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HomeMy WebLinkAboutCouncil requested additional modifications to the Inclusiona Recommended Action: Approve the "Reimbursement - Planning - Agreement Between the City of Huntington Beach and Ranco Huntington Investments, LLC for Costs Incurred for Former Lamb School CEQA Documentation" as prepared by the City Attorney. Approved 5-0-2 (Carchio, Green out of room) 22. (City Council) Approve and authorize the Mayor and City Clerk to execute a Reimbursement Agreement with Ranco Huntington Investments, LLC in the amount of$69,278 for California Environmental Quality Act (CEQA) documentation for the former Wardlow School site. Recommended Action: Approve the "Reimbursement - Planning - Agreement Between the City of Huntington Beach and Ranco Huntington Investments, LLC for Costs Incurred for Former Wardlow School CEQA Documentation" as prepared by the City Attorney. Approved 5-0-2 (Carchio, Green out of room) 23. (City Council/Redevelopment Agency) Authorize the Executive Director to waive certain conditions precedent to the Redevelopment Agency's payment of an amount not to exceed $950,000 under the Sixth Implementation Agreement with CIM/Huntington LLC (CIM) for the development of The Strand project; and, CIM is committing to purchase and install police/fire radio antennas within the Strand Parking Structure at a cost not to exceed $70,000. Redevelopment Agency Recommended Action: Authorize the Executive Director to waive certain conditions precedent to the Agency's payment of an amount not to exceed $950,000 under the Sixth Implementation Agreement provided that the Executive Director and CIM have executed a written agreement that has been approved to form by the City Attorney, committing CIM to purchase and install police/fire radio antennas within the Strand Parking Structure at a cost not to exceed $70,000. Approved 5-0-2 (Carchio, Green out of room) ADMINISTRATIVE ITEMS 24. (City Council) Approve and provide direction for recommendations on modifications to the Inclusionary/Affordable Housing. Program Policies and Procedures as discussed at the January 20th and February 3rd, 2009 City Council meetings; and, direct staff to return with a resolution to adopt modifications and finalized Inclusionary Housing Program Policies and Procedures. Recommended Action: �7 Provide diFeofien to medifieetiono Aste l in Me pa4o n oenfinn niumhor 1 6-,- and b4 Approve medWinatinno to the InGh4sionay L-ousing Onlinieo and PTOGeduFe0 outlined in n 44sio oenfinn numb o 7_16, 7nG ' �--rvcca�'c�'vzrrnrrcv-rrr� .�i .�r.��. ccnvrrTurrnve�.T�rv�-arr� c) Direct staff to return with straw vote policy and procedures incorporated via a resolution at a time there will be no negative impact on pending litigation. Approved 7-0 Staff report items 1, 3, 8, 9, 10, 11, 12, 13, and 14 all approved as presented. Staff report item #2 modified to remove restriction of sole use as down payment of new primary residence. Underwriting community to set refinancing not to exceed 80% of the appraised value as affordable, and City to subordinate. Staff report item #4 modified to include a process to send notice to homeowners six months before and allow public comments to clarify policy for future staff and homeowners. Staff report item #5 approved as stated in staff report if staff is unable to provide a means to accomplish the purchase of an insurance instrument as outlined in #5 "proposed change." Staff report item #6 to include "pre-qualified" to list City will create, maintain, and provide. List will be subject to disclaimers and renewable every thirty days via website. Staff report item #7 modified to "defined as job relocation, family illness or medical necessity"- Economic Development department to clarify process to certify these issues. Item #15 added to include 30-year covenant to be in place from date of original sale of unit. Approved 7­0 ORDINANCES FOR INTRODUCTION 25. (City Council) Approve for Introduction Ordinance No. 3827 temporarily superseding certain City municipal and zoning code provisions relating to the required time of payment of specific development impact fees. Recommended Action: After City Clerk reads by title, Approve for Introduction Ordinance No. 3827, "An Ordinance of the City of Huntington Beach Temporarily Superseding Certain City Municipal and Zoning Code Provisions Relating to the Required Time of Payment of Specific Development Impact Fees." Approved 6-0-1 (Tardy out of room) t Council/Agency Meeting Held: Deferred/Continued to: A groved ❑ onditionally Approved ❑ Denied City ler s Sig at re l Council Meeting Date: 3/2/2009 Department ID Number: ED 09-13 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL M E S SUBMITTED BY: FRED A. WILSON, CITY ADMINISTRATOR PREPARED BY: STANLEY SMALEWITZ, DIRECTOR OF ECONOMIC DEVELOPMENT SUBJECT: APPROVE POLICY MODIFICATIONS TO INCLUSIONARY HOUSING PROGRAM Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: Staff has provided recommendations for modifications to the Inclusionary Housing Program Policies and Procedures as discussed at the January 20th and February 3, 2009, City Council meetings. Separately, the Planning Department will be bringing the ordinance forward at a future meeting. Funding Source: Not Applicable. Recommended Action: Motion to: 1. Provide direction to modifications listed in the Analysis section, number 1-6. 2. Approve modifications to the Inclusionary Housing Policies and Procedures outlined in the Analysis section, numbers 7-16. 3. Direct staff to return with a resolution to adopt modifications and finalized Inclusionary Housing Program Policies and Procedures for approval. Alternative Action(s): Do not approve modifications to the Inclusionary Housing Program Policies and Procedures and provide direction to staff to modify policies and procedures. REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 3/2/2009 DEPARTMENT ID NUMBER: ED 09-13 Analysis: On January 20, 2009, a City Council Study Session was held to present modifications to the Inclusionary Housing Policies and Procedures. An additional special City Council meeting was conducted on February 3, 2009, to further discuss changes to the policies and procedures. City Council asked Staff to review the following six items and return to the Council with alternative actions: 1. Gift Limit: Existing Policy Limit is currently $15,000. Proposed Change Eliminate limit — rely on bank underwriting standards. Staff Recommendation Recommend proposed change as long as down payment is continued to be capped at no more than 50% of purchase price. 2. Cash Out on Refinancing: Existing Policy Allowed if bank agrees to subordinate to the City's income and affordable housing cost restrictions. Proposed Change Allow cash out based on lender's underwriting criteria. City covenants would be subordinated to the new loan amount. Staff Recommendation Recommend with the following conditions: Owner uses funds solely for down payment on new primary residence; Lender is notified that the funds will be used as a down payment on another residence; and Total obligations do not exceed affordable housing cost and 95% of market value tests. 3. Timing for Affordable Price Setting: Existing Policy Affordable housing cost set daily based on current interest rates. Proposed Change Establish affordable housing cost monthly based on the lowest applicable interest rate published during the immediately preceding three months. Staff Recommendation Recommend 4. Grandfathering of Policies and Procedures Changes: Existing Policy Original covenants remain in place throughout the term. Policy and procedural changes are imposed on all program participants. Proposed Change Program participants have the option to apply the policies and procedures in place at the first home sale, or accept updated policies and procedures that occur over time. Staff Recommendation Recommend with the condition that original covenants remain in place throughout the term. -2- 2/24/2009 9:05 AM REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 3/2/2009 DEPARTMENT ID NUMBER: ED 09-13 5. Market Rate Resale Upon Death of Owner: Existing Policy The home remains subject to the income and affordability covenant restrictions. Proposed Change City allows resale at unrestricted market rate. City attempts to purchase an insurance instrument to provide sufficient revenue to replace the lost affordable housing unit. Staff Recommendation Maintain existing policy° 6. Maintain List of Interested Buyers: Existing Policy No interest list is currently provided by the City. Proposed Change The City would create and maintain an interest list. Staff Recommendation The City to create and maintain an interest list. Home owner or Real Estate agent will remain responsible for identifying a home buyer. Policy modifications that were discussed at the January 20th and February 3rd City Council meetings are: 7. Hardship rental provision added: - Defined as temporary job relocation, family illness or medical necessity. - Allows for unit to be rented for one (1) year at affordable rent for same income level as covenant. 8. Inheritance: - Transfer allowed in all instances. - New owner may rent the unit for one year at same income level as affordability restriction. - Resale is subject to the original income & affordability restrictions. 9. The estimated Affordable Sales Prices for units will be posted on the website each quarter. (New, previously not on the website). 10. Homebuyers may purchase durable goods from the seller at a cost of no more than $500 per item. (New, currently not allowed under the program). 11. Utilities allowances used in the calculations will be updated annually and posted on the city's website. (New, previously not on the website). 12. Conduct workshops with homeowners and real estate brokers at the large inclusionary projects. 13. Enforcement Documents: - Recorded Notice of Affordability Covenant. - Promissory Note equal to the difference between the original market price and Maximum Affordable Sales Price - Recorded Deed of Trust securing the obligations, - Special disclosure statement signed by the homebuyer confirming that buyer has received the Policies and Procedures Manual and has had the opportunity to ask -3- 2/24/2009 9:05 AM REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 3/2/2009 DEPARTMENT ID NUMBER: ED 09-13 questions about the terms and policies. This has been a policy, but the signed document is new. 14. Enforcement Measures: - Ongoing maintenance of a covenant database. - Annual review of County Assessor's records for title changes and homeowner exemption claims. - Annual notice to program participants to verify owner occupancy. Staff will also contrast and compare the City's Inclusionary Housing Program with the City of San Francisco and the County of Monterey Inclusionary Programs to clarify the issues that were brought up by the Cape Ann residents. Staff will prepare the revised Policy and Procedures Manual to be brought back to Council for adaptation at the March 16th, 2009 City Council meeting. Strategic Plan Goal: L:3 Preserve the quality of our neighborhoods, maintain open space, and provide for the preservation of historic neighborhoods. Environmental Status: Not applicable Attachment(s): City Clerk-ls 1. PowerPoint from February 3 meeting for Policies and Procedures -4- 2/24/200910:46 AM ATTACHMENT # 1 �.ncluSIOA1 -Ho" .HO i tinges to"�Policies & Procedures � L- Huntington Beach City Council. Special Session - February 3, 2009 t Goals for Program Modifications ® Clarify the program requirements. ® Simplify the process for owners & occupants. ® Modify terms to reflect current conditions. February 3,2009 Keyser Marston Associates Page 2 1 Household Income Measurement • Current Requirement: Median income used in --_- affordable housing cost calculations is based on Orange County median income published by the US Dept of Housing & Urban Development (HUD). - © Proposed Change: Add the following clarification - the median income published by HUD as adjusted annually by the California Housing & Community Development Department (HCD). Based on California Health & Safety Code Section 50093. February 3,2009 Keyser Marston Associates Page 3 Interest Rate Used In Affordable Housing Cost Calculations ® Current Requirement: The interest rate used in the calculation is set daily. _ ® Proposed Change: The interest rate will be set quarterly at the lowest rate offered for Fannie Mae, fixed-interest rate, 30 year, fully amortizing loans. February 3,2009 Keyser Marston Associates Page 4 2 Other Proposed Changes that i Impact Home Buyers . The Affordable Sales Prices for units will be posted on the web site each quarter. o Utilities allowances used in the calculations will be updated annually & will be posted on the web site. ® Home buyers may purchase durable goods from the seller at a cost of no more than $500 per item. o For disclosure purposes, each home buyer will =_- receive a copy of the Policies & Procedures manual. February 3,2009 Keyser Marston Associates Page 5 � F. Owner Occupancy Requirements m Current Requirement: Participants must occupy the home as their primary residence. v Proposed Changes: Hardship provision is added: ® Defined as temporary job relocation, family illness or =_== medical necessity. ® Allows for unit to be rented for one year at affordable rent for same income level as covenant. February 3,2009 Keyser Marston Associates Page G 3 Refinancing Restrictions • Current Requirements: ® Homes can be refinanced for better interest rate or -_ repayment terms. Maximum loan set at lesser of affordable housing cost or - 95% of market value. ® No cash out allowed if the affordability restrictions are subordinate to the financing. February 3,2009 Keyser Marston Associates Page 7 1 Refinancing Restrictions ® Proposed Change: Agency will subordinate to cash out loans if- ® The owner demonstrates that the funds will be used solely for the down payment on a new primary residence. The lender is notified that the funds will be used as a down payment on another residence. ® The total loan obligations meet the affordable housing cost and 95% of market value tests. February 3,2009 Keyser Marston Associates Page 8 4 w9 Inheritance • Current Requirements: Transfer to spouse allowed in all cases,and transfer to other family members allowed if they meet the household income restrictions. n New owner must occupy the home as their primary residence. • Proposed Changes: Transfer allowed in all instances. ® New owner may rent the unit for one year at same income level as affordability restriction. Resale is subject to the original income&affordability restrictions. February 3,2009 Keyser Marston Associates Page 9 Proposed New Monitoring & Enforcement Documents - ` ® Recorded Notice of the Affordability Covenant. o Promissory Note equal to the difference between the original market price & Affordable Sales Price. ® Deed of Trust securing the obligations. ® Special disclosure stating that home buyer has received the Policies & Procedures manual, and has had the opportunity to ask questions about the terms and policies. February 3,2009 Keyser Marston Associates Page 10 5 Proposed New Enforcement Measures ® Civil citations with monetary penalties for violations of affordable housing restrictions. ® Ongoing maintenance of a covenant database. ® Annual review of County Assessor's records for title changes and homeowner exemption claims. February 3,2009 Keyser Marston Associates Page 11 Proposed New Enforcement - ` Measures ® Annual notice to program participants to verify owner occupancy. ® Quarterly Affordable Sales Price calculation will be available on the web site to program participants. * Workshops with home owners and real estate brokers at the large inclusionary projects. February 3,2009 Keyser Marston Associates Page 12 6 RCA ROUTING SHEET INITIATING DEPARTMENT: ECONOMIC DEVELOPMENT SUBJECT: Policy Modifications to Inclusionary Housing Program COUNCIL MEETING DATE: March 2, 2009 L RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) Attached ❑ (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. Attached the Applicable El (Approved as to form by City Attomey) Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached ❑ Not Applicable Bonds (If applicable) Attached ❑ Not Applicable Staff Report (If applicable) Attached It Applicable Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EXPLANATI.OM FOR IvIIWMG ATTAC HHEMTS REVIEWED RETURNED FORWARDED Administrative Staff ( ) Deputy City Administrator (Initial) ) City Administrator (Initial) ( ) ) City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: (Below Spilce For City ClerWs Use • RCA Author: Stone n CITY OF HUNTINGTONH Interdepartmental Memo TO: Honorable Ma or and Members of the City Council VIA: Fred A. Wil '�Lity Administrator FROM: Stanley Sma ewitz, Director of Economic Development DATE: March 2, 2009 SUBJECT: Late Communication — Administrative Item Modifications to the Inclusionary/Affordable Housing Program Policies and Procedures Attached is a PowerPoint dated March 2, 2009, which will be presented during Administrative Item — Modifications to the Inclusionary Housing Policies and Procedures. If you have any questions, please call me at extension 5909. Attachment Council Mtg. 3-2-09 Late Communication -1- 3/2/2009 2:28:00 PM Inclusionary Housing Policies & Procedures: City Council Issues Huntington Beach City Council Regular Meeting March 2, 2009 Recommended Policy Modifications - Feb. 3rd Hardship rental provision added: - Defined as temporary job relocation,family illness or medical necessity. - Allows for unit to be rented for one(1)year at affordable rent for same income level as covenant. o Inheritance: - Transfer allowed in all instances. - New owner may rent the unit for one year at same income level as affordability restriction. - Resale is subject to the original income&affordability restrictions. o The estimated Affordable Sales Prices for units will be posted on the website each quarter. (New,previously not on the website). March 2,2009 Keyser Marston Associates Page 2 1 Recommended Policy Modifications - Feb. 3rd • Homebuyers may purchase durable goods from the seller at a cost of no more than$500 per item. (New,currently not allowed under the program). • Utilities allowances used in the calculations will be updated annually and posted on the city's website. (New,previously not on the website). • Conduct workshops with homeowners and real estate brokers at the large inclusionary projects. • Staff Recommendation: City will explore feasibility. Home owner remains responsible for finding a home buyer. March 2,2009 Keyser Marston Associates Page 3 Recommended Policy Modifications - Feb. 3rd • Enforcement Documents: - Recorded Notice of Affordability Covenant - Promissory Note equal to the difference between the original market price and Maximum Affordable Sales Price - Recorded Deed of Trust securing the obligations Special disclosure statement signed by the homebuyer confirming that buyer has received the Policies and Procedures Manual and has had the opportunity to ask questions about the terms and policies. This has been a policy,but the signed document is new. • Enforcement Measures: - Ongoing maintenance of a covenant database. - Annual review of County Assessor's records for title changes and homeowner exemption claims. - Annual notice to program participants to verify owner occupancy. March 2,2009 Keyser Marston Associates Page 4 2 Gift Limit ® Existing Policy: Limit is currently $15,000 ® Issue: Eliminate limit - rely on bank underwriting standards. ® Staff Recommendation: Agree with proposed change as long as down payment is capped at no more than 50% of purchase price. March 2,2009 Keyser Marston Associates Page 5 Cash Out Refinancing ® Existing Policy: Allowed if bank agrees to subordinate to City covenants. ® Issue: Allow cash out based on lender underwriting. City subordinates if the loan meets lenders underwriting criteria. ® Staff Recommendation: • If no subordination is required and new loan meets underwriting criteria, allow cash out. . Will subordinate, only if funds are to be used for down payment on another home; March 2,2009 Keyser Marston Associates Page 6 3 Timing for Affordable Price Setting ® Existing Policy: Interest rate used in affordable price setting is reset daily. ® Issue: Interest rate is reset monthly based on the lowest rate published over the preceding three months. ® Staff Recommendation: Agree March 2,2009 Keyser Marston Associates Page 7 Applicability of Changes to Policies & Procedures ® Existing Policy: Changes to policies & procedures imposed on all participants. ® Issue: Participants can opt for grandfathering or for change. ® Staff Recommendation: Do not recommend, same Policies and Procedures for all program participants. March 2,2009 Keyser Marston Associates Page 8 4 RECEIVED FROM AS PUBLIC RECORD FOR COUNCIL MEETING OF CITY CLERK FICE JOAN L FLYNN,CITY CLERK Market Rate Resale Upon Death of Owner • Existing Policy: Home remains subject to income and affordability covenants. • Issue: Home can be resold at market price. Insurance policy acquired to provide revenue to replace home. • Staff Recommendation: Maintain existing restrictions. March 12009 Keyser Marston Associates Page 9 3 x? b Maintain List of Interested Buyers 04, • Existing Policy: No interest list is compiled. • Issue: City should create and maintain an interest list. • Staff Recommendation: City will create an interest list. Home owner will remain responsible for finding and qualifying home buyers. March 2.2009 Keyser Marston Associates Page 10 L� 5 AS El1BL?Cf ti`=.9ORD FOR COUNCIL MEETING OF— CITY CLERK ICE JOAN Lr FLYNN,CITY CLERK Length of Covenants d << r • Existing Policy: Restart covenant upon resale • Issue: Establish one covenant period with no restart • Staff Recommendation: Apply the no restart policy on a going forward basis only March 2.2009 Keyser Marston Associates Page I I County of Monterey Inheritance Rental Policy Same as Huntington Beach's proposed change A Asset Test 1. 30%of the purchase price 2.25%of current median income 3. 6 months of living expenses based on household size A Capital Improvements Only if they do not exceed maximum sales price o Refinancing Currently 100%. Will revise downward due to increase in foreclosures. March 2.2009 Page 12 6 City of San Francisco © Median Income Set Lower/Maximum Resale Price Median Income set at 100%instead of 120%. Maximum resale currently for a 4 bedroom in San Francisco is $335K, Cape Ann is $489K. o Asset Test 10% of all assets between $30K and $130K added to household Income. 35% of all assets over $130K added to household Income. • 50 Year Restriction The 50 year restriction on BMR units restarts after each sale. March 2,2009 Page 13 City of San Francisco Capital Improvements Setting median income at 100% allows reimbursement of Capital Improvements, capped at 7% and must be approved in advance. • Rental Only a six month hardship rental provision instead of the proposed change in Huntington Beach's policy of one year. ® Refinance Can refinance with cash out only up to the amount unit was originally purchased for. March 2,2009 Keyser Marston Associates Page 14 7 CAPE ANN ' �,. CIL ME)�iA�t FUpTsu �;LERK G�a�Z COTTAGE LOCATION PLAN PRICE 85 2BLE 18830 Coolwater Lane $286,290 86 2AL 18834 Coolwater Lane $285,790 87 3BL 18838 Coolwater Lane $313,990 88 3AL 7469 Shelter Cove Circle $312,490 89 2AR 7465 Shelter Cove Circle $285,790 90 1AR 7461 Shelter Cove Circle $255,790 91 2BR 7457 Shelter Cove Circle $285,790 92 3BR 7453 Shelter Cove Circle $313,990 93 3AL 18817 Coolwater Lane $313,990 94 1BL 18813 Coolwater Lane $255,790 95 2BRE 18809 Coolwater Lane $286,790 Prices effective 2/04/00 and are subject to change. 18877 Breezy Lane.Huntington Beach, CA 92648•(714)842,0839 Recorded in the County of Orange, California Gary L. Granville,Clerk/Recorder RECORDING REQUESTED BY: 1111111111111111111111111111111111111111111111111111111 No Fee FIRST AMERICAN TITLE CO. ) 19990214033 3:59pm 03/23/99 AND WHEN RECORDED MAIL TO: 005 1�01236311 12 City of Huntington Beach D02 13 6.00 36.00 0.00 0.00 0.00 0.00 2000 Main Street ) Huntington Beach, CA 92648 ) Attn: City Clerk ) A ► o597 (Qm PSG. (Space above for Recorders use) This document is exempt from recording fees pursuant to Government Code Section 27383. DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) THIS DECLARATION OF CONDITIONS; COVENANTS AND RESTRICTIONS FOR PROPERTY (the "Declaration") is made as of /4, , 1999, by and between WL HOMES LLC, a Delaware limited liability company (the "Covenantor") , and THE CITY OF HUNTINGTON BEACH, a SCalifornia municipal corporation (the "City" or "Covenantee") . t RECITALS A. Covenantor has received zoning approval from the City for �g the construction of one hundred forty-six (146) detached condominium units located on the northern and eastern corners of Promenade Parkway and Seagate Drive in the City of Huntington flnU a Beach, as described in the "Legal Description of the Property" which is attached hereto as Exhibit "A" and incorporated herein by .19 this reference (the "Property") . a � B. City has, as a condition of such approval, required Covenantor to subject each of the condominium units constructed on the Property to certain covenants, conditions, and restrictions. s � The execution and recordation of this Declaration is intended to IREfully satisfy that condition. NOW, THEREFORE, the parties hereto agree and covenant as lag follows: 1. Affordability Covenants. Covenantor agrees for itself and its successors and assigns, and every successor to Covenantors interest in the Property, or any part thereof, that for thirty (30) years from the date the first certificate of occupancy is issued for a condominium unit in the Property (the "Expiration Date") : EVERY PAGE OF THIS DOCUMENT SHALL BE AFFIXED WITH THE SEAL OF THE CITY OF This document ��1Is1 soyl�e2s for the HUNTINGTON DEAN° official buM619SBOfirle' "199 (=pt-Gov9mnwnt Agency cr Huntington Berr � .ch, as contem- CONNIE 13RKVVAY CITY OF HUNTINGTON BEACH r_ sted under G.fnr-�;zamant Code -Eroc way, MEy--Clerk �e Brockway,cny jerk Sac.6103 and -hould be recorded free o4 charge. �P y City Clerk piputym blow, ,. (a) The Property shall only be owned and occupied by Covenantor or by "Moderate Income Households . " Moderate Income Households shall mean persons or families earning not more than One Hundred Twenty Percent (1201i) or less of the Orange County median income, adjusted for appropriate family size, as published by the United States Department of Housing & Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093 , or a successor statute . (b) The Property shall only be sold at an "Affordable Housing Cost" to Moderate Income Households . Affordable Housing Cost shall mean the permitted gross sales prices of the condominium units as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose . (c) The covenant contained in this Section 1 shall run with the Property and shall automatically terminate and be of no further force or effect upon the Expiration Date. 2 . Transfer of Property. No transfer of the Property shall occur until the City determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser' s principal residence, (b) that the proposed purchaser is a Moderate Income Household, and (c) that the proposed transfer occurs at an Affordable Housing Cost . In the event that Covenantor (including successors and assigns) desires to sell the Property, Covenantor shall send written notice thereof to the City at the following address : City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser' s intent with respect to his/her/its residency of the Property and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price . The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms . In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14) days after submission of a completed form. If the City fails to approve or disapprove a submission within such fourteen (14) day period, the City shall be deemed to have approved such transfer in accordance with the foregoing. Prior to conveyance of the Property, each approved 18324.181-3332.FCM 012199 -2- purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that the purchaser buying the Property may only sell the unit at an Affordable Housing Cost to a Moderate Income Household, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased, except as approved by the City in the case of hardship. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor' s sale of the Property, provided that the Covenantor shall not be obligated to incur any out-of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance . THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIG'i OF COVENANTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TARING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTLING THE TRANSFER PRICE, THE PRIMARY OBJECTIVE OF THE CITY AND THIS DECLARATION IS TO PROVIDE HOUSING TO MODERATE INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. ,&s�� 1,A) coyknantorls Initials The covenant contained in this Section 2 shall run with the Property and shall automatically terminate and be of no further force or effect upon the Expiration Date. 3 . Non-Discrimination Covenants . Covenantor covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. Covenantor and its successors and assigns shall refrain from restricting the rental or lease (if permitted by Covenantor 1B324.181-3332.FQ4 012199 -3 and Covenantee) or sale of the Property on the basis of race, color, religion, sex, marital status, national origin, or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause : (a) In deeds : "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators .and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. " (b) In leases : "The Lessee herein covenants by and for himself and herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, that this lease is made and accepted upon and subject to the following conditions : "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased. " (c) In contracts : "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, lessees, subtenants, sublessee or vendee of the premises . " Nothing in this Section 3 shall be construed to authorize the rental or lease of the Property or any condominium unit thereon, if such rental or lease is not otherwise permitted or approved in accordance with the terms and provisions of this 18324.181-3332.FCM 012199 -4- Declaration. The covenants in this Section 3 shall run with the Property. 4 . Covenants Do Not Impair Lien. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Declaration shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest . 5 . Covenants For Benefit of City. All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of the Covenantee for the entire period during which time such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or in equity at any time in perpetuity. 6 . Subordination. Notwithstanding any other provision hereof, the provisions of this Declaration shall be subordinate to the lien of the First Lender' s Deed of Trust and shall not impair the rights of the First Lender, or such lender' s assignee or successor in interest, to exercise its remedies under the First Lender' s Deed of Trust in the event of default under the First Lender' s Deed of Trust by the borrower. Such remedies under the First Lender' s Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure . After such foreclosure or acceptance of a deed in lieu of foreclosure, the covenants of this Declaration shall be forever terminated and shall have no further effect as to the Unit foreclosed on or any transferee thereafter; provided, however, if the holder of such First Lender' s Deed of Trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure, this Declaration shall automatically terminate upon such acquisition of title, provided that (i) the City and Covenantor have been given written notice of default under such First Lender' s Deed of Trust, and (ii) the City or Covenantor shall not have cured or commenced to cure the default within such 30-day period and given its firm commitment to complete the cure in form and substance acceptable to the First Lender. This Declaration shall not diminish or affect the rights of the United States Department of Housing and Urban Development ( "HUD" ) , FNMA, or the Veterans Administration ( "VA" ) , as and if applicable, under the First Lender' s Deed of Trust . 18324.181-3332.FCM 012199 -5- Notwithstanding any provision in this Declaration to the contrary, all of the provisions of this Declaration shall terminate and have no further force and effect upon the occurrence of one of the following events : (i) Title is acquired by HUD, VA, FNMA or another party upon foreclosure of a deed of trust insured by HUD or guaranteed by VA; (ii) Title is acquired by HUD, VA, FNMA or another party by a deed in lieu of foreclosure of a deed of trust insured by HUD. or guaranteed by VA; or (iii) a deed of trust insured by- HUD is assigned to HUD. 7 . Deed of Trust. Each Unit in the Property shall, be encumbered by a recorded deed of trust naming as beneficiary both the Covenantor and Covenantee . The deed of trust (a sample form is attached hereto as Exhibit "B" ) shall secure the obligation of each owner of a Unit to reimburse either the Covenantor or Covenantee, as appropriate, for any costs paid for from that certain WL Homes Trust Account, defined in the Reimbursement Agreement, dated -ekjj�ut ,� U , 1999, between WL Homes LLC and the City, to cure a def ult by such owner under a purchase money loan for the unit and/or deed of trust securing same . 8 . Counterparts . This Agreement may be executed in a number of counterparts, each of which shall be an original, but all of which shall constitute one and the same document . [Signatures and Jurats to follow] 18324.181-3332.FCM 012199 -6 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above . COVENANTOR: COVENANTEE : WL HOMES LLC, CITY OF HUNTINGTON BEACH a Delaware limited liability a California municipal company corporation dba JOHN LAING HOMES (CALIFORNIA) By: U"' By: L. EDGC MB Mayor Divisional President Orange County, California ATTEST: 1 By: Connie Brockway MAR E BROWNE City Clerk B , V y _- Deputy City Clerk APPROVED AS TO FORM: City At tzorsy REVIEWED AND APPROVED: 1 City ministrator INITIATED AND APPROVED: /' ", -740, Pla ning D ect r 18324.181-3332.FCM 012199 - h.. STATE OF CALIFORNIA ) ) ss . COUNTY OF ORANGE ) On J-AtJ. 22.ND 1999, before me, the undersigned, a Notary Public in and for said State, personally appeared L. J. EDGCOMB and MARIANNE BROWNE personally known to me (^r r,r^.rod t;^ m6; t__b_____ a &) to be the person whose name =w=��`-y-*�r r r� r-�i j a'e i e�^i ev+ is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the persons or the entities upon behalf of which the person acted executed the instrument . WITNESS my hand and official seal . 8.GENNARO Commw n 01089201 -�s Nwa y F�®o—Cavarda Sign ure of Notary Public Orange county MY Comm.Expkes Mar 3,20M (S EA%j) STATE OF CALIFORNIA ) ss . COUNTY OF ORANGE ) On 1999 , before me, the undersigned, a Notary Public in and for said State, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person- whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the persons or the entities upon behalf of which the person acted executed the instrument . WITNESS my hand and official seal . Signature of Notary Public (SEAL) 18324.181-3332.FCM 012199 -8 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT �' State of County of On before me, .L//� Date Name and Title of Officer(e.g..'Jane e,Notary Public') personally appeared Name(s)of Signer(s) ❑personally known to me-OR-0�proved to me on the basis of satisfactory evidence to'be the persorKo ?� whose nam s ' /ar' subscribed to the wi4iin instrument and acknow ed me that- s a/the executed the same i /their uthorized capacity ies ,and that by ' thei ignature(s)on the instrument the person , ( or the ntity upon behalf of which the pers f(s acted, executed the instrument. I(Si ELIZhB=TH ERRING S{ i Commission# 1150021 Z WITNESS my hand and official seal. z ® No�ary Puolic-California > �I�'i •r> Orange County ri fury Comm.:xpires Aug 29,2001 1 Signature of Nota Public (j OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent f fraudulent removal and reattachment of this form to another document. Description of Attached Document Z6 Title or Type of Document: 4- J Document Date: / lr 7r Number of Pales: r i ne s -Other Than� S' rO Tha Named Awe. - Capacit ies) , laimed by Sign r s Signer's Name: IL Signer's Name: ❑ Individual ❑ Individual WCorporate Officer Corporate clyicer /y Title: Title(: ❑ Partner—❑ Lir6ed ❑ General ❑ Partner—❑ Li ited ffGeneral ?� ❑ Attorney-in-Fact ❑ Attorney-in-Fact ❑ Trustee ❑ Trustee ' ,yyy ❑ Guardian or Conservator . '- ❑ Guardian or Conservator ❑ Other: Top of thumb here ❑ Other: Top of thumb here CI Signer Is Representing: Si In Is Representing: 4y,k 0 1995 National Notary Association•8236 Remmet Ave.,P.O.Box 7184•Canoga Park.CA 91309-7184 Prod.No.5907 Reorder Call Toll-Free 1-800-76-6827 EXHIBIT "A" PROPERTY The Property shall mean and refer to that certain real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described as: All of Tract 15531, as shown on a Map recorded in Book 771, Pages 26 to 32, inclusive, of Miscellaneous Maps, Records of Orange County, California. 18324.181-3332.FCM 012199 -9- Order No. Escrow No. !� Loan No. WHEN RECORDED MArL TO: SPACE ABOVE THIS LINE FOR RECORDER'S USE DEED OF TRUST WITH ASSIGNMENT OF RENTS (LONG FORM) This DEED OF TRUST,made between herein called TRUSTOR, whose address is FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, herein called TRUSTEE, and WL HOMES LLC, a Delaware limited liability company, dba JOHN LAING HOMES (CALIFORNIA) and THE CITY OF HUNTINGTON BEACH, a California municipal corporation, herein called BENEFICIARIES, WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that property in the City of Huntington Beach, County of Orange, State of California, described as: See Exhibit "A" attached hereto together with the rents, issues and profits thereof, subject, however, to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits for the purpose of securing (1) payment of the sum of $ ,with interest thereon according to the terms of a promissory note or notes of even date herewith made by Trustor, payable to order of Beneficiary, and extensions or renewals thereof, (2)the performance of each agreement of Trustor incorporated by reference or contained herein and (3) payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust. A. To protect the security of this Deed of Trust, Trustor agrees: 1) To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon, not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation of law;to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably necessary, the specific enumerations herein not excluding the general. 2) To provide, maintain and deliver to Beneficiary Fire Insurance satisfactory to and with loss payable to Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order as Beneficiary may determine, or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee: and to pay all costs and expenses, including cost of evidence of title and attorney'e fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed. EXHIBIT "B" (CONTINUED ON NEXT PAGE) 1193(1/94) 18324.181-3405.FCM 121.798 Page of 4) To pay; at least ten days before delinquency all taxes and assessments affecting said property, including assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be prior or superior hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may; make or do the same is such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees, 5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from date of expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed,the maximum allowed by law at the time when said statement is demanded. B. It is mutually agreed; 1) That any award of damages in connection with any condemnation for public use of or injury to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the Indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof;join in granting any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof. 4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The Grantee in such reconveyance may be described as "the person or persons legally entitled thereto". 5) That as additional security,Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues,and profits,including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, Including reasonable attorney's fees,upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 6) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby. After the lapse of such time as may then be required by law following tho recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale- Trustee may postpone sale of all or any portion of said property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed (CONTINUED ON NEXT PAGE) 1193(1/94) 1e324.1e1,340s.rCM 121799 Page of x EXHIBIT "A" PROPERTY The Property shall mean and refer to that certain real property located in the City of Huntington Beach, County of Orange, , State of California; more particularly described as : All of Tract 15531, as shown on a Map recorded in Book 771, Pages 26 to 32, inclusive, of Miscellaneous Maps, Records of Orange County, California .