e. A moderate income household of four can afford a rent of $2,800 per month. Apartment and townhome rents currently range from $1,900 to $2,500 per month.) Rents are expected to remain affordable to moderate income renters for the next two years. The new tenant shall not be entitled to relocation expenses when the lease terminates. The unit must remain affordable for another moderate income homebuyer.

Rong Shen has been trying to sell her home since January of this year. Due to the soft real estate market, she has been unable to sell the home. Therefore, staff recommends that the County allow her to rent the home.

CONSEQUENCE OF NEGATIVE ACTION:

Should this not be approved, the property owner would not be allowed to rent this unit.

CHILDREN'S IMPACT STATEMENT:

Not Applicable.