COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Housing

DATE:

10/06/2006

BOARD MEETING DATE:

11/7/06

SPECIAL NOTICE/HEARING

None

VOTE REQUIRED

Majority

TO:

Honorable Board of Supervisors

FROM:

Duane Bay, Director, Department of Housing

SUBJECT:

Approve a Resolution authorizing the sale of a County owned Below Market Rate (BMR) Unit

Recommendation

Adopt a Resolution:

1.

Authorizing the sale of a County owned BMR unit to a qualified low income buyer at an affordable price; and

2.

Authorizing the Director of the Department of Housing to execute all legal documents to effect the sale.

Vision Alignment

Commitment: Offer a full range of housing choices.
Goal 9: Housing exists for people at all income levels and for all generations of families.

The action contributes to this commitment and goal by maintaining an affordable homeownership unit and recycling it to a new income qualified first-time homebuyer.

Performance Measures:

Measure

FY 2005-06
Actual

FY 2006-07
Target

Number of County-supported affordable housing units completed and occupied

158

200

Background

In April 1992 the County of San Mateo (“County”) and Silverado Development Inc., (“Developer”) entered into an agreement allowing the Developer the right to construct an additional condominium unit in its development at 248-262 Fifth Avenue, Redwood City (Unincorporated North Fair Oaks). In exchange for the right to construct eight units instead of seven, the Developer agreed to sell one unit to a low or very low income household and to impose a deed restriction limiting the price upon resale. The restriction is effective for forty years from the date of the agreement, and limits the sales price to an amount affordable to low or very low income households based on the income limits in effect at the time of resale. The County has the option to purchase the property at a price established by the terms of the affordable housing agreement. If the County declines to purchase the property, the Owners would then have the right to sell to a party of their choosing, subject to the resale restrictions.

The subject unit was purchased for $102,000 on March 18, 1993 by qualified buyers (“Owners”). On December 17, 2003 the Owner gave notice of their desire to sell the property. On January 13, 2004, the Board of Supervisors approved exercising the County’s option to purchase the property and on March 2, 2004 authorized its purchase. A Grant Deed, instrument #2004-185100, was recorded September 14, 2004 transferring ownership of the unit to the County for the price of $174,546.88.

Discussion

In order to preserve and sustain long term affordable housing, the Department of Housing has established an affordable price of $300,000 to be sold to a 2-4 person household whose gross annual household income does not exceed the HOME Income Limit adjusted for family size. Future re-sales will be similarly restricted. The most recent sale of a similar but non-restricted unit in the building was a recorded price of $440,000 on 8/22/2005. There is a unit currently in this complex on the market for $495,000



The buyer selection process has been conducted by the Housing Authority Staff. A potential buyer from the Housing Authority’s Family Self-Sufficiency and Homeownership Program has been identified. The potential buyer has been pre-approved for a conventional first mortgage, a second mortgage from the County’s Start Downpayment Assistance Program and the Housing Assistance Payment from the Housing Authority.

County Counsel has reviewed and approved the Resolution as to form.

Fiscal Impact

There is no Net County Cost.