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Denied on Second Reading <br />b. Rental covenant. Deed restrictions for affordable rental <br />units shall be required prior to issuance of the first <br />certificate of occupancy for any rental unit in the <br />development. <br />2. Content. The deed restrictions shall contain all terms determined <br />by the City Manager to be appropriate to ensure the affordability of <br />the unit and compliance with this Chapter. <br />3. Deed of trust. The deed restrictions shall be secured by a deed of <br />trust on the property, which may be subrogated to other deeds of <br />trust on the property. <br />4. Term. All ownership and rental covenants shall be perpetual or <br />virtually so; they shall require affordability of the affected unit for <br />the greatest duration allowed by law. <br />5. Sale. <br />a. Ownership covenants. Ownership covenants shall allow <br />sale to another homeowner qualifying under Section <br />17.76.070. These covenants shall allow for appreciation of <br />the home at a rate determined based on changes in the area <br />median income, plus an allowance for the value of capital <br />improvements to the home installed by the owner. The rate <br />may be capped so as to ensure the continued affordability <br />of a unit to a new purchaser, to ensure that unit price does <br />not fall unreasonably below the level at which a unit would <br />be considered affordable, and to facilitate the economically <br />practical sale of a unit once its owner's income increases <br />sufficiently for the owner to afford a market -rate unit. The <br />seller of the home shall charge to the buyer no other special <br />or unusual fees, including any finder's fee. The City <br />Council may consider allowing an owner of an affordable <br />unit to sell to a buyer who does not meet the qualifications <br />of Section 17.76.070, below, in exceptional circumstances <br />involving significant disruption to the local economy or <br />individual financial hardship. In exchange, the owner <br />would transfer equity to the City at that time. The City <br />Manager may specify in the deed restriction the amount of <br />such equity. The amount shall be based on the difference <br />between the initial sale price and the estimated market price <br />of the unit at the time of initial sale. <br />Ordinance No. 1839, Series 2022 <br />Page 12 of 16 <br />