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HA1981/06/09r:Nw.] ANAHEIM HOUSING AUTHORITY June 9, 1981, 1:00 P. M. Council Chambers Anaheim Civic Center PRESENT: AUTHORITY MEMBERS: ABSENT: AUTHORITY MEMBERS: PRESENT: CITY MANAGER: CITY ATTORNEY: SECRETARY: EXECUTIVE DIRECTOR: Overholt, Kaywood, None William 0. Talley William P. Hopkins Linda D. Roberts Norman J. Priest Bay, Roth and Seymour Chairman Seymour called the regular meeting of the Anaheim Housing Authority to order at 2:47 p.m. MINUTES: On motion by Mrs. Kaywood, seconded by Mr. Bay, minutes of the Anaheim Housing Authority regular meeting held May 26, 1981, were approved. MOTION CARRIED. FINANCIAL DEMANDS AGAINST THE ANAHEIM HOUSING AUTHORITY in the amount of $2,699.53, in accordance with the 1981 budget, were approved. 177.152: APPROVAL OF SELLING GUIDLINES FOR AN AFFORDABLE FOUR -UNIT NEW CONSTRUCTION PILOT PROJECT IN THE PATT STREET NEIGHBORHOOD: (Continued from the meeting of May 26, 1981). Mr. Norm Priest, Executive Director of Community Development, briefed his report dated June 2, 1981. recommending approval of the guidelines by which the units would be offered for sale. Mr. Roth explained he had asked that the matter be held over for full Authority action and also since a 15 -year resale restriction was involved. They had previously discussed the matter at length and were also going to have a work session on resale controls. He made his position clear that he had many problems with resale controls, rent control, etc. While he was in support of the development, he was opposed to long -term restrictions. Mr. Priest stated that the restrictions themselves were not mandated by any other governmental body. Those were in the purview of the Authority and their decision on the matter would not impede the development. Mr. Ed Gardner, Member of the Housing Commission, stated on the matter of the deed restrictions, the Commission discussed that issue thoroughly and in par- ticular the number of years, five and fifteen; fifteen years for the units in which the City made the greatest subsidy, and five years for those where they had made the least. It was felt that those restrictions were necessary in order to prevent changing hands too rapidly; fifteen years on the two units and five years on the others. 81 -29 Anaheim Housing Authority, Ju ne 9, 1981, 1:00 P. M. Mrs. Kaywood noted that initially the development was supposed to have been five units. She asked if that was one of the reasons the Housing Commission allowed the development to go to four units. Mr. Gardner answered that was correct; otherwise, they would have had to restrict the units to thirty years. The Chairman stated he had questions relative to the non - forgivable second trust deed. He wanted to know if the amount of that deed represented the amount of the subsidy; Mr. Gardner answered "yes" as he understood the situation. After further questions posed to Mr. Gardner, the Chairman surmised that the only control implied was that the unit must be sold to a family or individual represent- ing 120% or less of median income; Mr. Gardner confirmed that was correct. Chairman Seymour stated as he understood the matter, he might not be opposed to the fifteen years or five years, but wanted to be certain that the buyer who was initially being subsidized paid his own way, and that was being accomplished through the non - forgivable second trust deed, although he felt there should be a higher than 8% interest rate. When the time came to sell the property, they would try to find a buyer at 120% of the median or less. If so, and if they had the financial programs available to assist, then it would work. If not, then the units would go to the marketplace through a normal sale. The seller would sell his property, pay off the second trust deed, and everybody would be squared at that point. He saw no problem in structuring the matter in that fashion. There would be no resale price controls; the buyer could sell at any time for whatever the market would bear, provided that the 120% median income buyer could buy it. If that could not be done after offering the unit at fair market value for six months, then the seller could sell his property in the traditional fashion. Authority Member Roth felt that too many "ifs" were involved. He reiterated that he had real problems as an individual who opposed not only rent control, but also controls in general, and then to find himself voting on an issue adding fifteen year controls. If the situation could be defined and structured to take another look. Otherwise, he would be opposed. Chairman Semour wanted to see if he could get concurrence from the Authority on a concept. The important issue was how the buyer would be treated when he wanted to sell the property and also if there was any gift of public funds along the way. He suggested that staff draw up for analysis a proposal that would be the same as that proposed in the subject situation, but with a higher interest rate on the second trust deed and then in Item Number four of the June 2, 1981 staff report (on file in the City Clerk's office) provide an opportunity for the buyer after six months' exposure to the market for a family with income in the 120% median or less to purchase the unit. If unsuccessful, then the buyer would be able to go to the marketplace. He would suggest an interest rate of between 10 and 12 %. If that made sense, he would ask staff to refine that concept and bring it back to the Authority. 81 -30 Anaheim Housing Authority, June 9, 1981 1:00 P. M Mr. Priest stated they would bring back a proforma agreement for evaluation with a 10% interest rate and 120 days on the market. Authority Member Overholt explained that relative to the 120 days, when Chair- man Seymour was away, one affordable project came through using the 120 figure as the exposure to the market, as opposed to 180 days. He was interested in seeing that there was consistency on the 120 -day requirement; the Chairman indicated he had no problem with that. Authority Member Seymour offered Resolution No. AHA81 -8 for adoption, autho Standard Agreement No. 80, Chapter 13 and other related documents as recommended in memorandum dated June 9, 1981 from the Executive Director of Community Development. Refer to Resolution Book. RESOLUTION NO. AHA81 -8. A RESOLUTION OF THE ANAHEIM HOUSING AUTHORITY AUTHORIZING EXECUTION OF STANDARD AGREEMENT NO. 80- CHAP -13 AND OTHER RELATED DOCUMENTS WITH THE STATE OF CALIFORNIA FOR THE IMPLEMENTATION AND PARTICIPA- TION IN THE CALIFORNIA HOMEOWNERSHIP ASSISTANCE PROGRAM (CHAP). Roll Call Vote: AYES: AGENCY MEMBERS: Overholt, Kaywood, Bay, Roth and Seymour NOES: AGENCY MEMBERS: NONE ABSENT: AGENCY MEMBERS: NONE Chairman Seymour declared Resolution No. AHA81 -8 duly passed and adopted. ADJOTTNPMENT: Mr. Roth moved to adjourn. Mr. Bay seconded the motion. MOTION CARRIED. Adjourned: 3:10 p.m.