Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: CONSIDERATION OF A RESOLUTION APPROVING AN
AFFORDABLE HOUSING REGULATORY AGREEMENT
BETWEEN THE CITY AND PINK VIKING ORH LLC IN
CONNECTION WITH THE DEVELOPMENT OF FLAHAVAN
ESTATES, AND AUTHORIZING THE CITY MANAGER TO
SIGN DOCUMENTS RELATED TO THE AFFORDABLE
HOUSING AGREEMENT
Date: August 12, 2025
Written by: JP Harries, Senior Planner
Recommendation
It is recommended that the City Council adopt a Resolution approving an Affordable Housing Regulatory Agreement between the City and Pink Viking ORH LLC (“Developer”) in connection with the development of the Flahavan Estates subdivision, and authorizing the City Manager to sign documents related to the Affordable Housing Regulatory Agreement.
Background
On January 23, 2024, the Cotati City Council adopted Resolution No. 2024-04, approving Preliminary Design Review, a Tree Removal Permit, a Hillside Development Permit, and a Vesting Tentative Map for Flahavan Estates, a 35-lot single-family home subdivision located at 8841 Old Redwood Highway.
Under the City of Cotati’s Affordable Housing Ordinance in effect at the time of project entitlement approval, 15% of the housing units in a residential development must be designated as affordable, based on Area Median Income (AMI). The AMI is the median gross annual income, adjusted for household size, as periodically published by the Department of Housing and Community Development (HCD). The ordinance further mandated that one-third of these affordable units be reserved for very low-income households, one-third for low-income households, and one-third for moderate-income households.
Condition of Approval No. 6 in Resolution No. 2024-04 requires the Developer to obtain City Council approval of an Affordable Housing Agreement prior to recording the Final Map. This agreement must specify the affordability levels, tenant or buyer selection criteria, and other requirements to ensure the affordability of the restricted units for a minimum of 55 years. The agreement is then recorded to run with the deeds of the subject lots. The proposed agreement is attached to the accompanying Resolution as Attachment A.
Analysis/Discussion
The proposed Affordable Housing Regulatory Agreement with Pink Viking ORH LLC (“Agreement”) pertains to rental units in the Flahavan Estates project. Originally, the City and the Developer anticipated that the individual lots and homes throughout the development would be sold when the project’s entitlements were approved. However, the Developer has opted to retain ownership and offer all units in the development as rentals due to financing needs for construction of the homes. If the Developer later decides it is economically feasible to sell the lots during the Agreement’s term, the Agreement includes a provision requiring a new Affordable Housing Regulatory Agreement to be recorded that would control the sale prices of the restricted units.
The Agreement provides that the restricted units in the development must be offered at affordable rents. Affordable rent is defined as a gross monthly rent that does not exceed onetwelfth of 30% of the applicable AMI limit, adjusted for family size, minus a reasonable allowance for utilities and other costs, such as HOA dues. The rents are computed based on the income limits for an assumed household size equal to the number of bedrooms in the unit plus one person. For example, the rents for a three-bedroom unit are based upon the income limits for a four-person household.
A very low-income household is generally defined as one with an adjusted income not exceeding 50% of the AMI. A low-income household has an adjusted income not exceeding 80% of AMI, and a moderate-income household has an adjusted income between 80% and 120% of AMI.
However, adjustments may be made in areas with unusually high or low family incomes, atypical housing-cost-to-income ratios, or other specific circumstances.
The published 2025 State Income Limits for Sonoma County, which are used to determine household eligibility and rents, are as follows:
# of Persons in
Household: 1 2 3 4 5 6 7 8
Very Low Income 52850 60400 67950 75500 81550 87600 93650 99700 Low Income 84650 96750 108850 120900 130600 140250 149950 159600 Median Income 92400 105600 118800 132000 142550 153100 163700 174250 Moderate Income 110900 126700 142550 158400 171050 183750 196400 209100 The attached Agreement and Declaration of Restrictive Covenants ensures that five designated units will be restricted for affordable housing for 55 years. As proposed, all restricted units will be three-bedroom two-bath homes with the following unit mix:
• Lot 1: 3-bedroom unit at 80% AMI
• Lot 8: 3-bedroom unit at 120% AMI
• Lot 23: 3-bedroom unit at 120% AMI
• Lot 33: 3-bedroom unit at 50% AMI
• Lot 35: 3-bedroom unit at 80% AMI
Financial Considerations
The City of Cotati incurs no adverse fiscal impact from approval of the Affordable Housing Regulatory Agreement. The Developer fully covers all staff time and legal services required to prepare the agreement, which also includes a provision for an annual payment to the City to monitor compliance. No City Affordable Housing Funds are allocated to this project.
Environmental Issues
The approval of the Affordable Housing Regulatory Agreement is not a “project” subject to the California Environmental Quality Act (CEQA) because it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines.