Agenda - 03-21-1990 - Laserfiche WebLink

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16 160 LAND USE AND ENVIRONMENT [16] sold only to families whose income is less than 50 percent of the median income of the U.S. Census Bureau's primary metropoli- tan statistical area for the region that includes Utopia, and that these units be deed-restricted with provisions requiring that they be resold only to low-income people for resale prices that are tied to rises in the consumer price index. The moderate-income units are limited to persons and families making between 80 and 50 percent of the median income and also have requirements designed to keep those units, upon resale, affordable to moderate-income persons. A unit is affordable to a given income group, according to the ordinance, if a family making an income that would put it at the top of its group could afford to rent or buy the unit by spending no more than 25 percent of its income. In the case of for-sale housing, the ordinance permits the builder to set the price based on a formula, applied at the time occupancy permits are obtained, that assumes a 10 percent down payment, and sets a price based on the maximum mortgage a home buyer at the top of the applicable group's income range can carry at prevailing interest rates without spending more than 25 percent of that family's income on interest and principal payments, esti- mated homeowner association dues, and estimated taxes. The Utopia City Council has carefully studied the housing market in the area, with the help of the professor and the city attorney, and is confident that the new ordinance satisfies all three requirements, which is necessary to avoid legal and politi- cal problems. Obviously the ordinance in question simulta- neously bestows both the higher-density benefit and the in- clusionary obligation. Although it took considerable study of the housing market, the council is also satisfied that the benefit be- stowed on the land is more valuable than the obligation extracted. In fact, the council has concluded that the owner of Fairhaven can make a lot of extra money while benefiting Utopia by con- structing 200 low- and moderate-income units. The city council has discovered that residential undeveloped land sells in Utopia for about $10,000 per permitted housing unit. Fairhaven, for instance, where only 400 market units could be built before the inclusionary ordinance was passed, can now build 800 market units plus 200 inclusionary units, with an in- crease in value from $4 million to $8 million plus or minus the cost or value of 200 inclusionary units. The city council of Utopia has done its research and knows that building 200 inclusionary units will not cost$4 million. It has been determined from a study, which the council ordered prior