News

Pleasanton council to consider increasing first-time homebuyer loans

PDA rent deferral proposed, COVID-19 facilities contracts also on tap

To increase participation in a little-used city program aimed at first-time local homebuyers, the Pleasanton City Council is set to discuss increasing maximum loan amounts as well as restructuring loan terms and adopting a "shared appreciation loan" repayment policy at its online regular meeting Tuesday, starting 7 p.m.

Launched in 2003, the city's down payment assistance (DPA) program is considered "an important addition to the city's other main home ownership effort" of providing below-market rate homeownership through low and deferred-interest loans, according to a city staff report.

Since its inception, the DPA program has helped a total of 50 low- and moderate-income residents with loans -- all but four reside in and own below-market housing units. The remaining four are unrestricted, market-rate homeowners.

However, only one DPA loan has been issued in the last five years; current underuse of the DPA program was attributed by staff to the recent and ongoing increase in market housing prices, both in Pleasanton and the Bay Area overall.

Should the council adopt recommendations, staff said the program could see up to $300,000 of annual funding "if the city were to process three loans at the maximum funding level." The proposed changes include increasing the maximum individual loan amount to $100,000.

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Loans are currently issued at 3.5% -- a "relatively competitive" interest rate compared to the program's original 4.25% prime rate -- and amortized over 20 years, according to city staff. The city contracts with nonprofit Hello Housing to administer the program.

Low- and moderate-income buyers in Pleasanton can get up to $20,000 for a down payment from the DPA program right now, but staff said high price points for Pleasanton home sales render the current maximum loan "insufficient to be used to contribute to the industry requirement of at least 20% down payment, which would be more than $260,000 for a single-family detached home in Pleasanton."

The median sale price for a single family detached home in Pleasanton was $1.3 million as of July, according to the East Bay Association of Realtors.

"Even condominium or townhome units that have lower price points $755,000 median sale price in July 2020 would still require more than $151,000 down payment to purchase one of these units," staff said.

Last year, the council's work plan noted the need to revisit the DPA program "to increase its effectiveness." Staff has since suggested several modifications "to better assist prospective Pleasanton first time home buyers" such as including $100,000 to $300,000 in the city's fiscal year 2020-21 midterm budget to fund the program.

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The changes "would require the city to allocate more funding to support the program," according to staff. The city's Lower Income Housing Fund (LIHF) funds the bulk of the DPA program, "and the proposed modifications would result in more LIHF funds being expended annually."

The current balance of the LIHF is approximately $10 million.

In other business

* Three separate contracts for services related to COVID-19 will be presented during the consent agenda portion of the meeting. Items on the consent agenda are considered routine in nature and usually voted on by the council in one motion.

Staff has recommended deferring rental payments for one year for the Pleasanton Downtown Association's use of the city-owned building downtown at 333 Division St.

As of March, the monthly rate is $996 for the PDA; should the deferral be approved, the city would not receive $11,952 from the PDA from November through October 2021.

The group recently requested the deferral "so that limited incoming revenues can be directed to marketing the downtown and supporting businesses."

Most of the PDA's "revenue-generating" events were canceled for the year, following restrictions and sheltering orders from state and county health officials related to the pandemic. The canceled events include the St. Patrick's Day Brew Crawl, Wine Stroll, and Concerts in the Park, as well as the Halloween Brew Crawl and Antique Fair.

As a result, staff said the PDA lost out on about $136,500: "This severely reduced revenue has created financial hardship for the PDA, particularly as it has decreased PDA's ability to effectively promote the downtown, per the agreement with the city."

The deferred rent would be repaid over a 36-month period at 0% interest, or $332 in addition to their regular monthly rent payment.

* A lease agreement for portable trailers to maintain physical distancing between employees at the city's Operations Services Department is slated for ratification Tuesday.

With the city moving into the next phase of its recovery plan, all maintenance divisions staff are expected to "work 100% at the same time, but at 50% building occupancy." To meet distancing requirements among employees, staff said additional indoor accommodations are necessary.

The one year $162,325 contract with Pacific Mobile Structures will pay for the use of two large office trailers and two smaller trailers that will act as locker rooms for employees. The trailers will serve the Parks and Utilities Divisions' field staff through Sept. 2021.

The council is also poised to approve a $138,000, one-year lease with Royal Restrooms for one two-stall restroom and another two-stall restroom with shower, both also to be used by maintenance personnel until Sept. 2021.

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Pleasanton council to consider increasing first-time homebuyer loans

PDA rent deferral proposed, COVID-19 facilities contracts also on tap

by / Pleasanton Weekly

Uploaded: Mon, Oct 19, 2020, 9:42 pm

To increase participation in a little-used city program aimed at first-time local homebuyers, the Pleasanton City Council is set to discuss increasing maximum loan amounts as well as restructuring loan terms and adopting a "shared appreciation loan" repayment policy at its online regular meeting Tuesday, starting 7 p.m.

Launched in 2003, the city's down payment assistance (DPA) program is considered "an important addition to the city's other main home ownership effort" of providing below-market rate homeownership through low and deferred-interest loans, according to a city staff report.

Since its inception, the DPA program has helped a total of 50 low- and moderate-income residents with loans -- all but four reside in and own below-market housing units. The remaining four are unrestricted, market-rate homeowners.

However, only one DPA loan has been issued in the last five years; current underuse of the DPA program was attributed by staff to the recent and ongoing increase in market housing prices, both in Pleasanton and the Bay Area overall.

Should the council adopt recommendations, staff said the program could see up to $300,000 of annual funding "if the city were to process three loans at the maximum funding level." The proposed changes include increasing the maximum individual loan amount to $100,000.

Loans are currently issued at 3.5% -- a "relatively competitive" interest rate compared to the program's original 4.25% prime rate -- and amortized over 20 years, according to city staff. The city contracts with nonprofit Hello Housing to administer the program.

Low- and moderate-income buyers in Pleasanton can get up to $20,000 for a down payment from the DPA program right now, but staff said high price points for Pleasanton home sales render the current maximum loan "insufficient to be used to contribute to the industry requirement of at least 20% down payment, which would be more than $260,000 for a single-family detached home in Pleasanton."

The median sale price for a single family detached home in Pleasanton was $1.3 million as of July, according to the East Bay Association of Realtors.

"Even condominium or townhome units that have lower price points $755,000 median sale price in July 2020 would still require more than $151,000 down payment to purchase one of these units," staff said.

Last year, the council's work plan noted the need to revisit the DPA program "to increase its effectiveness." Staff has since suggested several modifications "to better assist prospective Pleasanton first time home buyers" such as including $100,000 to $300,000 in the city's fiscal year 2020-21 midterm budget to fund the program.

The changes "would require the city to allocate more funding to support the program," according to staff. The city's Lower Income Housing Fund (LIHF) funds the bulk of the DPA program, "and the proposed modifications would result in more LIHF funds being expended annually."

The current balance of the LIHF is approximately $10 million.

In other business

* Three separate contracts for services related to COVID-19 will be presented during the consent agenda portion of the meeting. Items on the consent agenda are considered routine in nature and usually voted on by the council in one motion.

Staff has recommended deferring rental payments for one year for the Pleasanton Downtown Association's use of the city-owned building downtown at 333 Division St.

As of March, the monthly rate is $996 for the PDA; should the deferral be approved, the city would not receive $11,952 from the PDA from November through October 2021.

The group recently requested the deferral "so that limited incoming revenues can be directed to marketing the downtown and supporting businesses."

Most of the PDA's "revenue-generating" events were canceled for the year, following restrictions and sheltering orders from state and county health officials related to the pandemic. The canceled events include the St. Patrick's Day Brew Crawl, Wine Stroll, and Concerts in the Park, as well as the Halloween Brew Crawl and Antique Fair.

As a result, staff said the PDA lost out on about $136,500: "This severely reduced revenue has created financial hardship for the PDA, particularly as it has decreased PDA's ability to effectively promote the downtown, per the agreement with the city."

The deferred rent would be repaid over a 36-month period at 0% interest, or $332 in addition to their regular monthly rent payment.

* A lease agreement for portable trailers to maintain physical distancing between employees at the city's Operations Services Department is slated for ratification Tuesday.

With the city moving into the next phase of its recovery plan, all maintenance divisions staff are expected to "work 100% at the same time, but at 50% building occupancy." To meet distancing requirements among employees, staff said additional indoor accommodations are necessary.

The one year $162,325 contract with Pacific Mobile Structures will pay for the use of two large office trailers and two smaller trailers that will act as locker rooms for employees. The trailers will serve the Parks and Utilities Divisions' field staff through Sept. 2021.

The council is also poised to approve a $138,000, one-year lease with Royal Restrooms for one two-stall restroom and another two-stall restroom with shower, both also to be used by maintenance personnel until Sept. 2021.

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