Title 2 — RESIDENCES

The City may use the proceeds of bonds to make, purchase, or otherwise contract for the making of, a mortgage loan or other secured loan to a Qualified 501(c)(3) Sponsor, upon such terms and conditions as the City shall deem proper, for the Costs of a Residence.

(Added by Ord. 211-24, File No. 240726, App. 8/1/2024, Eff. 9/1/2024)

Subject to regulations approved by the Citywide Loan Committee pursuant to Section 43.15.13, surplus revenues of a Residence shall be deposited into the Housing Trust Fund, established pursuant to Charter Section 16.110. (Added by Ord. 211-24, File No. 240726, App. 8/1/2024, Eff. 9/1/2024)

Residences financed under this Article XV shall meet all the following affordability requirements:

(a) The Sponsor, or any other owner of a Residence that is not the City, shall enter into a regulatory agreement with the City for the life of the Residence to restrict occupancy of units to tenants with household income not to exceed 120% of AMI, and monthly rent not to exceed one-twelfth of 30% of 120% of AMI. Nothing in this Article XV shall limit the Board from requiring household incomes and corresponding rent maximums to be lower than the preceding sentence.

(b) Initial rents for qualified households shall not exceed the lesser of: (1) 30% of one-twelfth of the applicable annual income limit, or (2) at the election of the Sponsor, either (A) 15% below comparable market rent as established by a third-party market study accepted by the City, or (B) the average 10% below Small Area Fair Market Rents established by HUD.

(c) Average income at Stabilized Occupancy in each Residence must be no greater than 100% of Median Income. Average rents at Stabilized Occupancy in each Residence must be no greater than 30% of such average income limit.

(d) In instances of acquisition, no existing residents shall be involuntarily displaced. Units will be made available to households meeting the income restrictions applicable to the Residence upon voluntary vacancy of each such unit. Any existing tenants who elect to income-certify after the acquisition of a Residence will have their rent adjusted to the applicable affordability levels. If a Residence is subject to Administrative Code Chapter 37 (the Residential Rent Stabilization and Arbitration Ordinance, or “Rent Ordinance”) prior to acquisition, units will continue to be subject to the Rent Ordinance and excluded from the regulatory agreement until the earlier of: (1) the existing tenant voluntarily vacating the unit, or (2) the existing tenant income-certifying and executing a new lease under the requirements of the regulatory agreement.

(e) Annual rent increases shall not exceed the lesser of the annual percentage change of 100% of AMI from the previous year or 4% of the existing rent.

(Added by Ord. 211-24, File No. 240726, App. 8/1/2024, Eff. 9/1/2024)

The City may fix rents, payments, fees, charges, and interest rates for financing under this Article XV and may agree to revise from time to time such rents, payments, fees, charges, and interest rates to reflect changes in interest rates on bonds, losses due to defaults, or changes in other expenses related to this Article, including City administrative expenses, in each case subject to Section 43.15.8 and other applicable laws. (Added by Ord. 211-24, File No. 240726, App. 8/1/2024, Eff. 9/1/2024)

The City may grant deeds of trust or mortgages as security for repayment of bonds, and may hold deeds of trust as security for loans made to Qualified 501(c)(3) Sponsors under this Article XV, and may pledge or assign the same as security for repayment of bonds. Such deeds of trust, mortgages or security interests, or any other interest of the City in any Residence, may be assigned to, and held on behalf of the City by, any bond purchaser, collateral agent, or bank or trust company appointed to act as trustee by the City in any ordinance or indenture providing for the issuance of bonds.

(Added by Ord. 211-24, File No. 240726, App. 8/1/2024, Eff. 9/1/2024)

The City may contract for such housing development services, construction management, engineering, architectural, financial, accounting, property management, asset management, appraisal, consulting, or other professional services as may be necessary in the judgment of the City to further the purposes of this Article XV. (Added by Ord. 211-24, File No. 240726, App. 8/1/2024, Eff. 9/1/2024)

(a) Except as specifically provided in this Article XV, the acquisition, development, construction, improvement, repair, maintenance, or rehabilitation of a Residence financed under this Article shall not be subject to any requirements relating to buildings, works, or improvements owned or operated by the City under Administrative Code Chapter 6; and any requirement of public competitive bidding or other procedural restriction imposed on the award of contracts for acquisition, development, construction, improvement, repair, maintenance, or rehabilitation of a City building, work, or improvement or to the lease, sublease, sale, or other disposition of City property under Chapter 6 shall not be applicable to any action taken under this Article.

(b) The Public Utilities Commission shall supply electricity to a Residence financed pursuant to this Article XV based on the feasibility assessment described in Administrative Code Section 99.2. (Added by Ord. 211-24, File No. 240726, App. 8/1/2024, Eff. 9/1/2024)

(a) The Program Administrator is responsible for the administration of this Article XV, subject to any rules and regulations promulgated, pursuant to this Article. The Program Administrator, in consultation with the Controller’s Office of Public Finance, shall prepare and submit to the Citywide Loan Committee for approval, rules and regulations permitted under this Article, including but not limited to rules and regulations for underwriting standards, surplus revenues, credit enhancement, and Sponsor fees.

(b) Regulations for Income Certification Process.

(1) Incomes shall be certified only through providing one year’s tax returns and a voluntary statement of assets, except as otherwise required by a public subsidy.

(2) Initial credit and rental background checks shall be conducted concurrently with initial income certification.

(3) Applicants shall be approved or denied within 20 business days of a determination of preference made pursuant to Administrative Code Chapter 47.

(4) Recertification shall be limited to once every five years, unless otherwise required by law.

(c) The Program Administrator shall monitor each Residence for compliance with that Residence’s regulatory agreement for the term of such regulatory agreement and provide an annual report to the Board of Supervisors on the status of this Article XV.

(Added by Ord. 211-24, File No. 240726, App. 8/1/2024, Eff. 9/1/2024)

In addition to all other powers specifically granted by this Article XV, the City may do all things necessary or convenient to carry out the purposes of this Article. Notwithstanding Section 43.1.17 of this Chapter 43 or any other provision to the contrary, the City shall have the power to acquire, own, lease, dispose of, and operate one or more Residences financed under this Article, in each case as a business, in furtherance of the purposes of this Article. (Added by Ord. 211-24, File No. 240726, App. 8/1/2024, Eff. 9/1/2024)