2017-348241 DOC# 2017-0348241
FREE RECORDING REQUESTED
PURSUANT TO GOV. CODE SECTION Aug 01, 2017 04:14 PM
11 27383 OFFICIAL RECORDS
Ernest J. OUNT b E O
Recording Requested By: SAN DIEGO EO: $ 00CRDER
City of Encinitas PAGES ii
Development Services Department
505 S. Vulcan Avenue
Encinitas, CA 92024
And When Recorded Mail To:
City of Encinitas
City Clerk's Office
505 S. Vulcan Avenue
Encinitas, CA 92024
A(�
A.P.N. 254-331-23 & -24
AFFORDABLE HOUSING REGULATORY AGREEMENT
(Density Bonus)
This Affordable Housing Regulatory Agreement (hereinafter the "REGULATORY
AGREEMENT") is made and entered into and is effective as of this )S day of
L 201-7 by and between the City of Encinitas (hereinafter the 'CITY"), and
Citym- dk Hymettus, LLC (hereinafter the "OWNER").
RECITALS
A. Whereas, the OWNER is the owner of real property (hereinafter the "PROPERTY")
described in EXHIBIT A, attached hereto and made a part hereof;
B. Whereas, the CITY approved a Density Bonus for Tentative Map 13-187 by Planning
Commission Resolution No. PC 2016-23 on April 21, 2016, in accordance with
California Government Code §65915;
C. Whereas, the OWNER has designated Lot Nine (9) of TM 13-187 as the required
affordable unit and the OWNER has agreed to construct a new residential unit
(hereinafter "UNIT") on the PROPERTY;
D. Whereas, in order to restrict the use of the affordable UNIT, the OWNER is bound by
this REGULATORY AGREEMENT and has consented to be regulated and restricted
as provided herein;
E. Whereas, the TENANT HOUSEHOLD is the eligible household to rent the UNIT
(hereinafter " TENANT HOUSEHOLD"); and
City of Encinitas t
Affordable Housing Regulatory Agreement-Updated February 2016
F. Whereas, the HOMEBUYER HOUSEHOLD is the eligible household to purchase the
UNIT (hereinafter " HOMEBUYER HOUSEHOLD")
NOW, THEREFORE, the parties hereto agree as follows:
1. TERM OF AGREEMENT.
The term of this REGULATORY AGREEMENT shall commence on the issuance of a
certificate of occupancy for the UNIT and shall continue for a period of thirty (30) years.
2. DEVELOPMENT OF THE AFFORDABLE UNIT
A. OWNER shall construct a new residential unit on the PROPERTY.
B. The exterior appearance of the affordable UNIT shall be compatible with units in the
surrounding neighborhood, including units within TM 13-187. The interior
appearances, finishes, and amenities of the UNIT shall be comparable to new units
in the community.
C. Prior to the commencement of construction, the quality of materials, floor coverings,
cabinets, fixtures, appliances, doors, and windows shall be specified in sufficient
detail to ensure that the quality level is comparable to new for-sale units in the CITY
or surrounding communities to the satisfaction of the Development Services Director
(hereinafter, the "DIRECTOR"). Such documentation shall be provided from the
OWNER to the CITY prior to the issuance of a certification of occupancy.
D. If lots in subdivision are marketed under a custom lot sale program, then the UNIT
shall be constructed as one of the first five units in the subdivision. If the subdivision
is constructed by a single builder in one or more phases, the UNIT shall be
constructed and certification of occupancy issued prior to occupancy of the fifth
market rate unit.
E. The UNIT shall be a minimum of 2,764 square feet of living space, with a minimum of 4
bedrooms and 3 bathrooms and a 2-car garage.
F. The UNIT shall be provided with an adequate usable yard area comparable to new
units in the community.
3. GENERAL CONDITIONS
A. OWNER shall only rent or sell the UNIT to an income eligible household at or below
fifty percent (50%) of San Diego Area Median Income, as defined and periodically
updated by California Health and Safety Code §50105 and adjusted for household
size.
B. OWNER shall advertise the availability of the UNIT for a minimum of two
consecutive weeks in a local newspaper. The OWNER may employ additional
marketing methods that are in accordance with professional standards. The CITY
may also advertise the UNIT to provide contact information to interested households.
City of Encinitas 2
Affordable Housing Regulatory Agreement-Updated February 2016
OWNER shall make applications available for a minimum of two weeks during the
advertisement period. OWNER shall maintain a record of all interested households
and applications. OWNER must provide such documentation to the CITY.
C. OWNER shall comply with the Fair Housing Act and not discriminate against any
prospective tenant or homebuyer on the basis of race, color, religion, sex, national
origin, familial status, disability or other individuals protected under State and
Federal fair housing laws.
D. OWNER is prohibited from renting or selling the UNIT to a family member, relative,
employee, or any pre-determined household.
E. OWNER may sell the property with the prior written approval of the DIRECTOR.
The sale of the UNIT may be to a non-qualifying household, if the UNIT will be
continuously rented to a qualifying very low income household, at or below fifty
percent (50%) of San Diego Area Median Income, as defined and periodically
updated by California Health and Safety Code §50105 and adjusted for household
size. At the time of said sale, the subsequent owner shall execute a new Affordable
Housing Regulatory Agreement with the CITY. The City shall require the subsequent
owner to post a performance bond or provide other assurances of performance
within the identified construction schedule (as described in Section 2.D).
F. During the term of this agreement, the UNIT shall be utilized for residential use only
in accordance with applicable local ordinances and regulations; any commercial use
or transient habitation (of less than thirty days) is specifically prohibited.
G. Occupancy of the UNIT shall be appropriate to the number of bedrooms in the UNIT.
As a general rule and policy, an appropriately sized household is no less than one
person per bedroom and no more than two persons per bedroom, which is
reasonable under the Fair Housing Act and intent of program assistance.
4. OPTION TO SELL (Except as provided in Section 3.E)
A. QUALIFICATION OF ELIGIBLE HOMEBUYER HOUSEHOLD
i. UNIT shall only be sold to an income eligible HOMEBUYER HOUSEHOLD at or
below fifty percent (50%) of San Diego Area Median Income, as defined and
periodically adjusted by the California Health and Safety Code §50105, and
adjusted for household size.
ii. The OWNER shall verify the income of all adult members of any proposed
HOMEBUYER HOUSEHOLD. For the purposes of determining the
HOMEBUYER HOUSEHOLD gross annual income, all adult (18 years of age
and over) members of household shall provide recent (within a year) source
documentation to verify income. Source documentation may include, but is not
limited to, any of the following: tax returns, paystubs, wage statements, W2s,
bank statements, social security documents, and employment verification.
City of Encinitas 3
Affordable Housing Regulatory Agreement-Updated February 2016
ii. Prior to opening escrow to sell the UNIT, OWNER shall provide CITY with
HOMEBUYER HOUSEHOLD'S income qualifying source documentation, which
may include, but is not limited to, any of the following: tax returns, paystubs,
wage statements, W2s, bank statements, social security documents, and
employment verification. The CITY may require additional documentation to
verify eligibility. DIRECTOR shall confirm or deny eligibility based on the
documentation provided.
iii. HOMEBUYER HOUSEHOLD must certify that they will occupy the UNIT as
owner-occupant and principal residence; and that the household does not own or
have an interest in any other real property.
B. CALCULATION OF AFFORDABLE HOUSING COST
i. The maximum affordable sales price for the UNIT shall be calculated in
accordance with California Health and Safety Code §50052.5. The following
conditions shall also be applied when determining the maximum affordable sales
price:
a. The calculation shall include a five percent down payment.
b. The calculation shall include an interest rate which is based on the current
Freddie Mac Monthly Average Commitment Rate on 30-Year Fixed-Rate
Mortgages.
c. The calculation shall include reasonable housing costs, which includes,
but not limited to, property taxes, property insurance, Homeowners'
Association fees, additional district fees (if applicable), and an allowance
for utilities based on the current Utility Allowance Schedule, published by
the Encinitas Housing Authority.
d. Actual financing to be obtained by any prospective homebuyer shall be a
fixed rate loan fully amortized over thirty years.
ii. Prior to opening escrow, the sale price of the UNIT shall be approved by the
DIRECTOR.
C. ADDITIONAL REQUIREMENTS
i. At the time of initial sale, HOMEBUYER HOUSEHOLD shall execute a new
Regulatory Agreement with the CITY in accordance with California Government
Code §65915(c)(2), unless it is in conflict with the requirements of another public
funding source or law.
ii. HOMEBUYER HOUSEHOLD shall submit a report to the DIRECTOR at initial
occupancy and annually thereafter, on a form prescribed by the DIRECTOR. The
report shall certify that the HOMEBUYER HOUSEHOLD occupies the UNIT as
their primary residence. The HOMEBUYER HOUSEHOLD shall provide source
City of Encimt&s 4
Affordable Housing Regulatory Agreement-Updated February 2016
documentation verifying the occupancy status of the HOMEBUYER
HOUSEHOLD.
5. OPTION TO RENT
A. QUALIFICATION OF ELIGIBLE TENANT HOUSEHOLD
i. The UNIT shall only be rented to an income eligible TENANT HOUSEHOLD at or
below fifty percent (50%) of San Diego Area Median Income, as defined and
periodically adjusted by the California Health and Safety Code §50105, and
adjusted for household size.
ii. The OWNER shall verify the income of all adult members of any proposed
TENANT HOUSEHOLD. For the purposes of determining the TENANT
HOUSEHOLD annual gross income, all adult (18 years of age and over)
members of household shall provide recent (within one-year) source
documentation to verify income. Source documentation may include, but is not
limited to, any of the following: tax returns, paystubs, wage statements, W2s,
bank statements, social security documents, and employment verification.
iii. OWNER shall provide CITY with TENANT HOUSEHOLD'S income qualifying
source documentation, which may include, but is not limited to, any of the
following: tax returns, paystubs, wage statements, W2s, bank statements, social
security documents, and employment verification. The CITY may require
additional documentation to verify eligibility. DIRECTOR shall confirm or deny
eligibility based on the documentation provided.
B. CALCULATION OF AFFORDABLE RENTAL PRICE
i. The maximum monthly rent of UNIT shall be calculated in accordance with
California Health and Safety Code §50053. Rental rate may be adjusted
periodically in accordance with California Health and Safety Code §50053. No
additional fees or charges shall be assessed to the TENANT HOUSEHOLD in
excess of the affordable rent.
ii. An allowance for tenant-paid utilities shall be deducted from the maximum
affordable rent. The OWNER shall only use the most current Utility Allowance
Schedule, published by the Encinitas Housing Authority.
iii. The DIRECTOR shall approve the maximum rental rate for the UNIT, including
the applicable utility allowance.
C. MANAGEMENT AND MAINTENANCE
i. OWNER shall maintain tenant files containing information on the household
income and the source documentation used by OWNER to determine household
income. Said files shall be maintained for a period of five years from the
termination of any tenancy. Upon written request, OWNER shall allow the CITY
Ciro of Encinitas 5
Affordable Housing Regulatory Agreement-Updated February 2016
access to review tenants' files and financial records for compliance with this
REGULATORY AGREEMENT.
a. OWNER shall re-certify the TENANT HOUSEHOLD's income eligibility
every twelve months. In the event that the TENANT HOUSEHOLD no
longer qualifies, the OWNER shall provide notice in accordance with
applicable State law.
b. TENANT HOUSEHOLD shall enter into a written occupancy agreement or
lease with the OWNER. OWNER shall use the standard lease form
published by the California Apartment Association or other form approved
by the DIRECTOR.
ii. Prior to the occupancy of the UNIT, the OWNER shall provide a copy of the
occupancy agreement or lease to the CITY for review and approval.
iii. Leases and the landlord-tenant relationship shall be subject to California law and
the provisions of this REGULATORY AGREEMENT. The OWNER shall establish
reasonable rules of conduct and occupancy that comply with State and local laws
and regulations.
a. OWNER is responsible to maintain the leased UNIT in a habitable condition
and in good repair at all times. OWNER is responsible for maintenance
costs, including all repairs, corrections and replacements necessary to
maintain and preserve the UNIT in a safe and sanitary condition in
accordance with the U.S. Department of Housing and Urban
Development's (HUD) Housing Quality Standards (HQS) and State Law.
Upon written request by the CITY, the OWNER shall provide DIRECTOR
or representative with access to inspect the UNIT for compliance with this
section. Failure by the OWNER to maintain the UNIT shall constitute a
violation under this REGULATORY AGREEMENT.
b. OWNER shall obtain, and at all times during the term of this
REGULATORY AGREEMENT shall maintain policies of general liability
and property damage insurance from an insurance company authorized to
be in business in the State of California. The property damage insurance
shall be in an amount sufficient to replace the UNIT in the event of fire or
other major damage. OWNER may self-insure, with the prior written
approval of the DIRECTOR.
c. OWNER may contract with a management agent for the performance of
the services or duties. However, such an arrangement does not relieve the
OWNER of responsibility for proper performance of these duties. OWNER
shall notify the CITY in writing within 30 days of any change of property
management of the UNIT.
iv. OWNER shall make a good faith effort to expeditiously re-rent the UNIT whenever it
becomes vacant. In the event the UNIT is vacant for a period of more than 30
days, the OWNER shall notify the CITY. If available, CITY shall provide OWNER
City of Encinitas 6
Affordable Housing Regulatory Agreement-Updated February 2016
with a list of eligible households seeking rental housing. Upon a showing that
OWNER failed to make a good faith effort to expeditiously re-rent the UNIT, CITY
can extend the affordable housing restriction period, if the UNIT is not continuously
rented (i.e., vacancies of more than 30 days), for a period equal to the total amount
of time that the UNIT remained vacant in excess of 30 days between vacancies.
D. ANNUAL MONITORING
i. OWNER shall submit a report to the DIRECTOR at initial occupancy and
annually thereafter, on a form prescribed by the DIRECTOR. The report shall
include information on the household occupying the UNIT, household income,
and the amount of rent collected. Whenever requested by the CITY, the OWNER
shall provide source documentation demonstrating the qualified status of the
household.
6. NON-DISCRIMINATION
OWNER shall not discriminate against any prospective tenant or homebuyer on the basis
of race, color, religion, sex, national origin, familial status, disability or other individuals
protected under State and Federal fair housing law.
7. CERTAIN ACTS PROHIBITED
OWNER shall not make any sale, encumbrance (except for a first Deed of Trust
associated with mortgage financing), assignment or conveyance, or transfer in any
other form, of the PROPERTY or of its entire interest therein other than in accordance
with the terms of this REGULATORY AGREEMENT.
8. VIOLATION OF REGULATORY AGREEMENT BY THE OWNER
In the event of the violation of any of the provisions of this REGULATORY
AGREEMENT by the OWNER, the CITY may give written notice thereof to the OWNER
by registered or certified mail addressed to the OWNER at the address stated in this
Regulatory Agreement, or to such other address as may have been designated by the
OWNER, and if such violation is not corrected to the satisfaction of the CITY within 30
days after the date such notice is mailed (or within such further time as the CITY, in its
reasonable discretion, may permit), the CITY may, without further prior notice, declare
in writing a default under this REGULATORY AGREEMENT effective on the date of
such declaration of default, and upon any such declaration of default the CITY may
apply to any court, State or Federal, for specific performance of this REGULATORY
AGREEMENT; for an injunction against any violation by the OWNER of this
REGULATORY AGREEMENT; for the appointment of a receiver to take over and
operate the UNIT in accordance with the terms of this REGULATORY AGREEMENT; or
for such other relief as may be appropriate.
9. AMENDMENT.
This REGULATORY AGREEMENT shall not be altered or amended except by writing
executed between the parties.
City of Encinitas 7
Affordable Housing Regulatory Agreement-Updated February 2016
10. SEVERABILITY.
In the event that any provision or covenant of this REGULATORY AGREEMENT is held
by a court of competent jurisdiction to be invalid or unenforceable, then it shall be
severed from the remaining portions of this REGULATORY AGREEMENT, which shall
remain in full force and effect.
11. BINDING ON SUCCESSORS.
This REGULATORY AGREEMENT shall bind, and the benefits thereof shall inure to,
the respective parties hereto, their legal representatives, executors, administrators,
successors in the office or interest, and assigns; provided, however, that the OWNER
may not assign this REGULATORY AGREEMENT or any of its obligations hereunder,
voluntarily or by operation of law, without the prior approval of the CITY, excluding an
assignment to an affiliate. As used herein, "affiliate" means any entity in which OWNER
holds an ownership interest, or any person or entity that holds an ownership interest in
the PROPERTY.
12. GENDER.
The use of the plural in this REGULATORY AGREEMENT shall include the singular and
the singular shall include the plural; and the use of one gender shall be deemed to
include all genders.
13. ELECTION OF REMEDIES: EVENT OF DEFAULT.
The remedies of the CITY hereunder or under any other instrument providing for or
evidencing the financial assistance provided herein are cumulative, and the exercise of
one or more of such remedies shall not be deemed an election of remedies and shall
not preclude the exercise by the CITY of any one or more of its other remedies.
14. WAIVER.
No waiver by the CITY of any breach of or default under this REGULATORY
AGREEMENT shall be deemed to be a waiver of any other or subsequent breach or
default hereunder.
15. GOVERNING LAW.
This REGULATORY AGREEMENT shall be construed in accordance with and
governed by the laws of the State of California.
16. NOTICES.
Written notices and other written communications by and between the parties hereto
shall be addressed as follows unless and until a party hereto has in writing,
communicated a different address to the other party hereto.
Ciry of Encinitas 8
A&rdable Housing Regulatory Agreement-Updated Februan 2016
CITY OWNER
City of Encinitas Citymark Hymettus, LLC
505 S. Vulcan Ave. Richard Gustafson, President of
CityMark Development
Encinitas, CA 92024 3818 Park Boulevard
Attn: Housing Management Analyst Ph: (619) 231-1161
IN WITNESS WHEREOF, OWNER has executed this REGULATORY AGREEMENT as of the
day and year first above written.
OWNER
Citymark Hymettus, LLC
By. Date: 7 S / 7
Richard Gustafson, President of CityMark Development
(Notarization of signature must be attached)
CITY
City of Encinitas
By: Date: 7 Z s/
Catherine S. Blakespear, Mayor
(Notarization not required)
APPROVED AS TO FORM:
h //1
Glenn a ine, City Attorney Dat
Cin of Encinitas 9
Affordable Housing Regulatory Agreement-Updated Febmary 2016
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
A Notary Public or other Officer Completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of San Diego
On July 6, 2017 before me, Kris Johnson, Notary Public, personally appeared Richard
Gustafson President , who proved to me on the basis of satisfactory evidence to be the
person whose names) is are subscribed to the within instrument and acknowledged to
me that he she/they executed the some in his her/they authorized capocity(ies), and that
by his her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY, under the laws of the State of California, the
foregoing paragraph is true and correct.
KRIS JOHNSON
WITNESS my hand and official seal. r� commission #2046512
i •F.- - Notary Public - California Z
Shnson, Z � San Diego County Z' My Comm. Expires Nov 20,2017
Not y Public
Commission#2046512
My Commission Expires: November 20, 2017
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the
document and could prevent fraudulent removal and reattachment of this form to another document.
Description of Affached Document:
CityMark Hymettus—Affordable Housing Regulatory Agreement (Density Bonus)
APN#'s: 254-331-23 & 24
CA Rev. 1/01/2015
EXHIBIT A
LEGAL DESCRIPTION
ALL OF LOTS 1 IN BLOCK 8 AND ALL THOSE PORTIONS OF LOTS 2 AND 18 IN SAID
BLOCK 8 OF SOUTH COAST PARK, IN THE COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO THE MAP THEREOF NO. 1776, FILED IN THE OFFICE OF
THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY, JANUARY 11, 1924,
DESCRIBED AS FOLLOWS:
BEGINNING AT A CONCRETE MONUMENT MARKING THE INTERSECTION OF THE
CENTER LINES OF FULVIA STREET AND HYMETTUS AVENUE; THENCE ALONG THE
CENTER LINE OF SAID HYMETIUS AVENUE NORTH 15 043'30" WEST, A DISTANCE OF
387.79 FEET; THENCE SOUTH 74 026'30" WEST, A DISTANCE OF 421.32 FEET TO A
POINT IN THE CENTER LINE OF SAID FULVIA STREET; THENCE ALONG THE SAID
CENTER LINE OF FULVIA STREET THE FOLLOWING COURSES AND DISTANCES:
FIRST, SOUTH 33 024'30" EAST, DISTANCE OF 113.35 FEET TO AN ANGEL POINT;
SECOND, SOUTH 47 032'30" EAST, A DISTANCE OF 202.31 FEET (RECORD 201.88 FEET)
TO THE BEGINNING OF A CURVE; THIRD, ALONG THE ARC OF SAID CURVE WHICH IS
CONCAVE TO THE NORTHEAST, HAVING A RADIUS OF 170.45 FEET THROUGH A
CENTRAL ANGLE OF 4r29'45" A DISTANCE OF 141.30 FEET (RECORD 141.80 FEET) TO
THE END THEREOF; FOURTH. NORTH 84 057'45" EAST, A DISTANCE OF 169.95 FEET
(RECORD 170.14 FEET) TO THE POINT OF BEGINNING.
APN: 254-331-23 & -24
Cul of Encinitas 10
Affordable Housing Regulatory Agreement-Updated February 2016