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LAW OFFICES GILCHRIST ~ RliTTER FFOFEBBIONAL CORPOF2pTIO:V Mayor Jennifer Hosterman Vice Mayor Cheryl Cook-Kallio Councilmember Cindy McGovern Councilmember Matt Sullivan Councilmember Jerry Thorne Pleasanton City Council March 25, 2009 Page 2 whichever is less. This assures that rents cannot increase more than the average increase pursuant to the rent stabilization agreement by which they aze protected now. If the Application is approved by the City Council, the Park Owner has also agreed to delay the conversion and sale of lots in the Pazk for at least ten years. Until the date of conversion, he has also agreed to continue to abide by the most recent Rent Accord as entered into with the City of Pleasanton. CREATING AFFORDABLE PURCHASE HOUSING: Upon conversion to resident ownership, the opportunity to purchase may be the first and only occasion that these families have ever had to own notjust a "mobile" house, but the land beneath it. This combination will allow these residents, who have been paying a personal property loan on their house and rent on the land, the ability to combine these two housing costs into a regular real estate loan. When the State created the laws to govern the conversion process, it also established a financial assistance program to enable lower income residents the ability to purchase if they choose. The State-funded below market rate financing program, called MPROP, adjusts the monthly payments based on the homeowner's income rather than the purchase price to keep the payments affordable. Low income financing in other communities has been provided at 3% interest with payments based upon the ability to pay and unpaid interest deferred until the property is sold. The goal of this State program is to create affordable purchase housing. Home sites in a subdivided mobilehome community aze typically much less costly than single-family homes in the surrounding area. This particularly holds true in Pleasanton, where homes are out of reach for many fixed income seniors. Those residents who choose to purchase their lots will benefit from the advantages of home ownership over renting, including building real estate equity which they can leave to their heirs, tax incentive programs for first-time homebuyers, tax (interest) write-off, and governing the community in which they all live. There has been concern expressed as to the purchase price of the lots. Because no one knows the future of real estate values ten years from now, realistic predictions would be impossible. However, we do know that at the time of conversion the owner will: • Engage a licensed appraiser to determine the value of the lots;