Title
a. Authorize an increase in estimated revenues and appropriations in the amount of $400,000 in the Economic Development Department’s Inclusionary Housing Fund appropriations Unit 009-8208-DEO002 (4/5th vote required); and
b. Authorize the Auditor-Controller to amend the FY 2015-16 Economic Development Department Community Development adopted budget, Fund 009, Unit 8208 and Appropriation Unit DEO002, to increase estimated revenues and appropriations by $400,000 (4/5th vote required)
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Authorize an increase in estimated revenues and appropriations in the amount of $400,000 in the Economic Development Department’s Inclusionary Housing Fund appropriations Unit 009-8208-DEO002 (4/5th vote required); and
b. Authorize the Auditor-Controller to amend the FY 2015-16 Economic Development Department Community Development adopted budget, Fund 009, Unit 8208 and Appropriation Unit DEO002, to increase estimated revenues and appropriations by $400,000 (4/5th vote required).
SUMMARY:
This request is to increase appropriations within Economic Development Department’s Inclusionary Housing Fund 009. The increase in appropriations is necessary to enable the County to exercise its option to purchase an inclusionary home before the home is sold at foreclosure and lost from the inclusionary housing inventory. There is currently enough fund balance in Fund 009 to cover this unanticipated expenditure.
DISCUSSION:
The Board of Supervisors adopted an Inclusionary Housing Ordinance in 1980 to require developers to develop and support affordable housing in the County. Since the program began, more than 250 units of owner occupied affordable housing have been developed. There are three ways the County loses these units: 1) the term of affordability is reached; 2) the County fails to exercise its option to purchase a home when the owner sells and another income qualified buyer cannot be found; and 3) when senior lienholders sell the home through foreclosure proceedings.
When an owner purchases an Inclusionary Unit, he/she is required to sign a number of documents that are intended to protect the County’s interest in maintaining the stock of affordable housing in Monterey County. One of these documents is the Buyer’s Occupancy and Resale Restriction Agreement with Option to Purchase. The terms of this document require Inclusionary Home owners to notify and work with the County to identify income qualified purchasers who will purchase the home and sell it to an income qualified household in the future. This document also allows the County to purchase the home on a number of grounds, including if the homeowner defaults on senior lienholders, or fails to consult with the County prior to selling the home to a non-income qualified household. The County can also buy the home if the owner wants to sell and offer it to the County for the restricted price.
An Inclusionary home located at 18035 Stonehaven Drive in the Las Palmas Ranch II housing subdivision may be foreclosed on by the Homeowner’s Association for past due HOA fees. The attorney for the HOA contacted the County in a last-chance effort to keep the homeowner from losing their home and the County from losing an affordable housing unit. There are sufficient funds in the County’s Inclusionary Housing fund to purchase the home. The increase in revenue and appropriations is necessary to allow the County to purchase the home before the foreclosure sale takes place and then to sell the home to an income qualified home buyer. This will preserve the home as an affordable unit. County staff anticipates that if the County purchases the unit, it will take approximately three months to repair and resell the home.
OTHER AGENCY INVOLVEMENT:
The Economic Development Department has worked closely with County Counsel to preserve this unit as affordable housing.
FINANCING:
There is no impact to the General Fund as a result of this action. There is currently sufficient fund balance in Fund 009 cover this unanticipated expenditure. Once the property is sold to a qualified household all proceeds from the sale will be returned to Fund 009, Unit 8208 and Appropriation Unit DEO002.
Prepared by: _____________________________________________________________________
Jane Royer Barr, Housing Program Manager, Ext. 5389
Approved by: _____________________________________________________________________
David L. Spaur, CEcD, EDFP, Economic Development Director, Ext. 5387
Attachments:
None