Resident Selection Plan
Policies adopted by the City Council indicate priorities for certain target groups among people eligible to participate in the City’s BMR program. The administration of a Resident Selection Plan would enable the City to equitably assign priority status for those types of households. Staff proposes to periodically open and close a single Waiting List and allocate a range of preference points according to the characteristics contained in the Resident Selection Plan. The total points scored will determine an applicant's position on the list.
Although similar, there are differences in the preferences of the rental vs. the ownership program. Differing preferences are noted in bold for ease of identification.
Staff recommends the following Resident Selection Plan be adopted for the City of Sunnyvale BMR Ownership Program:
Preference due to Community Contributions:
Reside in Sunnyvale Work in Sunnyvale
(Minimum requirement is to reside or work in Sunnyvale for six months prior to application submittal).
Preference due to Employment (non-probationary status)
City of Sunnyvale employee School district employee working in schools with a majority of Sunnyvale residents Certified child care teacher working at child care center in Sunnyvale or at child care center operated by school district Sunnyvale service industry worker Sunnyvale health care worker (e.g., home health care aide, staff in convalescent homes and assisted living facilities). Other non-City Public Service employee (e.g., Santa Clara County, State, federal)
Housing Characteristics
Resident of at-risk assisted unit (within 5 years of affordability expiration) Resident of BMR rental unit Resident of housing or mobile home park lost due to redevelopment or conversion Number of years on "BMR Priority 1 Waiting List" as of 9/1/03
Preference due to Household Characteristics
Single parent households Households with Children under 12 Chronically Ill Persons including those with HIV and mental illness Disabled
Staff recommend the following Resident Selection Plan be adopted for the City of Sunnyvale BMR Rental Program:
Preference due to Community Contributions:
Reside in Sunnyvale Work in Sunnyvale
(Minimum requirement to reside or work in Sunnyvale for six months prior to application submittal.)
Preference due to Employment
City of Sunnyvale employee School district employee working in schools with a majority of Sunnyvale student residents. Certified child care teacher working at child care center in Sunnyvale or at child care center operated by school district Sunnyvale service industry worker Sunnyvale health care worker e.g. home health care aide, staff in convalescent homes and assisted living facilities Other non-City Public Service employee (e.g. Santa Clara County, State, federal)
Housing Characteristics
Resident of at-risk assisted rental unit (within 5 years of affordability expiration) Resident of BMR rental unit Resident of housing or mobile home park lost due to redevelopment or conversion
Preference due to Household Characteristics
Single parent households Number of Children under 12 Chronically Ill Persons including those with HIV and mental illness Displaced teenage parents (or expectant teenage parents) Disabled Homeless or at risk of becoming homeless Seniors (over 55 years old)
Establishing Initial Rents in BMR Rental Units
The following procedures modify prior Council actions, and are recommended by staff in order to establish initial rents for Below Market Rate rental units. Chapter 19.66 does not contain a specific formula to establish initial rental rates of BMR units. The ordinance include that the income eligibility of the tenants at a maximum of 70% AMI. Base rents for the BMR units will be established at the time of initial occupancy of newly constructed units. Base rents are calculated utilizing the following methods and the lower rent calculated is the initial base rent:
Initial Rents are calculated based on HUD Area Median Income (AMI) for San Jose Metropolitan Statistical Area as follows: HUD publishes annual Area Median Income (AMI) data for 1-8 person households, and HUD has determined that 30% of income for housing costs as affordable. As previously discussed 80% AMI for Santa Clara County establishes rents significantly above current market rents. It was determined that 65% of area median income results in a more appropriate outcome. 65% AMI is recommended since it is similar to existing HUD methodology utilized to determine low income eligibility in extremely high-income areas like Santa Clara County. Monthly rents would be equal to 30% of 65% of AMI divided by twelve based upon number of bedrooms (1 Bedroom equals two-person household income, 2 Bedroom equals three person household income). Therefore, if AMI is at $95,000 for a three person household, the maximum monthly rent for a two bedroom unit would be:
$95,000 x 0.65 = $61,750 x 0.30 = $18,525
$18,525 divided by 12 months = $1,543 per month
Initial Rents are calculated utilizing the City of Sunnyvale Rent and Vacancy Survey Report published in July (January through June) and January (July through December). The semi-annual report surveys approximately 100 complexes containing approximately 15,000 rental units. The report contains current market median rents per unit size (number of bedrooms). The initial rents for the BMR units to be set at 80% of the median rents as contained in the most recent Rent and Vacancy Survey Report. 80% of median rents is recommended in order to insure that BMR unit rents are established significantly below market rents. Therefore if the current report contains information that median rent for a two bedroom rental is $1,335, then the base rent would be:
$1,335 x .0.80 = $1,068
The initial rent for a two-bedroom unit is established by using the lesser of the above two calculations, or $1,068.
Staff has applied the above recommended procedure for establishing initial rent and has determined that, at this time, the 80% of median rent procedure results in the lower rent for all bedroom sizes. Therefore, initial rents for units in the BMR program, based on June 2003 survey data, are calculated as follows:
Unite Size Median Rent BMR Rent (@80%)
Studio $835 $668
1 Bdroom $1,050 $840
2 Bdroom $1,335 $1,068
3 Bdroom $1,840 $1,472
The City Council approved a requirement to limit the annual rent increase to the lesser of 5% or the percentage increase in the average market rent as published in the semi-annual Sunnyvale Vacancy and Rent Survey. Staff recommends that this criteria be incorporated into the recommended guidelines to establish the procedure for calculating permitted annual increases for below market rate rental units.