City Council to vote on Riverside Avenue affordable housing project

SOUTH LAKE TAHOE, Calif. - The City Council will consider transferring three lots on Riverside Avenue to the St. Joseph Community Land Trust for one dollar so the non-profit can develop three single-family moderate-income affordable housing during a public hearing at its meeting Tuesday night.

The parcels are located at 3141 Riverside Avenue and are currently undeveloped and used for off-street parking by many in the Al Tahoe area.

In the works since 2019, a purchase agreement would allow St. Joseph Community Land Trust (SJCLT) to develop the homes that would be available for purchase by households earning no more than 120 percent of the Area Mean Income (AMI). The AMI for El Dorado County fr 2021 is $91,100.

There are conceptual plans for the two 2-bedroom and one 3-bedroom home that were approved by City Council on August 11, 2020. A construction loan commitment has been obtained from RCAC (Rural Communities Assistance Corporation). The general contractor selection process is nearing completion.

One of the last steps before the transfer of title to the three lots to SJCLT can be finalized is a vote City Council in favor of the deal.

The parcels had been previously purchased by the City from the South Lake Tahoe Redevelopment Successor Agency for $225,000 for the purpose of providing sites for the development of affordable housing.

The option agreement between the City and SJCLT from February 11, 2020 allowed a timeframe during which SJCLT and the City could meet certain initial milestones related to the development of the site.

SJCLT has provided documentation demonstrating basic compliance
with the conditions of the option agreement. The total project will consist of the development of three single-family homes (two-bed, two-bath: approx. 1372 square feet and three-bed, two-bath: approx. 1500 square feet) to be sold to moderate-income buyers. SJCLT will serve as the project developer and administer the buyer selection process which will be consistent with HUD guidelines and require SJCLT to verify that buyers comply with details associated with the following key components:

- Buyer Income verification (household income cannot exceed 120% AMI)
- Mortgage preapproval from a qualified lender
- Completion of a HUD-approved homebuyer education program
- Verification that the home will be the buyer’s primary residence

There are restrictive covenants in the deal, and SJCLT to ensure the long-term affordability of the homes and contain provisions ensuring compliance
reporting and a reversionary clause that stipulates if SJCLT fails to retain ownership of the property, it shall automatically revert to the City.

To lower the cost of the house to the buyer, the project will use a “Community Land Trust” business model in which ownership of the land is maintained by SJCLT and conveyed to each homebuyer through a 99-year ground lease. The model is a relatively common instrument to help maintain the affordability of ownership-based homes as it allows for ongoing stewardship of the homes to ensure occupancy, maintenance and resale provisions are met and that homes will remain permanently affordable.

The City Council meeting starts at 5:30 p.m. and will be held in person in the Council Chambers at the airport, and online. To watch, make comments and to see the full agenda, visit https://www.cityofslt.us/84/Watch-City-CouncilPlanning-Commission-Me.