Camarillo City Council
AGENDA REPORT
Date: March 27, 2024
To: Honorable Mayor and City Councilmembers
From: Greg Ramirez, City Manager
Submitted by: David Sanchez, Director of Community Development Subject: Authorization to Purchase and Resale – 209 Riverdale Court #564
BACKGROUND
This agenda item seeks City Council approval to purchase a market rate unit located at 209 Riverdale Ct #564 (Brookshire Subdivision), resale as a low-income unit, and authorize the City Manager, or his designee, to execute the necessary documents to complete the purchase and resale as a low-income unit.
DISCUSSION
The property located at 209 Riverdale Court #564 is a market rate condominium in the Brookshire subdivision (a part of the Village at the Park Neighborhood), that is currently for sale at a listing price of $589,000. The condominium is 1,161 square feet and includes two-bedrooms, two-bathrooms, and a balcony on the third floor overlooking the soccer field adjacent to the YMCA. The unit also includes a one car garage located at the base of the building. The subdivision was constructed in 2006 and is composed of 197 condominiums in 12 buildings.
Historically, the City has purchased and resold existing affordable units to prevent their affordability status from expiring. The City has funded these efforts primarily through Community Development Block Grant (CDBG) funds. Likely due to high interest rates, owners of affordable units have not been selling their properties as frequently this past year compared to previous years. This has restricted the City’s opportunity to purchase units and preserve their affordability covenants.
Nonetheless, the CDBG funds earmarked for this purpose must be expended to meet expenditure timelines set for the grant by the U.S. Department of Housing and Urban Development (HUD). The City currently has $575,570 in available CDBG funding available for this specific purpose. Staff sent letters to all owners of affordable units with expiring affordability covenants soliciting their interest in selling their unit to the City.
However, no affirmative responses were received. In order to expend these grant funds
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and comply with the CDBG timeliness deadline, staff proposes the purchase of a market rate unit in order to resale it as a deed-restricted low-income unit as part of the City’s Affordable Housing Program.
Low Income Limits
No. Persons in
Household 1 2 3 4 5 6 7 8
Median Income 86,450 98,800 111,150 123,500 133,400 143,250 153,150 163,000 Qualified
Income 74,400 85,000 95,650 106,250 114,750 123,250 131,750 140,250 Staff has notified the sellers about the City’s interest in purchasing the property, (subject to City Council approval). The proposed purchase is outside the Affordable Housing Preservation Program (City Council Policy 7.12, Attachment 2) because the unit potentially being purchased is currently a market-rate unit.
The City has engaged a local real estate agent and has entered into a Purchase Agreement (Attachment 3) to purchase the market-rate unit for $589,000. Escrow was initiated on February 29, 2024. In addition to the purchase price, the City’s anticipated closing costs are estimated to be $4,366 (the City’s final closing costs may vary). The total estimated purchase cost is approximately $593,366.
Upon the close of escrow, the City will begin the resale process of the unit to an eligible buyer in accordance with the City’s Affordable Housing Program. The unit will be deed- restricted with an Affordable Housing Agreement as low-income for a period of 55 years resetting upon each future transfer or sale of the property. The new Agreement will be consistent with the City’s current affordable housing policies and with the Health and Safety Code section 50052.5. The resale price of the low-income unit has been calculated at $170,000 pursuant to the formula for low-income units established by state law. The City’s estimate for closing costs for the City’s resale is approximately $5,000, resulting in net proceeds from the sale of approximately $165,000, an amount more than sufficient to repay the General Fund. After repayment of the General Fund, the remaining proceeds will return to the CDBG Fund for future program activities.
Fiscal Discussion
Proposed funding for the total estimated purchase cost of $593,366 includes $575,570 available in the CDBG Fund and an approximate $17,796 loan from the General Fund.
The General fund loan may increase or decrease based on final closing costs. The General Fund loan will be repaid entirely upon resale of the property as a low-income unit. The estimated purchase cost, proposed purchase funding, and resale proceeds are summarized below.
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City’s Purchase Cost
Purchase Price $ 589,000
Estimated Closing Costs $ 4,366
Total Purchase Cost $ 593,366
Funds Available for Purchase
CDBG Fund $ 575,570
General Fund loan (approximate, fully repayable upon resale) $ 17,796 Total Available Funds $ 593,366
City’s Proceeds from Resale
Resale price – calculated in accordance with HSC Section 50052.5 $ 170,000 Estimated closing costs $ (5,000)
Total Proceeds
(Estimate)
$ 165,000
FISCAL IMPACT
The purchase of the property will be funded with $575,570 available in the CDBG Fund and an approximate $17,796 General Fund loan. Of the resale proceeds, the General Fund will be entirely repaid, and the remaining proceeds will return to the CDBG Fund.
CEQA DETERMINATIONS
Not applicable.
RECOMMENDATION
Adopt a resolution approving the purchase of a market rate unit located at 209 Riverdale Ct #564, the resale of the unit as a low-income unit, approve a General Fund loan of approximately $17,796, approve the usage of $575,570 available from the CDBG Fund to partially pay for the purchase of the property, and authorize the City Manager, or his 209 Riverdale Ct #564 Purchase and Resale
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designee, to execute the necessary documents to complete the purchase and resale as a low-income unit.
ATTACHMENTS
1. Resolution
2. City Council Policy 7.12
3. Residential Purchase Agreement
4. Location Map
REFERENCE MATERIALS – AVAILABLE FOR REVIEW AT CITY HALL None