Liang - Completion Bond on BMR housing, BMR units for families, not on separate parcel

From: Liang-Fang Chao

Date: Tue, Sep 18, 2018 at 2:08 AM
Subject: Completion Bond on BMR housing, BMR units for families, not on separate parcel
To: City Council <citycouncil@cupertino.org>, City Attorney's Office <CityAttorney@cupertino.org>, manager@cupertino.org, "City of Cupertino Planning Dept." <planning@cupertino.org>

Dear Mayor Paul and Councilmembers,

Please insist that at least 60% of BMR units should be 2-bedrooms or bigger so that they could accommodate families in need, or people with disabilities or seniors who need caretakers. Singles have more options for affordable housing by sharing apartments. The Municipal Code requires BMR units to be comparable in size with market-rate units, but the Development Agreement appears to not comply with our Affordable Housing Manual.

Please insist that the Low and Very Low Income units follow the City's Affordable Housing Manual so that they are constructed with materials of comparable quality and they are scattered throughout the development (inclusionary). The Development Agreement appears to not comply with our Affordable Housing Manual. It is highly likely that the Low and Very Low Income units will be placed in a separate parcel and gets constructed last.

Please insist that the BMR units are constructed as early as possible so that these units could help with housing shortage. The Development Agreement now only requires the occupancy permits of BMR to be issued before the LAST occupancy permit of the market-rate units. In case any of the market-rate unit gets delayed for any reason, the BMR units might not get built.

Please insist on a completion bond for the BMR housing portion. If the BMR units are not built within a designated time frame (perhaps by the end of the current Housing Element cycle). the completion bond will then be used to fund the construction of the BMR units.

The Development Agreement for the draft Vallco Specific Plan suggests that the Project Developer will seek public funding, which might take several years or may never materialize, instead of funding for the construction of the BMR units from the profit of the office and market-rate housing portion. That seems to defeat the purpose of the plan. If the Vallco Specific Plan is approved, the City would have given the developer an instance boost in land value just from the upzoning from retail only to add a significant amount of office and residential allocation. Once the project is developed, there will be more profit to be made. Yet. the developer won't fund the construction of the BMR?

Under the "Timing of Delivery of BMR Units" in the Development Agreement,

"Developer will endeavor to build separate BMR Unit residential buildings at approximately the same time and that BMR units must be developed roughly in proportion with the delivery of market rate units, provided that City recognizes that delivery of BMR units may be affected by and delayed due to market conditions, logistics, and financing considerations.

....

If Developer is unable to secure LIHTC financing after three rounds of applications to TCAC, Developer shall provide the City with security in a form acceptable to the City in an amount to cover the otherwise applicable City Affordable Housing Fee, and Developer shall be responsible for securing feasible financing for the BMR Units to complete construction within a reasonable timeframe mutually agreed upon by the parties."

The above section seems to suggest that the Developer will simply pay in lieu fee if they can't find public funding for the BMR units. So, in the end, the City might still have no BMR units needed to fulfill the RHNA requirements. If meeting RHNA requirement is being used to push through the massive allocation for Vallco Specific Plan, shouldn't the City ensure that the BMR is built on site, no matter what happens?

Your job is not to rubber stamp everything the developer asks. Your job is to keep the developers accountable to deliver their promises.

Sincerely,

Liang Chao

Cupertino Resident