AgdaPkt 2015-07-27 Joint SA and PFA

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7.3.A. - Page 2 the program will provide an economic benefit to both the property owner (forgivable loan) and to the residents (rent stabilization). The building safety aspects of the program will also be shared by the property owners and residents. • Clarify that the program will only be offered for five (5) years so that potential applicants do not delay program participation and compliance. • Limit funding in first year to $1.5 million to encourage early participation. • Require the rent stabilization to continue for at least 5 years and require compliance with these conditions through a deed of trust recorded on the property. • Re- evaluate the program in 6 months. The following are some of the key program elements: • The owner of a pre -1989 multi - family residential building within the City that lacks an automatic sprinkler system may apply to participate in the Program at the same time they apply to the City for a building permit to install an automatic sprinkler system in their pre -1989 residential building. • The Program allows an eligible Owner to receive a Program Loan to assist them in paying for the cost of the automatic sprinkler installation. The amount of the Program Loan may not exceed $5.00 per square foot (gross square footage) of the residential building unless the Program Manager approves a greater amount due to unusual circumstances. • Under the terms of a Program Loan, the loan payments are automatically deferred and ultimately forgiven if the borrower does not increase the rents in their residential building more than 5% or the increase in CPI, whichever is less, in any 12 month period during the term of the loan. If these agreed rent restrictions are breached, then the loan becomes immediately due and payable with accrued interest. • To receive a Program Loan, an eligible Owner must not have recently imposed an unusual rent increase on the tenants in their residential building. Under the proposed Program parameters, the applicant must demonstrate to the satisfaction of the Program Manager that no rent increase in the 12 months preceding their application, and continuing through the date they receive a Program Loan, has been greater than the average increases on a percentage basis than during the 5 year period preceding their application. (See Section III.A.6. of Attachment A, City of Redwood City Fire Safety First Pilot Program). • To participate in the Loan Program, an eligible Owner must complete and execute a loan agreement, promissory note and deed of trust as required by the OAK #4832 - 4527 -1077 v2 Page 2 of 4