Dear Council Members,

As a member of the Housing Commission I will not have the opportunity to
talk to Council during the presentation by staff of the "Recommendation
from the Housing Commission that $3.5 Million in the BMR Fund be
reserved for First Time Home buyers Loans".

Here are my personal considerations:

1- The Housing Commission heard a dozen specialists from the housing
sector and received a volume of information from staff, during the long
study period on how to use the BMR Fund

2- The Commission wanted the Fund to benefit a large number of people,
since we have a list of a 1 000 people waiting, up to 16 years, for an
affordable home in Menlo Park. For that the HC recommends a scheme in
which 46 families will be able to get affordable loans. I urge Council
to make sure that this or a larger number of families be served by the
Fund.

3-The dedication of the Fund to increase the number of PAL loans was
made based on staff experience that shows:

* the current number of proposed developments in M. P. could
produce 29 to 38 BMR units in the next years

* most buyers of BMR units have used PAL loans
* since PAL loans were risen to $75 000, the number of loans have
increased substantially

4- The options of uses for the Fund did not include the HEART program,
which was unknown to the Commission. But options similar to HEART's were
studied. Those options were:

* set funds aside for a non profit developer to produce affordable
housing
* set aside funds to purchase existing building to be rehab for
low income resident

Both options were rejected after professionals of the area indicated
that costs incurred were considerable and out of significant meaning for
a Fund application. Besides, the fund would not be recoverable and the
PAL loans would be back to the current 5 to 6 loans per year due to it's
limited funding.

5- Staff informed that once this fund is spent the opportunities to
replenish it to the same level is not in sight. The Housing Commission
opted for applications to maintain the Fund replenished.

6- As a member of the Housing Commission and not knowing the detailed
benefits of the HEART to the BMR Fund or to the BMR program in Menlo
Park I feel, at the moment, that the Fund should be committed to PAL
loans only, with its majority dedicated to the BMR buyers and also that
the BMR Fund should be applied only in opportunities that will secure
its replenishment.

Sincerely,
Elza Keet
copy to Clarice Y. O'Neal
Received on Thu Jan 6 14:06:50 2005