19.28.080 Housing agreement.

(A) Where required by this chapter, applicants/developers shall draft and agree to enter into a housing agreement with the city. The terms of the draft agreement shall be reviewed and revised as appropriate by the community development director, who shall formulate a recommendation to the decision-making body for final approval.

(B) The housing agreement shall include at least the following:

(1) The number of inclusionary units, bedroom counts for the inclusionary units and their target households;

(2) The standards for determining the affordable rent or affordable sales price and housing cost for the inclusionary units;

(3) The location, unit size (square feet), and number of bedrooms of the inclusionary units;

(4) The tenure of use restrictions for the inclusionary units;

(5) A schedule for completion and occupancy of the inclusionary units and market rate units;

(6) A description of remedies for breach of the agreement by either party (the city may identify tenants or qualified purchasers as third party beneficiaries under the agreement);

(7) Other provisions to ensure implementation and compliance with this chapter.

(C) In the case of for-sale inclusionary units, the housing agreement shall include the following conditions governing the sale and use of inclusionary units during the applicable use restriction period:

(1) The inclusionary units shall be sold to and owner-occupied by eligible lower-income households at an affordable sales price and housing cost.

(2) The initial and subsequent purchasers of an inclusionary unit shall execute an instrument or agreement approved by the city restricting the sale of the inclusionary unit in accordance with this chapter during the applicable use restriction period. Such instrument or agreement shall be recorded against the parcel containing the inclusionary unit and shall contain such provisions as the city may require to ensure continued compliance with this chapter.

(3) The city shall establish maximum resale prices for inclusionary units during the applicable use restriction period, taking into consideration such factors as cost-of-living increases, any improvements made to the unit, and customary closing costs.

(4) The owner of an inclusionary unit who wishes to sell the unit shall provide the first right of refusal to purchase the unit to the city and send written notice to the city of their intent to sell not less than sixty calendar days prior to the intended date of sale of the unit. Upon receipt of the owner's notice, the city shall have sixty calendar days to purchase the unit or to assign its right of refusal.

(5) The owner shall share with the city any amount received by the owner as a result of the first sale following expiration of the applicable use restriction period that is above the maximum resale price. The city shall deposit its share of any such proceeds in its housing fund.

(D) In the case of rental inclusionary units, the housing agreement shall provide for the following conditions governing the use of inclusionary units during the use restriction period:

(1) The rules and procedures for qualifying tenants, establishing affordable rent, filling vacancies, and maintaining inclusionary units for qualified tenants;

(2) Provisions requiring owners of the rental project to verify tenant incomes on an annual basis and maintain books and records to demonstrate compliance with this chapter;

(3) Provisions requiring owners of the rental project to submit an annual report to the city which includes the name, address, and income of each person occupying the inclusionary units, and which identifies the bedroom size and monthly rent or cost of each inclusionary unit.

(E) Following execution of the agreement by all parties, the completed housing agreement, or memorandum thereof, shall be recorded and the

conditions therefore filed and recorded on the parcel or parcels designated for the construction of inclusionary units. The approval and recordation shall take place prior to final map approval, or, where a map is not being processed, prior to issuance of building permits for such parcels or units. The housing agreement shall be binding to all future owners and successors in interest.