HomeMy WebLinkAbout7/23/2003 - STAFF REPORTS (2) DATE: JULY 23, 2003
TO: CITY COUNCIL
FROM: DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT
RESALE RESTRICTIONS IN SUNRISE NORTE, QUAIL POINTE, DESERT DORADO, AND
SUNRISE PALMS RESULTING FROM CITY'S COVENANT CONTROL
MECHANISM/DENSITY BONUS PROGRAM
RECOMMENDATION:
That the Council adopt a policy of replacing the City's resale restrictions on certain single-
family home and condominium subdivisions adopted pursuant to its Covenant Control
Mechanism/Density Bonus Program with a revised set of restrictions targeted to buyer's
income, with certain provisions homeowners to opt out of the program
SUMMARY:
The City of Palm Springs, in December 1980, adopted a Covenant Control density program for
subdivision developers seeking density bonuses as an incentive to construct new housing
during difficult economic times. The mechanism applied to several subdivisions proposed on
land that had recently been rezoned from Airport Noise/Blowsand areas to residential. State
law normally requires that a developer seeking a density bonus restrict 20% of the units to low-
and moderate-income buyers or renters. This program was designed to avoid having to create
a difficult restriction on 20% of the units, and instead created a program whereby the City
restricted the increase in sales price of the homes to the amount of capital improvements plus
the Consumer Price Index, inan effort to keep them forever affordable to moderate income .
families .
Over the past several years, the program has been enforced in a haphazard way because it
relies on the real estate recordation/title process during a sale to trigger a request to the City
for a determination of the Maximum Allowable Price. Because the restrictions themselves are
buried in the CC & Rs, sometimes transactions have occurred when the buyer, the seller, the
agents, and the title/escrow officer have not read the restrictions and/or contacted the City for
a resale calculation. As a result, there are owners who have purchased property without being
aware of any restriction, and who may have purchased their homes at a higher than "maximum
allowable" price.
Based on the interest primarily from the Quail Pointe neighborhood, the newest of the four,
staff has begun to investigate these restrictions further. From an staffing/administrative point
of view, staff would support the rescission of the restrictions. Quail Pointe, too, supports it,
based on an affirmative vote of 80% of the homeowners and 88% of the mortgage lenders.
However, staff feels that, based on the legal premise that created the program in the first place
(density bonus law), a different set of restrictions that are clearer and contain opt-out
provisions should be recommended in their place, rather than rescinding the restrictions
altogether.
Council could decide to do either, but any decision by the Council would only be in response to
formal request by the required percentage of homeowners and mortgage lenders seeking an
aA
amendment to their Declaration of CC & Rs. Whatever the Council decides, staff will
undertake a process to seek the approval by the requisite number of homeowners and lenders
to effect the change.
BACKGROUND:
Staff made a presentation on the issue of the residential "resale restrictions" at the June 11
Council Study Session agenda. Staff's recommendation at that presentation was to replace the
current resale restriction embedded in the CC&Rs with new, clearer restrictions that do a number
of things:
1. Clear up the confusion as to whether or not the home is restricted, as it will be
recorded separately from the CC & Rs and show up clearly and separately on the
title report. That will make it easier for escrow companies to include compliance
in the escrow instructions, which most buyers (should) read before closing on a
home.
2. Create a different restriction based on the income of the buyer(moderate), not on
the sales price of the house and CPI increases. The CPI increase calculation
would become part of the remedy if the home is sold to an "above-moderate"
income buyer.
3. Provide an opportunity for the restriction to go away altogether, with an early
"buyout provision" as well as a termination of the restriction upon sale to an "over-
moderate" income buyer and compliance with the remedy.
4. Sunset the restrictions in 10 years, in any case, without any further action.
The purpose of recommending the replacement of the restrictions, rather than rescinding them,
was because of the legislative purpose and legal basis for creating them in the first place. They
were created as part of a City Covenant Control Mechanism/Density Bonus Program that was
designed to trade increased density in the subdivisions with the requirement that the homes
remain affordable. The legal requirement on a density bonus under State law is only that 20% of
the units remain affordable, but in this case the City created a mechanism that it argued would
ensure the long-term affordability of the homes, as determined by a comparison with their price,
mortgage financing, and area median income. Because the program was built on the theory that
there would be a close relationship between income growth(which determines"moderate income"
levels), consumer price index(which is the basis for determining Maximum Allowable Price under
the restrictions), and real estate values,as the relationship between these numbers has weakened
over the past two decades the basis for the program design has also weakened, but not the legal
rationale.
The City would not be in violation of the law, as described by the City Attorney, if it granted a
density bonus under State law, and then after a period of time rescinded the required 20%
affordability restriction and left the units unrestricted. To seek an opinion from the State as to
whether or not this would be okay is to invite HCD's scrutiny and almost assuredly the undesired
answer, especially since the City's Housing Element, which does include these homes as
"moderate income housing", is still being reviewed by the Department. A replacement of the
current restrictions with a new set is better from a legal perspective, but not absolutely necessary.
a,4a
Certainly the homeowners would wish to see the resale restrictions lifted from their homes. As
noted above, homeowners in Quail Pointe have already undertaken the exercise of having a
vote of the required number of owners and lenders to amend their CC& Rs to remove the resale
restrictions on their homes. They now need to City to consent to the change, as required by the
document.
The Council could decide to remove all the resale restrictions (pending approval by the property
owners and mortgage lenders, as in Quail Pointe), or decide to replace the restriction with the
recommended one that's clearer and fairer, and which contains an opt-out provision. If the
Council votes to rescind the provision on Quail Pointe, the work is already done from the
homeowners end and a CC & R amendment would need to be recorded against each property
waiving the City's right to restrict.
If the Council votes to alter or amend the restriction, as staff has recommended, staff will
undertake a process to seek the required number of signatures from both homeowners and
lenders, to effect the change. If the owners and lenders do not agree to such a change, the
current restrictions would remain in place. Staff also suggests that the issue of the resale
restrictions in Sunrise Norte,where the City needs to extend the leases, be tabled until a proposal
on the leases is brought forward, after the appraisal is complete.
The new restrictions would be more similar to how the Redevelopment Agency restricts units,
based on the income of the buyer. The Agency's most recent resale agreement was on the
Cottonwood/Chuckwalla homes, which restricts the sale of a new home to a qualified buyer.
There is a process of searching for a qualified buyer that is spelled out in the Regulatory
Agreement. If the buyer is unable to find an income-qualified buyer, then he/she is subject to the
provisions of the restrictions. Under new Redevelopment Law,the seller not only has to repay the
Agency silent second loan, but has to share in the home's price appreciation with the Agency.
This is done on a sliding scale, from 100% of the price appreciation due the to Agency if the
property sold in the first year, down to 10% in the 10'h year. This equity sharing is not a provision
that we are recommending for the Resale Restricted homes.
Under a new Quail Pointe restriction, in the case where a seller had an offer from a non-qualified
buyer (above moderate income), provisions similar to the current restrictions would kick in. The
City would calculate the increase in price and the increase in CPI and come up with a target price
for the home. If the sales price were above that, a "decontrol fee" equal to 1/3 of the difference
between the actual selling price and the target price would be due the City. Based on recent
resales where the actual price has come in higher than the"Maximum Allowable Price" under the
restriction, staff estimates that the "decontrol fee" from each transaction (1/3 of the difference)
would be $2,000-$3,000, based on current values. In return for the fee, the City would agree to
permanently remove the restriction from the title.
If an income qualified buyer purchased the property,the restriction would remain, and there would
be no fee due.
What if a non-income qualified buyer were to purchase the house, and the Maximum Allowable
Price was higher than the actual sales price? In that case we'd suggest an alternative minimum
fee and have the restriction be removed. Staff suggests that the level of the fee, in that case,
should be$1,000 and $2,500, paid from the escrow on the house. Just as above, the restriction
would then terminate.
OV7_3
The last issue is that if the restrictions were rescinded, even if the State did not object, there would
be 577 housing units in the City that are non-conforming in regards to density. This is the problem
identified by Council in the Study Session. The Planning Department just tackled the issue of
rectifying non-conforming residential uses in that area (existing apartments in down-zoned R-1
areas), but the solution to that problem would be a zoning text and general plan amendment
allowing those densities retroactively in those subdivisions. That could be accomplished in the
General Plan Update process.
The last issue is the Sunrise Norte leases,where the City owns the land and the homeowners are
on a lease. The City has hired an appraiser to determine the fair market appraisal of both the fee
value and the leasehold value of those lots. Staff will present a program for extending the leases
within the next several months: Council will determine then if it chooses to continue to subsidize
the leases or allow them to float to free market. New restrictions could be then tied to a lease
subsidy, or released with a market rate lease, for example.
The resolutions state the City's position on amended restrictions on the three subdivisions, then:
Quail Pointe,Sunrise Palms,and Desert Dorado. A separate resolution is included should Council
decide it wishes to rescind the restrictions instead.
ohn S. R ymon
irector Commhaify & Economic Development
,d�
City Manager
ATTACHMENTS:
1. Resolution Adopting New Restrictions
2. Resolution Rescinding Restrictions
2
Blank Page 1 of 1
Velma Burnell
From: Kerrie Stephens
Sent: Wednesday, July 16, 2003 8:36 AM
To: Velma Burnell
Subject: FW: Home resale restrictions being concidered
-----Original Message-----
From: Britton Stuber [mailto:brittoi@earthlink.net]
Sent: Monday,July 07, 2003 10:39 AM
To: chrism@ci.palm-springs.ca.us
Cc: rono@ci.palm-springs.ca.us;jeanner@ci.palm-springs.ca.us; willk@ci.palm-springs.ca.us;
deynah@ci.paim-springs.ca.us
Subject: Home resale restrictions being concidered
We purchased our home at fair market value just over one year ago and we were never disclosed the fact of
20 year old resale restrictions. The solutions that the city council members are mulling over for refilling the
city housing funds that you have ignored over the years are unfair and after discussion with two attorneys
this week, close to being abusive to the present home owners. I have started to organize my housing
development(Desert Dorado) into a block of activists who all are willing to enter into a class action law suit
that will have many layers of responsible parties. And as side note, people of moderate means that live
here are not the ones that should be filling your ignored fund.
My biggest issue with this city council is that you felt that it was acceptable to decide this issue with out
notification of the affected parties (us) and proper public input of something that is so very important and
restrictive to our development. Please advise why we were not notified by staff of these goings on? Shouldn't
we be a party to our own financial investments and well being?
The majority of us home owners are not real estate sharks who are buying and selling homes, but we are
citizens who deserve to be able to tap their home equity for home or personal improvement like people from
the rest of the city are able to do. This city's negligence in keeping up the beaurocracy of these restrictions
over the years, and with the passage of so much time and the huge number of homes that have been sold at
fair market value over and over again leaves one to think that city council doesn't understand the dozens of
very complicated and marginally legal issues this city would be standing on. My neighbors are mad as hell
and we will fight for our investments. And by the way, shouldn't have someone informed the city and county
assesor of what our home values should have been? I do know we pay fair market value on our property
taxes. This seems to me to be a clear signal from our city government that these restrictions are of no
importance to us.
Thank-you for your time, Britton Stuber and John Hines, 2580 N. Aurora Drive, Palm Springs, CA 92262,
phone: 323-7889
,12,/0 -
7/16/2003
Y :n.77"
ELIVABETH BAKER
7 ATTORNEY AT LAUD
July 14, 2003
The Honorable Members of the Palm Springs City Council:
On Sunday, July 6, 2003 I was informed, for the first time, that my Desert Dorado residence was subject
to a recorded CC&R which limited the price I could obtain on sale of my home and that the City was
proposing a modification of that restriction. As a result, I have reviewed the controlling law, i.e., that
which was in effect when my subdivision was built; the actual CC&R, City Council and Planning
Commission minutes, and the proposed modification.
I have concluded, as more particularly set forth in the attachment to this letter, that the CC&R was
enacted by the then City Council in excess of the Council's authority and is therefore, unenforceable; that
the compliance method required by statute was so seriously flawed so as to be non-existent; and the
proposed solution constitutes an inverse condemnation which is inequitable and unenforceable.
Since City staff has been insistent in dealing with all four similarly situated developments at the same time
and have refused to recommend terminating the Quail Point restrictions after encouraging the gathering
of requests and consents from substantially more than the required minimum of owners and mortgage
holders [i.e. 80% homeowners and 88% mortgage holders], and both Quail Point and Sunrise Palms
CC&R's are modeled after the Desert Dorado ones, all suffer from the same flaws and should be
considered void.
While Sunrise Norte is in a quite different situation than the other three, it is difficult to understand why
the City has delayed in extending the City owned leases, defeating the owners opportunity to refinance
at the most favorable rates of a lifetime, a matter of some urgency. That the City owns the leases should
not be used as an excuse to extend the resale restrictions beyond 30 years, even if those restrictions were
legally permissible originally.
It is time to act, without further delay, to acknowledge that the resale restrictions of the first three are
null and void and to extend the Sunrise Norte leases without further concessions from the residents.
Sincerely yo Irs/,q^ /
mil/ V
OlzUabeftiBaker � L
cc. File, City Attorney c
Enclosures: Summary Attachment
d
I • '
1321 Eost Rdobe Woy • Polm Springs Colifornio 92262-2307 • (760) 320-3556 \ FRX (760) 325-9425
SUMMARY ATTACHMENT
I. Original Controlling Law
At the time that the Desert Dorado project was proposed the statutory scheme which
permitted a density bonus in exchange for resale restrictions was still relatively new, and
each of those statutes have since been amended a number of times, however, in the early
1980's there were two density bonus statutes. The relevant Government Code Sections
provided as follows:
'65� 913.4 (a) if a developer reserved 20% or more for occupancy by lower income
households: (b) the City was required to provide at least one concession and could provide
more, including a density bonus or other regulatory incentive; and under subsection (c) the
units for lower income households could be reserved for only 10 years, or, if it was required
by the mortgage financing assistance program, a longer time. Significantly, even for low
income housing the restriction could not be more than 10 years sinless it was required by a
"construction or mortgage financing assistance program, mortgage insurance program, or rental
.Mbsidv program."
'65915 (a) when at least 25% of the units are reserved for families of low or moderate
income, or 10%n for lower-income households or 50% for seniors, then the City was required
to grant a density bonus or provide other incentives or equivalent financial value
[undefined]. Under subsection b, the City was required to establish procedures for carrying
out this section, and only one such density bonus could be provided.
'6§ 5916 Onlv where there was a direct financial contribution to a housing development
through participation in the cost of infrastructure, write-down of land costs, or subsidizing
the cost of construction, could the units be restricted for 30 years.
Where, as here, it is commonly agreed that the intent of the parties to reserve units
for low or moderate income persons was not fulfilled, because the required low or moderate
income persons could not be found [excepting one in Desert Dorado for whom the
developer secured a low interest rate by buying down the interest with his funds]; no
adequate notice was provided to buyers, either originally or especially on resale; no direct
financial contribution was made by the City; and no effective monitoring or compliance
Page 1 of 4
method was established [notes of meetings indicate the concern of the City that it not cost
additional staff].
II. Current Law
Current law is similar, excepting only that:
'6§ 5915 (c) (1) permits lower income density bonus units to be restricted for 30 years or
longer if required by financing assistance programs, and:
(c) (2) for 10 years for moderate income units if a condominium.
NEITHER THE OLD LAW NOR CURRENT LAW AUTHORIZES A 60 YEAR
RESTRICTION, OR MORE THAN 10 YEARS WITHOUT BOTH FUNDING ASSISTANCE
AND A COMPLIANCE PROGRAM.
III. Enforcement Was Inadequate
Apparently, from prior meetings with the City Attorney and City Staff, it is generally
agreed that initial administration as well as enforcement on resale has been seriously flawed.
spotty, and in most cases non-existent.
The Quail Point CC&R's, for instance, were noted on some of the original deeds but
are not shown on most current deeds. And, even if such restriction is shown on a deed, the
deed is not presented to the buyer until well after the escrow closes and the deed has been
recorded.
On Desert Dorado lease land the CC&R's are not noted in the lease assignment,
which presented prior to the close of escrow, but are referenced in the lease, which is not
provided until after the close of escrow.
IV. The Staff Proposal
Staff have proposed, for the three subdivisions, a "modification of existing
Page 2 of 5
restrictions" which include a new agreement, reinstituting enforcement of the resale
restriction with monetary penalties, early termination and payment to the City, together with
notification to buyers.
A. New Agreement
All three subdivisions are beyond the 10 year period permitted by statute so that any
"modification" of the agreement would be a new agreement, and unenforceable for lack of
consideration. Since the City cannot enforce the old agreements, how can the City insist
on a new agreement?
B. Resale Restriction
The proposed resale restriction would encourage fraud in estimating the cost of
improvements to the property; charge qualified moderate income buyers a higher price on
resale [no maximum price]; and charge non-qualified buyers with a controlled lower price
based on CPI - an absurd result, injuring the very people that the original plan intended to
benefit as well as the current owners.
C. Early Termination
Current owners, the citizens least culpable for creating this situation, would be
penalized for selling to a non-qualified buyer at a lower price, and asked to pay the City
either a set sum or the difference in price. But, if a non-qualified buyer can purchase at
a lower price than the qualified buyer, then the seller is being penalized twice, first with the
lower price and then with a payment to the City.
D. Payment to the City
While the stated intent is to benefit the City's Low and Moderate Income Housing
Page 3 of 5
Fund, limiting the resale price and charging current owners a payment capped at $10,000.00
to avoid anew agreement which replaces the unenforceable old agreement becomes a fiasco
which benefits no one other than the City, and smacks of extortion.
E. Enforcement
If this Council accepts the staff recommendation:
• How could it be implemented?
The City has not given the present homeowners formal notice and an opportunity to
be heard.
• Who would agree on behalf of the homeowners?
Certainly, not every current homeowner would agree.
• How will the program be implemented?
The current proposal is inconsistent
• How would any program be enforced?
An agreement with each home owner would be a massive undertaking.
• What mechanism would be available to dispute an administrative decision
concerning the cost of improvements, the qualifications of buyers, the amount
to be charged a homeowner on resale?
?????
• Who would bear the costs of establishing the program, the costs of
administration, appeals of decisions and collection of funds'?
???????????
V. Summary
Page 4 of 5
No law in existence at the time these subdivision agreements were made supports the
City's position; even if the original agreement had been enforceable, it terminated after 10
years; and the City waived enforcement by its failure to set up a workable compliance
mechanism. The proposed solution does not benefit low or moderate income buyers,
encourages fraud, penalizes the current owners and not those most culpable, and benefits
only the City.
If the City insists on imposing these, or any new restrictions it will spawn a
multiplicity of suits. The situation is not suitable for a class action because each transaction
potentially involves two different Real Estate Brokers, two different Real Estate
Salespersons, one or more Sellers, the Developer, the City, the escrow company, the title
insurance company, the present mortgage holder, and even the Tribal Council. In such a
situation, even nominal attorney fees and costs would equal or exceed the recovery, without
taking into consideration the ill will which would be generated.
Page 5 of 5
g 65913.2 PLANNING .AND ZONING
Cross References:
Violations; bringing action into compliance; extension of time: § 65913.7.
Collateral References:
i'
Cal Condo Handbook 2d (Hanna) §§ 8 2, 8.5, 8.6.
t:
§ 65913.3. Review of applications and permits for residential, com-
mercial, and industrial developments
Every city, county, or city and county shall provide for coordination
of review and decisionmaking and the provision of information
j' regarding the status of all applications and permits for residential,
commercial, and industrial developments, as required by such cite,
county, or city and county, by a single administrative entity. The city,
county, or city and county may charge fees to defray costs which are
directly attributable to the coordination of an application of a Bevel-
;!;, oper by a single administrative entity.
For the purposes of this section, "administrative entity" means a
person or agency designated by the legislative body of the cm,
county, or city and county to coordinate the review and decisionmak-
mg and provide information regarding the status of all permits or
applications required by the local agency.
A city, county, or city and county may adopt, by resolution or
i ' ordinance, procedures for the implementation of this section by the
LI
designated administrative entity.
F Added Scats 1980 cb 1152 § 10; Amended Stan 1981 ch 946 § I, Stars 1983 ch 126:
t.
1 Ii Amendments:
Ilj 1981 Amendment: (1) Amended the first paragraph by (a) substituting "provide for
coordination of review and decisionmaking and the provision of mformauon
-t), regarding the status" for "upon request of a developer, provide for review" in the
" first sentence; (b) substituting "The" for "Such" before "city, county (c)
1" substituting "coordination of an application of a" for "review of the applications
-1 of such" to the second sentence; and (d) deleting the former last sentence which
read. "-This section shall not be construed to require delegation of development
review functions performed by the legislative body pursuant to any other provi-
sion of law.", (2) substituted "coordinate the review and decisionmakmg ane
provide information regarding the status" for "oversee review" in the secone
paragraph; and (3) added the last paragraph
1983 Amendment: Amended the first sentence by (1) deleting ", on or before
January 1, 1983," after "county shall", and (2) added commercial, ana
industrial'.
Collateral References:
=1 ' Cal Condo Handbook 2d (Hanna) § 9 16.
' I
'{ § 65913.4. Reservation of units for lower income households; Regula-
tory concessions and incentives
(a) If a developer agrees to construct a housing development with 20
i' percent or more of the units reserved for occupancy by lower income
households, as defined by Section 50079.5 of the Health and Safety
422
pr.n i Ys tt a,r l9Y kWja, u'`, ' : tail Ht}+a'pS�y°' r "Y2 [ ia'Y: i yi tt ) - ki+ k•yS�,r}N�7 Ya .� l ro ^r V, p n v 9
�-
Ar
�
-
Q .
HOUSING DEVELOPMENT ARPROVALS AM-' W.
d3''1H��d1
Cod,, including elderly persons and families, as defined by Section :t5 :'
5DD67 of the Health and Safety Code, who meet the cruena for lower to
Income households, a efty, county', or city and county issuing permits IS
t+ scd
rer :he housing development shall, unless it males one of the nndWs
deson'oed in subdivision (b) provide at least one, and may orot'ide
FOR. of the Following regulatory concessions or incentives to ensure
a,
:.^.at the iIOCSini4 development w111 be produced 3C a reduced COSC
A -eduction in site development standards or a modification of � A. >8 g
:ovine rode requirements or architectural aesig-i reauiremencs wmcn ; ,
e.ec,ed the mmimum building standards approved bs the State Buife-
ne Standards Commission as provided in Pa c 15 (corn,-olencmg w„-:
nc:rcn . 'O01 ) of Division 13 of the real:h and Safe:y Cote, R
ludi ne, but nor limped cc, a .mducuon in subacl and sa_uare
"volay :eQulrwontnts and to the ratio of ehicular parking Spaces that +•r5et s�
_L'!C _t:le`-a"lS, De r,❑lllred. �`;, - ��:
De.^.sit% ponuses, as dehned o% Section i. __ �
i 1prO k'al " miX,d '1Se ZOn.!;'.0 Ln -oniunc:lon '.�1th ^., hOL'sfn° Jr' , 'A,� -
-f':Ie2: :ommerinal, Or]ce, inaaszr'.al, or ogler land uses will ^will Je rS R+,
s; or the rousing devel',)pmeno and 1! :ne . emmerc:al. o-ice.
nocst-,ai. or other land uses =2 _ rnrati'cle ,v'i.h the 'nousine croiect
sl one ,..;sane — plannec ccvelopmer_t to the area where the
5
-ocsc2 housmc protect vill be 'ioca2d _
AM propoeec 13% .!a d,:cl-
;r .he ir. , :none, , or cif; and ,oust_. ,mica result :n tdennna-
_Est reductu�ns
1 is subdivision apes nor ilmlt ar reeulre the provision of direct
Sr.anciai inc--nines for the housing development. includme the
slon of push&, owned land, cy one cud, punt}' or city. and rour.c.
,. me waiver of Fees or dedication reauiremencs F
=.m densli� 'bonus cranted cursuanc to this subc nsion is an alte7aa-
io. and not in addition cc, a density bonL's ?_r'ant'aQ pursuant io
ACC:ien ..�,e _
after evaluaiine the regaiatory concessions or mcentives which
—.—Id result to the housing development bang produced at a reduced
tasi pursuant to subdivision fat, a c:e,, count', , or ity and county
nay determine that it is unnecessary or inappropriate to tak, am of
tie acilons identified to subdivision ia) This determmatfon shall be
,upporzed by either of the following_ •.-ran findings '
The housing dev,!opmen[ does not need additional local assis-
.ance because the reseMd unis in the development would be afforda-
A to ven, low income households, as Banco by Section f010f of the
Health am Code without cddiuona, assistance.
_"The actions :d,nuhed in ;uneisision ial Mould have a substantial
mpac: loon :low p u^ v ealt.l Or safttl Th1S nhd!n; Sh. it ale �G�P
�o�� _,-a_t' �Ui2S t�❑i.a. �' ICCh J" .n Cne T'�rtfl^.y*7-a^{^r-R'
f�L1}iP 4 J� 1lwiJ' Yh YrI P � Pl9)r 15 �aYtifr< 1 4Y J t 1 S YVti�k+y 1
_ sr-il• glLia c.r;F;3° w.v ra,ri7.�;J n^.t`da(� a' i�„r,� �.''.n �S..,wY ..ds`t. T1 a s 'Iz a .a' ,y: iv
o-
a § 65913.4 PLANNING AND ZONING
l il, (c) This section applies to any housing development containing five or
�Nl more units, including, but not limited to, those developments that
I receive federal, state, or local construction or mortgage financing
assistance, mortgage insurance, or rent subsidies. Except for units
ff financed under Sections 1472 and 149Oa of Title 42 of the United
6 States Code, the units for lower income households specified in
j subdivision (a) shall be reserved for a period of 10 years, or a longer
1 period of time if required by the construction or mortgage financing
assistance program, mortgage insurance program, or rental subsidy
program.
Added Stars 1995 ch 1117 §2; Amended Stars 1986 on 1190 § 1, effective September 26,
1986.
Amendments:
1986 Amendment: Added "Except for units financed under Sections 1472 and 1490a
of Title 42 of the United States Code," m the last sentence of subd (c)
Former Section: Former § 65913.4 was added by Stars 1980 ch 1152 § 10 and renumbered
§ 65913.9 by Stars 1982 ch 1355 §2.
Collateral References;
Cal Condo Handbook 2d (Hanna) § 8.6.
i,
§ 65913.5. Protest against local fees, taxes, reservations, or other
exactions on residential housing development; Time limit for filing
action
(a) Any party may protest the establishment of the imposition of I any I fees, dedications, reservations, or other exactions imposed on a
residential housing development by a local agency by meeting both of
the following requirements:
�j (1) Tendering any required payment in full or providing satisfactory
evidence of arrangements to ensure performance of the conditions
necessary to meet the requirements of the imposition.
(2) Serving written notice on the governing body of the entity which
notice shall contain all of the following information:
I (A) A statement that the required payment is tendered, or that any
conditions which have been imposed are provided for or satisfied,
under protest.
(B) A statement informing the governing body of the factual elements
of the dispute and the legal theory forming the basis for the protest.
(b) Compliance by any party with subdivision (a) shall not be the
basis for a local agency to withhold approval of any map, plan,
permit, zone change, license, or other form of permission, or concur-
retire, whether discretionary, ministerial, or otherwise, incident to, or
Ri necessary for, the development of the residential housing develop-
ment. This section does not limit the ability of a local agency to
ensure compliance with all applicable provisions of law in determining
whether or not to approve or disapprove a development project.
1 424
1 II;
� P
I
I u
Y
l'
!I.
CHAPTER 43
Ir'
Density Bonuses and Other Incentives
dill
[Title 7, Planning and Land Use—Division 1, Planning and Zoning—
` ,I Chapter 4.3, Density Bonuses and Other Incentives; Chapter added n
it Stats 1979 on 1207 § 10, effective October 2, 1979 1
r
' § 65915, Required agreements
'i § 65915.5, Condominium conversions including low or moderate income housing
units or lower income household units
§ 65916. Assurance of continued availability for low- and moderate-income units
where there is direct financial contribution
65917. Legislative Intent
65918 Application of provisions to charter cities
it
i •I Cross References:
Housing development approvals §§ 65913 et seq
y..
i Collateral References:
Ij Cal Jur 3d Zoning anc Other Land Controls § 74
'! Cal Condo Handbook 2d (Hanna) §§ 8 7, 8.9.
i
r.
§ 65915. Required agreements
(a) When a developer of housing agrees to construct at least (1)
percent of the total units of a housing development for persons and
families of low or moderate income, as defined in Section 50093 of the
Health and Safety Code, or (2) 10 percent of the total units of a
housing development for lower-income households, as defined in
Section 50079.5 of the Health and Safety Code, or (3) 50 percent of
the total dwelling units of a housing development far qualifying
residents, as defined in Section 51.2 of the Civil Code, a city, counl},
t, or city and county shall either (1) grant a density bonus or (_)
provide other incentives of equivalent financial value.
(b) A developer may submit to a city, county, or city and count} a
' E preliminary proposal for the development of housing pursuant to this
section prior to the submittal of any formal requests for general plan
i #I amendments, zoning amendments, or subdivision map approvals, The
city, county, or city and county shall, within 90 days of receipt of a
i} �I• written proposal, notify the housing developer in writing of the
1'
jQ{ 428
l�ln.
f III,
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{'} v '4 •i;
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ry.F t,}xa`<fe t^.ca'�'FA' •aytl.rY'yrtd Ppr #'r rF t r ,y >e ) n� F.}'-n o rzC'f t o ls, +4di'29,..'.
$JILI
i y ii ✓-'+'�3��1y V ,t$�,r C�rdlru �S}r $i=r"'° �✓ r 4 JI+�"�`.3ir.�� tl'y'��PF t�E f a �� ya �i� j r� � a,wv}��a
Ly �
DENSITY BONUSES -\ND rNCENTSVES 65915h';'"
manner in which It will comply with this section. The city, county, or
c11L and county shall establish procedures For carrytng out :.his
section, which shall include legtslanve bodv approval of the means of
cmpitance with this section
,.
Icl For the purposes ot' this chapter, censlty bonus" means a densuv
.nc:ease of at least percent ever the otherwise ma;imum allowable �. w _
esldentiai density under the applicable zonms ordinance and �.,z,.
lane use }s_ x
element or the general plan. The dens,te 'oonus shall not be Inclined
xhen d-=iriin2 the number of rousma units which s equal to 1.0
er '4 percent of the totei. The censtt% bonus shall apply to housm-
ievelopments consisting of hve or more dwe11m2 units. _
dl If a developer agrees to eons[-,ici both percent of the total
units For persons and [amines of low or moderate income ana 10 '
cercent o[ the total units for lower-income house:nolds, the developer "
Is _nt:ued to ,Cu} one density oonus 'snder this section alti.ough .:2e -0
,m, anc, —ocinti, or count': ma'., at Its discrtl10n, 'rant more _'
an I,ne easily 'oonus
�ma 'n;n ❑ '_J- ` ,C, cdec::ve Ce;coer '.°'n �menaec .[a¢ ,_ _.. _" _' , ..� ,
nS=, Sra[s 'I.9S_ _-C ta¢ ___ _
�menumcuu:
'.9c .O LtI ❑nib pl a nUU6in2c ❑OnSc%[l c, Ss Je.^.nca
.. _r_c.on iC0'0 ai .nc Sc'altn urn Sam[, i:ic �bl
,rani y ambit oonus or cronae nocnu n o, oaurvulcnr inunu:�! "'4
.nine" `e- "enter 'nto in agruem cnt .vnn 'ne 1r/c!Upr _., _.trier :rant a caps)r,
�anue ar orovtae not Its than :,,vp otncr cone nconutes a, .n- crolect" -
aan n '.Ile sccono caracnon, .31 amen❑ 'nc tnir, cccFazraon r. la)
-rcr m inn 'ana land use memcnr cf_n ccneral man" in the nrs': aenten x, ,
hi suosuwung "cumoer oi nousm: anus +.ruin Is _auai :c 'C or - xrcant of L'
:ne to[ai" to: 'btnera'ue allowacie nensli, .n the second sentence, and ,c)
ne!enn¢ :nc iormr. :CrI sentence .omen retie "Dine: oonus mceauses wn!cn i
c.n', eounn' or c!n' ana coune. may agree :o orevioe irI [ins ecuon ma:uce
:ne ;oilowinz lai 2rcemouon [f 'Se eeveicoment from :ne reauircmants cr Sec:',on r:
to-;-- and anv loan crmnance adoome cu:suant 'nerete tbl —onst—ucnon of
puouc mprovemen[s aoounenant cc ;ne proposed housing dcvc!olmcnL, '.vmcn -
mav mcluae, bur ;nail no[ be amnec cc, s[reets, sewers and sidewalks -
t,niisoon of feaerai or sm[e ran[ moneys or local -evenuts [O provide the '.anc
on which the housing aeveieomsm Htil 'oe -onstructed a[ a ;eaucca post
Fccmouon of the dcvc!oomcnt iron an" provision ai local cramances
ter,
cause an 'ndtr cl nines:, in the cost c: me ^ousmg umrs ,e at developed in,
t61 suosumteo the fouen oaraeraon for :ne loaner i ID ry eur oaracraoh 'mc.n -cac
"ti'Culn3 in this secoon shall prccicce a _.[s, county', or city ana coun[v ;ram
Meng an,, ademonal acsons v'mch >/ill ,ie i•.ousme deveicoers w constluzr • -
'nous!nn aevelooments with Doreen[ or more of :he royal units of a 'aousmg
ecvclooment for persons ana hamu!es or low or moderate income The AtL=nAa- r*
t:on of :he mean 'ot nicn a count'), IT nt': ana .;ounry wiP eomoly Nn.,
'tls -naorar snall ec 'n the sole cuar-uon ai:he :I['- :ouniv -r „p and .;ounrt
orot'cec, that no ac,ciorcr shall ce -eautrtc 10 enter min un unaccentaoc
acrcemcnt v u or=-rccuratc to aooroval , 'nousini J--,tlnomcrn
iX
'737 )ISIC^amenamen[. d
S odl _C;IZ9a[:UnS ;eu; .
P081 kinenamenr
am6 ]I 1 :rou',ms _'np[�enL ' idal : 'nz nEia'^'L5 ,11 c.:nn_r In •�U, ;� t
�i :nil C�ac' c,mc "i 7"�r4i^°:,; � �y
n'4J'ti`T�i .....
t€
§ 65915 PLANNING .AND ZONING
I>
°- Collateral Reference::
Law Revtcw Articles-
Review of Selected 1979 California Legislation. I Pacific LJ 573
C� Review of Selected 1984 Legislation. 16 Pacific LJ 706.
II.
>I
65915.5. Condominium conversions including low or moderate in-
come housing units or lower income household units
a When an applicant for approval to convert apartments to a
4{ condominium prc3ect agrees to provide at least 33 percent of the total
units of the proposed condominium project to persons and families of
low or moderate income as defined in Section 50093 of the Health
and Safety Code, or 15 percent of the total units of the proposed
condominium project to lower income households as defined in
Section 50079.5 of the Health and Safety Code, and agrees to pay for
the reasonably necessary administrative costs incurred by a city,
county, or city and county pursuant to this section, the city, county,
' or city and county shall either (1) grant a density bonus or (21
provide other incentives of equivalent financial value. .A city, county.
or city and county may place such reasonable conditions on the
granting of a density bonus or other incentives of equivalent financial
value as it finds appropriate, including, but not limited to, conditions
" which assure continued affordability of units to subsequent purchasers
who are persons and families of low and moderate income or lower
•� n
income households.
(b) For purposes of this section, -density bonus" means an increase
h'w in units of 25 percent over the number of apartments, to be provided
within the existing structure or structures proposed for conversion.
(c) For purposes of this section, "other incentives of equivalent
financial value" shall not be construed to require a city, count} or
t�r_ city and county to provide cash transfer payments or other monetary
compensation but may include the reduction or waiver of require-
F. menns which the city, county, or city and county might otherwise
Ai apply as conditions of conversion approval.
�u (d) An applicant for approval to convert apartments to a condomin-
ium project may submit to a city, county, or city and county a
preliminary proposal pursuant to this section prior to the subminal of
S 1 any formal requests for subdivision map approvals. The city, count},
or city and county shall, within 90 days of receipt of a written
1•,; proposal, notify the applicant in writing of the manner in which it
will comply with this section. The city, county, or city and count}
�1 shall establish procedures for carrying out this section, which shall
�. include legislative body approval of the means of compliance with this
E, section.
'•itl.
(e) Nothing in this section shall be construed to require a cit},
` 430
I
c,'
...........
yqy
0- Z"M 11 -,1. VIWA
DENSITY BONUSE
UNS AND INCENTIVES 3 65917 1 ygq
YORK,
county, or zity and county to apurove a pfoposat to convprtapart-
rntnis ro condominiums,
An applicant shall be ineligibie for a density bonus or other
inctrinvics under t-his section if the apartments proposeci For ccriver-
sion constitute a housing development for which a density bonus or i in,
3thc- incentives were provided under Section 65915.
-h 0'4
vX
Onciaminsms genet_A: CC3c 350 sec
63916. Assurance of conrinued mailability for ]ow- and moderate- J, C
income units where there is dirge: driancial contribution
Where there is a chrm driancial zoncribudon to a hounng dmelop-
men,, pursuant to Secoon w9tf through par-moanon in cost of
mrasirumm. mic-down of ianc: osic or subsidizing the nor ji
r.
constr
uction, the cu „ 2ounin or :icy, and, shall ensure
nec avauahm Or aw. anin moccrK24ricom UMU AV 10 %sars
When murottndce' '-n'- agreement Drcv.Zcc or in secnon Vol sow!
inc mechanisms uric ')roctct_"es liel-ts3aTI, 1" -'ar— cur OIS
Now—Sec now fammg 1 0570
f"'[iater,rn
L,,, Amca:2
R"W A 4ocoa l-0 --imomia 2n ?�:�z
lie zramaw �i i --nsu, oonun, ] -In 'mm , OCai ?rzlcjncL -Jrc,sion
B0,cs 10( -lonslinuce a 'duem 5-onva—lam7gumn for ourmcs= D! jo, Caus
In -1p,s 4c� �tcn
65917. Legislative intent
in enacting this chapter ii �s the ntiemi of the Leg,.siaiurt char the
density bOTIUS Or other inctitim olved by :he city, countv or at-,
and county pursuant to this chapter MY corimbub simbaniln G
the economic ftasilbiliiy o, low- and moderate-Income housing In
DFOI)Gsed housing dC"(t!oPmivnS.
kona Scats !CQQ A W 1 11 Comme Dome 1, 479, ArnmuM Setts NEI W 120 i
--A
Inc CI loacc "'1Iai:' 10 rm -11aDi--r
")r2 —JCt
m� v SVIOUC 1 n! SM
4p
'm m
A- q
i
Ot
STEVEN VICDRY
July 17, 2003
t
The Honorable Members of the Palm Springs City Council:
I am writing this letter, as I will be traveling on July 23, 2003, when this matter is on the Council
agenda. Therefore, I request you allow one of my neighbors to read my cormnents into the
record.
On Sunday, July 13, 2003, Britt Stuber, a fellow Desert Dorado resident introduced me to what
has become the shock of my 7 years as a year round resident of Palm Springs. Britt explained to
me that the city of Palm Springs was proposing to enforce provisions of CC&R, which would
limit the price at which I might be able to sell my residence, and that the city was proposing a
modification of the restriction as it was originally stated in the CC&R.
This was the first inkling of any such restriction I have received since purchasing the home
approximately 30 months ago. I paid fair market value for my home when I purchased it, Since
then, I have put approximately $20,000.00 into improvements. Now, after making this sizable
investment, I am told the "free enterprise" system upon which our country is founded does not
exist(or at least is restricted severely)in my neighborhood.
I made my initial response to this travesty known to the council and my neighbors at the council
session on July 16, 2003. This was prior to my review of Elizabeth Baker's summary analysis of
the legal basis for the City's claim of authority over this matter.
After reviewing her summary, I have referred the matter to my attorney for further study.
However, as a layperson, I believe Ms. Baker has made a pretty compelling case for the fact that
any authority originally granted in the CC&R ceased to exist quite some time ago as a matter of
law. I will not agree to any modifications unfavorable to property owners.
I expect that you will make the right decision, but am prepared to engage in any legal action
necessary to protect my property rights. The potential for a representative action should be
enough to send shivers down the spine of every Realtor, Title Company, escrow agent and
mortgage lender in Palm Springs. The cost of such actions will lie at your feet.
Many residents of the affected areas may be unable to obtain home equity loans or favorable
refinancing and all may now also be in doubt as to their ability to sell what might be one of them
single greatest assets at a fair market price.
This issue demands your immediate action. You must grant us a decision to acknowledge that the
resale restrictions of Quail Point, Sunrise Patens and Desert Dorado are null and void. I also urge
you to extend the Sunrise Norte leases without further concessions from the residents.
Sincerely Yo s
1371 East Luua
Steven V1COry ', Faint springs,CA 92262
Phone:760-322-4590
Cc: File; City Attorney; Marc R. Tow, Esq.; Fax 760-322-2676
.dl� llh. Emar1.
bluewatertoo2OOO@yahoo.com
you focus on your personal best. t (ewwaater�t000220j/OO@yahoo.com
V�KY/—
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS APPROVING AN AMENDMENT TO THE
DECLARATION OF COVENANTS, CODES, & RESTRICTIONS
FOR THE QUAIL POINTE SUBDIVISION, AS REQUESTED
RESCINDING THE RESALE RESTRICTIONS CREATED
PURSUANT TO THE CITY'S COVENANT CONTROL
MECHANISM
WHEREAS, the City of Palm Springs (the "City"), a municipal corporation duly organized
and existing under and by virtue of the Constitution and laws of the State of California, did
approve a General Plan Amendment on February 6, 1980, changing the land use designation of
120 acres from "Airport Noise and Blowsand" to "Density Controlled Residential (6 Units Per
Acre), to allow for proposals over and above typical densities; and
WHEREAS, the State of California requires a jurisdiction to grant a density bonus to a
residential developer, if requested, in return for restrictions that require 20% of the units to be
made available at a price affordable to families of low- or moderate income; and
WHEREAS, on December 4, 1980, the City adopted its Covenant Control Mechanism for
the affected acreage, creating a restriction based holding the resale price to increases in the
Consumer Price Index, as a substitute for income-based restrictions; and
WHEREAS, over the past twenty years the mechanism, embedded in a section of the
Covenants, Codes & Restrictions recorded against each property, has created a number of
problems, including spotty compliance and the ultimate failure to keep prices affordable to many
moderate income buyers; and
WHEREAS, the provisions of the CC & Rs allow the homeowners and lenders to vote on
amending the agreements, with the City to consent in writing, and the residents and lenders in
Quail Pointe have done so and formally requested the rescission of the resale restriction
provision by the City; and
WHEREAS, the City desires to rescind the restrictions, as has been requested formally
by the Quail Pointe homeowners; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and correct.
Section 2. Approval of Amendment to Existing CC & Rs. The City hereby consents to
amending the Declaration of Covenants, Codes & Restrictions in the Quail Pointe subdivision,
as requested, by consenting to a change eliminating the City's resale restriction.
-1-
a !�
J
Section 3. Effective Date. This Resolution shall take effect immediately upon adoption.
ADOPTED THIS_ day of , 2003.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
City Clerk City Manager
REVIEWED AND APPROVED AS TO FORM:
-2-
��oZ
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS APPROVING AN AMENDMENT TO THE
DECLARATION OF COVENANTS, CODES, & RESTRICTIONS
FOR THE DESERT DORADO SUBDIVISION, IF REQUESTED,
RESCINDING THE RESALE RESTRICTIONS CREATED
PURSUANT TO THE CITY'S COVENANT CONTROL
MECHANISM
WHEREAS, the City of Palm Springs (the "City"), a municipal corporation duly organized
and existing under and by virtue of the Constitution and laws of the State of California, did
approve a General Plan Amendment on February 6, 1980, changing the land use designation of
120 acres from "Airport Noise and Blowsand" to "Density Controlled Residential (6 Units Per
Acre), to allow for proposals over and above typical densities; and
WHEREAS, the State of California requires a jurisdiction to grant a density bonus to a
residential developer, if requested, in return for restrictions that require 20% of the units to be
made available at a price affordable to families of low- or moderate income; and
WHEREAS, on December 4, 1980, the City adopted its Covenant Control Mechanism for
the affected acreage, creating a restriction based holding the resale price to increases in the
Consumer Price Index, as a substitute for income-based restrictions; and
WHEREAS, over the past twenty years the mechanism, embedded in a section of the
Covenants, Codes & Restrictions recorded against each property, has created a number of
problems, including spotty compliance and the ultimate failure to keep prices affordable to many
moderate income buyers; and
WHEREAS, the provisions of the CC & Rs allow the homeowners and lenders to vote on
amending the agreements, with the City to consent in writing; and
WHEREAS, the City desires to rescind the restrictions, and offer rescission to the
homeowners in Desert Dorado if they can achieve the requisite percentage of signatures; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and correct.
Section 2. Approval of Amendment to Existing CC & Rs. The City hereby consents to
amending the Declaration of Covenants, Codes & Restrictions, by consenting to a change
eliminating the City's resale restriction in Desert Dorado, if the homeowners meet the required
numbers of votes of owners and lenders.
-1-
aa �
Section 3. Effective Date. This Resolution shall take effect immediately upon adoption.
ADOPTED THIS _day of , 2003.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
City Clerk City Manager
REVIEWED AND APPROVED AS TO FORM:
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS APPROVING AN AMENDMENT TO THE
DECLARATION OF COVENANTS, CODES, & RESTRICTIONS
FOR THE SUNRISE PALMS SUBDIVISION, IF REQUESTED,
RESCINDING THE RESALE RESTRICTIONS CREATED
PURSUANT TO THE CITY'S COVENANT CONTROL
MECHANISM
WHEREAS, the City of Palm Springs (the "City"), a municipal corporation duly organized
and existing under and by virtue of the Constitution and laws of the State of California, did
approve a General Plan Amendment on February 6, 1980, changing the land use designation of
120 acres from "Airport Noise and Blowsand" to "Density Controlled Residential (6 Units Per
Acre), to allow for proposals over and above typical densities; and
WHEREAS, the State of California requires a jurisdiction to grant a density bonus to a
residential developer, if requested, in return for restrictions that require 20% of the units to be
made available at a price affordable to families of low- or moderate income; and
WHEREAS, on December 4, 1980, the City adopted its Covenant Control Mechanism for
the affected acreage, creating a restriction based holding the resale price to increases in the
Consumer Price Index, as a substitute for income-based restrictions; and
WHEREAS, over the past twenty years the mechanism, embedded in a section of the
Covenants, Codes & Restrictions recorded against each property, has created a number of
problems, including spotty compliance and the ultimate failure to keep prices affordable to many
moderate income buyers; and
WHEREAS, the provisions of the CC & Rs allow the homeowners and lenders to vote on
amending the agreements, with the City to consent in writing; and
WHEREAS, the City desires to rescind the restrictions, and offer rescission to the
homeowners in Sunrise Palms if they can achieve the requisite percentage of signatures; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and correct.
Section 2. Approval of Amendment to Existing CC & Rs. The City hereby consents to
amending the Declaration of Covenants, Codes & Restrictions, by consenting to a change
eliminating the City's resale restriction in Sunrise Palms, if the homeowners meet the required
numbers of votes of owners and lenders.
-1-
Section 3. Effective Date. This Resolution shall take effect immediately upon adoption.
ADOPTED THIS _day of , 2003.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
City Clerk City Manager
REVIEWED AND APPROVED AS TO FORM:
-2-
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS APPROVING AN AMENDMENT TO THE
DECLARATION OF COVENANTS, CODES, & RESTRICTIONS
FOR THE QUAIL POINTE SUBDIVISION, AS REQUESTED
REPLACING THE RESALE RESTRICTIONS CREATED
PURSUANT TO THE CITY'S COVENANT CONTROL
MECHANISM WITH RESTRICTIONS BASED ON BUYER'S
INCOME, WITH EARLY TERMINATION AND OPT-OUT
PROVISIONS
WHEREAS, the City of Palm Springs (the "City"), a municipal corporation duly organized
and existing under and by virtue of the Constitution and laws of the State of California, did
approve a General Plan Amendment on February 6, 1980, changing the land use designation of
120 acres from "Airport Noise and Blowsand" to "Density Controlled Residential (6 Units Per
Acre), to allow for proposals over and above typical densities; and
WHEREAS, the State of California requires a jurisdiction to grant a density bonus to a
residential developer, if requested, in return for restrictions that require 20% of the units to be
made available at a price affordable to families of low- or moderate income; and
WHEREAS, on December 4, 1980, the City adopted its Covenant Control Mechanism for
the affected acreage, creating a restriction based holding the resale price to increases in the
Consumer Price Index, as a substitute for income-based restrictions; and
WHEREAS, over the past twenty years the mechanism, embedded in a section of the
Covenants, Codes & Restrictions recorded against each property, has created a number of
problems, including spotty compliance and the ultimate failure to keep prices affordable to many
moderate income buyers; and
WHEREAS, the provisions of the CC & Rs allow the homeowners and lenders to vote on
amending the agreements, with the City to consent in writing, and the residents and lenders in
Quail Pointe have done so and formally requested the rescission of the resale restriction
provision by the City; and
WHEREAS, the City has developed an alternative set of restrictions based on the
income of the buyer, with provisions for early termination, opting out of the program altogether,
and a potential financial recapture by the City of a portion of the increased value of the home by
the elimination of the restrictions by the City; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and correct.
-1-
Section 2. Approval of Amendment to Existing CC & Rs. The City hereby consents to
amending the Declaration of Covenants, Codes & Restrictions in the Quail Pointe subdivision,
as requested, based on the parameters set forth in this resolution.
Section 3. Form of Resale Restriction. The resale restriction shall be set forth in a
Regulatory Agreement Restriction Resale of Property recorded against each property with the
County Recorder of Riverside County. A Quitclaim of the previous provision contained in the
Declaration of Covenants, Codes & Restrictions shall be recorded simultaneously.
Section 4. Nature of Resale Restriction. The nature of the Regulatory Agreement shall
require the seller to sell to a buyer of Moderate Income, as determined by the annual Moderate
Income levels for Riverside and San Bernardino County, as set forth in 25 Cal. Code Regs.
Section 6932, revised annually. If the seller sells to a moderate income buyer, the restriction
remains in place and no remedy is necessary; if the Seller sells to a buyer over moderate
income, the remedies are set forth in Section 4.
Section 5. Remedy for Over-Moderate Income Buyer. If the Seller sells to a buyer over
moderate income, the City shall calculate the Maximum Allowable Price set forth in the current
CC & Rs and determine the difference between the Actual Sales Price and the Maximum
Allowable Price. The Seller shall then pay the City One Third (1/3) of the difference between
the two prices, which the City shall use for the purposes of promoting or creating affordable
housing. In no event shall the amount paid to the City exceed Ten Thousand Dollars ($10,000),
even if the difference in the two prices exceeds Thirty Thousand Dollars ($30,000). In no case
shall the amount paid to the City be less than One Thousand Dollars ($1,000), even if the Actual
Sales Price is less than the Maximum Allowable Price. After the remedy payment is made to
the City, the Regulatory Agreement shall terminate and the home shall become unrestricted.
Section 6. Termination. The Regulatory Agreement shall terminate Ten (10) Years from
the date it is recorded against the property, with no further action necessary by either party. It
shall terminate prior to the 10 year provision pursuant to the provisions of Section 5 above. If
the Owner chooses to use the Early Opt Out provision, it shall terminate subject to the
provisions of Section 7 below.
Section 7. Early Opt Out. Within twelve months from the date of the Regulatory
Agreement being recorded against the property, and Owner can choose to Opt Out of the
program for a payment of Three Thousand Dollars ($3,000) made to the City. If the Owner
chooses the Early Opt Out, the City shall record a termination of the Regulatory Agreement
against the property and the property shall be unrestricted.
-2-
o)-e
Section S. Effective Date. This Resolution shall take effect immediately upon adoption.
ADOPTED THIS_day of , 2003.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
City Clerk City Manager
REVIEWED AND APPROVED AS TO FORM:
-3-
a�3
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS APPROVING AN AMENDMENT TO THE
DECLARATION OF COVENANTS, CODES, & RESTRICTIONS
FOR THE DESERT DORADO SUBDIVISION, IF REQUESTED,
REPLACING THE RESALE RESTRICTIONS CREATED
PURSUANT TO THE CITY'S COVENANT CONTROL
MECHANISM WITH RESTRICTIONS BASED ON BUYER'S
INCOME, WITH EARLY TERMINATION AND OPT-OUT
PROVISIONS
WHEREAS, the City of Palm Springs (the "City"), a municipal corporation duly organized
and existing under and by virtue of the Constitution and laws of the State of California, did
approve a General Plan Amendment on February 6, 1980, changing the land use designation of
120 acres from "Airport Noise and Blowsand" to "Density Controlled Residential (6 Units Per
Acre), to allow for proposals over and above typical densities; and
WHEREAS, the State of California requires a jurisdiction to grant a density bonus to a
residential developer, if requested, in return for restrictions that require 20% of the units to be
made available at a price affordable to families of low-or moderate income; and
WHEREAS, on December 4, 1980, the City adopted its Covenant Control Mechanism for
the affected acreage, creating a restriction based holding the resale price to increases in the
Consumer Price Index, as a substitute for income-based restrictions; and
WHEREAS, over the past twenty years the mechanism, embedded in a section of the
Covenants, Codes & Restrictions recorded against each property, has created a number of
problems, including spotty compliance and the ultimate failure to keep prices affordable to many
moderate income buyers; and
WHEREAS, the provisions of the CC & Rs allow the homeowners and lenders to vote on
amending the agreements, with the City to consent in writing; and
WHEREAS, the City has developed an alternative set of restrictions based on the
income of the buyer, with provisions for early termination, opting out of the program altogether,
and a potential financial recapture by the City of a portion of the increased value of the home by
the elimination of the restrictions by the City; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and correct.
Section 2. Approval of Amendment to Existing CC & Rs. The City hereby consents to
amending the Declaration of Covenants, Codes & Restrictions, based on the parameters set
forth in this resolution in the Desert Dorado subdivision, if the homeowners meet the required
numbers of votes of owners and lenders.
-1-
a� �
Section 3. Form of Resale Restriction. The resale restriction shall be set forth in a
Regulatory Agreement Restriction Resale of Property recorded against each property with the
County Recorder of Riverside County. A Quitclaim of the previous provision contained in the
Declaration of Covenants, Codes & Restrictions shall be recorded simultaneously.
Section 4. Nature of Resale Restriction. The nature of the Regulatory Agreement shall
require the seller to sell to a buyer of Moderate Income, as determined by the annual Moderate
Income levels for Riverside and San Bernardino County, as set forth in 25 Cal. Code Regs.
Section 6932, revised annually. If the seller sells to a moderate income buyer, the restriction
remains in place and no remedy is necessary; if the Seller sells to a buyer over moderate
income, the remedies are set forth in Section 4.
Section 5. Remedy for Over-Moderate Income Buver. If the Seller sells to a buyer over
moderate income, the City shall calculate the Maximum Allowable Price set forth in the current
CC & Rs and determine the difference between the Actual Sales Price and the Maximum
Allowable Price. The Seller shall then pay the City One Third (1/3) of the difference between
the two prices, which the City shall use for the purposes of promoting or creating affordable
housing. In no event shall the amount paid to the City exceed Ten Thousand Dollars ($10,000),
even if the difference in the two prices exceeds Thirty Thousand Dollars ($30,000). In no case
shall the amount paid to the City be less than One Thousand Dollars ($1,000), even if the Actual
Sales Price is less than the Maximum Allowable Price. After the remedy payment is made to
the City, the Regulatory Agreement shall terminate and the home shall become unrestricted.
Section 6. Termination. The Regulatory Agreement shall terminate Ten (10) Years from
the date it is recorded against the property, with no further action necessary by either party. It
shall terminate prior to the 10 year provision pursuant to the provisions of Section 5 above. If
the Owner chooses to use the Early Opt Out provision, it shall terminate subject to the
provisions of Section 7 below.
Section 7. Early Opt Out. Within twelve months from the date of the Regulatory
Agreement being recorded against the property, and Owner can choose to Opt Out of the
program for a payment of Three Thousand Dollars ($3,000) made to the City. If the Owner
chooses the Early Opt Out, the City shall record a termination of the Regulatory Agreement
against the property and the property shall be unrestricted.
-2-
C.S
Section 8. Effective Date. This Resolution shall take effect immediately upon adoption.
ADOPTED THIS _day of , 2003.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
City Clerk City Manager
REVIEWED AND APPROVED AS TO FORM:
-3-
a� 4:2,
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS APPROVING AN AMENDMENT TO THE
DECLARATION OF COVENANTS, CODES, & RESTRICTIONS
FOR THE Sunrise Palms SUBDIVISION, IF REQUESTED,
REPLACING THE RESALE RESTRICTIONS CREATED
PURSUANT TO THE CITY'S COVENANT CONTROL
MECHANISM WITH RESTRICTIONS BASED ON BUYER'S
INCOME, WITH EARLY TERMINATION AND OPT-OUT
PROVISIONS
WHEREAS, the City of Palm Springs (the "City"), a municipal corporation duly organized
and existing under and by virtue of the Constitution and laws of the State of California, did
approve a General Plan Amendment on February 6, 1980, changing the land use designation of
120 acres from "Airport Noise and Blowsand" to "Density Controlled Residential (6 Units Per
Acre), to allow for proposals over and above typical densities; and
WHEREAS, the State of California requires a jurisdiction to grant a density bonus to a
residential developer, if requested, in return for restrictions that require 20% of the units to be
made available at a price affordable to families of low- or moderate income; and
WHEREAS, on December 4, 1980, the City adopted its Covenant Control Mechanism for
the affected acreage, creating a restriction based holding the resale price to increases in the
Consumer Price Index, as a substitute for income-based restrictions; and
WHEREAS, over the past twenty years the mechanism, embedded in a section of the
Covenants, Codes & Restrictions recorded against each property, has created a number of
problems, including spotty compliance and the ultimate failure to keep prices affordable to many
moderate income buyers; and
WHEREAS, the provisions of the CC & Rs allow the homeowners and lenders to vote on
amending the agreements, with the City to consent in writing; and
WHEREAS, the City has developed an alternative set of restrictions based on the
income of the buyer, with provisions for early termination, opting out of the program altogether,
and a potential financial recapture by the City of a portion of the increased value of the home by
the elimination of the restrictions by the City; and
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS AS FOLLOWS:
Section 1. Recitals. The above recitals, and each of them, are true and correct.
Section 2. Approval of Amendment to Existing CC & Rs. The City hereby consents to
amending the Declaration of Covenants, Codes & Restrictions, based on the parameters set
forth in this resolution in the Sunrise Palms subdivision, if the homeowners meet the required
numbers of votes of owners and lenders.
-1-
a � 7
Section 3. Form of Resale Restriction. The resale restriction shall be set forth in a
Regulatory Agreement Restriction Resale of Property recorded against each property with the
County Recorder of Riverside County. A Quitclaim of the previous provision contained in the
Declaration of Covenants, Codes & Restrictions shall be recorded simultaneously.
Section 4. Nature of Resale Restriction. The nature of the Regulatory Agreement shall
require the seller to sell to a buyer of Moderate Income, as determined by the annual Moderate
Income levels for Riverside and San Bernardino County, as set forth in 25 Cal. Code Regs.
Section 6932, revised annually. If the seller sells to a moderate income buyer, the restriction
remains in place and no remedy is necessary; if the Seller sells to a buyer over moderate
income, the remedies are set forth in Section 4.
Section 5. Remedy for Over-Moderate Income Buyer. If the Seller sells to a buyer over
moderate income, the City shall calculate the Maximum Allowable Price set forth in the current
CC & Rs and determine the difference between the Actual Sales Price and the Maximum
Allowable Price. The Seller shall then pay the City One Third (1/3) of the difference between
the two prices, which the City shall use for the purposes of promoting or creating affordable
housing. In no event shall the amount paid to the City exceed Ten Thousand Dollars ($10,000),
even if the difference in the two prices exceeds Thirty Thousand Dollars ($30,000). In no case
shall the amount paid to the City be less than One Thousand Dollars ($1,000), even if the Actual
Sales Price is less than the Maximum Allowable Price. After the remedy payment is made to
the City, the Regulatory Agreement shall terminate and the home shall become unrestricted.
Section 6. Termination. The Regulatory Agreement shall terminate Ten (10) Years from
the date it is recorded against the property, with no further action necessary by either party. It
shall terminate prior to the 10 year provision pursuant to the provisions of Section 5 above. If
the Owner chooses to use the Early Opt Out provision, it shall terminate subject to the
provisions of Section 7 below.
Section 7. Early Opt Out. Within twelve months from the date of the Regulatory
Agreement being recorded against the property, and Owner can choose to Opt Out of the
program for a payment of Three Thousand Dollars ($3,000) made to the City. If the Owner
chooses the Early Opt Out, the City shall record a termination of the Regulatory Agreement
against the property and the property shall be unrestricted.
-2-
C�
Section 8. Effective Date. This Resolution shall take effect immediately upon adoption.
ADOPTED THIS_ day of , 2003.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
City Clerk City Manager
REVIEWED AND APPROVED AS TO FORM:
-3-
a C'Jq