7.45.050 Affordable Housing Density Bonus.
The City’s Zoning Ordinance authorizes increased density in Manufactured Home Park Overlay Zones through a density bonus program. To qualify for the density bonus program, the park owner must enter into a development agreement that commits to compliance with this section.
A. A minimum of 10 percent of new units must meet the following affordability requirements:
1. The owner must offer to qualified tenants who are being displaced and whose units cannot be moved the opportunity to either rent or purchase one of the affordable units.
2. The mortgage/rent for these tenants shall not be greater than the higher of:
a. Amount of current space rent and mortgage on home;
b. Thirty percent of the family’s adjusted income per Department of Housing and Urban Development (HUD) standards; or
c. Thirty percent of the income for a family at 50 percent of median income, based upon most recent HUD Income Limits for the Bend Metropolitan Statistical Area (Bend MSA), with family size corresponding to unit size as follows: For one-bedroom units the income shall be based upon a family of two. For two-bedroom units the income shall be based upon a family of three; for three-bedroom units the income shall be based upon a family of four; and for four-bedroom units the income shall be based upon a family of six.
3. For rental developments, up to 10 percent of the newly created affordable units shall have a rent or mortgage that is affordable for a family at or below 30 percent of median income. The number of units that will be required to meet this threshold shall be based upon the income surveys of existing tenants. Income surveys of all existing tenants shall be initiated by the owner and tenants shall be required to provide verification information to the owner as condition of receiving benefits/housing under this section. Units created as part of this section must be offered to existing tenants whose incomes are at or below 30 percent of median income.
B. Any displaced tenant-owner shall be assured of affordable transitional housing and the payment of any necessary and reasonable moving expenses for personal property to relocate from their existing unit to a transitional unit and from the transitional unit to the permanent housing in the new unit. Tenant shall be required to solicit a minimum of two bids from licensed moving companies and shall be required to take the lower of these bids. The allowable transitional relocation expenses shall not exceed:
1. Actual reasonable expenses in moving family or other personal property.
2. Actual direct losses of tangible personal property as a result of moving but not to exceed an amount equal to the reasonable expenses that would have been required to relocate such property, as determined by the City Manager or designee.
3. An amount not to exceed $4,000 (adjusted annually by the increase, if any, in the Consumer Price Index (CPI) based on the index published by the U.S. Department of Labor, Bureau of Labor Statistics, using the index U.S. City Average, All Items, All Urban Consumers, Not Seasonally Adjusted (1982-1984 = 100)), in total for relocation to transitional housing and from transitional housing to permanent housing. However, during the period of transition, tenant will still be required to pay, for rent, the amount stated above in this section and comply with lease agreement and applicable Landlord Tenant Law. Any significant violations of lease will negate tenant rights under this chapter.
4. Park owners may elect to contract for moving of tenant or may move tenants utilizing other resources; provided, that all bonding and insurance is satisfied for the moving of the belongings.
5. Park owners may provide transitional housing, either on site or off site to meet the requirements of this section.
6. Tenant-owners who cannot qualify for the new permanent unit due to rental history issues, credit worthiness or other factors shall not be eligible for relocation benefits under this section but shall receive compensation for their units as stated in BC 7.45.025. Income alone cannot be a factor in excluding someone from receiving benefits under this section.
C. All tenant property in a park under closure notice shall remain secure and all services in rental agreements shall be provided to tenants remaining in park until closure.
D. New rental units developed under the density bonus program shall meet the affordability requirements for not less than 20 years, beginning after project completion, and must be offered first to existing tenants in the park. The affordability requirements for the rental units apply without regard to the term of any loan or mortgage or the transfer of ownership. The requirements must be imposed by deed restrictions, covenants running with the land, or other mechanisms approved by the City of Bend, except that the affordability restrictions may terminate upon foreclosure or transfer in lieu of foreclosure. The City of Bend, the owner, or other entity having property rights in project may use purchase options, rights of first refusal or other preemptive rights to purchase the housing before foreclosure or deed in lieu of foreclosure to preserve affordability. The affordability restrictions shall be revived according to the original terms if, during the original affordability period, the owner of record before the foreclosure, or deed in lieu of foreclosure, or any entity that includes the former owner or those with whom the former owner has or had family or business ties, obtains an ownership interest in the project or property. Rent for new units to be occupied by tenant-owners shall be as stated in this section. All other rental units required to meet the 10 percent of total unit requirement will have a rent that shall not exceed 30 percent of income for a family at 50 percent of median income per HUD Income Limits for Bend MSA and family size will be based upon unit size.
E. Subsequent Rents for Units Vacated During Affordability Period. Units that are vacated by original tenants during the period of affordability shall remain available and rented to low-income tenants. Rents for these units shall not exceed 30 percent of income for tenants at 50 percent of median per HUD Income Limits for Bend MSA and family size will be based upon unit size as stated in this section. Owners of rental properties shall be required to submit an annual rent schedule for all units to the City of Bend.
1. Rent Increases. Any increase in rents for assisted units is subject to the provisions of outstanding leases and, in any event, the owner must provide tenants of those units not less than 30 days’ prior written notice before implementing any increase in rents.
2. Over-Income Tenants. Units continue to qualify as affordable housing despite a temporary noncompliance caused by increases in the incomes of existing tenants, if actions satisfactory to City of Bend are being taken to ensure that all vacancies are filled in accordance with this section until the noncompliance is corrected.
F. New affordable ownership units developed under the MHP Overlay Zone shall be acquired by an existing tenant or homebuyer whose family qualifies as a low-income family, and the housing must be the principal residence of the family throughout the period of affordability. Units shall be first offered to tenants being displaced.
1. Mortgage Amounts. Mortgage for new units shall be as stated in this section for units that are to be sold to existing owner tenants. All other ownership units required to meet the 10 percent of total unit requirement will have a sales price whose mortgage shall not exceed 30 percent of income for a family at 80 percent of median income per HUD Income Limits for Bend MSA and family size will be based upon unit size.
2. Periods of Affordability. The newly created/assisted ownership unit must remain affordable for a period of eight years. However, a portion of the gained equity shall be recaptured for a period of 20 years.
3. Resale and Recapture. To ensure affordability, the property owner/developer must impose either resale or recapture requirements, at its option and upon agreement with the City of Bend. The resale or recapture requirements shall comply with the following standards:
a. Resale. Resale requirements must ensure, if the housing does not continue to be the principal residence of the family for the duration of the period of affordability, that the housing is made available for subsequent purchase only to a buyer whose family qualifies as a low-income family (80 percent of median income per HUD Income Limits for the Bend MSA) and will use the property as its principal residence. The resale requirement must also ensure that the price at resale provides the original assisted owner a fair return on investment (including the homeowner’s initial investment (down payment) and any capital improvement) and ensure that the housing will remain affordable to a reasonable range of low-income homebuyers.
b. Transaction Documents. Deed restrictions, covenants running with the land, or other similar mechanisms must be used as the mechanism to impose the resale requirements. The affordability restrictions may terminate upon occurrence of any of the following termination events: foreclosure, transfer in lieu of foreclosure or assignment of an FHA insured mortgage to HUD. The owner/developer of the property, with approval of the City of Bend, may use purchase options, rights of first refusal or other preemptive rights to purchase the housing before foreclosure to preserve affordability. The affordability restrictions shall be revived according to the original terms if, during the original affordability period, the owner of record before the termination event obtains an ownership interest in the housing.
c. Recapture. Recapture provisions must ensure that the market value of the assistance to the homebuyers (real market value of property minus total cost to purchaser at time of initial sale/occupancy), if the housing does not continue to be the principal residence of the family for the duration of the period of affordability, is recouped. Deed requirements shall ensure that this recaptured amount of funding is deposited with Neighbor Impact (or designated successor) and shall be utilized, minus administrative costs, to assist a future purchaser of the property. Neighbor Impact will market the property to eligible purchasers. Trust deeds, mortgages or other instruments of property transfer executed at time of sale shall ensure compliance with this section.
d. Reduction During Affordability Period. The market value amount to be recaptured shall be reduced on a pro rata basis for the time the owner-tenant homeowner has owned and occupied the housing measured against the required affordability period. This shall be at a rate of 50 percent per year beginning in year six and accelerating to 100 percent per year beginning in year eight.
e. Shared Net Proceeds. Upon recapture of market value of assistance, 10 percent of the amount of seller’s net proceeds shall be deposited in the City of Bend Affordable Housing Fee Fund to be utilized for affordable housing projects. This requirement shall expire 20 years after project completion.
f. Uses of Recaptured Proceeds. All funding recaptured upon sale of any unit during period of affordability shall be utilized to assist a qualifying low-income homebuyer to purchase the unit. Portion of seller’s net proceeds recaptured shall be utilized as stated in this section. [Ord. NS-2157, 2011]