100 First Street Project

LWV Letter re Plans for Mixed-Use Development

LEAGUE OF WOMEN VOTERS
of the Los Altos-Mountain View Area
97 Hillview Avenue, Los Altos, CA 94022

July 6, 2007

Chair Megan Satterlee and Members of the Architecture and Site Review Committee:

Re: 100 First Street Project/July 18, 2007

The LWV of the Los Altos/Mtn. View Area has advocated consistently in previous communications that the City of Los Altos modify its below market rate ("BMR") housing program to distinguish between home ownership units and rental units. We have learned after several years of studying BMR programs that the most successful BMR programs in the Bay area target home ownership units to households with incomes at moderate-income levels (80 + 120% area median income (AMI)) and rental units to those with very-low-incomes (50% or less of AMI). (AMI for a family of four is $105,500).

Regarding the "post office" site, where 20 ownership condos are proposed, we recommend that the Planning Commission and City Council request that 15% of the units (3 units) be targeted to be affordable to households at moderate income levels. Instead of setting the sales price so that a household at 120% of AMI can afford to purchase the unit, as the present Los Altos program does, we recommend setting the sales price so that a household at 90 or 100% of AMI can afford to buy the unit. This would make the units affordable to more households within the moderate income range and would mirror BMR programs in other nearby communities.

We also recommend other changes in the present BMR agreements that should make the BMR program more appealing to buyers. They reflect what has been done in successful programs in Sunnyvale and Palo Alto. Examples include assuming a 5% or lower down-payment, rather than the 10% down that the City now mandates in setting the purchase price, and specifying that only 30% of a household's income is used for affordable housing costs. Staff has indicated that some of these changes to the program should be made going forward.

We commend the City for recognizing the distinction between rental and ownership housing in terms of targeting appropriate AMI at the 420-426 Tyndall Street project. Specifying that the BMR unit be low-income if a rental, but moderate-income if ownership is helpful. Actually, we believe that rental units should be very-low-income in order to be significantly below market-rate rents. Again, this is the structure that successful BMR programs nearby follow.

We note that requiring 15% of the units to be marketed as moderate income rather than 10% as low or very-low, along with the other recommendations we are making, should not impact the developer's bottom line, but these recommendations should make the BMR program more successful. We also recommend, as we have earlier, that the unit mix of BMR's reflect the total unit mix of the project.

Sincerely,

Susan Russell
Co-Chair, Affordable Housing Committee
League of Women Voters of Los Altos/Mountain View Area
Cc: James Walgren, David Kornfield

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