Los Altos City Council
September 8, 2026

CITY COUNCIL SPECIAL

MEETING
AGENDA
September 8, 2026 - 6:00 PM
Hybrid
PARTICIPATION: Members of the public are invited to participate by attending the meeting at the Los Altos Council Chamber, located at Los Altos City Hall, 1 N. San Antonio Rd, Los Altos, CA, during the meeting.

Public comments are accepted in person at the physical meeting location, remotely using Zoom technology, or via email to [email protected] or through the Public Comment forum on the city website: Public Comments Form.

RULES FOR CONDUCT: According to Los Altos Municipal Code, Section 2.05.010 "Interruptions and rules for conduct": Understanding that the purpose of the city council meetings is to conduct the people's business for the benefit of all the people, in the event that any meeting of the city council is willfully interrupted by a person or group of persons so as to render the orderly conduct of the meeting impossible, the mayor, mayor pro tem, or any other member of the city council acting as the chair may order the removal of the person or persons responsible for the disruption and bar them from further attendance at the council meeting, or otherwise proceed pursuant to Government Code Section 54957.0 or any applicable penal statute or city ordinance.

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https://losaltosca-gov.zoom.us/j/98576428350?pwd=vaP85DgmENcKxPJ2TYR3nUVhbReaxY.1 Telephone: 1-669-444-9171 / Webinar ID: 985 7642 8350 / Passcode: 869519 SUBMIT WRITTEN COMMENTS: Before the meeting, comments on matters listed on the agenda may be emailed to [email protected]. Emailed public comments sent directly to the City Council, either as a group or individually, will not be included in the agenda packet but may be disclosable as part of a public records request. Emails sent to [email protected] will be included in the appropriate agenda packet and are also disclosable as part of a public records request.

AGENDA

CALL MEETING TO ORDER

ESTABLISH QUORUM

STUDY SESSION

1. Study Session - Below Market Rate For-Sale and Rental Housing Guidelines Provide feedback and direction to staff regarding the draft Below Market Rate (“BMR”) For-Sale and Rental Housing Guidelines

ADJOURNMENT

SPECIAL NOTICES TO THE PUBLIC
In compliance with the Americans with Disabilities Act, the City of Los Altos will make reasonable arrangements to ensure accessibility to this meeting. If you need special assistance to participate in this meeting, please contact the City Clerk 72 hours prior to the meeting at (650) 947-2610.

City Council Staff Report
Meeting Date: September 8, 2026
Prepared By: Monica Gallardo-Melkesian
Approved By: Gabe Engeland
Subject: Study Session - Below Market Rate For-Sale and Rental Housing Guidelines

COUNCIL PRIORITY AREA
Housing

RECOMMENDATION
Provide feedback and direction to staff regarding the draft Below Market Rate (“BMR”) ForSale and Rental Housing Guidelines

ENVIRONMENTAL IMPACT
The City Council’s action to hold a study session and provide direction to staff is statutorily exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15262, which applies to feasibility and planning studies for possible future actions that have not been approved, adopted, or funded.

FISCAL IMPACT
None.

PREVIOUS COUNCIL CONSIDERATION
The City Council adopted the original BMR Program and priority ranking policy in 1995 and has since reviewed and considered multiple aspects of the City’s BMR Program over the years, including affordable housing agreements, multi-family affordable housing regulations, and revisions to the priority ranking categories.

BACKGROUND
The City has administered its BMR Program for many years through a combination of adopted policies, affordable housing agreements, deed restrictions, administrative practices, and projectspecific implementation requirements. While these tools have allowed the City to implement the program over time, the City does not currently have comprehensive BMR administrative guidelines that consolidate the program’s requirements, procedures, and expectations in one publicly available document.

Establishing written BMR For-sale and Rental Housing Guidelines is important because it will provide a clear and consistent reference for City staff, developers, property managers, BMR homeowners, applicants, and residents. Consolidating the City’s BMR requirements in one place will improve transparency, support consistent administration, clarify responsibilities, and help ensure that program requirements are understood and applied consistently across both ownership

and rental units. The proposed Guidelines also provide an opportunity to document and organize the practices and requirements the City has developed and applied over the years, while updating the program to reflect current administrative needs (see Attachment 1 and 2).

The Guidelines are intended to assist in the administration, oversight, and regulation of the City’s BMR Program and to provide a clear framework for implementing the City’s inclusionary housing and density bonus requirements in Chapter 14.28 of the Los Altos Municipal Code, as well as applicable state and federal laws and regulations. Since the City hired its first full-time Housing Manager in November 2023 as part of the 6th Cycle Housing Element Program 5.B, BMR Program oversight has been centralized within the City, with consultants providing outside administrative assistance as needed.

ANALYSIS
Draft BMR Guidelines Overview
In preparing the draft BMR For-sale and Rental Housing Guidelines, City staff researched BMR programs in other jurisdictions to identify best practices and common administrative approaches. Staff also reviewed the City’s existing BMR policies, practices, and administrative requirements for consistency with applicable state and federal laws and regulations, including applicable fair housing requirements and the City’s obligation to affirmatively further fair housing.

City staff recommend maintaining two separate sets of guidelines: one for BMR for-sale units and one for BMR rental units. Separate guidelines are appropriate because ownership and rental units involve different program requirements, administrative procedures, legal documents, monitoring obligations, and ongoing responsibilities for developers, property managers, homeowners, renters, and City staff. Organizing the requirements separately will make the guidelines easier to use, reduce confusion, and allow each document to provide more targeted direction for the specific type of BMR unit being administered.

The Guidelines address developer requirements, affordable housing agreements and deed restrictions, unit design and delivery standards, tenant and buyer eligibility, marketing and selection procedures, rent and sales price calculations, occupancy requirements, annual monitoring, appeals, and compliance enforcement. For both rental and ownership units, affordable units must be provided onsite, constructed concurrently with market-rate units, and deed restricted for long-term affordability. Affordable Housing Agreements and related deed restrictions govern each project and run with the land; where there is a conflict, applicable laws, ordinances, regulatory agreements, or lender/funder requirements prevail over the Guidelines.

The Guidelines establish income, household size, occupancy, and asset standards for eligible households. Rental units are leased based on applicable income limits and maximum rent calculations tied to Santa Clara County Area Median Income limits published by HCD, with adjustments for household size and utility allowances. Ownership units are sold at an affordable sales price calculated based on income level, assumed household size, housing costs, financing assumptions, homeowner expenses, and applicable utility and maintenance allowances.

Ownership applicants must also meet additional requirements, including first-time homebuyer status, ability to obtain financing, minimum and maximum down payment standards, primary

residence requirements, asset limits, and completion of homebuyer education.

The Guidelines also create a standardized marketing, application, and selection process. For both rental and ownership opportunities, applicants submit applications, are entered into a lottery, and are then ranked based on lottery number and applicable local preference tiers. First priority is provided for local public-serving positions, followed by applicants who live or work in Los Altos.

For rental units, the Guidelines address lease requirements, maximum BMR rent calculations, utility allowances, tenant recertification, occupancy rules, restrictions on subletting, notice requirements, and procedures for re-renting vacant units. For ownership units, the Guidelines address affordable sales prices, resale restriction documents, maximum resale prices, primary residence obligations, annual monitoring, limits on unauthorized rental or transfer, and enforcement remedies for noncompliance or misrepresentation.

DISCUSSION
Priority Categories
Staff is seeking Council direction regarding the current priority categories and if they should be modified. Below are the current priority categories:

First Priority (in no order of preference)
• Persons who are regular, full-time staff for School District or Charter School who have been employed by a school that serves Los Altos residents, including the following schools outside City limits: Springer Elementary, Mountain View High, Cupertino Jr.

High, Homestead High School, Alta Vista High, and West Valley Elementary, for a period of no less than 12 months prior to the time of application; • Persons who are salaried City employees as defined in the City's personnel rules, who have been employed by the City for a period of no less than 12 months prior to the time of application; and
• Persons who are salaried Santa Clara County Fire Department employees who are assigned to the two fire stations located in the city of Los Altos.

Second Priority (in no order of preference)
• Persons who reside in the City at the time of application and who have lived in the City for at least the prior two years;
• Persons who work in the City at the time of application and have worked in the City for at least two years; and households who are required to relocate their residence as a result of Council action.

Third Priority (in no order of preference)
• Persons who work in the City at the time of application;

• Persons who have lived in the City for at least two years and who have moved out of the City within the five years prior to the time of application; and • Persons whose parents or children live in the City at the time of the application and such persons have lived in the City at some prior time.

Fourth Priority
• Persons who live or work within Santa Clara County at the time of application.

Staff’s research found that many jurisdictions use fewer local preference categories than the City’s current four-category structure. Staff also reviewed the existing categories for consistency with applicable fair housing requirements, including the City’s obligation to affirmatively further fair housing (AFFH). AFFH requires jurisdictions to administer housing programs in a manner that helps expand housing access, reduce barriers to opportunity, and avoid policies that may reinforce segregation or limit access to affordable housing for protected classes or households from outside the community. Preferences based on length of residency, prior residency, or family relationships with current residents are inconsistent with these objectives.

The proposed BMR Guidelines therefore propose simplifying the preference system to two categories, removing residency and employment-duration requirements, and retaining a firstpriority category for individuals who serve the Los Altos community, including qualifying school district, charter school, City, and Santa Clara County Fire Department employees. Staff also recommend expanding this category to include regular, full-time employees of private schools located in the City of Los Altos. This approach supports recruitment and retention for local public-service positions and better reflects current standard practices in many jurisdictions.

The proposed preferences would not preclude other eligible households from applying for the City’s BMR units.

The following are the proposed priority categories as reflected in the Draft Guidelines:

First Priority (in no order of preference)
• Persons who are regular, full-time staff who are employed by a school or school district serving kindergarten through high school students for public, private, or charter schools within the City limits and the following schools outside City limits: Springer Elementary, Mountain View High, Cupertino Jr. High, Homestead High School, Alta Vista High, and West Valley Elementary;
• Persons who are regular, full-time City employees as defined in the City’s personnel rules; and
• Persons who are regular full-time Santa Clara County Fire Department employees who are assigned to the two fire stations located in the City of Los Altos.

Second Priority

• Persons who live and/or work in the City.

Selection Process
The City’s current BMR selection process applies the adopted priority rankings and then ranks applicants within each priority category based on the date and time a complete application is submitted. Under this approach, applicants in a higher priority category are considered before applicants in a lower priority category, while applicants within the same category are generally considered on a first-come, first-served basis. As a result, an applicant’s placement can be affected by the exact timing of application submittal, even when multiple applicants are otherwise eligible within the same preference group.

Based on staff’s review of other BMR programs, many jurisdictions use a lottery system to select eligible BMR renters and buyers. Staff recommend moving to a lottery system because it would create a more transparent, equitable, and administratively consistent process. A lottery reduces the emphasis on which applicant submits first, helps avoid the perception that access depends on speed or timing, and gives eligible applicants within each applicable preference category an equal opportunity to be selected. It also provides a clearer and more repeatable process to follow when demand for BMR units exceeds the number of available units.

Under this approach, the City’s preference categories would continue to apply, but applicants would be selected by lottery within the applicable preference group rather than ranked solely by submission date and time. This would preserve the City’s policy priorities while making the selection process easier to understand, less dependent on application timing, and more consistent with the practices used by many other BMR programs.

Next Steps
Staff is seeking City Council direction on the policy questions below. Following the study session, staff will revise the draft BMR Guidelines consistent with City Council direction and return to Council for consideration and adoption.

1. Does the City Council want to modify the current priority categories?

2. Does the City Council want to replace the current first-come, first-served BMR selection process with a lottery system that maintains the recommended priority categories?

3. Does the City Council have any additional comments or direction on any portion of the draft BMR Guidelines?

ATTACHMENTS

1. Attachment 1 - Draft Los Altos BMR For Sale Program Guidelines

2. Attachment 2 - Draft Los Altos BMR Rental Program Guidelines

3. Attachment 3 - BMR Written Public Comment

DRAFT
City of Los Altos
Below Market Rate Housing
For-Sale Program Guidelines
Adopted by the
Los Altos City Council
on ______________, 2026
1 North San Antonio Road
Los Altos, California 94022-3087
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
ATTACHMENT 1

TABLE OF CONTENTS
Chapter 1: Introduction 1
Purpose of the Guidelines 1
Non-Discrimination 1
Conflict with Other Documents 1
Definitions 2
Chapter 2: Developer Requirements 4
Affordable Housing Agreements & Deed Restrictions 4
Term for Affordable Housing 5
Location & Design 5
Timing of Delivery 5
Determination of Sales Prices 6
Chapter 3: Marketing & Resident Selection Plan 7
Marketing Plan 7
Local Preferences 7
Accessibility Preference 8
Selection Process 9
Chapter 4: Determining Eligibility 10
Eligibility Criteria 10
Method of Calculating Income 16
Calculating Income from Assets 17
Eligibility Forms 19
Chapter 5: Home Ownership Provisions 20
General Requirements 20
Pricing Units 21
Loan Requirements 23
Home Buyer Education 23
Permitted Transfers 24
Resale Process 25
Annual Certification of Owner Occupancy 26
End of Affordable Unit Term 26
Chapter 6: Program Compliance 27
Burden of Proof Eligibility 27
False Statements or Misrepresentations 27
Unauthorized Rental, Sale, or Transfer 28
Appeal Process

CHAPTER 1

INTRODUCTION
City of Los Altos | BMR Housing For-Sale Program Guidelines 1 Purpose of City of Los Altos BMR
Housing For-sale Program Guidelines
The purpose of the City of Los Altos’ Below Market
Rate (BMR) Housing For-Sale Program Guidelines is to
support the administration of the City’s BMR Program,
which helps provide affordable homeownership
opportunities for very-low, low-, and moderate-income
households. The BMR Program is intended to preserve
the long-term affordability of designated Affordable
Units, or Affordable Ownership Units, for eligible
purchasers and homeowners who meet applicable
income, purchase price, occupancy, and program
requirements, as set forth in the applicable Affordable Housing Agreement, deed restrictions, these Guidelines, and other governing laws and regulations.

These Guidelines provide the City, developers,
applicants, and current and future BMR Owners with
information regarding the BMR Program, including
income and purchase price limits, eligibility
requirements, application and selection procedures, resale restrictions, annual certification requirements, and other program obligations. They describe the regulatory
requirements that apply to BMR ownership properties
and provide practical guidance for implementing and
participating in the program.

These Guidelines are adopted pursuant to the City’s
inclusionary housing and density bonus requirements in
Chapter 14.28 of the Los Altos Municipal Code, as well
as applicable state and federal laws and regulations. They are intended to be consistent with those requirements
and to assist in the administration, oversight, and
regulation of the City’s BMR Program.

Non-Discrimination
The Program will be implemented consistent with the
City’s commitment to nondiscrimination. There shall be
no discrimination against or segregation of any person or group of persons, on the basis of race, color, ancestry, national origin, religion, creed, age, disability (mental and physical), sex, gender (including pregnancy, childbirth, breastfeeding or related medical conditions), sexual
orientation, gender identity, gender expression, medical condition, genetic information, marital status, military or veteran status, or any other basis forbidden by federal, state, or local law.

Conflict with Other Documents
Where the provisions of these Guidelines conflict, or are inconsistent, with local ordinances or state or federal laws or regulations, or executed regulatory agreements with
the City, the provisions of those ordinances, laws,
regulations or agreements shall prevail. In developments where the City’s AHA is subordinate to a deed restriction from an affordable housing lender or funder, those
lenders and funders’ policies and procedures shall also prevail. The Development Services Director may
promulgate additional administrative procedures that are consistent with these Guidelines.

CHAPTER 1: INTRODUCTION
City of Los Altos | BMR Housing For-Sale Program Guidelines 2 Definitions
As used in these Guidelines, unless the context requires otherwise, the following words and terms have the
meanings set forth below.

Affordable Housing Agreement (AHA) : A recorded
contract between the City and the property owner
describing the Affordable Units, affordability categories, and income categories and explaining in detail how the
units will be marketed and sold.

Affordable Sales Price : The sales price of a for-sale
Affordable Unit resulting in projected average monthly
housing payments, determined as of the acquisition date, including interest, principal, mortgage insurance,
property taxes, homeowners insurance, homeowners’
association dues, if any, and a reasonable allowance for utilities, property maintenance, and repairs, not
exceeding an affordable housing costs as defined in
Section 50052.5 of the California Health and Safety
Code and California Code of Regulations Title 25,
Sections 6910-6924.

Affordable Unit or Affordable Ownership Unit : A
dwelling unit that is deed restricted to an Affordable Sales Price.

Area Median Income (AMI) : The median family income
for Santa Clara County, adjusted for actual household
size, as determined annually by the California
Department of Housing and Community Development
(HCD) and based on data published by the U.S.

Department of Housing and Urban Development.

Applicant/Co-Applicant : The household applying to
purchase an Affordable Unit. Applicant may be used
herein to refer to the Applicant’s entire Household
and/or all adults in the Household, as the context
requires. “Primary Applicant” refers to the first-named party on the application form. The Primary Applicant is the first listed Applicant on a Program application and must be the primary person on the sales contract for the Affordable Unit. In addition, this person will be the
primary point of contact. “Co-Applicants” are all other adult members of the Household aged 18 years or older.

BMR Administrator : A third party to whom the City
assigns some or all of its responsibilities and obligations regarding the Program administration.

BMR Owner or Owner : Household that owns an
Affordable Unit.

City : The City of Los Altos or BMR Administrator
working on behalf of the City to implement these policies and procedures.

Developer : The person(s) or legal entity(ies), who also may be the property owner, who is seeking Residential
Development Project permits or approvals from the City
or developing a particular Residential Development
Project, in the City.

Domestic Partner : Domestic Partner is defined in
Section 297 of the California Family Code. An individual is considered a Domestic Partner of the Owner by
presenting the Declaration of Domestic Partnership filed with the California Secretary of State.

Eligible Household : a Household eligible to participate in the BMR Program, as further defined herein.

Eligible Purchaser : A person whose Gross Income does
not exceed the income category for the Affordable Unit
(as that income category is defined in the Affordable
Housing Agreement), who demonstrates that he or she
meets the following required criteria to the City’s
satisfaction:

1. Has sufficient funds to make the downpayment
and pay related buyer’s closing costs;

2. Is a first-time homebuyer, as defined below.

3. Is qualified for purchase financing;

4. Has the capacity to pay taxes, homeowner’s dues,
insurance, closing costs, and other related costs;

5. Has provided verification satisfactory to the City
of income, job history, residency history, and
qualification for any priority status under the
rating system that the City may establish from
time to time.

CHAPTER 1: INTRODUCTION
City of Los Altos | BMR Housing For-Sale Program Guidelines 3 HCD : the California Department of Housing and
Community Development or any successor agency.

Household : all persons who will be living together in the same housing unit, whether related or unrelated, over the age of 18, and dependents under the age of 18 who live
with a member of the household 50% of the time or
more.

Household Income : the combined gross annualized
income of all adult household members (aged 18 or
older), as further defined herein.

HUD : the United States Department of Housing and
Urban Development.

Low-Income Household : households with incomes at or
below the Low-Income limit published by HCD, which
is set at approximately 80 percent of Area Median
Income.

Marketing Plan : the document that describes marketing
for the Affordable Ownership Units and shall include, at a minimum, procedures and requirements for
determining eligibility, occupancy requirements, initial marketing policies, application process, income
verification requirements, annual ownership
certification, grounds and procedures for rejection of
ineligible applicants and eligibility termination.

Market Rate Unit : a dwelling unit where the rental rate or sales price is determined by the area’s current rate of monthly rent or sale value.

Maximum Resale Price : the maximum sale price for
resale of Affordable Ownership Units. The formula used
to determine the price is outlined in each unit’s Resale Restriction Documents.

Moderate-Income Household : households with incomes
at or below 120% of Area Median Income, as published
by HCD.

Primary Residence : the residence where a household lives at least ten out of any given twelve months and is the
household’s permanent address for purposes of income
taxes, the US Postal Service, driver’s license, and voter registration.

Resale Restriction Documents : Set of documents the
City executes with the buyers of Affordable Units
including the Resale Restriction with Option to
Purchase, Deed of Trust, Promissory Note, Notice of
Default, etc. that ensure compliance with the BMR
Program requirements.

Residential Development Project : Any development that
includes an application to the City for planning or
building permits to create one or more dwelling units, to convert non-residential uses to residential uses, or to convert residential units from rental to for-sale. As used in these Guidelines, “Residential Development” includes, without limitation, rental housing; for-sale housing;
mixed-tenure housing; mixed-use residential; detached
single-family dwellings; duplexes; triplexes; multiplefamily dwelling structures; condominium or townhouse developments; condominium conversions; and land
subdivisions intended to be sold or rented to the general public. However, accessory dwelling units and licensed
care facilities are excluded from the definition of
Residential Development.

Utilities : Utilities means garbage collection, sewer, water, electricity, gas, and other fuels used for heating, cooling, cooking, and refrigeration for a dwelling unit. Utilities do not include telephone, cable, or internet service.

Very Low-Income Household : Households with
incomes at or below the Very Low- Income limit
published by HCD, which is set at approximately 50
percent of Area Median Income.

CHAPTER 2

DEVELOPER REQUIREMENTS
City of Los Altos | BMR Housing For-Sale Program Guidelines 4 Inclusionary Housing Requirements
for New Developments
All multi-family residential projects that create five or more new dwelling units shall, at minimum, provide Affordable Units as follows. Nothing in this informational guide or the Los Altos Municipal Code shall preclude a project
from providing additional Affordable Units beyond the
minimum. Calculations for the required Affordable Units shall be rounded up to the next whole number.

Multifamily
Development Type
Affordable Housing Requirement
Projects with
5 to 9 units
15% of the units (rental or ownership) shall be designated as affordable units.

Alternatively, applicants may request to pay an inclusionary housing in-lieu fee instead of providing onsite units.

Projects with
10 or more units
Rental: 20% of the total number of units shall be designated as affordable units.

Alternatively, applicants may request to pay an inclusionary housing in-lieu fee instead of providing onsite units.

Ownership: 15% of the total number of units shall be designated as affordable units.

Alternatively, applicants may request to pay an inclusionary housing in-lieu fee instead of providing onsite units.

Density Bonus
If a developer requests a density bonus, the same
Affordable Units may be used to satisfy both Density
Bonus Law and the City’s on-site inclusionary housing
requirement, but only to the extent those units meet the requirements of both programs. If the Affordable Units
provided for the density bonus do not fully satisfy the City’s inclusionary housing requirements, the developer must provide any additional inclusionary Affordable Units required by the City.

CHAPTER 2: DEVELOPER REQUIREMENTS
City of Los Altos | BMR Housing For-Sale Program Guidelines 5 BMR Affordable Housing Agreements
& Deed Restrictions
Affordable Unit Developers sign Affordable Housing
Agreements and Deed Restrictions (“AHA”) with the
City that outline the terms and conditions of their
participation in the BMR Program. Each AHA is unique
and has covenants that run with the land. AHAs shall
prevail over these Guidelines because they run with the land.

AHAs require Affordable Unit Developers to sell certain Affordable Ownership Units on the Property at
affordable housing costs to Eligible Purchasers.

Additionally, AHAs require that the Affordable
Ownership Units are constructed of similar quality as
market rate units in the project.

Term for Affordable Ownership
Housing
Affordable Ownership Units to satisfy the inclusionary
housing requirements of the Los Altos Municipal Code
shall be deed restricted for a term of at least 55 years.

Location and Design of Affordable
Housing Units
All Affordable Units shall be reasonably dispersed
throughout the residential development and consistent
with Federal and State fair housing laws, have a
distribution of units by number of bedrooms
proportionate to the market-rate units, and be of
comparable size based on net habitable square footage of the units. Affordable Units for seniors shall comply with applicable design requirements for senior housing.

Affordable Units shall be designed and constructed to be consistent with the market rate units in the project,
including comparable exterior design, interior design,
appearance, materials, and quality of finish. Affordable Units shall also have access to the same project parking, amenities, and recreational facilities available to marketrate units.

Timing of Delivery of Affordable
Housing
All Affordable Units in residential developments shall be constructed on-site concurrently with market rate units.

The Certificate of Occupancy for the Affordable Units
shall be issued no later than the Certificate of Occupancy for the market rate units. In phased developments, the
total Affordable Units requirement shall be calculated
based on the whole development; each phase shall include the required number of Affordable Units based on the
number of market-rate units in that phase; and on-site
units shall be developed concurrently with the marketrate units in each phase. For a residential mixed-use project with one or more phases, the Certificate of
Occupancy for the Affordable Units shall be issued no
later than the Certificate of Occupancy for the market
rate units in each phase.

CHAPTER 2: DEVELOPER REQUIREMENTS
City of Los Altos | BMR Housing For-Sale Program Guidelines 6 Determination of Sales Prices for
Ownership Affordable Housing Units
For each Affordable Unit in a project, the City establishes an Affordable Sales Price (“ASP”) as follows:

1. Calculates the assumed household size by
counting the number of bedrooms in the subject
Affordable Unit and adding one. For example, if
the unit is a two-bedroom unit, the assumed
household size is three.

2. Ascertains the current Area Median Income
(“AMI”) for the assumed household size. Income
limits are adjusted annually by the State
Department of Housing and Community
Development (HCD). The current Santa Clara
County Income limits are published and available
on the Santa Clara County website.

3. Multiplies by 0.30 the AMI applicable for Low
Income Households (70%) or Very- Low Income
Households (50%), or 0.35 for Moderate Income
Households (110% of AMI). Divides the
applicable product by 12, to derive a maximum
monthly Affordable Housing Cost (“AHC”).

4. Convert the AHC to an ASP as follows:
a. Obtains the estimated amount
available for first mortgage principal
and interest payment by subtracting
from the AHC the estimated cost of
property taxes, property insurance,
private mortgage insurance,
homeowner association dues (if any),
and allowances for utilities (which
shall be based upon the utility
allowances published by the Santa
Clara County Housing Authority in
connection with its implementation
of the federal Section 8 voucher
program) and for maintenance and
repairs (assumed to be 1% of the sale
price per year).
b. Using the amount available for
principal and interest, calculates the
maximum principal amount of the
first mortgage loan that can be
borrowed, assuming the interest rate
for a 30-year fixed-rate mortgage at
the “Prevailing Market Interest Rate”,
defined as the average 30year fixed
conventional mortgage rate published
by Freddie Mac in its Primary
Mortgage Market Survey for the week
immediately preceding the date of
calculation.
c. Sets the maximum sales price by
dividing the first mortgage loan
amount by a figure equal to the
percentage of the sales price that will
not be provided by the homebuyer as
down payment. On a transaction
where the mortgage amount is equal
to $200,000 and the homebuyer down
payment is 3%, the formula for
determining the maximum sales price
would thus read as follows:

Maximum Sales Price =
$200,000/.97

CHAPTER 3

MARKETING, LOCAL PREFERENCES, & RESIDENT SELECTION PLAN City of Los Altos | BMR Housing For-Sale Program Guidelines 7 Marketing Plan
The City will prepare a Marketing Plan and Affordable
Ownership Selection Plan for the Affordable Ownership
Unit(s). The plan will describe the marketing procedures, community outreach efforts, application process,
eligibility review, selection process, and coordination with the Developer. The City will also provide the
Developer with the Affordable Sales Price for each
Affordable Ownership Unit. The Developer only has
rights to review the Affordable Sales Price and does not have any approval rights.

Local Preferences
The City of Los Altos has established the following
preferences for Affordable Units:

First Priority (in no order of preference)
● Persons who are regular, full-time staff who are
employed by a school or school district serving
kindergarten through high school students for
public, private, or charter schools within the City
limits and the following schools outside City
limits: Springer Elementary, Mountain View
High, Cupertino Jr. High, Homestead High
School, Alta Vista High, and West Valley
Elementary;
● Persons who are regular, full-time City employees
as defined in the City’s personnel rules; and
● Persons who are regular full-time Santa Clara
County Fire Department employees who are
assigned to the two fire stations located in the
City of Los Altos.

Second Priority
● Persons who live and/or work in the City.

At the initial application for the Affordable Housing, the Applicant shall self-attest to any preferences. Preferences will be verified as part of the eligibility determination process.

During the initial sale of an Affordable Unit, an
Applicant household shall be eligible for a local
preference if at least one member of the Applicant
household satisfies the applicable local preference criteria.

For projects that have Federal funding such as Lowincome Housing Tax Credits and/or State funding, the above preferences will be applied to the extent allowed by such funding programs.

Acceptable Documents to Verify
Priority Tiers
Preferences must be met by the applicants and/or coapplicants that will be on title to the Affordable Unit.

Applicants claiming a preference must submit the
following documents to prove they meet a local
preference by the application deadline for the Affordable Unit lottery, in addition to the documents required as
part of the application submittal. The documents must
be current: if issued monthly, the most recent month’s
bill; if issued quarterly, not more than 90 days old. PO Boxes or private mailboxes such as Postal Annex cannot
be accepted as proof of meeting a local preference.

Applicants must meet the eligibility and qualification
criteria at the time of the lottery. Eligibility will be verified when and if a file is reached for review after the lottery and ranking of applications pursuant to the
lottery results.

CHAPTER 3: MARKETING, LOCAL PREFERENCES, & RESIDENT SELECTION PLAN City of Los Altos | BMR Housing For-Sale Program Guidelines 8 First Priority: Works for the City of Los Altos, School, or Santa Clara County Fire Department:
● A signed letter from the City of Los Altos
Human Resources Department verifying the
Applicant is a regular, full-time City employee.

The letter must include the Applicant’s start date
and regular hours worked per week.
● A signed letter from the school or school district’s
Human Resources Department verifying that the
Applicant is a regular, full-time school employee.

The letter must include the Applicant’s start date
and regular hours worked per week.
● A signed letter from the Santa Clara County Fire
Department Human Resources Department
verifying that the Applicant is a regular, full-time
employee assigned to one of the two fire stations
located in the City of Los Altos. The letter must
include the Applicant’s start date, regular hours
worked per week and assigned station.

Second Priority: Lives and/or works in the City of Los
Altos:

Applicants must provide at least one of the following
documents to verify residency or employment in the City of Los Altos:
● One current utility bill showing the Applicant’s
City of Los Altos residence address. Utility bills
may include gas, electricity, garbage, or water
service.
● A current paystub showing the Applicant’s City
of Los Altos work address.
● A current, fully executed lease showing the
Applicant’s City of Los Altos residence address.
● If the Applicant’s employer is not located in the
City of Los Altos, or if the Applicant’s paystub
does not show a City of Los Altos work address,
the Applicant must submit a signed and dated
letter from the employer’s Human Resources
Department confirming that the Applicant
works primarily in the City of Los Altos and that
at least 75 percent of the Applicant’s working
hours are performed in the City.
● Self-employed Applicants who work from a
home or business located in the City of Los Altos
must submit a copy of their current City of Los
Altos business license.

Accessibility Preference
If an Affordable Unit has accessibility features related to mobility, hearing impairment, or sight impairment,
Applicants who can demonstrate a need for the features
will receive a preference for those units. The need for the specific accessibility feature or features must be
documented by a medical professional, though this letter does not need to spell out the specific nature of the
applicant’s disability.

CHAPTER 3: MARKETING, LOCAL PREFERENCES, & RESIDENT SELECTION PLAN City of Los Altos | BMR Housing For-Sale Program Guidelines 9 Selection Process
All Applicants who submit a complete application by the required deadline will be entered into a lottery. After the lottery is conducted, the lottery results will be organized according to the local preference tiers for which each
Applicant household qualifies, as described in the Local Preferences section above.

The City does not maintain a waitlist for for-sale
Affordable Units. However, the City may maintain an
interest list. When a for-sale Affordable Unit becomes
available, individuals on the interest list will be notified by email of the purchase opportunity.

Following the lottery, the City will begin a more detailed application review and eligibility determination process.

Eligible Households will be offered an Affordable Unit
that is appropriate for their household size, based on
lottery order and preference tier ranking.

A new lottery will generally be held each time a for-sale Affordable Unit becomes available and the applicable
preference tiers will be applied each time a lottery is conducted.

How the Lottery Works

1. Submitan application. Applicants must submit a
complete application by the required deadline to
be included in the lottery.

2. Random lottery numbersareassigned. The City
will conduct a random lottery. Each complete
application will receive a lottery number, which
establishes the Applicant’s order within the
general lottery.

3. Preference tiers areapplied. After lottery
numbers are assigned, the City will determine
which Applicants qualify for a local preference
tier. Applicants who qualify for a preference tier
will be placed within that tier in lottery number
order. Applications within each preference tier
will be considered before applications that do not
qualify for a local preference.

4. Lottery resultsare published. The City will make
the lottery results available after the lottery is
completed. The results will show the order in
which applications will be reviewed, based on
lottery number and applicable preference tier.

5. Applicantsare contacted in order. The City will
contact Applicants in the order established by the
final lottery results and applicable preference
tiers. Applications will be reviewed and processed
in that order until all available Affordable Units
in the project have been assigned.

CHAPTER 4

DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 10 Prospective buyers of any Affordable Unit governed by
these Guidelines must be certified eligible for the BMR Program by the City prior to buying any Affordable Unit and are subject to annual monitoring for as long as they continue to own an Affordable Unit. The eligibility
criteria for the BMR Program are set forth below.

Prospective owners shall complete an eligibility
application form and submit the necessary
documentation needed to determine eligibility to the
City for the Affordable Unit. Applications that are
incomplete will be returned to the applicant with a
checklist of missing items and will not be reviewed
further until all required items are included and it is deemed complete. After initial review, the City may
request additional information from the Applicant.

Eligibility Criteria
The following are the eligibility criteria for Affordable Units. Applicants/Households must:

1. Be first-time homebuyers;

2. Intend to reside in the home as their primary
residence;

3. Meet the income eligibility requirements for the
unit being applied for;

4. Meet any asset eligibility requirements;

5. Meet the occupancy standards for the unit being
applied for;

6. Not have a conflict of interest;

7. Not own residential real estate; and

8. Complete a homebuyer education course.

First-Time Homebuyer
Applicants must be a “First-time Homebuyer” which
means a person who has not owned a residential property during the three-year period before the purchase of an
Affordable Unit regardless of whether the individual’s
interest in such property results in a financial
gain, such property is in another state or country, or
whether the property was used as the primary residence.

Exceptions include:
● An individual who owned a home with a former
spouse or Domestic Partner during their prior
marriage or partnership.
● An individual who has owned a principal
residence that was not permanently affixed to a
permanent foundation, according to applicable
regulations.
● An individual who has owned a property that was
not in compliance with state or local building
codes, and which cannot be brought back into
compliance for less than the cost of constructing
a permanent structure.
● Timeshares.
● Loan co-signers from previous real estate
transactions if the applicant was not on title and
there was no financial gain for the applicant
● Acting solely as a trustee with no beneficiary
interest in a trust that includes residential
property, subject to verification of income and
assets from the trust.
● Being a named beneficiary of a trust that includes
a residential property, but only if the trustor is
living at the time.
● Ownership of shares in a not-for-profit limited
equity co-op (rental income, if any, will be
included when determining eligibility).

To verify First-time Homebuyer status, 3-years of federal tax returns will be reviewed to confirm that the applicant has not claimed any of the tax deductions associated with homeownership (e.g., deductions of mortgage interest or property tax payments).

CHAPTER 4: DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 11 Primary Residence
The Household must occupy the Affordable Unit as its
sole and primary residence. By signing the application, the Applicant acknowledges the Primary Residence
requirement and agrees that residency will be monitored annually.

Occupancy Standards by Unit Size at Occupancy
The minimum occupancy standard for Affordable Units
is one person per bedroom. The household size for an
Affordable Unit may not exceed two people per
bedroom, plus one. For example, in a two-bedroom unit,
the maximum household size that could occupy the unit
would be five (5) people. While certain types of live-in care givers are not considered a part of the household for income eligibility purposes, they would be considered a part of the household for determining the number of
bedrooms required for a household. To qualify as a livein aide, the City must verify the need for the live-in aid by obtaining a letter from the person’s health care provider.

Unit Size
Minimum
Household
Size
Maximum
Household
Size
Studio 1 2
1 bedroom 1 3
2 bedrooms 2 5
3 bedrooms 3 7
4 bedrooms 4 9
Some households may qualify for a range of unit sizes
(e.g., a 3-person household may qualify for a 1-, 2- or 3- bedroom) and may choose among those for which they
qualify, assuming they can afford the unit. The
marketing or leasing agent will review household size and notify Applicants of the unit sizes for which they are
eligible. Any question about eligibility for a particular unit size shall be brought to the City to resolve.

Conflict of Interest
The following persons are ineligible to purchase an
Affordable Unit:
● All employees and officials of the City who have
by the authority of their position, policy-making
authority or influence over the City of Los Altos
housing programs.
● The developer of the Affordable Unit to be
purchased.
● The immediate relatives, employees, and anyone
gaining significant economic benefit from a
direct business association
Ownership of Residential Real Estate
Applicants that own their primary residence or other
residential property that produces income are ineligible for an Affordable Unit. If an applicant owns property
that does not produce income, the equity will be imputed and included in the asset calculation.

CHAPTER 4: DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 12 Income Eligibility
To participate in the BMR Program, an Applicant’s
household income must be no greater than the allowed
household income for the unit being applied for, by
household size, as provided by the State Department of
Housing and Community Development (HCD). The
current Santa Clara County Income limits are published
and available on the Santa Clara County website, which
are adjusted annually.

Determination and Verification of Household Size
The Household size is defined as the total number of
residents who intend to live together in the Affordable Unit. The Applicant must provide documentation
outlining the current residency of the household
members, such as tax returns, birth certificates, marriage certificates, and school records. Where documentation is unavailable or an Applicant household will include
members not already living together, a signed affidavit by all adult household members will be required. If it is
found later that a person named in the affidavit is not living in the Affordable Unit, the Household will be
considered out of compliance.

A household consists of all persons living together in the same housing unit, whether related or unrelated, over the age of 18, and dependents under the age of 18 who live
with a member of the household 50% of the time or
more, as indicated on a valid court custody documents
and current school registration documents, and/or must
be listed as a dependent child on that party’s tax returns.

Households may also include the following:
● Temporarily Absent Family Members: The
income of temporarily absent family members is
counted towards the household income,
regardless of the amount the absent member
contributes to the household.
● Adult Students Living Away from Home: If the
adult student is counted as a member of the
household in determining the household size (to
compare against the HUD income limits), the
first $480 of the student’s income must be
counted in the family’s income. Note, however,
that the $480 limit does not apply to a student
who is the head of household or spouse (their full
income must be counted),
● Permanently Absent Family Members: If a family
member is permanently absent from the
household (e.g., a spouse who is in a nursing
home, or incarcerated), the head of household has
the choice of either counting that person as a
member of the household and including income
attributable to that person as household income
or specifying that the person is no longer a
member of the household.
● Unborn/Adopted Child: An unborn child can be
counted in the household size once there is
medical confirmation of the pregnancy. A child
in the adoption process can be counted with
verification of the adoption process.

CHAPTER 4: DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 13 The following are not considered part of the household
for the purpose of determining income eligibility:
● Live In Aide/Children of Live In Aide: A live-in
aide is a person who resides with one or more
elderly persons, near-elderly persons, or persons
with disabilities, and who is determined to be
essential to the care and well-being of the
person(s), is not obligated for the support of the
person(s) and would not be living in the unit
except to provide the necessary supportive
services. To qualify as a live-in aid, the City must
verify the need for the live-in aide by obtaining a
letter from the person’s health care provider. The
City will not require Applicants to provide access
to confidential medical records or to submit to a
physical examination. Income of a live-in aide is
excluded from the household income.
● Foster Children/Foster Adult: Documentation
from the relevant foster care agency is required to
confirm this relationship.

Determination & Verification of Household Income
A household’s income is defined as the projected
combined gross annual income of all household members
aged 18 and over. The definition of income shall be the same as the federal definition found in 24 CFR Part 5
(commonly known as the “Section 8” definition). As
specified in 24 CFR Part 5, the income derived from any assets shall be included in the income calculation. Income determination is based on the “Technical Guide for
Determining Income and Allowances for the HOME
Program” as updated from time to time by 24 CFR 5.603
and 5.609. If units are governed by another program such as Low- Income Tax Credits or other programs that
include affordability restrictions that have different
procedures to determine income, those regulations shall apply.

A “snapshot” of the household’s current circumstances
will be used to project future income. An assumption
should be made that today’s circumstances will continue for the next 12 months unless guaranteed evidence to the contrary.

CHAPTER 4: DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 14 Income Inclusions and Exclusions
The following is included in the calculation of gross
annual household income:

Type of Pay Documentation
Wages and salaries, overtime pay, commissions,
fees, tips, bonuses, and other compensation for
personal services, before payroll deductions
3 most recent months of pay stubs
Most recent year’s complete income tax return
(Need 3 years tax returns if City requires First
Time Buyer status for ownership units)
Net income from the operation of a business or
profession or from the rental of real or personal
property (without deducting expenditures for
business expansion or amortization of capital
indebtedness)
Most recent year’s complete income tax return
plus a Self-Employment Affidavit
Interest and dividends 3 most recent months of bank statements Payments received from Social Security,
annuities, insurance policies, retirement funds,
pensions, disability or death benefits, and other
similar types of periodic receipts
Documentation showing the amount received
each month
Unemployment, disability compensation, and
severance pay
Documentation showing the amount received
each month
Payments received as public assistance Documentation showing the amount received each month
Periodic and determinable allowances, such
as alimony and child support payments, and
regular contributions or gifts received from
persons not residing in the home
Interlocutor decree which indicates specified
payment or proof of non-payment (lien filed)/
documentation showing amount received each
month
All regular pay, special pay, and allowances
of a member of the Armed Forces (whether or
not living in the dwelling) who is the head of
household or spouse
Copies of the last 3 months’ paychecks or other
verification of employment and income
Full-Time Students over the age of 18
Earnings up to $480. Copies of last 3 months’
paychecks. Transcript/school registration that
shows full-time enrollment.

CHAPTER 4: DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 15 Income documentation needs to be current, generally
defined as less than 120 days old. The City reserves the right to request more documentation if the above
information is not sufficient to give accurate
determination. In that case, up to 12 preceding months
may be required to determine income. Depending on the
situation, additional documentation such as letters or
affidavits may be requested as needed.

A written statement from the administrator of another
government program under which the household receives
benefits, and that examines the annual (gross) income of the household each year may be used as documentation
of income in lieu of collecting the documentation
described above. The statement must indicate the
household size and its total gross income.

Tax Returns
The prior year’s tax return is required from each adult household member to assist with income verification as a reference point for reasonableness. Tax returns and tax transcripts must be signed and dated by the taxpayer.

Since income is projected forward, taxes are not used for calculating income, except for self- employment income
in some cases. If a household member does not file taxes, the household member must complete a non-tax filer
affidavit and Form 4506-T to obtain a transcript or
statement of non-tax filing.

If the household member cannot produce a transcript or
statement using the mail, phone or online methods,
property management staff can witness the request by
having the Applicant call, mail, or go online from the
property management office.

The following include items that shall not be considered income:

1. Casual, sporadic, or irregular gifts.

2. Amounts specifically for, or in reimbursement of,
medical expenses.

3. Lump-sum additions to family assets, such as
inheritances, insurance payments, capital gains,
settlement for personal or property losses (these
are considered assets-see below).

4. Amounts of educational scholarships paid
directly to the student or the educational
institution, and amounts paid by the government
to veterans for use in meeting the cost of tuition,
fees, books, and equipment.

5. Special pay to a serviceman head of household
away from home and exposed to hostile fire.

6. Relocation payments.

7. Foster child or foster adult care payment.

8. Medicaid payments or other government agency
caregiver payments to enable disabled family
member to reside in family home.

9. Amounts specifically excluded by state or federal
statute from consideration as income.

10. Rent subsidies provided by government
programs, such as a Housing Choice Voucher
(Section 8), short term rental relief, and other
sources, are excluded from income.

11. Payments for certain Volunteer Programs under
Action Agency (VISTA, SCORE, etc.).

12. Amounts received under training programs
funded by HUD.

13. Earnings in excess of the limits set by HUD for
full-time students over age of 18.

14. Income from employment of children under the
age of eighteen.

15. Income from live-in aide.

16. Income and distributions from qualified tuition
savings plans (ex. 529 accounts).

CHAPTER 4: DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 16 Method of Calculating Income
Annual Income shall be calculated by using one of the
following methods for each source of income:

Pay Stub Averaging
Determine the basis on which employees are paid
(hourly, weekly, or monthly, and with or without
overtime). Calculate the total of 3 months’ worth of pay stubs and multiply by 4 to get an annual figure. Be careful of those who get paid “twice a month” which may be
paid either twice a month (24 times a year) or every two weeks (26 times a year). An annual salary is counted as annual income regardless of the payment schedule. For
example, if a teacher’s annual salary is $30,000, this is the annual income regardless of whether the teacher is paid over a nine- or 12-month period.

Year to Date Annualization
Irregular income such as tips, commissions, bonuses,
overtime are annualized by taking total year to date and divide by how many weeks the total spans to calculate
weekly average and multiply by 52 for annual amount.

Alternatively, applicants can also provide documentation from the employer that describes frequency and amount
of irregular income.

Variations in Pay
For those whose annual employment is less stable or does not conform to a twelve-month schedule (e.g., seasonal
laborers, construction workers), examine income
documentation that covers the entire previous twelvemonth period.

Self-Employment
Use the net income from the operation of a business or
profession including self-employment income. Selfemployment also includes contract work and “gig” work.

Net income is gross income less business expenses,
interest on loans, and depreciation computed on a
straight-line basis. Those with self-employment income
must supply the most recent year’s tax return and
complete a Self-Employment Affidavit. The SelfEmployment Affidavit shall be used to document projected net self-employment business income for the
following 12 months. Additional documentation, such as
business bank statements, may be requested to clarify
income.

In addition to net income, owners must count any
salaries or other amounts distributed to family members from the business, and cash or assets withdrawn by family members, except when the withdrawal is a
reimbursement of cash or assets invested in the business.

When calculating net income, owners must not deduct
principal payments on loans, interest on loans for
business expansion or capital improvements, other
expenses for business expansion, or outlays for capital improvements.

If the net income from a business is negative, it must be counted as zero income. A negative amount must not be
used to offset other family income.

Commercial Property Income
The net income or rent received from any commercial
property or land owned by any applicant shall be
calculated using the most recent year’s tax return.

CHAPTER 4: DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 17 Unemployment
Unemployed applicants submit an affidavit in place of
pay stubs. Unemployment payments are considered
income and should be annualized.

Interestand Dividends
Average 3 months of account statements. Additional
information may be requested about any unusual
deposits.

Regular Monthly Payments
Use stub or award letter to determine monthly payments
such as Social Security, disability, pension, child support, etc., and multiply by 12. Count the total income before any deductions.

Calculating Income from Assets
Assets are defined as cash or non-cash items that can be converted to cash. Assets have both a market value and a cash value. The market value of an asset is simply its
dollar value on the open market. For example, the market value of a share of stock is the price quoted on the stock exchange on a particular day. A property’s market value is the amount it would sell for on the open market. This
may be determined by comparing the property with
similar, recently sold properties.

An asset’s cash value is the market value less reasonable expenses required to convert the asset to cash, including penalties or fees for converting financial holdings. Any penalties, fees, or transaction charges levied when an asset is converted to cash are deducted from the market value to determine its cash value (e.g., penalties charged for premature withdrawal of a certificate of deposit, the
transaction fee for converting mutual funds to cash or
broker fees for converting stocks to cash), In the case of real estate, the cash value is the equity based on the
market value less the unpaid balance of all loans and liens and all reasonable costs incurred to sell the unit.

Only the cash value (rather than the market value) of an item is counted as an asset. If more than one person owns an asset, the value of the asset should be prorated
according to the Applicant’s percentage of ownership.

Assets include:
● Cash in accounts (checking and savings accounts,
safe deposit boxes, and elsewhere)
● Cash value of stocks (including options), bonds,
treasury bills, certificates of deposit, mutual
funds, money market accounts, and revocable
trusts
● Cash value of life insurance policy available to the
individual before death
● Equity in real property or cooperatives
● Personal property held as an investment such as
gems, jewelry, coin and art collections, antiques,
and vintage and/or luxury cars
● Lump sum or one‐time receipts, such as
inheritances, capital gains, lottery winnings,
victim’s restitution, insurance settlements, gifts,
and other amounts not intended as periodic
payments
● Mortgages or deeds of trust held by the individual

CHAPTER 4: DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 18 The following Assets are included in the calculation of gross annual household income:

Type of Asset Documentation
Checking Account Copies of three most recent statements showing all deposits, interest earned, and balances.

Savings Account, Mutual Fund / Money
Market Fund, Certificates of Deposit Copy of statement(s) of current value Stocks, including Options
Copy of statement(s) of current value; stock
prices attach a copy of recently dated newspaper
or online source that shows the value of each
company’s stocks
Bonds, including Savings Bonds Copies of each and value Life Insurance Copy of policy and two most recent statements Gift Notarized gift letter
Personal Loan Letter or loan agreement
Other Third party documentation to verify the amount
of the asset
Assets can generate income, and for the purpose of
determining an applicant’s income, the actual income
generated by the asset (e.g., interest on savings or
checking account) is what counts, not the value of the
asset.

Assets do not include:
● Company pension and retirement plans
● Dedicated education funds/savings accounts,
such as 529 plan college savings accounts
● Funds dedicated to federally recognized
retirement programs such as 401(k)s, 403(b)s,
and IRAs or future/potential pension benefits
or insurance proceeds held in accounts not
currently owned and controlled by the
applicant.
● Any assets not effectively owned by the
applicant, i.e., when assets are held in the
individual’s name, but assets and any income
they earn accrue to the benefit of someone
else who is not a member of the household,
and that other person is responsible for
income taxes incurred on income generated
by the asset.
● Assets that are part of active business (not
rental property).
● Necessary personal property including cars,
furniture etc.

CHAPTER 4: DETERMINING ELIGIBILITY
City of Los Altos | BMR Housing For-Sale Program Guidelines 19 Imputed Income from Assets
When the total value of net household assets is $50,000 or more (as adjusted by HUD annually) and the actual
income from an asset cannot be calculated, the income
can be imputed by applying the HUD passbook savings
rate to the asset (.045% starting January 2025). If the actual income from an asset cannot be determined and
the total net household assets is less than $50,000, do not impute the income of the assets.

Maximum Assets
Applicants that own their primary residence or residential real estate that produces income are ineligible for the BMR Program. If the property is a vacation home, or
other non-income producing real estate, an exception
may be allowed by the City, and the equity will be
imputed and included in asset calculation.

For Affordable Units deed restricted exclusively by the City of Los Altos, the following are the maximum asset
limits:
● Assets of a BMR Owner cannot exceed thirty
percent (30%) of the purchase price of the
Affordable Unit or $150,000, whichever is lower.

The assets to be included or excluded are the same as used to calculate income from assets in the income eligibility section, above.

Eligibility Forms
“Eligibility Forms” are the typical application forms used to document income and eligibility for BMR Program
Applicants. The City will use the most current forms
available from the California Tax Credit Allocation
Committee (CTCAC), or substantially similar forms
approved by the City.

Dates on Forms
Forms prepared and/or signed after the effective date of certification shall be signed with the current date and include the following statement “True and Correct as of (insert effective date). The statement must be initialed by the Applicant(s). Backdating of forms is not permitted.

Application Changesafter Submission
Changes to an application after submission are only
allowed in the following limited circumstances:
● Removal of an applicant in the case of death,
divorce or dissolution of marriage or domestic
partnership;
● Addition of an Applicant’s Spouse or Domestic
Partner, a newborn child, or a new Household
member in the case of a legal adoption or new
legal guardianship (including foster children);
● Update of income qualifications, such as a new
job or a job that has ended; and/or
● Correction of technical errors, such as current
phone number or other non-qualifying
information.

Applicants must ensure the completeness and accuracy of their application before submission. The City has sole
discretion to approve of any changes.

CHAPTER 5

HOMEOWNERSHIP PROVISIONS
City of Los Altos | BMR Housing For-Sale Program Guidelines 20 General Requirements
Resale Restriction Documents
BMR Owners must execute the City’s Resale Restriction
Documents which include the Deed of Trust, Promissory
Note, Affordability Covenants, Resale Restriction, and
Purchase Option, or other documents requested by the
City (“Resale Restriction Documents”). The Resale
Restriction Documents include the BMR Program
requirements including owner occupancy, prohibition of
renting unit, maintaining unit and the procedures to sell the unit, refinance, title transfer, and monitoring and compliance measures.

Owner Occupancy
The Affordable Unit shall be the owner’s principal place of residence. To be considered as a principal place of
residency, the owner shall live in the unit for at least 10 months out of each calendar year. In emergency or
hardship situations, a temporary waiver may be granted
on a case-by-case basis for a short period of time
(generally a maximum of one year) by the City. The City requires the Owner to submit an annual certification of occupancy providing requested documentation.

Insurance
The Owner must obtain and maintain a standard
homeowner’s insurance policy, with the City named as
an additional insured for the Affordable Unit. The
Owner must ensure that the City receives a copy of
evidence of insurance on at least an annual basis.

Homeowner’s Exemption
The Owner must continuously claim a homeowner’s
exemption for property taxes for the Affordable Unit.

Maintenance Of Home
The BMR Owner shall not damage or destroy the
Affordable Unit and shall maintain the Affordable Unit
in compliance with all applicable laws, ordinances, and regulations.

CHAPTER 5: HOME OWNERSHIP PROVISIONS
City of Los Altos | BMR Housing For-Sale Program Guidelines 21 Pricing Units
Initial Maximum Affordable Sales Price
The Affordable Sales Price of the Affordable Unit shall be calculated by City staff and finalized when the
Affordable Housing Agreement between the Developer
and the City is executed, using the assumptions outlined below. The following chart shows how the total monthly
affordable housing cost is calculated by income category:

Income Category
Maximum
Income
(Percent of
AMI)
Percent of
AMI Used for
Calculating
Affordable
Housing Cost
Percent of Income
Used
to Calculate
Affordable Housing
Cost
Very Low-Income 50% 50% 30% of Income
Low-Income 80% 70% 30% of Income
Moderate-Income 120% 110% 35% of Income
Assumptions
Once the total monthly affordable housing cost
allowance from above is calculated, the following
assumptions are used to determine the components of
the monthly housing costs and establish the initial sales price.

1. Household Size: The income for household
size shall be the number of bedrooms plus one
person, meaning one person for a studio, two
persons for a one-bedroom unit, three persons
for a two-bedroom unit, four persons for a
three-bedroom unit, and five persons for a
four-bedroom unit.

2. Down payment: Three percent (3%)

3. Mortgage Term: 30 years, amortized

4. Mortgage Interest Rate: The average 30-year
fixed conventional mortgage rate published by
Freddie Mac in its Primary Mortgage Market
Survey for the week immediately preceding the
date of calculation.

5. Property Taxes: 1.15% of sales price divided by
12 6. Hazard Insurance: $75

7. Mortgage Insurance Premium (MIP): 0.5% of
loan amount divided by 12

8. Maintenance: Approximately 1% of the sales
price

9. HOA/Condo Dues: The estimated or actual
dues proposed for the unit from Developer.

10. Utility Allowance: Schedule issued annually by
the County of Santa Clara.

CHAPTER 5: HOME OWNERSHIP PROVISIONS
City of Los Altos | BMR Housing For-Sale Program Guidelines 22 Maximum Affordable Sales Price Upon Resale
The City will calculate Maximum Resale Price for the
Affordable Unit, which shall be the lowest of the
following: (a) the Increased Base Price (defined below); or (b) the Fair Market Value (defined below).

The “Increased Base Price” means the purchase price that Owner paid for the Affordable Unit, increased by the
percentage change in the Area Median Income, from the
original purchase date of the Affordable unit by the
Owner to the date of notification for a “Transfer” as
defined in the City’s Covenants.

The “Fair Market Value” shall be determined by (a)
agreement of the City and the Owner; or (b) if either
party declares an impasse in discussion of fair market
value, by appraisal by a qualified, licensed appraiser with at least five (5) years’ experience appraising residential properties, to be appointed by the City and paid for by the Owner out of escrow.

Adjustments to Maximum Resale Price
The Increased Base Price shall also be adjusted for the “Value of Capital Improvements”. The “Value of Capital
Improvements” shall mean the value of real property (as defined in Civil Code Section 658): (1) made or installed by or under the direction of the Owner; (2) with an initial cost of Two Thousand Dollars ($2,000) or more; (3)
which can be documented by the Owner to the
reasonable satisfaction of the City; and (4) which the City or the Administrator approved in writing in advance
(unless the improvements were otherwise ordered,
directed, or required by a court of competent jurisdiction or anyone acting under statutory authority, or unless the City agrees, subject to its reasonable discretion, that the improvements were necessary in the interest of health or safety and were required to be made or installed under
circumstances such that obtaining advanced approval was not reasonably practicable). The value of such
improvements to be considered in calculation of the
Increased Base Price shall be a reasonable value agreed upon by the parties, or, if no agreement is reached, the appraised market value of the improvements when
considered as additions or fixtures to the Affordable Unit (i.e., the amount by which said improvements enhance
the market value of the Affordable Unit at the time of
sale or valuation). The adjustment to the Increased Base Price for such improvements shall be limited to the
increase in value and shall be determined by the City and the Owner, or, in the event of a failure to agree, by an independent residential appraiser selected by the Owner from a list of appraisers established by the City. The cost of the appraisal shall be borne by the Owner. If the City fails to provide or maintain a list of approved appraisers, the Owner may select an appraiser, subject to approval by the City, which the City shall not unreasonably deny,
condition, or delay.

The Increased Base Price shall be decreased by (a) the cost of repair to bring the Affordable Unit into compliance
with any governmental law or ordinance (including local building codes), provided, however, that this shall not include any repair or retrofit of any non-code-compliant items which existed when the Owner took title to the
Affordable Unit; (b) the cost to repair any damage caused by infestation of wood-destroying pests specified by a
licensed structural pest control operator (including any costs associated with ridding the Affordable Unit of such insects); (c) the cost to repair associated with curing any other insect infestation recommended by a licensed
structural pest control operator; and (d) the cost to
render the Affordable Unit “broom clean” and habitable
for residential purposes, including but not limited to any needed roof repairs or replacement and any repairs
needed to place plumbing, electrical, heating, air
conditioning, or appliances in good order and operating condition.

CHAPTER 5: HOME OWNERSHIP PROVISIONS
City of Los Altos | BMR Housing For-Sale Program Guidelines 23 Loan Requirements
Loan Terms
The first mortgage used by the applicant(s) must be for no more than a 30‐year term. Loans must also be fixed
rate and fully amortizing. Balloon payments, negative
amortization, adjustable and/or non‐prime interest rate loans, prepayment penalties, and stated‐income loans are prohibited. The City, in its sole discretion, may identify other prohibited loan characteristics.

Down Payment
The applicant must be able to make at least three percent (3%) down payment from the borrower’s own funds,and
the maximum down payment shall be 30% of the
Affordable Sales Price. The applicant’s down payment
funds must be held in an account in the applicant’s name for at least six months prior to submitting this
application. Funds used for the three percent (3%) down payment may not be used for closing costs. The applicant is responsible for paying any applicable closing costs
however, gift funds may be used for closing costs.

Gift Funds
The applicant may use gift funds that do not exceed 20
percent of the Affordable Sales Price. Gift funds may not be used for the three percent (3%) down payment
requirement. All gifts must be clearly identified in a gift letter which must be submitted with the application that includes the following:

1. The amount of money being provided.

2. The relationship of the giver to the applicant.

3. Statement, under penalty of perjury, that the applicant is not required nor expected to repay the funds, nor is the giver to hold title for the Affordable Unit, in
whole or in part, upon the close of escrow or in the
future.

4. Attached to the letter, the applicant must provide
documentation of the funds to be gifted (e.g., most
current account statements).

Title/Ownership
Affordable Units may be vested in any form if all adult members of the household are titleholders and appear on title as a fee owner for the Affordable Unit. Co-signing for a loan for Affordable Units by a non BMR household
member is not allowed.

Home Buyer Education
Completion of a first-time homebuyer education course
is required within 12 months prior to closing the
purchase of an Affordable Unit. This course may be
completed by one of the applicants. Staff will provide
applicants with a list of the approved courses.

CHAPTER 5: HOME OWNERSHIP PROVISIONS
City of Los Altos | BMR Housing For-Sale Program Guidelines 24 Permitted Transfers
Owners who wish to make any change to title must
notify the City in writing before the change occurs. The Owner must provide written notice to the City at least
ninety (90) days before the proposed transfer. If a transfer occurs because of inheritance or the death of an Owner, the City must be notified within ninety (90) days after the Owner’s death. The transfers described below may be permitted, provided that the Owner complies with the
notice, documentation, and approval requirements in
this section. All Owners, heirs, transferees, and successors in interest remain bound by the Resale Restriction
Documents.

Transfer To Spouse, Domestic Partner, Or Co-Owner
An Owner may add a spouse or Domestic Partner to title
if the Owner marries or entersa domestic partnership and the spouse or Domestic Partner will become a co-owner
of the Affordable Unit. The Owner must submit a
marriage certificate or Domestic Partner registration to the City for review before the transfer occurs. Adding
any other person to title is prohibited unless the City grants prior written approval.

A transfer between spouses as part of a dissolution
proceeding, or between Domestic Partners as part of the dissolution of a domestic partnership, may be permitted.

The Owner must submit the applicable dissolution
documents to the City for review.

Upon the death of a co-owner, the City may require the
surviving co-owner to execute an addendum to the City’s Resale Restriction Documents, under which the
surviving co-owner assumes the same rights and
responsibilities under those documents as the original
Owner.

Transfer To A Trust
If an Owner wishes to place the Affordable Unit into a
trust, the Owner must submit a copy of the trust
documents to the City for review and approval before the transfer occurs. No provision of the trust may conflict with the Resale Restriction Documents. The City may
require revisions to the trust documents before approving the transfer. If the City does not approve the trust and the transfer occurs, the transfer will be considered an ineligible transfer and a default under the Resale
Restriction Documents.

Transfer By Inheritance
If the Owner dies and there is no surviving co-owner, an heir must provide written notice to the City within
ninety (90) days after the Owner’s death. If the heir
wishes to own and occupy the Affordable Unit, the heir
must submit income and asset documentation to the City
for review. If the heir is verified as income and asseteligible, the heir must execute new Resale Restriction Documents for a new fifty-five (55) year term. If the heir is not income eligible, exceeds the maximum asset limit, or chooses not to own and occupy the Affordable Unit,
the Affordable Unit must be sold to another Eligible
Purchaser in accordance with the Resale Restriction
Documents.

If the heir was a current Household member at the time
of the Owner’s death, the heir may occupy the
Affordable Unit for up to one (1) year before either
qualifying to inherit the Affordable Unit as an Eligible Purchaser or selling the Affordable Unit in accordance
with the Resale Restriction Documents. The heir shall be entitled only to the BMR Owner’s proceeds from the sale or transfer.

CHAPTER 5: HOME OWNERSHIP PROVISIONS
City of Los Altos | BMR Housing For-Sale Program Guidelines 25 Resale Process
Owners of Affordable Ownership Units must notify the
City of their intent to sell or transfer the Affordable Ownership Unit before marketing (if any) occurs in
accordance with the notice periods noted above in the
Permitted Transfers section. The City has the first option to purchase the Affordable Ownership Unit, at the
Maximum Resale Price, and may choose this option. The
City will inform the Owner if it exercises its first option in the City Response Letter.

If the City elects not to purchase the Affordable
Ownership Unit, the City staff will work with the Owner for the resale or transfer process. The City has the right to inspect the property and will determine the Maximum
Resale Price and will provide the Maximum Resale Price
to the Owner, good for six months. The Maximum
Resale Price is dependent on the formula outlined in the property’s Affordability Covenants, Resale Restriction, and Purchase Option Agreement. Please note that the
Owner may not be able to achieve the Maximum Resale
Price if no Eligible Purchaser is willing to pay that price, or there are adjustments to the price given the condition of the Affordable Ownership Unit. It is expected that the Owner will sell the Affordable Ownership Unit to an
Eligible Purchaser, in habitable condition. Eligibility will be certified by the City, using the guidelines provided herein.

The City will work with the Owner to market the
Affordable Ownership Unit in accordance with the City
local preferences and lottery selection process stated in Chapter 3 of these guidelines. The City shall continue
offering the Affordable Ownership Unit to Applicants in the lottery order until an Eligible Purchaser is approved by the City and closes escrow.

If the Owner does not follow the procedures outlined
above or sells the Affordable Ownership Unit at an
unrestricted (market) price, the Owner shall pay the
excess sales proceeds of the sale to the City, as provided in the Affordability Covenants, Resale Restriction, and
Purchase Option Agreement.

CHAPTER 5: HOME OWNERSHIP PROVISIONS
City of Los Altos | BMR Housing For-Sale Program Guidelines 26 Annual Certification of Owner
Occupancy
Participation in the BMR Program has the following
requirements and restrictions, which are spelled out in the Resale Restriction Documents.
● The Affordable Unit must be the BMR Owner’s
primary residence (owner-occupied) and remain
occupied by the BMR Owner for the term of the
Resale Restriction Documents and may not be
rented out or sublet.
● The BMR Owner is required to maintain
adequate property insurance on the Affordable
Ownership Unit.
● The BMR Owner will submit an annual
certification, evidencing primary residency and
insurance coverage.

The City will annually mail or electronically send Owners a letter/notification requesting documentation to show
compliance with the requirements of the BMR Program.

The letter/ notification from the City will include a list of the types of documentation required at that time, which will include a self-certification of occupancy and
document(s) verifying owner occupancy which may
include insurance statements, DMV vehicle license and
registration documents, personal income tax forms, and
utility or property bills, showing the BMR Owner’s name and the home address.

If the Owner fails to perform an annual certification
within 90 days of receiving their annual letter, they may be fined $1,000. The City shall continue to fine the
Owner an additional $1,000 for every 30-day period that passes without resolution or response to the City’s
requests. If unpaid by the Owner, the City shall take steps to assess these fines as a special assessment against
Affordable Unit.

End of Affordable Unit Term
If the Owner has complied with the Resale Restriction
Documents throughout the full term of affordability and has not sold or otherwise transferred the Affordable Unit prior to the expiration of that term, the Affordable Unit shall be released from the Resale Restriction Documents and the City Deed of Trust. Upon the Owner’s request,
the City shall record a release of the Resale Restriction Documents and a reconveyance of the Deed of Trust.

Following recordation of such release and reconveyance, the Affordable Unit shall be deemed a market-rate home, and the Owner shall no longer be subject to the Resale
Restriction Documents, including these Guidelines.

CHAPTER 6

PROGRAM COMPLIANCE
City of Los Altos | BMR Housing For-Sale Program Guidelines 27 Burden of Proof of Eligibility
All applicants bear the burden of proof to demonstrate
that their Household meets all the Program Eligibility
Requirements by submitting complete applications with
all required Valid Third- Party Documentation. Failure
to adequately demonstrate such eligibility, by providing incomplete applications or otherwise not complying with these Guidelines or associated application instructions, will result in a determination of ineligibility and denial of Program benefits.

Program staff is not required to prove that Applicants are ineligible, only that they failed to adequately demonstrate their eligibility in their application, and/or failed to submit a complete application, failed to secure adequate financing, or failed to deposit required down-payment
and closing cost funds into escrow.

The City may contact any source provided by Applicant
or included in his/her application to verify Applicant
information, and/or request information from those
sources named or described generally on the Program’s
Authorization to Release Information Form included in
application forms.

False Statements or
Misrepresentations
Any false statement(s), intentional misrepresentation of the facts, or false representations submitted as part of any Program application, occupancy certification, or other
Program submittal to obtain an eligibility determination or verify Program compliance constitutes an act of fraud and may be prosecuted accordingly. Submitting
intentionally false, misleading or incomplete information in a Program application will result in denial of eligibility to participate in the Program, and the applicant(s) will be permanently banned from the Program.

If the City should discover that a purchase was completed by an owner(s) who intentionally made false statements
or misrepresented facts to appear eligible to purchase the property, this will constitute fraud and/or default under the Agreement, and the City will use all available legal remedies to bring the home into compliance, and/or
impose any criminal or civil penalties allowed by law.

If the City determines that BMR owner(s) have made
intentionally false statements or misrepresentations in their annual occupancy certification in order to appear compliant with Program requirements, it will use any
enforcement measures available under the Ordinance,
these Guidelines, the Deed of Trust, and/or Agreement
to restore compliance, up to and including sale of the
BMR home and forfeiture of equity related to the BMR
sales price.

CHAPTER 6: PROGRAM COMPLIANCE
City of Los Altos | BMR Housing For-Sale Program Guidelines 28 Unauthorized Rental, Sale, or Transfer
of BMR Home
If any portion of the BMR home is rented out, sold or
otherwise transferred in full or part without prior City approval, the City may use all available legal remedies to bring the home into compliance, and/or impose any
criminal or civil penalties allowed by law, including
possible sale of the property and/or requiring
Homeowner(s) to reimburse the City for all rent that was collected in violation of Program requirements, or the
amount of any presumed rent, based upon prevailing
market-rate rents for a comparable rental unit, or for any excess sale proceeds, as explained further in the BMR
Agreement recorded against the home.

Appeal Process
Applicants may appeal a determination letter by
providing a written explanation of the reasons for their appeal, and any supporting evidence. The appeal letter
must be delivered to the Housing Manager by mail or
personal delivery within ten (10) calendar days of
issuance of the determination letter being appealed. City staff are not authorized to assist applicants in drafting appeal letters, nor in determining appropriate grounds
for appeal or appropriate forms of supporting evidence.

Applicants may refer to these Guidelines and application forms, and/or seek their own advisors/counsel for
guidance in determining what types of documentation
would be reasonable.

The Development Services Director shall review the
appeal letter and issue a final determination within thirty (30) calendar days or less of receipt. Appeal to the
Development Services Director is the final administrative appeal.

DRAFT
City of Los Altos
Below Market Rate Housing
Rental Program Guidelines
Adopted by the
Los Altos City Council
on ______________, 2026
ATTACHMENT 2

TABLE OF CONTENTS
Chapter 1: Introduction 1
Purpose of the Guidelines 1
Non-Discrimination 1
Conflict with Other Documents 1
Definitions 2
Chapter 2: Developer Requirements 4
Inclusionary Housing Requirements for New Developments 4 Density Bonus 4
BMR Affordable Housing Agreements & Deed Restrictions 5 Term for Affordable Rental Housing 5
Marketing & Tenant Selection Plan 5
Area Median Income Limits & Updated BMR Rental Rates 5
Location & Design of Affordable Housing Units 5
Timing & Delivery of Affordable Housing 6
Existing Residential Development Project Waitlists, Eligible Renter Selection & Certification 6 Releasing Process 6
Chapter 3: Determining Eligibility 7
Eligible Renters Eligibility Requirements 7
Qualifying Households 7
BMR Program Requirements 8
Property Requirements 8
BMR Program Eligibility Certification 8
Chapter 4: Local Preferences & Selection Process 9
Local Preferences 9
Applicable Documents to Verify Priority Tiers 9
Accessibility Preference 10
Selection Process 11
Chapter 5: Rental Lease Provisions 12
Calculation, Approval, & Use of BMR Rent 12
Lease Terms & Occupancy Conditions 12
Chapter 6: Program Compliance 15
Burden of Proof Eligibility 15
False Statements or Misrepresentations 15
Unauthorized Rental or Subletting BMR Unit 16
Appeal Process 16

CHAPTER 1

INTRODUCTION
Purpose of City of Los Altos BMR
Housing Rental Program Guidelines
The purpose of the City of Los Altos’ Below Market Rate (BMR) Housing Rental Program Guidelines is to
support the administration of the City’s BMR Program,
which helps provide rental apartments for extremely low, very low, low-, and moderate-income households. The
BMR Program is intended to preserve the long-term
affordability of designated Below Market Units (BMUs)
for eligible renters who meet applicable income and
program requirements, as set forth in the applicable
Affordable Housing Agreement, deed restrictions, these
Guidelines, and other governing laws and regulations.

These Guidelines provide the City, BMU owners,
property managers, applicants, and current and future
renters with information regarding the BMR Program,
including income and rent limits, eligibility requirements, application and selection procedures, annual certification requirements, and other program obligations. They are
intended to describe the regulatory requirements that
apply to BMR rental properties and to provide practical guidance for implementing and participating in the
program.

These Guidelines are adopted pursuant to the City’s
inclusionary housing and density bonus requirements in
Chapter 14.28 of the Los Altos Municipal Code, as well
as applicable state and federal laws and regulations. They are intended to be consistent with those requirements
and to assist in the administration, oversight, and
regulation of the City’s BMR Program.

Non-Discrimination
The Program will be implemented consistent with the
City’s commitment to non-discrimination. There shall be no discrimination against or segregation of any person or group of persons, on the basis of race, color, ancestry, national origin, religion, creed, age, disability (mental and physical), sex, gender (including pregnancy, childbirth, breastfeeding or related medical conditions), sexual
orientation, gender identity, gender expression, medical condition, genetic information, marital status, military or veteran status, or any other basis forbidden by federal, state, or local law.

Conflict with Other Documents
Where the provisions of this manual conflict, or are
inconsistent, with local ordinances or state or federal laws or regulations, or executed regulatory agreements with
the City, the provisions of those ordinances, laws,
regulations or agreements shall prevail. In developments where the City’s deed restriction is subordinate to a deed restriction from an affordable housing lender or funder, those lenders and funders’ policies and procedures shall also prevail.

City of Los Altos | BMR Housing Rental Program Guidelines 1

CHAPTER 1: INTRODUCTION
Definitions
As used in these Guidelines, unless the context requires otherwise, the following words and terms have the
meanings set forth below.

Affordable Housing Agreement (or AHA): A recorded
contract between the City and the property owner
describing the Affordable Units, the affordability
requirements and explaining in detail how the units will be marketed and rented.

Affordable Unit or Below Market Units, BMUs or Units:

A dwelling rental unit that is required to be occupied by and at a rent affordable to an Eligible Renter.

Area Median Income (AMI): The median family income
for Santa Clara County, adjusted for actual household
size, as determined annually by the California
Department of Housing and Community Development
(HCD) and based on data published by the U.S.

Department of Housing and Urban Development.

Applicant/Co-Applicant: The household applying to
rent an Affordable Unit. Applicant may be used herein to refer to the Applicant’s entire Household and/or all
adults in the Household, as the context requires.
“Primary Applicant” refers to the first-named party on
the application form. The Primary Applicant is the first listed Applicant on a Program application and must be
the primary person on the lease for the Below Market
Unit. In addition, this person will be the primary point of contact. “Co-Applicants” are all other adult members of the Household aged 18 years or older.

BMR Administrator: A third party to whom the City
assigns some or all of its responsibilities and obligations regarding the Program administration.

City: The City of Los Altos or the BMR Administrator.

Developer: The person(s) or legal entity(ies), who also may be the property owner, who is seeking Residential
Development project permits or approvals from the City
or developing a particular residential development
project, in the City.

Eligible Renter: a Household eligible to participate in the BMR Rental Program, as further defined herein.

Extremely Low-Income Household: households with
incomes at or below the Extremely Low-Income limit
published by HCD, which is set at approximately 30
percent of Area Median Income.

HCD: the California Department of Housing and
Community Development.

Household: all persons who will be living together in the same housing unit, whether related or unrelated, over the age of 18, and dependents under the age of 18 who live
with a member of the household 50% of the time or
more.

Household Income: the combined gross annualized
income of all adult household members (aged 18 or
older), as further defined herein.

HUD: the United States Department of Housing and
Urban Development.

Low-Income Household: households with incomes at or
below the Low-Income limit published by HCD, which
is set at approximately 80 percent of Area Median
Income.

Market Rate Unit: a dwelling unit where the rental rate or sales price is determined by the area’s current rate of monthly rent or sale value.

Moderate-Income Household: households with incomes
at or below 120% of Area Median Income, as published
by HCD. See Exhibit A for a link to current limits.

City of Los Altos | BMR Housing Rental Program Guidelines 2

CHAPTER 1: INTRODUCTION
Residential Development Project: Any development that
includes an application to the City for planning or
building permits to create one or more dwelling units, to convert non-residential uses to residential uses, or to convert residential units from rental to for-sale. As used in these Guidelines, “Residential Development” includes,
without limitation, rental housing; for-sale housing;
mixed-tenure housing; mixed-use residential; detached
single-family dwellings; duplexes; triplexes;
multiple-family dwelling structures; condominium or
townhouse developments; condominium conversions;
and land subdivisions intended to be sold or rented to the general public. However, accessory dwelling units and
licensed care facilities are excluded from the definition of Residential Development.

Tenant Selection Plan: the document that describes
marketing for the Below Market Units and shall include, at a minimum, procedures and requirements for
determining eligibility, occupancy requirements, initial marketing policies, application process, income
verification requirements, annual ownership certification, rejection of ineligible applicants, and eligibility
termination.

Utilities: Utilities means garbage collection, sewer, water, electricity, gas, and other fuels used for heating, cooling, cooking, and refrigeration for a dwelling unit. Utilities do not include telephone, cable, or internet service.

Very Low-Income Household: Households with incomes
at or below the Very Low-Income limit published by
HCD, which is set at approximately 50 percent of Area
Median Income.

City of Los Altos | BMR Housing Rental Program Guidelines 3

CHAPTER 2

DEVELOPER REQUIREMENTS
Inclusionary Housing Requirements
for New Developments
All multi-family residential projects that create five or more new dwelling units shall, at minimum, provide Affordable Units as follows. Nothing in this informational guide or the Los Altos Municipal Code shall preclude a project
from providing additional Affordable Units beyond the
minimum. Calculations for the required Affordable Units shall be rounded up to the next whole number.

Multifamily
Development Type
Affordable Housing Requirement
Projects with
5 to 9 units
15% of the units (rental or ownership) shall be designated as affordable units.

Alternatively, applicants may request to pay an inclusionary housing in-lieu fee instead of providing onsite units.

Projects with
10 or more units
Rental: 20% of the total number of units shall be designated as affordable units.

Alternatively, applicants may request to pay an inclusionary housing in-lieu fee instead of providing onsite units.

Ownership: 15% of the total number of units shall be designated as affordable units.

Alternatively, applicants may request to pay an inclusionary housing in-lieu fee instead of providing onsite units.

Density Bonus
If a developer requests a density bonus, the same
Affordable Units may be used to satisfy both Density
Bonus Law and the City’s on-site inclusionary housing
requirement, but only to the extent those units meet the requirements of both programs. If the Affordable Units
provided for the density bonus do not fully satisfy the City’s inclusionary housing requirements, the developer must provide any additional inclusionary Affordable Units required by the City.

City of Los Altos | BMR Housing Rental Program Guidelines 4

CHAPTER 2: DEVELOPER REQUIREMENTS
BMR Affordable Housing Agreements
& Deed Restrictions
BMU Owners sign Affordable Housing Agreements
(“AHA”) with the City that outline the terms and
conditions of their participation in the BMR Program.

Each AHA is unique and has covenants that run with the
land. Federal, state, and local laws and regulations shall prevail over AHAs (e.g. the Tenant Protection Act, AB
1482). AHAs shall prevail over these Guidelines because they run with the land.

AHAs require BMU Owners to maintain the Below
Market Units on the Property and to construct the Below Market Units in similar quality of market rate units in the Project.

Term for Affordable Rental Housing
Affordable Rental Units to satisfy the inclusionary
housing requirements of the Los Altos Municipal Code
shall be deed restricted for a term of at least 99 years.

Marketing & Tenant Selection Plan
At least ninety (90) days before leasing begins for a
Residential Development Project, the Developer shall
submit a written marketing and tenant selection and plan to the City for review and approval. The plan shall
describe how the Affordable Units within the
Development will be marketed and leased.

The City will review the marketing plan within thirty
(30) days of submission and will either approve it or
provide written comments explaining why it is not
approved. If the City does not approve the marketing
plan, the Developer shall submit a revised plan within
thirty (30) days.

The City will approve the marketing plan if, in the City’s reasonable discretion, the plan is consistent with the
Affordable Housing Agreement, these Guidelines, the
City’s priority ranking policies, state and federal fair housing laws, and any other applicable policies or legal requirements.

Area Median Income Limits &
Updated BMR Rental Rates
The City updates the Area Median Income Limits used
to calculate the BMR rental rates once a year soon after California Department of Housing and Community
Development (“HCD”) publishes its Area Median
Income (AMI) Limits. Area Median Income is the
median gross yearly income for households in Santa Clara County, California. Developers, or their property
managers, will be provided with the updated BMR rental
rates annually.

Location and Design of Affordable
Housing Units
All Affordable Units shall be reasonably dispersed
throughout the residential development and consistent
with Federal and State fair housing laws, have a
distribution of units by number of bedrooms
proportionate to the market-rate units, and be of
comparable size based on net habitable square footage of the units. Affordable Units for seniors shall comply with applicable design requirements for senior housing.

Affordable Units shall be designed and constructed to be consistent with the market-rate units in the project,
including comparable exterior design, interior design,
appearance, materials, and quality of finish. Affordable Units shall also have access to the same project parking, amenities, and recreational facilities available to
market-rate units.

City of Los Altos | BMR Housing Rental Program Guidelines 5

CHAPTER 2: DEVELOPER REQUIREMENTS
Timing of Delivery of
Affordable Housing
All Affordable Units in residential developments shall be constructed on-site concurrently with market-rate units.

The Certificate of Occupancy for the Affordable Units
shall be issued no later than the Certificate of Occupancy for the market-rate units. In phased developments, the
total Affordable Units requirement shall be calculated
based on the whole development; each phase shall include the required number of Affordable Units based on the
number of market-rate units in that phase; and on-site
units shall be developed concurrently with the
market-rate units in each phase. For a residential
mixed-use project with one or more phases, the
Certificate of Occupancy for the Affordable Units shall be issued no later than the Certificate of Occupancy for the market-rate units in each phase and prior to issuance of the Certificate of Occupancy for the non-residential portion of the development.

Existing Residential Development
Projects Waitlists, Eligible Renter
Selection & Certification
Developers, or property managers on behalf of the
Developers, for the existing Residential Development
Projects manage existing waitlists, provide BMR Rental
Program information for available Affordable Units, and obtain initial Eligible Renters’ information in their
pre-screening process. The BMR Rental Program
confirms household income and eligibility requirements
before leases are signed as outlined below in the BMR
Rental Program Requirements.

The existing Residential Development Projects will have one (1) year to continue to use their waitlists from the date of the City Council’s approval of these BMR Rental Housing Program Guidelines. After the one-year period,
all Residential Development Projects will be required to implement the lottery selection process outlined below in Chapter 4.

Releasing Process
When a BMR Eligible Renter vacates, the Developer, or
the Developer’s property manager, must provide notice
to the City and re-rent the Affordable Unit to an Eligible Renter in accordance with these BMR Guidelines and the
AHA for the Affordable Unit.

If an Affordable Unit is vacated within a Residential
Development Project within a one-year period from
when a lottery was held, then the Developer, or
Developer’s property manager, will utilize the lottery list and contact the applicant with the highest lottery
number to offer the Affordable Unit to them. If the
applicant is interested in leasing the Affordable Unit, they will be required to submit the necessary application
information to be qualified for the Affordable Unit.

After the one-year period, if an Affordable Unit is
vacated, the Developer, or Developer’s property manager, will market the Affordable Unit for lease and conduct a new lottery for the Affordable Unit in accordance with
the lottery process outlined above. The new lottery list will be maintained for a period of one year.

City of Los Altos | BMR Housing Rental Program Guidelines 6

CHAPTER 3

DETERMINING ELIGIBILITY
Eligible Renters
Eligibility Requirements
A person or household is eligible to rent a Below
Market Unit if they meet the BMR Program and
property requirements in accordance with the
property’s AHA covenants and as outlined in the
BMR Program Requirements below.

Eligible Renters are required to meet household
income requirements related to the established
Santa Clara County’s Area Median Income (AMI)
which is published annually and are selected based
on the City’s priority ranking policies and
procedures as further outlined in the Local
Preferences section below in Chapter 4.

Qualifying Households
Affordable Units for rent are subject to asset limits. The assets of an Eligible Renter of an Affordable Unit
cannot exceed $150,000, excluding funds dedicated to
Federally recognized retirement programs.

Affordable Units shall be leased based on income limits for a household size using the “bedrooms + 1” formula,
and the minimum occupancy level shall be one person
per bedroom, as follows:

Unit Size
BMR Rent
Based On
Minimum
Occupancy
Studio
1 person
household
1 person
1 bedroom
2 person
household
1 person
2 bedrooms
3 person
household
2 persons
3 bedrooms
4 person
household
3 persons
4 bedrooms
5 person
household
4 persons
An exception to the minimum occupancy standards
shall be made if reasonable accommodation is required.

Preference is given to eligible applicants for an
Affordable Unit in accordance with the Local
Preference section in Chapter 4 below, to the extent
permitted by State or Federal law or other fair housing laws.

City of Los Altos | BMR Housing Rental Program Guidelines 7

CHAPTER 3: DETERMINING ELIGIBILITY
BMR Program Requirements
The household cannot exceed the income limit for the
income category that the City has established for the
Below Market Unit. Gross Monthly Income shall be
defined in Title 25, Section 6914, of the California Code of Regulations.

The Eligible Renter must demonstrate to the City that
they have the capacity to pay the rent for the Below
Market Unit. The Eligible Renter must provide
verification satisfactory to the City of their income, job history, residency history, and qualification for any
priority status under the City’s local priorities ranking as outlined in the Local Preferences section above.

The Eligible Renter will have no more household
members than approved according to limits that the City from time to time may establish.

Property Requirements
The property requirements are by the Developer and the
City as stated above. They can include capacity to pay
monthly rent, credit history, verification of income,
residency history, number of household members,
number and types of pets, etc.

BMR Program Eligibility Certification
Upon completing the Property Manager’s initial
pre-screening process, Eligible Renters shall verify BMR Program eligibility by declaring their household size and income with third-party documentation via the City’s
online portal.

City of Los Altos | BMR Housing Rental Program Guidelines 8

CHAPTER 4

LOCAL PREFERENCES & SELECTION PROCESS
Local Preferences
The City of Los Altos has established the following
preferences for Affordable Units:

First Priority (in no order of preference)
• Persons who are regular, full-time staff who are
employed by a school or school district serving
kindergarten through high school students for public,
private, or charter schools within the City limits and
the following schools outside City limits: Springer
Elementary, Mountain View High, Cupertino Jr.

High, Homestead High School, Alta Vista High, and
West Valley Elementary;
• Persons who are regular, full-time City employees as
defined in the City’s personnel rules; and
• Persons who are regular full-time Santa Clara County
Fire Department employees who are assigned to the
two fire stations located in the City of Los Altos.

Second Priority
• Persons who live and/or work in the City.

At the initial application for the Affordable Housing, the Applicant shall self-attest to any preferences. Preferences will be verified as part of the eligibility determination process.

If at least one member of the Applicant household meets a local preference, the Applicant shall have a preference for the Affordable Unit.

For projects that have Federal funding such as
Low-income Housing Tax Credits and/or State funding,
the above preferences will be applied to the extent allowed by such funding programs.

Acceptable Documents to Verify
Priority Tiers
Preferences must be met by the applicants and/or
co-applicants that will be on the lease to the Affordable Unit. Applicants claiming a preference must submit the
following documents to prove they meet a local
preference by the application deadline for the Affordable Unit lottery, in addition to the documents required as
part of the application submittal. The documents must
be current: if issued monthly, the most recent month’s
bill; if issued quarterly, not more than 90 days old. PO Boxes or private mailboxes such as Postal Annex cannot
be accepted as proof of meeting a local preference.

Applicants must meet the eligibility and qualification
criteria at the time of the lottery. Eligibility will be verified when and if a file is reached for review after the lottery and ranking of applications pursuant to the lottery
results.

City of Los Altos | BMR Housing Rental Program Guidelines 9

CHAPTER 4: LOCAL PREFERENCES & SELECTION PROCESS
First Priority, Works for the City of Los Altos, School, or Santa Clara County Fire Department:
• A signed letter from the City of Los Altos Human
Resources Department verifying the Applicant is a
regular, full-time City employee. The letter must
include the Applicant’s start date and regular hours
worked per week.
• A signed letter from the school or school district’s
Human Resources Department verifying that the
Applicant is a regular, full-time school employee. The
letter must include the Applicant’s start date and
regular hours worked per week.
• A signed letter from the Santa Clara County Fire
Department Human Resources Department verifying
that the Applicant is a regular, full-time employee
assigned to one of the two fire stations located in the City of Los Altos. The letter must include the
Applicant’s start date, regular hours worked per week
and assigned station.

Second Priority, Lives and/or Works in the City of Los
Altos:

Applicants must provide at least one of the following
documents to verify residency or employment in the City of Los Altos:
• One current utility bill showing the Applicant’s City of Los Altos residence address. Utility bills may
include gas, electricity, garbage, or water service.
• A current paystub showing the Applicant’s City of Los Altos work address.
• A current, fully executed lease showing the Applicant’s City of Los Altos residence address.
• If the Applicant’s employer is not located in the City of Los Altos, or if the Applicant’s paystub does not show
a City of Los Altos work address, the Applicant must
submit a signed and dated letter from the employer’s
Human Resources Department confirming that the
Applicant works primarily in the City of Los Altos
and that at least 75 percent of the Applicant’s working hours are performed in the City.
• Self-employed Applicants who work from a home or
business located in the City of Los Altos must submit
a copy of their current City of Los Altos business
license.

Accessibility Preference
If an Affordable Unit has accessibility features related to mobility, hearing impairment, or vision impairment,
Applicants who can demonstrate a need for the features
receive a preference for those units. The need for the
specific accessibility feature or features must be
documented by a medical professional, though this letter does not need to spell out the specific nature of the
applicant’s disability.

City of Los Altos | BMR Housing Rental Program Guidelines 10

CHAPTER 4: LOCAL PREFERENCES & SELECTION PROCESS
Selection Process
All Applicants who submit a complete application by the required deadline will be entered into a lottery. After the lottery is conducted, the lottery results will be organized according to the local preference tiers for which each
Applicant household qualifies, as described in the Local Preferences section above.

The City does not maintain a waitlist for the rental
Affordable Units. The City does keep an interest list so when rental Affordable Unit(s) are available, the
individuals on the interest list will be emailed about the rental opportunity.

Following the lottery, the City will begin a more detailed application review and eligibility determination process.

Eligible Households will be offered an Affordable Unit
that is appropriate for their household size, based on
lottery order and preference tier ranking.

A new lottery will generally be held each time a rental Affordable Unit becomes available and the applicable
preference tiers will be applied each time a lottery is conducted.

How the Lottery Works

1. Submit an application: Applicants must submit a
complete application by the required deadline to be
included in the lottery.

2. Random lottery numbers are assigned: The City will
conduct a random lottery. Each complete application
will receive a lottery number, which establishes the
Applicant’s order within the general lottery.

3. Preference tiers are applied: After lottery numbers are assigned, the City will determine which Applicants
qualify for a local preference tier. Applicants who
qualify for a preference tier will be placed within that tier in lottery number order. Applications within each
preference tier will be considered before applications
that do not qualify for a local preference.

4. Lottery results are published: The City will make the lottery results available after the lottery is completed.

The results will show the order in which applications
will be reviewed, based on lottery number and
applicable preference tier.

5. Applicants are contacted in order: The City will
contact Applicants in the order established by the final lottery results and applicable preference tiers.

Applications will be reviewed and processed in that
order until all available Affordable Units in the project have been assigned.

The lottery list ranking for any rental Affordable Unit within a project will be maintained for one (1) year.

City of Los Altos | BMR Housing Rental Program Guidelines 11

CHAPTER 5

RENTAL LEASE PROVISIONS
Calculation, Approval, &
Use of BMR Rent
The City annually calculates and approves the BMR
monthly rental rates (“BMR Rents”) when releasing its
approved AMI Limits.

BMR Rents are valid for 12 months and/or until the City calculates the following year’s BMR Rents aligned with
HCD’s annual AMI percentages.

BMR Rents must be approved by the City prior to
marketing vacant Affordable Units. It is the responsibility of the Developer and/or Developer’s property manager to ensure that the BMR Rents for the Affordable Units
adhere to the Residential Development Project’s AHA
on an ongoing basis.

BMR Rent Calculation
BMR Rents are the base amount that shall be deemed no
more than 1/12 of 30% of the applicable annual Income
Category, adjusted for household size appropriate for the unit (one person per bedroom plus one) less tenant paid utilities based on the Santa Clara Housing Authority’s
annually published Utility Allowance Schedule.
• Very Low Income: 30% multiplied by 50% of AMI
adjusted for the household size appropriate for the
unit, divided by 12
• Low Income: 30% multiplied by 70% of AMI adjusted
for the household size appropriate for the unit, divided by 12
• Moderate Income: 30% multiplied by 110% AMI
adjusted for the household size appropriate for the
unit, divided by 12
The City shall work with the Developer or the
Developer’s property manager to determine what utilities the tenant is responsible for paying outside of their rent payments to the landlord.

Any other mandatory fees charged to the Eligible Renters must be included in the rent or the Utility Allowance for the property. Parking fees, utility billing services fees, required use of a computer application to pay rent,
monthly or quarterly pest control charges, etc. are all examples of these fees. This also includes charges from the Ratio Utility Billing System (RUBS), in which a property uses a main meter but sub-charges individual units on the property for utility use. The actual costs shall be included in the Utility Allowance for the property.

Note that Utility Allowances must always be rounded up
to the nearest dollar, if rounding is used.

Lease Terms & Occupancy Conditions
Lease Agreements
The Developer’s Renter Master Lease Agreement
(“Lease”) must be approved in advance by the City and
copies of each executed Lease shall also be shared with the City for its Eligible Renter files and annual reporting processes. The Lease is required to include the City’s
BMR Addendum (as stated below) which is executed by
each Eligible Renter and a copy provided to the City’s
Housing Manager.

Lease terms and conditions for Eligible Renters shall be the same as market rate units in the Development.

Eligible Renters are eligible to sign a one-year lease
agreement with a BMR Program Addendum
(Attachment C) that acknowledges their program
participation and terms. After the initial one-year term, the lease may be renewed or continued as
month-to-month rental agreement.

All household members aged eighteen (18) and older
must sign the Lease for a Below Market Unit.

City of Los Altos | BMR Housing Rental Program Guidelines 12

CHAPTER 5: RENTAL LEASE PROVISIONS
Lease Agreements, continued
The following household members are not required to
sign the Lease:
• Legal dependents of leaseholders as claimed on the
most recent federal income tax return or minor
children of leaseholders. Spouses or Domestic Partners
are not considered dependents.
• Household members younger than age twenty-four
(24) years old who are the children of a leaseholder
who will reside in the Below Market Unit as their
Primary Residence, regardless of whether they are
named as a dependent on the federal tax form or not.
• Recent immigrants who cannot produce a credit score
and who are unable to demonstrate alternative forms
of credit. To qualify for this exception, a person must provide entrance documentation reflecting that the
person has been in the United States for two (2) years
or less.

Cosigners
Cosigners and guarantors are only permitted for seniors (age 62 and above) that require a cosigner if they are on a fixed income and for individuals that have a disability and are receiving State disability funding to support their housing costs.

Subletting
Program Eligible Renters shall not sublet any part of the Unit to anyone that is not part of the household at any time. Long-term or short-term vacation rentals are not
allowed at any time.

Permitting any person not named as an occupant of the
Lease to occupy the Unit shall be deemed an improper
subletting of the Unit.

There is also no renting or subletting of a parking space or any other space provided with the Unit.

Occupancy
Eligible Renters must occupy their Unit 10 months out
of the year as their primary residence.

Additional occupants are allowed and/or disallowed in
accordance with Program income limits, the Owner’s
occupancy standards and applicable laws. Before any
change in occupancy occurs, the Eligible Renter must
receive written permission from the Landlord before the Program certifies and updates program eligibility.

An existing Eligible Renter may not vacate their existing Affordable Unit to exchange it for a vacated Affordable Unit within the project as the vacant Affordable Unit
must be leased to a household on the property’s waiting list.

Rental Unit Maintenance
Eligible Renters are responsible for making sure that their Units are not damaged and for maintaining the unit in
compliance with the terms of their lease. Developers are responsible for maintaining the Affordable Unit in the
same manner they maintain their market-rate units. For
Affordable Units that will be re-rented, Developers shall provide the City’s Housing Manager or BMR
Administrator a tour of the Affordable Unit and/or a
history of the Affordable Unit’s maintenance prior to
marketing the Affordable Unit(s) for releasing.

City of Los Altos | BMR Housing Rental Program Guidelines 13

CHAPTER 5: RENTAL LEASE PROVISIONS
Annual Certification Renewal
Eligible Renters shall annually certify their household size and income; Eligible Renter households can exceed 15%
of the Unit’s maximum income limit at renewal. For
example, if the Unit is a low-income Unit, then the
household’s income cannot exceed 95% AMI based on
their household size.

A qualified Eligible Renter shall continue to qualify
unless at the time of recertification, the household exceeds 15% of the Unit’s income limits at renewal. The Eligible Renter is required to vacate the Unit within ninety (90) days of written notice of ineligibility.

If an Eligible Renter fails to provide the required
information by the requested deadline, the Eligible
Renter may no longer be eligible for the Program and
may face eviction and/or other consequences as identified in the lease agreement. The Program will always work
with Eligible Renters to ensure delays are not caused by extenuating circumstances that prevented the Eligible
Renter from responding in a timely manner.

If the Eligible Renter is undergoing a job transition at the time of an Eligible Renter’s annual income recertification, the Eligible Renter must provide a job offer letter from the new company they will be employed at, and the City
may be allowed to contact the new employer to confirm
the Eligible Renter’s income and employment.

Notice to Vacate
BMR Eligible Renters shall provide the City with a copy of any written notice sent to the BMU Owner
terminating their rental agreement. Unless another
contact is provided to Resident in writing, any written notice to terminate sent by Resident shall be copied to Housing Manager, City of Los Altos, 1 N. San Antonio
Rd., Los Altos, CA 94022.

City of Los Altos | BMR Housing Rental Program Guidelines 14

CHAPTER 6

PROGRAM COMPLIANCE
Burden of Proof of Eligibility
Participation in the Program is a privilege, not a right, as there are not enough BMR homes for all Eligible
Households. All applicants bear the burden of proof to
demonstrate that their Household meets all of the
Program Eligibility Requirements by submitting
complete applications with all required valid third-party documentation. Failure to adequately demonstrate such
eligibility, by providing incomplete applications or
otherwise not complying with these Guidelines or
associated application instructions, will result in a
determination of Ineligibility and denial of Program
benefits.

Program staff is not required to prove that Applicants are ineligible, only that they failed to adequately demonstrate their eligibility in their application, and/or failed to submit a complete application, failed to sign the required lease or rental agreement or pay any required security
deposit.

The City may contact any source provided by Applicant
or included in his/her application to verify Applicant
information, and/or request information from those
sources named or described generally on the Program’s
Authorization to Release Information Form included in
application forms.

False Statements or Misrepresentations
Any false statement(s), intentional misrepresentation of the facts, or false representations submitted as part of any Program application, occupancy certification, or other
Program submittal to obtain an eligibility determination or verify Program compliance constitutes an act of fraud and may be prosecuted accordingly. Submitting
intentionally false, misleading or incomplete information in a Program application will result in denial of eligibility to participate in the Program, and the applicant(s) will be permanently banned from the Program.

If the City should discover that an Applicant who
intentionally made false statements or misrepresented
facts to appear eligible to rent a BMR Unit occupies a
BMR Unit, this will constitute fraud and/or default
under the rental agreement, may be cause for eviction,
and the City will use all available legal remedies to bring the home into compliance, and/or impose any criminal or civil penalties allowed by law.

If the City determines that an Applicant has made
intentionally false statements or misrepresentations in their annual occupancy certification in order to appear compliant with Program requirements, it will use any
enforcement measures available under the Ordinance,
these Guidelines, the Rental Agreement or the AHA to
restore compliance, up to and including eviction and
assessments of civil penalties
City of Los Altos | BMR Housing Rental Program Guidelines 15

CHAPTER 6: PROGRAM COMPLIANCE
Unauthorized Rental or Subletting
BMR Unit
If any portion of the BMR Unit is subleased or otherwise transferred in full or part without prior City approval, the City may use all available legal remedies to bring the
home into compliance, and/or impose any criminal or
civil penalties allowed by law, including possible eviction and/or requiring Household to reimburse the City for all rent that was collected in violation of Program
requirements, or the amount of any presumed rent, based upon prevailing market-rate rents for a comparable rental unit.

Appeal Process
Applicants may appeal any determination letter or other terms in these Guidelines by providing a written
explanation of the reasons for their appeal, and any
supporting evidence the applicant wishes to provide. The appeal letter must be delivered to the Housing Manager
by mail or personal delivery within ten (10) calendar days of issuance of the determination letter being appealed.

City staff are not authorized to assist applicants in
drafting appeal letters, nor in determining appropriate grounds for appeal or appropriate forms of supporting
evidence, beyond advising them of the contents of these Guidelines, application forms, and other published
Program materials. Applicants may refer to these
Guidelines and application forms, and/or seek their own advisors/counsel for guidance in determining what types of documentation would be reasonable.

The Development Services Director shall review the
appeal letter and issue a final determination within thirty (30) calendar days or less of receipt. Appeal to the
Development Services Director is the final administrative appeal.

City of Los Altos | BMR Housing Rental Program Guidelines 16

From: Susan Russell
To: Public Comment; Gabriel Engeland; Jon Maginot; Monica Gallardo-Melkesian; Melissa Thurman Subject: September 8 Council Meeting - Study Session re BMR Units Date: Friday, September 4, 2026 11:55:12 AM
Attachments: LWV letter 94 to LA CC re BMR guidelines.doc Please see attached letter from LWV.

September 4, 2026
Re: September 8, 2026, City Council BMR Unit Study Session Meeting

Dear Mayor Meadows and Members of the City Council:

The League of Women Voters (LWV) supports strengthening procedures so that equality of opportunity for access to housing can be accomplished.

As the staff report points out, the current below market rate (BMR) guidelines include a longer list of preferences than most jurisdictions. “Preferences based on length of residency, prior residency, or family relationships with current residents….” are inconsistent with affirmatively furthering fair housing, the City’s legal obligation. Reducing the priority categories to two, the first for local public-service positions, and the second for those who live or work in Los Altos better meets fair housing standards.

Similarly, the current system of first-come, first-served is not as transparent and equitable as a lottery to select from applicants who have applied by a stated deadline. We urge the Council to adopt both changes to the BMR system.

Please send any questions about this email to Sue Russell at [email protected].

Sincerely,
Sue Russell, Co-Chair Housing Committee
Los Altos-Mountain View Area LWV
C: Gabe Engeland, City Manager
Monica Gallardo-Melkesian, Housing Manager
Jon Maginot, Assistant City Manager
Melissa Thurman, City Clerk
[email protected]

From: Anne Paulson
To: Public Comment
Subject: BMR guidelines
Date: Friday, September 4, 2026 8:42:58 PM
Dear Mayor Meadows and Councilmembers,
The Los Altos Affordable Housing Alliance is pleased to see the new Below Market Rate (BMR) Housing Guidelines coming before you. We agree with staff that the city’s BMR policies should be laid out in publicly available documents, one for rental housing and one for ownership housing.

For some time, we have been advocating for a lottery to award BMR units. We’re delighted to see this in the proposal. A lottery looks fairer and is fairer than what we have now.

The city has a long list of preferences for the below market units. It’s difficult to administer, and confusing for applicants. We urge you to simplify. Mountain View has one single preference, for those who live or work in Mountain View. We think that would work for Los Altos too. Alternatively, we could have first a preference for teachers, firefighters, and city workers; then a preference for all others who live or work in Los Altos.

We hope to see new guidelines adopted before 5150 El Camino begins leasing. We urge you to move this proposal forward quickly and appreciate your attention to this important issue.

Sincerely,
The Los Altos Affordable Housing Alliance

From: Anky van Deursen
To: Public Comment
Subject: BMR Guidelines
Date: Saturday, September 5, 2026 7:01:19 PM
Attachments: 2026.09.06 Public Comment BMR guidelines.pdf Dear Mayor and Members of the Los Altos City Council,
Thank you for the opportunity to provide input on the draft BMR Guidelines. I respectfully submit the attached comments/suggestions for your consideration and appreciate the time and attention of the City Council and staff in reviewing them.

Best regards,
Anky van Deursen

1 September 6, 2026
Dear Mayor and Members of the Los Altos City Council,
Thank you for the opportunity to comment on the September 8 study session regarding the proposed Below Market Rate (BMR) For-Sale and Rental Housing Guidelines.

I strongly support the City's effort to establish comprehensive written guidelines for the BMR program. As the staff report explains, Los Altos has historically administered the program through a combination of policies, affordable housing agreements, deed restrictions, administrative practices, and project-specific requirements. Consolidating these requirements into publicly available guidelines should improve transparency, consistency, and predictability for residents, applicants, developers, property managers, homeowners, and City staff.

I also support Council taking this opportunity to look beyond simply documenting existing practices and carefully consider whether some of the underlying policies should be updated. In particular, I encourage Council to provide direction on the following issues before the guidelines are returned for adoption.

1. Simplify the priority system, while carefully considering who should receive first priority.

I support staff's recommendation to simplify the existing four-tier preference system and remove preferences based on length of residency, former residency, and family relationships with current residents. The staff report raises important fair housing and Affirmatively Furthering Fair Housing (AFFH) concerns, noting that such preferences may create barriers to housing opportunities and be inconsistent with the City's obligation to expand housing access.

The separate question, however, is how the new preference system should be structured.

Under the proposal, first priority would be given to specified full-time school employees, full-time City employees, and full-time Santa Clara County Fire Department employees assigned to the two Los Altos fire stations. Everyone else who lives or works in Los Altos would receive second priority.

I support the goal of helping people who serve our community live closer to where they work.

However, I would like Council to consider whether the proposed first-priority category is too narrowly defined.

For example, preschool teachers, part-time school employees, caregivers, nurses, home-health workers, and other essential workers may provide important services to Los Altos residents but would not necessarily qualify for the first tier.

Rather than retaining the old four-tier structure, I encourage Council to consider whether the first tier should be broadened or whether a simpler live-or-work preference would better reflect the

2 range of people who contribute to our community, while remaining consistent with fair-housing requirements.

2. Support replacing first-come, first-served selection with a lottery, with additional operational clarification.

I support staff's recommendation to replace the current first-come, first-served selection process with a lottery. As the staff report explains, the current system can make an applicant's placement depend on the precise timing of an application, even when applicants are otherwise equally eligible. A lottery provides similarly situated applicants within a preference category an equal opportunity and creates a more transparent and repeatable process.

For the rental program, however, the final guidelines should explain more clearly how this will work when individual BMR units become vacant. If a lottery list remains valid for one year, the guidelines should specify when that existing list will be used, when a new lottery must be conducted, and how the City will minimize the time an affordable unit remains vacant. References to waiting lists, interest lists, and lottery lists should also be made internally consistent.

3. Consider a limit on annual rent increases for existing BMR tenants.

The rental guidelines establish maximum BMR rents but do not appear to separately limit how much an existing tenant's rent can increase from one year to the next.

I encourage Council to consider an annual cap for occupied BMR units. The purpose would not be to prevent the City from recalculating maximum BMR rents, but to protect an existing low- or moderate-income household from an unexpectedly large increase simply because the maximum allowable rent has increased. Predictability in housing costs should be an important component of an affordable housing program.

4. Reconsider the 90-day transition period for over-income households.

I agree that BMR units ultimately need to remain available to eligible households. However, becoming over-income can result from relatively ordinary and positive changes — a raise, promotion, additional work hours, or another household member obtaining employment.

Under the proposed guidelines, once a household exceeds the permitted income threshold, it must vacate within 90 days after receiving written notice.

Given our housing market, Council should consider whether six months, or potentially up to one year, would provide a more reasonable transition. This would preserve the integrity of the program while giving a household a realistic opportunity to find replacement housing.

3 5. Ask staff to explain and evaluate the $150,000 rental asset limit.

The proposed $150,000 asset limit deserves additional discussion. In particular, Council should consider how it may affect seniors and other lower-income households who have accumulated savings but continue to have relatively modest annual incomes.

I would like to understand the policy basis for selecting $150,000 and whether staff considered alternatives, including approaches that place greater emphasis on income generated by assets rather than simply the gross value of those assets.

6. Establish clearer affordability targets within the BMR requirements.

The percentage of units designated BMR tells us only part of the story. The income levels those units serve determine how deeply affordable the program actually is.

For rentals, the guidelines contemplate very-low-, low-, and moderate-income units but do not appear to establish a project-wide weighted-average AMI requirement or minimum distribution among those categories.

The same question exists for ownership housing. The draft establishes affordability calculations at different income levels but does not appear to require a particular project-wide affordability mix.

I encourage Council to ask staff to evaluate either a weighted-average AMI requirement or a minimum affordability mix for both programs. This would provide greater certainty about the actual level of affordability produced by the City's inclusionary requirements.

7. Preserve BMR housing as a permanent community asset where legally feasible.

The ownership guidelines provide for affordability restrictions of at least 55 years, while the rental guidelines provide for at least 99 years.

Given how difficult affordable housing is to create in Los Altos, I believe Council should consider whether affordability should instead be preserved in perpetuity where legally feasible.

For ownership units in particular, the proposed 55-year term raises an important policy question:
why should a home created through the City's inclusionary housing program eventually be permitted to become market-rate?
Similarly, while 99 years is obviously a very long period for rental housing, Council should understand the legal and policy rationale for choosing 99 years rather than permanent affordability.

4 Once Los Altos succeeds in creating an affordable home, I believe we should make every reasonable effort to preserve that affordability for future generations.

8. Reconsider whether 35% of income represents affordable ownership housing.

The proposed ownership guidelines calculate moderate-income housing costs using 35% of household income. Council should examine whether this provides an adequate affordability cushion once mortgage payments, property taxes, insurance, HOA dues, utilities, maintenance, and other ownership expenses are considered.

I encourage Council to consider whether a 30% standard would better support sustainable homeownership.

9. Protect lower-income BMR homeowners from HOA increases and special assessments.

Creating a BMR ownership opportunity is successful only if the household can continue to afford the home after purchasing it.

Condominium owners have limited control over future HOA dues and special assessments. This can be particularly problematic for very-low- and low-income purchasers. I therefore encourage Council to consider requiring a developer-funded HOA reserve or another mechanism to protect lowerincome BMR homeowners from substantial future increases or assessments.

10. Reconsider an absolute first-time-homebuyer requirement.

First-time homebuyers are an important population to serve, but Council should consider whether first-time status should be an absolute eligibility requirement rather than a preference or one factor in eligibility. An otherwise income- and asset-qualified senior, divorced individual, or other applicant who previously owned a home could be excluded even though that person currently has no realistic access to market-rate homeownership in Los Altos.

The central policy question is whether the program's objective is to provide affordable homeownership opportunities to qualifying households, or to limit those opportunities to people who meet the technical definition of a first-time homebuyer.

11. Include the basic resale-price methodology directly in the ownership guidelines.

A prospective BMR purchaser should be able to understand before buying a home how appreciation, equity, and the maximum future resale price will be determined.

Rather than leaving this important financial condition primarily to project-specific resale restriction documents, I encourage Council to require the basic resale methodology to be stated directly in the guidelines.

5 12. Consider a narrowly tailored hardship provision in the rental program.

Finally, I encourage Council to consider a limited, City-approved hardship provision for circumstances such as job loss, illness, caregiving responsibilities, or another significant temporary disruption. This should not create an unrestricted right to sublet a BMR unit. Any exception could require documentation, City approval, clear eligibility criteria, and a limited duration. Such a provision could recognize real-life emergencies without undermining the integrity of the BMR program.

Conclusion
The staff report asks Council three principal policy questions: whether to modify the priority categories, whether to replace first-come, first-served selection with a lottery, and whether Council has additional direction regarding the draft guidelines.

My answer would be yes to all three.

I support simplifying the preference system and removing the existing residency-duration and family-relationship preferences, while asking Council to carefully consider whether the proposed new first tier is sufficiently inclusive.

I support replacing first-come, first-served selection with a transparent lottery.

And I encourage Council to provide additional direction before final adoption, particularly regarding affordability levels, permanent affordability, tenant stability, asset limits, sustainable homeownership, and transparency.

Los Altos has relatively few opportunities to create BMR housing. When those opportunities arise, our goal should not simply be to produce a certain number of BMR units. We should ensure that those homes provide meaningful, lasting affordability, fair access, financial sustainability, and clear, transparent rules.

The proposed guidelines are an important step forward. With additional refinement, they can provide Los Altos with a strong BMR program that works for residents, property owners, developers, and administrators while preserving affordable housing as a lasting community asset.

Thank you for your consideration.

Sincerely,
Anky van Deursen