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HomeMy WebLinkAbout1996-08-08; Housing Commission; MinutesMinutes of: HOUSING COMMISSION Time of Meeting: 6:OO P.M. Date of Meeting: Place of Meeting: August 8, 1996 CITY COUNCIL CHAMBERS CALL TO ORDER: Chairperson Calverley called the Regular Meeting to order at 6:Ol p.m. PLEDGE OF ALLEGIANCE: The pledge of allegiance was led by Commissioner Scarpelli. ROLL CALL: Present: Chairperson Calverley, Commissioners Escobedo, Noble, Rose, Sato, Scarpelli, Schlehuber, Walker, and Wellman Absent: None Staff Present: Evan Becker, Housing and Redevelopment Director Debbie Fountain, Senior Management Analyst Leilani Hines, Management Analyst Toni Espinoza, Acting Housing Program Manager APPROVAL OF MINUTES: ACTION: Motion by Commissioner Scarpelli, and duly seconded, to approve the Minutes of the Special Meeting of July 1, 1996, as submitted. Calverley, Escobedo, Noble, Sato, Scarpelli, Schlehuber VOTE: 6-0-3 AYES: NOES: None ABSTAIN: Rose, Walker, Wellman COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA: There were no comments from the audience. NEW BUSINESS: 1. RANCHO CARRILLO MASTER PLAN - VILLAGES E. J, AND K - Request for recommendation of approval of 26 affordable two and three-bedroom townhome units and 20 second dwelling units in order to satisfy the inclusionary housing requirements of Villages E, J, and K of the Rancho Carrillo Master Plan. Evan Becker, Housing and Redevelopment Director, reviewed the background of the request and stated that this portion of the Master Plan is being developed by UDC Homes, who is represented by Dennis Ferdig and Mike Howes of Hofman Planning. Mr. Becker stated that Staff is recommending approval of 26 affordable townhouse units in the Village E part of Carrillo Ranch, and also 20 second dwelling units which are a part of Villages J and K of the Carrillo Ranch Master Plan. HOUSING COMMISSION 8/26/96 Page 2 Mr. Becker reviewed the proposed affordable housing project(s) --the location, the type of units being proposed, the mix of those units, the affordability level and the term of affordability for the units; as well as the financial aspect of the project, both second dwelling units and the townhouse units. Mr. Becker explained that the developer is prepared to change the proposed projects as recommended by Staff. As noted in the report, Staff is proposing and recommending and the developer shift their mix of affordable units to 26 townhomes and 20 second dwelling units so that the majority of the units are within the affordable townhome project rather than the second dwelling units. In terms of these units and their affordability, in both cases the units would have to satisfy the requirements of the lnclusionary Ordinance. In the case of the for-sale units in Village E, the sale price would have to be affordable to someone who now makes $37,300 for a family of four (80% of the county median). Given the assumptions we would make at this time, the maximum purchase price would be roughly $105,000. Eventually when a project like this goes forward and the City enters into an affordable housing agreement, the agreement and the actual documents that cover the restricted price would be based on assumptions at that time or actual variables at that time. For example, the interest rate on mortgage loans that would be available to the low-income purchasers could influence what the maximum purchase price is. The basic formula, however, stays the same-- all housing costs that are included in buying that unit have to fit within 30 percent of the household income. If the area median income for the county goes up, then the maximum purchase price could go up. In the case of the second dwelling units, if the unit is rented (governed under the Second Dwelling Unit Ordinance) it must be rented at a rent that is affordable to a household at an income of less than 80 percent of the median. In the case of a two-person household that would be $637 based on the current median income figures. Mr. Becker explained that the mechanics of the purchase and the resale of the affordable units have not been established with the developer. Eventually all the rules will need to be established--all the documents, the second trust deeds, the purchase and sale agreement, and the resale restrictions will have to be codified. The affordability level that must be satisfied according to our Ordinance is established and would be maintained in the further development of the program and the Affordable Housing Agreement. Mr. Becker stated that Staff will probably recommend that we not try to push the continued resale of the townhomes to a low-income qualified buyer. These programs are relatively young, but in the early history it has been shown that they are extremely burdensome to administer. The City is not capable of handling the burdensome requirements of a restricted resale program right now. It is preferable to achieve a very similar result and mimic the marketplace, while achieving the same goal affordability-wise. The Commission will not be taking any action at this time on how this might work in terms of the City’s subsidy or what the mechanism is. These actions will be reviewed later by the Commission. The Staff is recommending this proposal based on its consistency with the three basic criteria the Housing Commission was established to review - consistency with needs and priorities, consistency with city policies and ordinances and the financial feasibility. Staff believes that the developer is offering a fair mix of different housing opportunities. While the developer started with a proposal to do a larger number of second dwelling units, there is a need to be sensitive to concerns that we do not want second dwelling units to dominate the inclusionary housing production. The developer has agreed to switch the majority of their units to the affordable townhomes and do the lesser number of second dwelling units. Staff believes that second dwelling units are an important ingredient in what we should be doing from an lnclusionary Housing standpoint. They also figure into this mix from an economic standpoint in relation to the for-sale townhomes, because the developer has taken the queue to do what is a fairly expensive product type in terms of affordable housing. They have gone not only to homeownership, but they have gone to more than the lower hung of homeownership with these townhouses. It is going to be expensive for them to do that, and Staff HOUSING COMMISSION 8/26/96 Page 3 believes that the mix of second dwelling units that are a little more supportable or do not require subsidy are a way of compensating somewhat for this step that they are taking to do the more expensive homeownership product. Lastly, the specifics of what these developers are proposing will eventually find themselves into an Affordable Housing Agreement, the basic elements of which will reestablish essentially what is shown in these charts in terms of the mix of units--the bedroom distributions, the actually affordability levels, and the tenure of affordability. In addition, there will then be a schedule for when these units have to be produced in relation to the market units, and if there is a proposal for any City assistance, that would also have to be considered, approved, and then incorporated into an Affordable Housing Agreement. Chairperson Calverley opened the item for discussion among the Commission members. Commissioner Wellman asked about the silent trust deed. Mr. Becker explained that the City puts up no money. Commissioner Wellman asked if the developer stays short financially. Mr. Becker replied that there is no answer until it is decided what deal is made. Mr. Becker gave an example where the developer may ask for support of half of the cash shortfall. Commissioner Wellman asked if the phases will increase in value. Mr. Becker answered that they should keep going up, and the City would want to take a position at the initial sale to have an interest in the unit. Commissioner Wellman asked for an example of what would happen if the market price goes down instead of up. Mr. Becker explained that first of all there is no appreciation. The City would then be short on its second trust deed position. The first trust deed holder is going to get paid off first. Mr. Becker stated that he knows of cities providing silent seconds who have been short paid on their silent seconds, especially during the late eighties, early nineties, because with silent seconds, the cities are in subordinated positions. This is true with Villa Lomas and Laurel Trees, and rental projects, or with single-family homes. The first mortgage lenders will not lend unless the City take a subordinate position. Mr. Becker pointed out that the City would not put cash into the project, so there would be a big cushion. Potentially it is paper or money the City would use to recycle to create another affordable housing opportunity. He said that it is unlikely that the City would lose any money. Commissioner Wellman commented that if the market does go down, the Commission would have less to recycle or possibly nothing to recycle. She requests the record to reflect what would happen on resales in a declining market. Mr. Becker stated that the mechanism has not be chosen on how to implement this. Commissioner Scarpelli asked if the equity would be lost to the purchaser before the City. Mr. Becker stated that would typically be the case. Commissioner Scarpelli asked about developer fees and waiving of fees. Mr. Becker said that the Commission has done it with Villa Loma and it can be recommended; but there is a lot of sensitivity to waiving fees. A lot of Carlsbad’s fee assistance is based on a nexus between the units that get built and the need to provide infrastructure and public facilities. It is a problem when the financing plans for these public facilities and infrastructure do not work--the money must come from somewhere. An alternative is that the fees are paid, but the City lend the developer money from another source to pay the fees. Mr. Becker explained other things related to the recycling approach, i.e., in the lnclusionary Program where the City is capturing the full amount of subsidy or discount below the market value of the unit, that is going to be generally a larger amount than it takes to subsidize a family in a homeownership purchase, considering the array of existing units that are out there. Mr. Becker stated that one advantage of this approach is that $43,000, for instance, can convert into probably more assistance than one unit, which is an advantage. If the City turns around and assists this exact same unit at this market price, it would take the same amount of money; but there is the opportunity to have people who are coming into the program to use the recycled money. They are looking for bargains and have the whole city to work with.. There are units in La Costa for sale that are far below this level and would require less subsidy. It could be an advantage. Commissioner Scarpelli asked that this issue be brought before the Commission when it is worked out. Mr Becker replied that it would. - HOUSING COMMISSION 8/26/96 Page 4 Chairperson Calverley asked if there was going to be a time limit on how long the buyer had to stay. Mr. Becker explained that there are a lot of ways that these programs work; for instance, one approach that is pretty typical is to have a minimum period of occupancy before getting any shared appreciation. Another approach is forgiveness of the silent second, or the buyer gets a greater portion of the shared appreciation the longer they stay. Mr. Becker said that the Commission will be part of the decision on this. Chairperson Calverley asked if the developer were to ask for financial assistance, if the issue would be brought before the Commission. Mr. Becker stated that it would. Commissioner Scarpelli asked whether it would be correct to assume that the cost of the improvements of the subsidized units are not going to be lowered. We wanted to know if the developer was going to down- grade appliances or down-grade the unit itself to bring it within that range. Mr. Becker stated that the lnclusionary Ordinance does not permit any substantial difference in the market units verses the affordable; but there is some leeway. Chairperson Calverley invited the applicant to speak. Mike Howes, Hofman Planning Associates, 2386 Faraday Avenue, Suite 120, Carlsbad, addressed the Commission and stated that he and Dennis Ferdig of UDC have worked with Staff over a year on this project and have made a number of revisions based on direction from Staff. As explained in the Staff report, this project is in compliance with the City’s affordable housing policies and ordinances, and provides a variety of ownership and rental units available to lower-income households. These affordable units will be distributed and integrated into all phases of development--that is both the single-family and the duplex development of this project, which has always been one of the major goals of Carlsbad’s affordable housing programs integrating the affordable units in with the market-rate units. Mr. Howes stated that this is a good proposal that is going to provide a great variety of affordable housing opportunities. In regard to Village E, per the Master Plan, they could have had up to 174 condo units on that site or apartment units. The developers chose instead to provide 104 duplexes which offer purchasers a chance to have a fee simple ownership of their units, rather than air space, which generally is more preferable to people. In regard to Commissioner Scarpelli’s question about the appliances, these units are going to be smaller than some of the other units. These units will have the basic carpet, stoves, cabinets, sinks etc.; buyers probably will not have the opportunity to upgrade similar to the market units. Commissioner Scarpelli asked Mr. Howes if they were going to go below the base of the market units with the costs on the essential items. Dennis Ferdig, UDC Homes, 438 Camino del Rio South, Suite 112B, San Diego, replied that they have not gotten that far into designing the units at this point. He assumed that they will be the same base and would offer upgrades that the lower-income households would not want to tack onto their mortgage because it would increase their payment. Commissioner Scarpelli addressed the concern that was brought up in the last approval of the second dwelling units and that is the market rentability of those units. Commissioner Scarpelli asked if the developer has a feel as to how they plan on marketing those second dwelling unit homes. will the developer be marketing to emphasize the fact that they can be rented or should be rents versus non rentals. Mr. Ferdig replied that they would definitely try to encourage the rentability of the units because the rent will help with the monthly mortgage payments. Commissioner Scarpelli asked if the developer’s marketing thrust will be in that direction, and Mr. Ferdig replied that yes it would. Commissioner Wellman asked both Messrs. Howes and Ferdig if they have built any second dwelling units before, and if they have any evidence to show that the second dwelling units will be rented at affordable rates by low-income people. Mr. Ferdig told of a personal experience he had with a unit with a bedroom, - HOUSING COMMISSION 8/26/96 Page 5 bathroom, and a sitting area--no kitchen where college persons and even a handicapped person rented the unit. Commissioner Wellman asked if there were plans for oversight down the line to show how the units are actually being used so the City knows how many of them are meeting the affordable requirements that the City has established. Mr. Ferdig stated that he is not aware of any unless it is an affidavit included with their tax bills to have them specify how it is being used and at what rate. He said that there is nothing set in concrete yet; and is not sure how the City is going to be able to monitor a program like that. Commissioner Wellman asked if there are homeowner associations with each of these three villages. Mr. Ferdig replied that there is a major association for everything in Carrillo Ranch, but Village E also has its own independent sub association. Commissioner Wellman asked about the monthly payments that the owners have to make to the various associations, and if it is factored into the affordability scale. Mr. Ferdig replied that in both cases it will be the same for a market rate as an affordable unit, and that is calculated in the $635 a month, depending upon whether it is a one person, or two-person family. He thinks it includes average utility costs as well because all of this has to be included to qualify as an affordable payment. Commissioner Escobedo asked what UDC stands for. Mr. Ferdig stated that UDC once stood for Universal Development Corporation, which was a public company nationwide. UDC has been in business since 1968. It is now just UDC, three initials, no periods, because there already is an Universal Development Corporation. Chairperson Calverley asked if Village E is a PUD and what kind of numbers are being used right now for the Village E market rate units. Mr. Ferdig replied that Village E is a PUD, and they are projecting market rate units to between $155,000 and $190,000. Chairperson Calverley asked about the unit mix of studios and one bedrooms. She requested that the developer explain how or why they cannot determine what the mix is. Mr. Ferdig replied that there are no studios or one bedrooms in Village E--they are all two and three bedrooms. The developer is trying to find out what is more marketable in Villages J and K; i.e., is it going to be easier to locate potential renters that would qualify as a single-person household or a two-person household that may want the bedroom and living area. Mr. Ferdig stated that they do not have the market data at this time. Chairperson Calverley asked whether there was a difference in the market-rate units and if the difference will solely be in the marketability of the second unit as far as if it is a studio or a one bedroom. Mr. Ferdig replied that there may be a difference, but they do not know if there is a difference yet. He does not know if the City has more low-income single households or more low-income two or three-person households. They tried to get some kind of spread between studio units and one-bedroom, two-bedroom, and three-bedroom to provide as wide a spectrum of affordable housing options as we could. Chairperson Calverley asked if the developer will have an answer prior to construction or make these decisions while building the models as phasing goes in. Chairperson Calverley asked when the Commission will know. Mr. Ferdig replied that they would have the answer probably with their final site development plans when they are all plotted, and that the mix could be adjusted at that time. Chairperson Calverley asked whether the Commission would have access to developer’s market studies. She stated that the feedback would help the Commission because there are projects coming on-board that are going to try to do second dwelling units. Mr. Ferdig stated that he would hope to be able to do that, but he does not deal in the marketing side, just the land development side. He is sure the developer will try to get as good a grasp to what the needs are because of absorption rates. Chairperson Calverley requested a copy of the report be sent to Mr. Becker. Commissioner Schlehuber asked if there is a minimum size for one-bedroom units in Carlsbad. He asked if there is a design specification for what meets a one-bedroom criteria. He wondered if the developer has considered doing one bedrooms that are generally on the 600 square foot size. He is concerned about - HOUSING COMMISSION 8/26/96 Page 6 placing studios in a residential home environment rather than in apartment environments, where he believes they are better suited. At this point the developer has no marketing material on this matter. Commissioner Schlehuber asked Mr. Becker if there is a minimum threshold for an affordable unit. Mr. Becker replied that the lnclusionary Ordinance says that what comes out of the inclusionary program should be related to what we have identified as our needs in the Housing Element which means that the inclusionary ordinance needs to produce a variety of units not just studios, or SROs. The lnclusionary Ordinance is intended to implement the Housing Element, and the Housing Element has 52 different housing programs. It includes alternative shelter, which does identify SROs or Managed Living Units (MLUs), in Carlsbad. It includes studios and senior housing and also programs other than new construction. Mr. Becker stated that the City can be within the bounds of the lnclusionary Ordinance by doing a lot of different types of housing, including small units. The SROs, which were very important forms of shelter, began at well under 100 square feet for downtown working populations. They then evolved into what are now--generally 200 to 300 square feet. With 350 to 400 square feet with a kitchen and full bath, the unit is certainly more than what is considered an SRO room and a reasonable studio living-type situation. This unit may not be appropriate for everybody, but it is appropriate for some. In connection with the second dwelling unit program, Mr. Becker stated that the smaller end (maximum is 640 square feet), units that are down toward the studio end are more typical of what is out there in terms of the granny flat type of unit. He stated that a survey would probably indicate that 400 square feet is probably pretty consistent as a granny flat, which is created from market demand. Commissioner Schlehuber asked if there a minimum square footage amount, where the bar of the threshold is set, and if studios really meet the threshold bar for affordable units. Mr. Becker replied that the way the Housing Element guides us, that from a policy and program standpoint that studios, small units, even managed living units, which are less than the studio size, are all totally legitimate parts of the mix. He added that "putting all of our eggs in one basket" to try to get the 1,400 by doing the majority that way, is not being responsive to the Housing Element. Those smaller units, therefore fit into the mix. Commissioner Schlehuber asked again where to set the limit, at what point does the Commission request a stable occupancy, something without a high turnover, something that fits well. Mr. Becker replied that the smaller second dwelling units--the studio types--with a more transitory type occupancy, is serving a need and is perfectly appropriate. It is not appropriate if it gets to the point of moving the Commission too far away from doing family units, which have to be in the mix as well. Granny flats evolved into a very useful of affordable shelter; and the transitory nature and small size are features of these units. The evolution of these units has led to California state laws governing them. Commissioner Schlehuber asked if there are other developments in Carlsbad that meet the SRO, studio need. Mr. Becker replied that there are not, even though there have been attempts. He added that the second dwelling unit type of approach to that smaller unit for somebody that needs it for six months or a year may be an alternative that Carlsbad supports more than a 50-unit SRO or managed-living unit project. Commissioner Scarpelli pointed out that the market is going to drive the mix and that the developer probably will not produce this project if there is not a need. Commissioner Scarpelli agreed that the Commission needs to maintain a strong balance and continue to watch that balance. He suggested that the Commission look at the fact that the two projects brought before the Commission thus far are the second dwelling units are in fact doing for the City what could not be done with SROs, i.e., there will be an element of people who need that studio andlor who need that smaller unit, and certainly should not be deprived of it in this city. Commissioner Noble stated that in the six years he has been on the Planning Commission he recalls only one second-dwelling unit being approved. He pointed out that the marketing has to be in place. He told of a personal experience of the need for these units. He pointed out that the City does have a standard as he understands it--a studio can be no smaller than 474 square feet and one bedrooms can be no smaller than 612. He also stated that somebody he knows who lives in Villa Lorna thinks it is the greatest thing in the HOUSING COMMISSION 8/26/96 Page 7 world, even though they do not have all the top-of-the-line refrigerators and stoves, but they have all the equipment needed to be able to meet all FHA, HUD, and VA standards. He stated that ex-military cannot get a loan if they do not meet these standards. Commissioner Rose expressed his opinion that there is a need for studios. He asked if the studios will be one level or a loft. Chairperson Calverley responded that the information is in the packet and that they are one level over the garage. Commissioner Schlehuber commented that #5 of the motion says that “The affordable housing units must be restricted for ‘the useful life of the project‘ which means a minimum of 55 years.” He noticed on the Planning Commission, what they approved, it said it must be deed restricted. He asked if there is a reason the Housing Commission is different from that. Mr. Becker replied that the requirement of the lnclusionary Ordinance would be that they be deed restricted; that is what would apply. He said that deed restricted could be added to the Housing Commission resolution. , Commissioner Noble commented that the Planning Commission added the deed restricted because there is no guarantee that the units will be rented as affordable housing units. He said that as time goes on that people forget. He added that the deed restricted as well as the useful life of the house would help to ensure that it did not get lost in resale. Commissioner Schlehuber said that he is concerned about consistency and if somebody renovates it, when they reconvey it on a resale, it is still there. Commissioner Schlehuber would like to make a motion to change Resolution No. 96-009, under Conditions, #5, that the word “deed” be added before the word “restricted.” Commissioner Noble suggested that the applicant be given a chance to give his comments on this change. Chairperson Calverley asked the applicant if he had a comment to make on the word deed being added to the resolution. Mr. Ferdig commented that he wants to be sure that there is a clear understanding what the deed restriction is and thinks it is a poor choice of words, although he said he could not come up with anything better. He asked if it is mainly for notification so that everyone knows that this was a house designed to qualify as part of our lnclusionary requirement and asked if it does not change the owner’s ability to rent it or not rent it. Chairperson Calverley responded yes to Mr. Ferdig’s two questions. Commissioner Schlehuber commented that it would still be under the granny flat but it would be recorded as a deed. Commissioner Wellman expressed concern about a possible inconsistency between #4 and #5 because #4 refers to townhomes and #5 refers to affordable housing units, which could include townhomes. It was suggested to added the words “for Villages J and K after the word units in #5 for the deed restriction. ACTION: Motion by Commissioner Schlehuber and duly seconded, to change Resolution No. 96- 009 under Conditions, #5, to add the word “deed” before the word “restricted” and to add the words “for Villages J and K” after the word “units” to now read “The affordable housing units for Villages J and K must be deed restricted for “the useful life of the project” which means a minimum of 55 years. Calverley, Escobedo, Noble, Rose, Sato, Scarpelli, Schlehuber, Walker, Wellman VOTE: 9-0 AYES: NOES: None ABSTAIN: None - HOUSING COMMISSION 8/26/96 Page 8 Because of her concern about losing affordable housing product, Commissioner Wellman proposed a motion on #4 amended to read “For the for-sale townhomes, the units must remain affordable for their useful life.” Chairperson Calverley commented that she does not think this possible because for-sale units are setup under the affordable housing program, and with the paperwork, etc., it is so much easier on the Housing Commission to just let it go, take the money, and then work on the next project. Commissioner Wellman expressed her concern leaving these future sites open ended. She thinks it is important to limit them because she thinks that in the future the City will have the money but not the land. Chairperson Calverley asked the applicant to comment. Mr. Ferdig said that the City does not need land to continue the project and that the City does not need a new project to provide affordable for-sales because it can be done on re-sales. He said that the City can offer a financing plan to any home in the entire city if they have the money. Mr. Ferdig is of the opinion that allowing homeowners to earn equity and sell their homes at market rates, even though it is shared with the City, is “giving them a shot.” He said that the homeowner will be doomed if required to sell at an affordable rate to somebody else. It is just a lateral move for everybody. It does not make any difference whether it is at a profit or a loss because the City is not losing any money; and if prices go down, it is all relative. Commissioner Wellman respectively disagreed with Mr. Ferdig because under the lnclusionary Housing Ordinance Carlsbad has an obligation to have dedicated units for affordable income and homeowners, which is fine for the first owner. Her concern is for the subsequent buyer who is in need of affordable housing but is unable to find it. She suggests that the City help out the new buyer with a bigger trust deed, and the system continue the way it did for the first buyer where the use of the unit is dedicated for affordable housing. She stated that there is no oversight within this resolution to show that the secondary dwelling units are going to be dedicated and used by low-income people to meet the needs under the lnclusionary Housing Ordinance. Further, she said that because of the way the resolution is written with the townhomes for sale, they can be sold at any time and immediately lose that status, and there is no guarantee there will be a profit and there is no guarantee what would happen with this money, and there is no guarantee that there will be future land sites out there available. Mr. Ferdig commented that from a financing standpoint that unless the City is in the position to forget the silent second and provide the entire mortgage, whatever that mortgage may need to be, HUD, Fannie Mae, Freddy Mac, HFA, VA will not finance the mortgage. And they are very strong about it. They cannot obtain financing if it is deed restricted forever. Should they get the mortgage back in a foreclosure situation, their market is limited, and they will not finance any type of project like that. He said that there is a huge lawsuit right now with the City of San Diego on a La Jolla project where the developer has owned the nine affordable units for the last seven years and cannot sell them. They are empty. (tape ran out) Commissioner Scarpelli added that it becomes a hard money-type loan situation, which defeat the purpose. He commented that the City does not want to give a disincentive to the buyer because the City wants the individual to improve economically. In addition, a neighborhood would be concerned for its market value if there was not an incentive for neighbors to maintain their property. This could possibly cause more harm than good. Commissioner Noble commented that what Commissioner Wellman is talking about is that in the six conditions that the applicant has, #6 says that “Upon final approval of said affordable housing project and prior to final map approval, the applicant shall enter into an Affordable Housing Agreement with the City of Carlsbad. The agreement should be binding on all future owners and successors in interest. The Affordable Housing Agreement shall include all terms and conditions of said project approval and outline the incentive (financial or other), if any, to be provided by the City of Carlsbad.” That is before you build it. Mr. Becker said that as you go along, with several phases, that it is almost impossible to write an ordinance that fits everything right away. And as soon as you do, somebody will be smart enough to get around it. - HOUSING COMMISSION 8/26/96 Page 9 Chairperson Calverley asked Commissioner Wellman whether she wanted to make a motion. Motion by Commissioner Wellman on paragraph #4 be amended to read, “For the for-sale townhomes, the units must remain affordable for their useful life.” The motion was not seconded. Chairperson Calverley asked if there were any additional motions. Commissioner Wellman replied that she would like to make an additional motion. Commissioner Wellman stated she would like to make a motion to add a #7 for oversight with regard to the secondary dwelling units that the City establish an oversight method to ensure that there is compliance with the Affordable Housing Agreement that the developer signs with the City of Carlsbad because there currently is no enforcement, and there is nothing that will necessarily be addressed in the Affordable Housing Agreement to show that there is compliance that the secondary dwelling units, if they are rented, are rented at the market rate or that the structures stay as they are supposed to stay. Whether the City takes that on individually or asks the developer to because there are master associations within this planned community, so however they want to work it out, but I would think it is really incumbent to have any chance that this flies that any of these units are being used for the purposes which we intend under the Mandatory Provisions of the lnclusionary Housing Ordinance that they are used that way; especially since we have no track record. We are just making hopeful assumptions; but I think oversight is important to justify that. If for some reason the oversight shows that yes, the thing is going the way we proposed, no problem; if is not, then we have evidence and we can come back and look at it to see what needs to be done to make sure the spirit and actual law is being carried out with these units. Commissioner Noble pointed out that the comments being made are not about the issue that is being considered tonight. He explained to Commissioner Wellman that the appropriate way to handle this situation is either to make the motion to either recommend approval or disapproval, and then as soon as that is over to come back and make a minute motion recommending that the City set up some sort of oversight to function to ensure that. Chairperson Calverley informed Commissioner Wellman that the rental rates that are listed for the units are over a $1 a square foot, and you can lease any luxury apartment in San Diego county for less than that with pools and gyms. Commissioner Wellman replied that it is important that the oversight is important to know that the unit is being used the way it is supposed to be used. She further commented that the Granny Flat Ordinance does not apply for affordable housing or for Master Plan. Chairperson Calverley asked Mr. Becker if granny flats apply to the City’s numbers on affordable house. Mr. Becker answered affirmatively. Commissioner Wellman said that it was up for our interpretation and that she would withdraw her motion and make a minute motion. ACTION: Motion by Commissioner Noble, and duly seconded, as amended, that the Housing Commission adopt Resolution No. 96-009 recommending approval to City Council of twenty-six (26) affordable two and three bedroom townhouses, twenty (20) second dwelling units in Villages E, J, and K of the Rancho Carrillo Master Plan in order to satisfy the requirements of the lnclusionary Housing Ordinance. Calverley, Escobedo, Noble, Rose, Sato, Scarpelli, Schlehuber, Walker VOTE: 8-1 AYES: NOES: Wellman ABSTAIN: None HOUSING COMMISSION 8/26/96 Page 10 ACTION: Minute motion by Commissioner Wellman, and duly seconded, that the Housing Commission recommend to the City Council that they evaluate the oversight or setup an oversight committee to ensure that the affordable housing requirements are maintained with regard to secondary dwelling units being used as affordable housing. Escobedo, Noble, Sato, Scarpelli, Walker, Wellman VOTE: 6-2-1 AYES: NOES: Rose, Schlehuber ABSTAIN: Calverley Mr. Becker asked for a clarification. The oversight program, as he understands it, relates to oversight enforcement of requirements of the second dwelling unit program as they are governed by the Second Unit Dwelling Ordinance. Chairperson stated that this is just for second dwelling units and not for other affordable units. Commissioner Wellman responded affirmatively. Mr. Becker pointed out that when the Commission takes something like this to the Council, the Commission needs to be prepared because staff will be asked, “What are you doing now? What can you do? What resources will it take?” An alternative would have been for the Housing Commission to discuss this at a future meeting in order to allow staff the opportunity to share with the Commission information on the current and proposed oversight programs. The Commission then could have recommended specific action to the Council. However, per the motion approved, staff will go forward to the Council with the Commission’s request and the appropriate information. ANNOUNCEMENTS: Next scheduled meeting: September 12, 1996 ADJOURNMENT: By proper motion, the Regular meeting of August 8, 1996 was adjourned at 756 p.m. Respectfully submitted, EVAN BECKER Housing and Redevelopment Director KATHY VAN PELT Minutes Clerk MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED.