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HomeMy WebLinkAbout2013-11-05; City Council; 21400; Authorizing Buena Vista 11 SubdivisionCiTY OF CARLSBAD - AGENDA BILL AB# 21,400 AFFORDABLE HOUSING AGREEMENT AUTHORIZING THE BUENA VISTA 11 SUBDIVISION TO UTILIZE SECOND DWELLING UNITS TO SATISFY INCLUSIONARY HOUSING REQUIREMENTS DEPT. DIRECTOR MTG. 11/5/13 AFFORDABLE HOUSING AGREEMENT AUTHORIZING THE BUENA VISTA 11 SUBDIVISION TO UTILIZE SECOND DWELLING UNITS TO SATISFY INCLUSIONARY HOUSING REQUIREMENTS CITY ATTORNEY OA/ DEPT. CED AFFORDABLE HOUSING AGREEMENT AUTHORIZING THE BUENA VISTA 11 SUBDIVISION TO UTILIZE SECOND DWELLING UNITS TO SATISFY INCLUSIONARY HOUSING REQUIREMENTS CITY MANAGER IA>A\ RECOMMENDED ACTION: That the City Council adopt Resolution No. 2013-248 approving an affordable housing agreement authorizing the Buena Vista 11 subdivision (CT 13-01) to utilize second dwelling units to satisfy Inclusionary Housing Ordinance requirements. ITEM EXPLANATION: The Buena Vista 11 subdivision project is located on the southwest corner of the intersection of Buena Vista Way and Valley Street. The Planning Commission has approved development of eleven single family dwellings on the 2.73 acres of land, along with two second dwelling units that were proposed to comply with the City's Inclusionary Housing Ordinance. The developer is seeking City Council approval of an Affordable Housing Agreement to allow construction of the second dwelling units as a housing alternative under the City's Inclusionary Housing Ordinance. The Inclusionary Housing Ordinance allows the Council to approve a housing alternative when that alternative supports specific housing policies and goals. Alternatives include, but are not limited to, acquisition and rehabilitation of affordable units, conversion of existing market units to affordable units, construction of special needs housing projects or programs (shelters, transitional housing, etc.), and the construction of second dwelling uni^. Approval ofthe housing alternative shall be based on findings that new construction would be infeasible or present unreasonable hardship in light of such factors as project size, site constraints, market competition, price and product type disparity, developer capability, and financial subsidies available. Due to the small size of the development and the very substantial financial subsidy that would be required to make two market rate units affordable, the developer has indicated that it would present an unreasonable hardship upon the development to require that two ofthe units be made affordable to a low income household. Therefore, the developer is proposing to construct and deed restrict two second dwelling units within the approved residential development to satisfy the inclusionary housing requirement. While the proposed second dwelling units will be newly constructed units and will be located within the market rate development as required, it is considered to be a housing alternative, as defined by Section 21.85.070 of the Inclusionary Housing Ordinance. Therefore, the alternative requires City Council approval. DEPARTMENT CONTACT: Frank Boensch 760-434-2818 frankboensch(5)carlsbadca.gov FOR CITY CLERKS USE ONLY. A COUNCIL ACTION: APPROVED A CONTINUED TO DATE SPECIFIC • DENIED A CONTINUED TO DATE UNKNOWN • CONTINUED • RETURNED TO STAFF • WITHDRAWN • OTHER-SEE MINUTES • AMENDED • Page 2 The developer's justification for constructing a housing alternative to satisfy the inclusionary requirement has been reviewed and is supported by the Housing Policy Team. Staff concurs with the developer that the small size of the new market rate development and the substantial subsidy required to make two ofthe units affordable to low income households would be financially difficult and present an unreasonable hardship. The Planning Commission has approved the construction of two second dwelling units in its approval of the development on April 15, 2013. Therefore, staff recommends that the City Council approve the proposed affordable housing agreement (see attached) to allow two second dwelling units within the market rate development as an alternative to satisfy the inclusionary housing requirement for the Buena Vista 11 subdivision. Prior to the issuance of a final map or issuance of any building permits for the project, the developer is required to enter into an Affordable Housing Agreement with the City that binds the developer to the specifics ofthe affordable housing project. The Agreement will require the second dwelling units be rented at an amount which is affordable to a low income household earning 70% or less ofthe San Diego County Area Median Income (AMI), and the tenant's income does not exceed 80% of AMI. It is requested that the Affordable Housing Agreement, attached as Exhibit 2, be approved by the Council in substantially the form presented and subject to final approval by the City Attorney. The approving resolution authorizes the Housing and Neighborhood Services Director to execute the Agreement on behalf ofthe City. FISCAL IMPACT: The Developer has made no request for financial assistance for this project. Therefore, there will be no fiscal impact to the City. ENVIRONMENTAL REVIEW: The Planning Director has determined that the project is categorically exempt from the requirements of the California Environmental Quality Act. No further environmental review is required as part of the approval ofthis alternative to satisfy the City's Inclusionary Housing Ordinance. EXHIBITS: 1. City Council Resolution No. 2013-248 ^ approving a request from KLC BV Carlsbad, LLC, to allow the use of second dwelling units to satisfy Inclusionary Housing Ordinance requirements for the Buena Vista 11 subdivision (CT 13-01) 2. Affordable Housing Agreement. .1 1 RESOLUTION NO. 2013-248 2 3 APPROVAL OF AN AFFORDABLE HOUSING AGREEMENT AUTHORIZING THE BUENA VISTA 11 SUBDIVISION TO UTILIZE SECOND DWELLING UNITS TO SATISFY INCLUSIONARY HOUSING 4 REQUIREMENTS. CASE NO: CT 13-01 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WHEREAS, on April 15, 2013, the Planning Commission approved the Buena Vista 11 subdivision (CT 13-01) for the development of 11 single family residences on property located on the southwest corner of the intersection of Buena Vista Way and Valley Street, including a proposal to provide two second dwelling units affordable to low income households per the City of Carlsbad's Inclusionary Housing Ordinance; and WHEREAS, the developer of the Buena Vista 11 subdivision (CT 13-01) has proposed to meet the project's Inclusionary Housing Ordinance requirement with an alternative housing solution which would result in the developer providing two second dwelling units within the market rate development which will be affordable to low income households; and WHEREAS, the Inclusionary Housing Ordinance allows, at the discretion of the City Council, a housing alternative when the proposed alternative supports specific housing policies and goals and a determination is made that the new construction would be infeasible or present unreasonable hardship; and WHEREAS, based upon the City Council's determination that it would be financially infeasible and would represent an unreasonable hardship upon the subject developer to make two of the single family residences within the subject development affordable to low income households and the proposed alternative to satisfy the inclusionary requirement through the construction of two second dwelling unit on the site of the market rate development does meet the goals of the Inclusionary Housing Ordinance and the City's Housing Element; and 3 1 WHEREAS, the City Council did hold a public meeting to consider the developer's 2 request to approve an affordable housing agreement to allow two second dwelling units to 3 satisfy the inclusionary housing requirement for the Buena Vista 11 subdivision (CT 13-01) 4 located on the southwest corner of the intersection of Buena Vista Way and Valley Street; and 5 WHEREAS, upon hearing and considering all testimony, if any, of all persons 6 desiring to be heard, said City Council considered all factors relating to the proposed 7 inclusionary housing alternative. 8 NOW, THEREFORE, BE IT HEREBY RESOLVED that the City Council of the City of 9 Carlsbad, California, does hereby find as follows: 10 1. The above recitations are true and correct. 11 2. The developer's proposal to provide two second dwelling units affordable 12 to low income households on the site of the market rate development as an alternative to 13 constructing two single family residences and making them affordable to low income 14 households to satisfy the inclusionary housing requirement for the Buena Vista 11 subdivision 15 (CT 13-01) is consistent with the goals and objectives, and serves the priorities of, the City of 16 Carlsbad's Housing Element, Consolidated Plan, the Inclusionary Housing Ordinance, and the 17 Carlsbad General Plan. 18 3. As required by Section 21.85.070 of the Carlsbad Municipal Code, the City 19 Council hereby finds that the requirement to construct two single family residences and make 20 them affordable to low income households within the Buena Vista 11 market rate development 21 (CT 13-01) would be financially infeasible and would present an unreasonable hardship on the 22 developer due to the development's small project size of 11 units and the substantial subsidy 23 required to make those two units affordable to a low income household. 24 4. That based on the information provided within the City Council staff 25 report and testimony presented during the public meeting of the City Council, the City Council 26 hereby approves an Affordable Housing Agreement, in substantially the form presented and 27 subject to final approval by the City Attorney, to allow two second dwelling units on the site of 28 -2- 10 11 12 13 14 1 the market rate development as an acceptable housing alternative to providing two single 2 family residences affordable to low income households to satisfy the Inclusionary Housing 3 requirement for the Buena Vista 11 subdivision. 4 5. That the Housing and Neighborhood Services Director or his or her 5 designee is authorized by the City Council to execute all documents related to approval of the 6 subject alternative inclusionary housing proposal, including but not limited to an Affordable 7 Housing Agreement in substantially the form presented to the City Council and subject to final 8 approval of said Agreement by the City Attorney. 9 /// /// /// /// /// 15 /// 16 /// 17 18 19 20 21 /// 23 24 25 26 27 28 /// /// /// 22 /// /// /// /// /// -3- C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City of Carlsbad on the 5*^ day of November, 2013, by the following vote to wit: AYES: NOES: Council Members Hall, Packard, Wood, Blackburn and Douglas. None. ABSENT: None. ATTEST: BARBARA ENGLESONT^ Clerk Recording Requested by: City ofCarlsbad When Recorded Mail to: City ofCarlsbad City Clerk's Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad. Califomia 92008 (Space above for Recorder's Use) AFFORDABLE HOUSING AGREEMENT (Second DweUing Units) THIS AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into this day of Mft\/ffM/5^ 20 13 . by and between the CITY OF CARLSBAD, a municipal corporation ("City"), and KLC BV Carlsbad LLC , a Califomia limited liabilitv company ("Developer"), with reference to the following: RECITALS A. Developer is the owner of certain real property in the City of Carlsbad, County of San Diego, State of Califomia, described in "Exhibit A", which is attached hereto and incorporated herein by this reference, and which is the subject of a Tentative Map CT 13-01 , and Planned Development Permit PUD 13-03 , which provides conditional approval of the constmction of eleven (11) single family dwelling units ("Project"). B. Condition No. i5_ of Planning Commission Resolution No. 7006 , states that this Affordable Housing Agreement shall be entered into between the City and the Developer as a means of satisfying the Developer's affordable housing obligation, as such is defmed under Chapter 21.85 ofthe Carlsbad Municipal Code ("Affordable Housing Obligation"). Planning Commission Resolution No. 7006 provides that the affordable housing obligation will be satisfied by applying the requirements set forth in this Agreement for constmction of second dwelling units on affordable housing lots ("Affordable Housing Lots"). The Affordable Housing Lots which are subject to this Agreement are: Lots 9& 10 of Carlsbad Tract No. CT 13-01 in the City of Carlsbad, County of San Diego, State of Califomia, according to Map No. filed with the County Recorder of San Diego County on . C. Developer intends to constmct the required inclusionary units concurrent with the project's market units that are also identified on Exhibit "A". The Affordable Housing Lots shall be subject to this Agreement and this Agreement shall be recorded on the title for each Affordable Housing Lot. NOW, THEREFORE, incorporating the foregoing Recitals and in consideration of the mutual covenants contained herein, the parties agree as follows: 1 CA 2/5/2013 1. The Recitals Are Tme And Correct. 2. THE AFFORDABLE HOUSING OBLIGATION SHALL BE SATISFIED BY CONSTRUCTION OF SECOND DWELLING UNITS. Performance under this Agreement satisfies the Developers' obligation for affordable housing under Chapter 21.85 of the Carlsbad Municipal Code as applied to the land in Tentative Map CT 13-01 . by Condition No. J5_ in Planning Commission Resolution No. 7006 and any other applicable condition of approval. 3. SECOND DWELLING UNITS. (a) Constmction of Second Dwelling Units. Developer shall at the time a residential stmcture is constmcted on the Affordable Housing Lot, include in such residential stmcture a Second Dwelling Unit as defined under and subject to the requirements contained in Municipal Code Section 21.850.070. (b) Restriction on Rental of Second Dwelling Unit. The maximum monthly rent for any Second Dwelling Unit, subject to this Agreement, which becomes rented or leased shall not exceed an amount of 1/12th of thirty percent (30%) of the gross monthly income of a low-income household, adjusted for household size, at seventy percent (70%) of the San Diego County median income, as such median income is published by the United States Department of Housing and Urban Development from time to time. For purposes of this Agreement, "Rent" shall include a utility allowance as established and adopted by the City of Carlsbad Housing Authority, as well as all required monthly payments made by the tenant to the lessor in connection with use and occupancy of a housing unit and land and facilities associated therewith, including any separately charged fees, utility charges, or service charges assessed by the lessor and payable by the tenant (but not including fees and charges resulting from any default by the tenant or damage caused by the tenant, or fees or charges paid by the tenant to third party utilities or other providers). A sample schedule showing the calculation of the maximum rental amount as for 2013 is attached to this Agreement as Exhibit "B". (c) Restriction on Tenant Income. The Affordable Units shall be available to households with incomes not exceeding 80% of the median income for San Diego County, adjusted for actual household size. (d) Declaration. Developer shall require the purchaser from Developer of an Affordable Housing Lot upon which a Second Dwelling Unit has been constmcted to sign an affidavit or declaration under penalty of perjury, in a form prescribed by the City Housing and Neighborhood Services Director, which states that if the Second Dwelling Unit on the affordable housing lot is rented that it shall be rented at a monthly rental rate not to exceed the rate set forth in paragraph 3(b). Developer shall forward the original declaration to the City Housing and Neighborhood Services Director for maintenance in the City's files, and retain a copy for its own files in the event proof becomes necessary. (e) Deed Restriction. Prior to the sale of an affected lot, the Developer shall provide proof to the City Housing and Neighborhood Services Director that the language contained in Exhibit "C" has been included in each deed prior to the sale of an affected property and will mn with the land so as to restrict subsequent transfers. 2 CA 2/5/2013 4. REMEDIES Failure by the Developer to perform in accordance with this Agreement will constitute failure to satisfy the requirements of Chapter 21.85 of the Carlsbad Municipal Code and Condition No. 15 of Planning Commission Resolution No. 7006 . Such failure will allow the City to exercise any and all remedies available to it including but not limited to withholding the issuance of building permits for the lots shown on Carlsbad Tract No. CT 13-01 . 5. HOLD HARMLESS Developer will indemnify and hold harmless (without limit as to amount) City and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all damage (including attorneys' fees and expenses) sustained or incurred because of or by reason of any and all claims, demands suits, actions, obtained, allegedly caused by, arising out of or retaining in any maimer to Developer's actions or defaults pursuant to this Agreement, and shall protect and defend Indemnitees, and any of them with respect thereto. This provision shall survive the term of this Agreement. 6. INSURANCE Developer shall obtain, at its expense, commercial general liability insurance for development of the Project naming Indemnities as additional insureds with aggregate limits of not less than one million dollars ($1,000,000) purchased by Developer from an insurance company duly licensed to engage in the business of issuing such insurance in the State of Califomia, with a current Best's Key Rating of not less than A-:VII, such insurance to be evidenced by an endorsement which so provides and deliver to the City Clerk prior to the issuance of any building permit for the Project. 7. NOTICES All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, retum receipt requested to the party to receive such notice at the address set forth below: TO THE CITY: City of Carlsbad Housing & Neighborhood Services Department Attn: Housing & Neighborhood Services Director 1200 Carlsbad Village Drive Carlsbad, Califomia 92008 TO THE DEVELOPERS: KLC BV Carlsbad. LLC 101 S. Kraemer Blvd. Ste 136 Placentia. CA 92870 Any party may change the address to which notices are to be sent by notifying the other parties of the new address, in the manner set forth above. 8. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties and no modification hereof shall be binding unless reduced to writing and signed by the parties hereto. 3 CA 2/5/2013 9. DURATION OF AGREEMENT This Agreement shall terminate and become null and void upon repeal, termination, or modification of any applicable ordinance which act would render the Affordable Housing Obligation unnecessary or unenforceable. The restriction set forth in Paragraph 3(b) above shall terminate as to the Affordable Housing Lot at such time as the Second Dwelling Unit on the Affordable Housing Lot has reached the end of its useful life, which is assumed to be not less than 55 years from the date of completion of original constmction. 10. SUCCESSORS This Agreement shall benefit and bind Developers and any successive owners of Affordable Housing Lots. IL SEVERABILITY In the event any provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless, be and remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the day and year first above written. DEVELOPE Authorized Signatory Dated: 9//^/&^f3 By: Name: Title: CITY OF CARLSBAD By: ffol^^'feO Debbie Fountain Housing & Neighborhood Services Director Dated: \ \ Dated: (Chairman, president or vice-president and secretary, assistant secretary, CFO or assistant treasurer must sign for corporations. Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the office(s) signing to bind the corporation.) (If signed by an individual partner, the partnership must attach a statement of partnership authorizing the partner to execute this instrument.) (Proper notarial acknowledgment of execution by Developer must be attached.) APPROVED AS TO FORM: Celia A. BreWer, jCity Attorney Dated: Jane Mobaldi, Assistant City Attomey CA 2/5/2013 ACKNOWLEDGMENT State of California County of Orange On t>^|><)ewb€^ iCg, i5 before me. Jov F. Yukawa- appeared. Idfci-p ^- t^ihY^dPF who proved to i-Pong. Notarv Public personally me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Cofwnittioii # 19S2245 Notary PubHc - CaWoriiia ^ MY Comm. Expirw Sop 15.20151 SECRETARY CERTIFICATE FKC LLC a California limited liability company I, Mark J. Francuz, do hereby certify that I am the duly elected and qualified Secretary and keeper of the records of FKC LLC, a Califoraia limited liability company ("Company") and the following is a true and correct copy of the resolutions duly adopted by the Managers on September 13, 2013 pursuant to the provisions of the FKC LLC Second Amended and Restated Operating Agreement, and that such resolutions are now in full force and effect: RESOLVED: That BRETT S. ALBRECHT (the "Authorized Person"), as an employee of the Company, is hereby authorized and directed to do all acts necessary and proper on the part of the Company to negotiate, facilitate, draft and execute on behalf of KLC BV CARLSBAD, LLC, which is wholly owned and controlled by the Company, any and all: (i) applications and submittals to The City of Carlsbad, (ii) agreements, instmments and documents related to affordable housing issues, covenants and requirements, and (iii) other agreements, instmments and documents by and between The City of Carlsbad and KLC BV CARLSBAD, LLC, which are related to the development and entitlement of that certain real property that is the subject of that certain Tentative Map CT 13-01 in the City of Carlsbad, CA. KLC BV CARLSBAD, LLC, a Califoraia limited liability company, is the Owner of such real property and the Company is the sole Member and Manager of KLC BV CARLSBAD, LLC. Such development and entitlement applications, submittals, negotiations and agreements shall be on such other terms and conditions deemed reasonable and appropriate by the Authorized Person and he shall be further authorized to modify and amend such instmments and agreements at such times and on such terms and conditions as he deems reasonable and appropriate. RESOLVED: That BRETT S. ALBRECHT, is hereby authorized to do and perform any and all such acts on behalf of the Company, including execution of any and all deeds, documents, instmments and certificates, as such Authorized Person deems appropriate, necessary or advisable to carry out the purposes and intent of the foregoing resolution. IN WITNESS WHEREOF, I have hereunto subscribed my name as Mark J. Francuz, Secretary this 13th Day of September, 2013. FKC LLC a Califomia limited liability company Its Manager By: ;^^J,y, A^Pfuny^*^^ Mark J. Francuz, §0cretary FKC LLC - Secretary Certificate - Carlsbad, CA EXHIBIT A LEGAL DESCRIPTION OF PROPERTY THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL 1: THAT PORTION OF TRACT 1211 OF CARLSBAD LANDS, IN THE CITY OF CARLSBAD, IN THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1661, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 1, 1915, DESCRIBED AS FOLLOWS: BEGINNESfG AT A POINT IN THE CENTERLINE OF VALLEY STREET, DISTANT THEREON NORTH 34° 33' WEST 531.19 FEET FROM THE POINT OF INTERSECTION OF SAID CENTERLINE OF VALLEY STREET AND THE NORTHEASTERLY PROLONGATION OF THE SOUTHEASTERLY LINE OF SAID TRACT 121, SAID POINT BEING THE SOUTHEASTERLY CORNER OF LAND CONVEYED TO JOHN J. MERRITT AND WIFE BY DEED RECORDED IN BOOK 339, PAGE 456, OF OFFICIAL RECORDS; THENCE ALONG SOUTHEASTERLY LINE OF SAID MERRITT LAND, SOUTH 53° 27' WEST 193.4 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 23° 04' WEST 227.6 FEET TO THE NORTH BOUNDARY LINE OF CARLSBAD LANDS; THENCE ALONG SAID LAST MENTIONED LINE NORTH 89° 05' WEST, A DISTANCE OF 324.08 FEET MORE OR LESS, TO THE NORTHEASTERLY CORNER OF THE LAND CONVEYED BY SOUTH COAST LAND COMPANY, A CORPORATION, TO OCEANSIDE MUTUAL WATER COMPANY, A CORPORATION, BY DEED DATED AUGUST 29, 1922, AND RECORDED IN BOOK 899, PAGE 288 OF DEEDS; THENCE SOUTH 23° 04' EAST ALONG THE EASTERLY LINE OF THE LAND CONVEYED TO SAID OCEANSIDE MUTUAL WATER COMPANY, A DISTANCE OF 434.58 FEET TO A POINT; THENCE NORTH 5° 27' EAST A DISTANCE OF 298.6 FEET, MORE OR LESS, TO THE TRUE POINT OF BEGINNING. APN: 156-200-15-00 PARCEL 2: THAT PORTION OF TRACT 121 OF CARLSBAD LANDS, ACCORDING TO MAP THEREOF NO. 1661, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 1, 1915, DESCRIBED AS FOLLOWS: BEGINNE^G AT A POINT IN THE CENTERLINE OF VALLEY STREET, AS SHOWN ON SAID MAP DISTANT THEREON NORTH 34° 33' WEST, 531.19 FEET FROM THE POINT OF INTERSECTION OF SAID CENTER LINE OF VALLEY STREET, AND THE NORTHEASTERLY PROLONGATION OF THE SOUTHEASTERLY LINE OF SAID TRACT 12 L SAID POINT BEING THE SOUTHEASTERLY CORNER OF LAND 5 CA 2/5/2013 CONVEYED TO JOHN J. MERRITT AND WIFE, BY DEED RECORDED IN BOOK 339, PAGE 456, OFFICL\L RECORDS; THENCE ALONG THE SOUTHEASTERLY LINE OF SAID MERRITT LAND, SOUTH 55° 27' WEST, 193.4 FEET; THENCE NORTH 23° 04' WEST, 227.6 FEET TO THE NORTH BOUNDARY LINE OF SAID CARLSBAD LANDS; THENCE SOUTH 89° 05' EAST, ALONG THE SAID NORTHERLY LINE 173.8 FEET TO THE CENTERLINE OF SAID VALLEY STREET; THENCE SOUTH 34° 53' EAST, ALONG SAID CENTERLINE 137.0 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHERLY OF A LINE THAT BEGINS AT A POINT ON THE EASTERLY LINE OF THE ABOVE DESCRIBED LAND AT A POINT NORTH 34° 33' WEST, 58.5 FEET FROM THE SOUTHEASTERLY CORNER THEREOF AND RUNS WESTERLY TO A POINT ON THE WESTERLY LINE OF SAID LAND THAT IS NORTH 23° 04' WEST, 113.8 FEET FROM THE SOUTHWESTERLY CORNER THEREOF. APN: 156-200-01-00 PARCEL 3: THAT PORTION OF TRACT 121 OF CARLSBAD LANDS, ACCORDING TO MAP THEREOF NO. 1661, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MARCH 1, 1915, DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE CENTERLINE OF VALLEY STREET, AS SHOWN ON SAID MAP, DISTANT THEREON NORTH 34° 33'WEST, 531.19 FEET FROM THE POINT OF INTERSECTION OF SAID CENTERLINE OF VALLEY STREET, AND THE NORTHEASTERLY PROLONGATION OF THE SOUTHEASTERLY LINE OF SAID TRACT 121, SAID POINT BEING THE SOUTHEASTERLY CORNER OF LAND CONVEYED TO JOHN J. MERRITT AND WIFE, BY DEED RECORDED IN BOOK 339, PAGE 456, OFFICIAL RECORDS; THENCE ALONG THE SOUTHEASTERLY LINE OF SAID MERRITT LAND, SOUTH 55° 27' WEST, 193.4 FEET; THENCE NORTH 23° 04' WEST, 227.6 FEET TO THE NORTH BOUNDARY LINE OF SAID CARLSBAD LANDS; THENCE SOUTH 89° 03' EAST, ALONG THE SAID NORTHERLY LINE 173.8 FEET TO THE CENTERLINE OF SAID VALLEY STREET; THENCE SOUTH 341 33' EAST, ALONG SAID CENTERLINE 137.0 FEET TO THE POINT OF BEGINNING. EXCEPT THEREFROM THAT PORTION LYING NORTHERLY OF A LINE THAT BEGE^JS AT A POE^IT ON THE EASTERLY LINE OF THE ABOVE DESCRIBED LAND AT A POINT NORTH 34° 33' WEST, 58.5 FEET FROM THE SOUTHEASTERLY CORNER THEREOF AND RUNS WESTERLY TO A POE^T ON THE WESTERLY LINE OF SAID LAND THAT IS NORTH 23° 04' WEST 113.8 FEET FROM THE SOUTHWESTERLY CORNER THEREOF. APN: 156-200-02-00 CA 2/5/2013 EXHIBIT B MAXIMUM MONTHLY RENTAL AMOUNT San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area (MSA) Household Income Limits HUD ly/lethod Note: The following household income limits are adjusted for a high cost area as per the Federal Housing Act of 1937 and calculated using HCD methodology to comply with Health and Safety Code Sections 50052.5 and 50093. San Diego-Cai1sbad.San Marcos, CA MSA U.S. Department of Housing and Urt>an Development December 11,2012 Effective Date 2013 $ 72,300 Extremely Low Income Very Low Income 30% 35% 40% 50% Hshold Size Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00% Income Income Monthly Income Income Monthly Income Income Monthly Income Income Monthly ONE $16,950 $1,413 $423 $19,750 $1,646 $493 $22,600 $1,883 $565 $28,250 $2,354 $706 TWO $19,400 $1,617 $485 $22,600 $1,883 $565 $25,800 $2,150 $645 $32,250 $2,688 $806 THREE $21,800 $1,817 $545 $25,400 $2,117 $635 $29,050 $2,421 $726 $36,300 $3,025 $908 FOUR $24,200 $2,017 $605 $28,200 $2,350 $705 $32,250 $2,688 $806 $40,300 $3,358 $1,008 FIVE $26,150 $2,179 $653 $30,500 $2,542 $762 $34,850 $2,904 $871 $43,550 $3,629 $1,089 SIX $28,100 $2,342 $702 $32,750 $2,729 $818 $37,450 $3,121 $936 $46,750 $3,896 $1,169 SEVEN $30,050 $2,504 $751 $35,000 $2,917 $875 $40,000 $3,333 $1,000 $50,000 K167 $1,250 EIGHT $31,950 $2,663 $798 $37,250 $3,104 $931 $42,600 $3,550 $1,065 $53,200 $4,433 $1,330 Low Income 60% 65% 70% 80% Hshold Size Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00% Income Income Monthly Income Income Monthly income Income Monthly Income Income Monthly ONE $33,900 $2,825 $847 $36,700 $3,058 $917 $39,500 $3,292 $987 $45,150 $3,763 $1,128 TWO $38,700 $3,225 $967 $41,950 $3,496 $1,048 $45,150 $3,763 $1,128 $51,600 $4,300 $1,290 THREE $43,560 $3,630 $1,089 $47,200 $3,933 $1,180 $50,800 $4,233 $1,270 $58,050 $4,838 $1,451 FOUR $48,360 $4,030 $1,209 $52,400 $4,367 $1,310 $56,400 $4,700 $1,410 $64,500 $5,375 $1,612 FIVE $52,260 $4,355 $1,306 $56,600 $4,717 $1,415 $60,950 $5,079 $1,523 $69,700 $5,808 $1,742 SIX $56,100 $4,675 $1,402 $60,800 $5,067 $1,520 $65,450 $5,454 $1,636 $74,850 $6,238 $1,871 SEVEN $60,000 $5,000 $1,500 $65,000 $5,417 $1,625 $69,950 $5,829 $1,748 $80,000 $6,667 $2,000 EIGHT $63,840 $5,320 $1,596 $69,200 $5,767 $1,730 $74,450 $6,204 $1,861 $85,150 $7,096 $2,128 Moderate Income 90% 100% 110% 120% Hshold Size Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00% Annual Monthly 30.00% Income Income Monthly Income Income Monthly Income Income Monthly Income income Monthly ONE $45,550 $3,796 $1,138 $50,650 $4,221 $1,266 $55,700 $4,642 $1,392 $60,750 $5,063 $1,518 TWO $52,050 $4,338 $1,301 $57,850 $4,821 $1,446 $63,650 $5,304 $1,591 $69,400 $5,783 $1,735 THREE $58,550 $4,879 $1,463 $65,100 $5,425 $1,627 $71,600 $5,967 $1,790 $78,100 $6,508 $1,952 FOUR $65,050 $5,421 $1,626 $72,300 $6,025 $1,807 $79,550 $6,629 $1,988 $86,750 $7,229 $2,168 FIVE $70,300 $5,858 $1,757 $78,100 $6,508 $1,952 $85,950 $7,163 $2,148 $93,700 $7,808 $2,342 SIX $75,500 $6,292 $1,887 $83,900 $6,992 $2,097 $92,300 $7,692 $2,307 $100,650 $8,388 $2,516 SEVEN $80,700 $6,725 $2,017 $89,700 $7,475 $2,242 $98,650 $8,221 $2,466 $107,600 $8,967 $2,690 EIGHT $85,900 $7,158 $2,147 $95,450 $7,954 $2,386 $105,050 $8,754 $2,626 $114,550 $9,546 $2,863 Note: Income levels 80% and below are adjusted by a HUD high cost area allowance. This general income information is calculated from the U.S. Department of Housing and Urban Development (HUD) income figures. Specific program requirements may vary. Prepared by Affordable Housing Services Information, LLC Web: www.AHSinfo.com Phone (858) 832-1460 CA 2/5/2013 EXHIBIT C DEED RESTRICTION A Second Dwelling Unit has been constructed as part of this property, and shall be maintained and utilized in accordance with the requirements of Carlsbad Municipal Code Section 21.85.070 for the useful life of the main structure (estimated to be 55 years). The maximum monthly rent for the Second Dwelling Unit, if rented or leased, shall not exceed an amount equal to thirty percent (30%) of the gross monthly income of a low-income household, adjusted for household size, at seventy percent (70%) of the San Diego County median income as such median income is published by the United States Department of Housing and Urban Development fi'om time to time ("Affordable Units"). The Affordable Units shall be available to households with incomes not exceeding 70% of the median income for San Diego Countv. adiusted for actual household size. Prior to subsequent transfers of the property, seller shall require the purchaser to submit a signed affidavit or declaration under penalty of perjury on a form satisfactory to the City Housing and Neighborhood Services Director, to the Housing and Neighborhood Services Department, which acknowledges that the purchaser has read and understand the restrictions as they relate to the Second Dwelling Unit. CA 2/5/20: