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Mammoth’s Mayor Matthew Lehman attended the Mono County Board of Supervisors meeting on Tuesday, Aug. 14 with his developer hat on rather than his politician’s hat.

Lehman is the proponent of the proposed Rock Creek Ranch project in Paradise, and came before the Board to review his affordable housing agreement. Since the time that his tentative tract map was approved in 2009, the County has suspended its housing mitigation requirements in response to market changes that have increased affordable housing in the County and reduced the need for mitigation.

“The world has changed since your tract map was approved,” said Supervisor Hap Hazard. “I think we should waive all of it [housing mitigation].”

Supervisors Vikki Bauer and Byng Hunt agreed.

“Times have changed and the affordable housing demand is not as large because people can afford market rate,” Hunt said.

“I think it is good that government is getting out of the affordable housing business,” Bauer said. “I’m glad that you aren’t letting your project go into foreclosure like some others have.”

The Board approved the housing agreement with the waived mitigations 4-0. Supervisor Larry Johnston had to recuse himself because he owns a parcel that shares a water system connection with the project.

The Mono County Housing Authority, made up of the Mono County Board of Supervisors, held its annual meeting on Tuesday with two topics generating the most noise.

The first was Mono County’s rental housing program. The County only has three units, which are all currently occupied.

Supervisor Larry Johnston was concerned that management of the units was “sucking the profits.”

“These units should be significant moneymakers for the county,” Johnston continued. “Each home has been totally rehabilitated to the tune of about $50,000 each, and they’re in great shape.”

Johnston was disappointed that a breakdown of how the rent collected was then spent within in the county. This breakdown was not included in the agenda packet and Johnston asked staff to supply a report of where the money was going.

“We should look at Mammoth Lakes Housing’s management if we need help,” he concluded.

His fellow supervisors, however, did not necessarily see the same benefit of the rental housing.

“Why are we in rentals anyway?” asked Supervisor Byng Hunt. “We kind of slid into this.”

One option, according to County staff Mary Booher could be to sell the units, as there is already interest in one of them.

Another option, according to Supervisor Hap Hazard could be to turn the units in Benton into County offices.

“The long-term stability of the Eastern Sierra Unified School District could affect the residents of those units,” Hazard said.

At least one of the Benton renters is a teacher at High Desert Academy. On Wednesday, April 18 the ESUSD Board voted to dismiss 4.5 teaching positions within ESUSD, according to ESUSD Superintendent Don Clark. Two of those positions were teachers at High Desert Academy. The dismissal of those positions effectively closes the high school.

The Board left the issue on the table for the time being.

The second hot topic was whether or not the old Sheriff’s Substation where Mammoth Dog Teams is currently housed should be converted into County workforce housing.

Johnston, who believed the building could house two workforce housing units and a storage area without much need for renovation, suggested the idea.

Johnston pointed to the $237,000 in available housing funds as a pool of money that could be used to rehab the building.

Supervisor Hazard, however, had a difficult time seeing it as viable. He believed the $237,000 might be better used as employee down payment assistance but did ask staff to put together some numbers on just how much it would cost to rehab the substation.

“It’s not that it can’t be done, but it would be expensive,” explained County Director of Facilities and Risk Management Rita Sherman.

“Isn’t the county salvaging something similar in Bridgeport,” asked Johnston.

“It’s in better shape than this,” Sherman said.

Water and asbestos are at least two issues that would have to be fully addressed before a project such as this could move forward.

Mammoth’s Town Council effectively ended a lawsuit between property owner John Vereuck and Mammoth Lakes Housing over a potential default on a loan for MLH’s office space at 587 Old Mammoth Rd. Council voted unanimously to grant up to $93,000 from Housing Fund/Measure A account to repay the loan, which Vereuck made in 2004.

Mayor Jo Bacon said her only reservation was the amount, which if spent in its entirety would only leave about $14,000 in the Housing Fund. “Is it possible to negotiate a lower amount?” Bacon asked staff. Town Manager Dave Wilbrecht responded that the MLH Board has reportedly reached an amount lower than that, and Council will be keep in the loop on how much as Town staff works with MLH and Vereuck to execute payment of the note.

MLH Director Pam Hennarty “humbly” requested the funds for what she called a very difficult situation. “When times were good, we expanded staff and space, but now we need to reduce our overhead … and we need to settle this lawsuit.”

Councilmember Rick Wood, who is also the Council delegate to the MLH Board, reminded the room that MLH was created by the Town with specific voter-approved funding, which he said was the right thing to do. “MLH’s core structure is an extension of the Town,” Wood opined. He added that the effect of a judgment if [MLH] loses would be detrimental to MLH, and also unfair to Vereuck.

Wednesday’s Mammoth Lakes Town Council meeting was brief … or long, depending upon whether or not you’re privy to the closed session deliberations regarding the Mammoth Lakes Land Acquisition v. Town of Mammoth Lakes airport litigation judgment.

The brisk public portion, however, did see a fair amount of decisions made. One of the biggest could be a source of relief for Mammoth Lakes Housing, which has been financially challenged this past year. The non-profit agency has had to slash staff and is currently embattled in legal tussle with John Vereuck over a default on office space it initially purchased from Vereuck in 2004.

However, Council unanimously approved staff’s moving forward with an application for a Community Development Block Grant for various housing-related projects. The three-node grant requests include $600,000 for multi-family property acquisition and rehabilitation, another $400,000 for an existing multi-family rehab project for the Glass Mountain Apartments and $100,000 for two planning studies. One of those would be for revitalization programs specific to the Sierra Valley Sites neighborhood district.

The grants, which do not have to be accepted if awarded, require a maximum of $110,000 in matching Town funds (or 10%), which could be as cash, in-kind services or waivers. Cash payments would likely be pulled from the Town’s Housing Authority fund, and not the General Fund. Staff’s report, however, cautioned that, like many other buckets of Town money, the status of the Housing Fund could be “affected” by the litigation settlement discussions. Also the grant requests are “up to” amounts, and staff advised that there is currently no way to gauge how much the state will award.

Community Development Director Mark Wardlaw acknowledged that the request amounts mean match dollars that are much larger than usually requested for CDBG grants, but are geared to make them more attractive to the state. Also, the trio of grants could be approved a la carte, since they’re not necessarily interrelated.

During public comment on the matter, Leigh Gaasch voiced concern about affordable housing in Sierra Valley Sites. “Think about this before you go for grants: many residents have lived there since before there was a Town, when it was part of Mono County. I will [oppose] this until there’s a commitment to putting affordable housing all throughout town.”

MLH Director Pam Hennarty said she’s looking forward to the rehab projects, and the studies, which would add another 3 to 6 units of affordable housing to the Town’s inventory. “We’re taking something that’s in need of help and giving it a fresh, new breath,” she commented. MLH manages 130 units of affordable housing, but still has 170 people on its waiting list.

Jesse Baldwin, Contractors Association President, noted he hopes any work would go to local contractors. “Many would be happy to stand behind it if it would benefit local contractors,” he told Council.

Federal procurement requirements mean an open bidding process, and contractors have to meet license and bonding qualifications. Hennarty added that some types of projects don’t lend themselves to outside contractors.

“To the extent possible and feasible, we’d love to use local contractors,” she said.

A glance at the legal notices this week will show that Property Owner John Vereuck is foreclosing on Mammoth Lakes Housing for defaulting on two loans connected with Suite 5 in the Sherwin III Plaza.

According to MLH’s Executive Director Pam Hennarty, MLH purchased Suite 5 from Vereuck for $266,000 in 2004. The purchase was owner-financed @ 8% interest.

A year later, MLH purchased the office suite next door (Suite 4) for approximately $270,000. While that purchase was majority-financed by Eastern Sierra Community Bank, Vereuck gave MLH a second mortgage on Suite 5 in the amount of $100,000 to help MLH make the downpayment on Suite 4.

This second loan was also pegged at 8% interest and required a balloon payment (approx. $93K) at the end of five years as payoff.

Mammoth Lakes Housing said it ultimately made $237,000 in payments to Vereuck over eight years. The old note/new note monthly payment on the 900 square-foot Suite 5 cost $3,500/month.

Hennarty said the economic downturn and concomitant reduction in MLH staff made the combined 1,800-square feet between the two suites unnecessary.

MLH formerly had a $650,000 annual operating budget and five employees in its heyday. It now has an approximate $520,000 operating budget, according to Hennarty’s lieutenant Jennifer Halferty, and two employees.

“We want to ensure that the organization can continue to operate the important programs that we offer for a long time to come, and unfortunately we are also facing difficult economic times. Cuts had to be made.”

Both sides claim they attempted to approach the other about a renegotiation of terms.

Vereuck, however, says MLH only asked to renegotiate after it had stopped making its payments, and he does not believe in negotiating with folks who are trying to intimidate him. To make a political analogy, he said he does not negotiate with terrorists.

“They [MLH] need to be exposed for what they are,” he continued. “They’re unethical.” Vereuck noted that a high percentage, perhaps more than 50%, of MLH’s deed-restricted affordable housing is no longer deed-restricted and went back on the open market.

Which means that the taxpayers ultimately footed the bill for what now may well be second homes for out-of-towners.

Housing mitigation requirements have long been controversial. They’re perceived as needed to justify the additional workforce that will be brought in for jobs, but many developers rail against them, saying they make it harder to get loans and only add to a project’s cost, especially burdensome in a recessed economy. On Tuesday, Mono County’s Board of Supervisors took up an ordinance that would temporarily suspend the Mono County Code’s Housing Mitigation Requirements for up to two years.

As presented the suspension wouldn’t apply to projects that have already been approved and have yet to satisfy pre-negotiated housing mitigation requirements. Further, if a developer has met mitigation requirements [i.e. built a structure or paid in-lieu fees], those would also stand.

Supervisor Tim Hansen supported that position. “Projects with agreements in place should be held to those deals, but I’m open to extending the suspension to new projects,” he said. The suspension would exempt anything new projects can build within the next two years, but doesn’t exempt any mitigation obligations that would kick in after the suspension is lifted.

Supervisor Larry Johnston doesn’t consider the suspension a form of stimulus. “It doesn’t stimulate anything,” he stated. “[Housing mitigation] holds big developers accountable for providing adequate workforce housing to the community.” He dismissed the idea as just “another giveaway,” adding that the current Housing Ordinance was adopted through a public process, and so too should any sort of suspension. “We have not given appropriate notice to interested groups concerned with housing, such as Mammoth Lakes Housing. We owe it to those groups to be heard before suspending it.”

Discussion included the definition of “second units” added to homes, which are also known as “granny units,” and potentially limiting the size of second units both for ease of financing and scaling back potential density increases. With several developments located in District 2, Board Chair Hap Hazard reminded fellow Board members he had reservations about the Housing Ordinance from the get-go.

“The projects in my district are in rural areas, with no services, no schools, no childcare, no infrastructure to support workforce living. If we kick the door open on this, I’d be in favor of getting rid of the ordinance altogether,” he indicated.

Developer John Hooper, who’s built more than 200 affordable housing units countywide, said he finds the 2-year suspension “appropriate.” Hooper said housing mitigation affects his Rock Creek Ranch Project, financially, potentially mandating that 5 of his 11 homes have a second unit, at an additional cost of $50,000-60,000 per unit. Hooper is one developer whose affordable housing aspect has yet to be finalized.

In terms of the gap between how much affordable housing already exists in the marketplace and who can afford to live in it, Supervisor Vikki Bauer suggested that most of the waiting list is made up of rental units that are already below market rates. “Mono County can’t drive the market of affordable units down to where it should be, and we’re not going to be able to change that,” Bauer said.  “Government has no business being in the housing market.”

“Affordable housing has warped the natural market,” Supervisor Byng Hunt posited. “Employers should look at housing, people should look at their own needs. Let the market do its own thing. [Government] shouldn’t be stepping in and upsetting things.”

The Board passed the ordinance 4-1, with Johnston dissenting. The suspension takes effect in July. The Board plans to revisit the suspension sometime prior to its expiration, and can either repeal it in one year, or extend it another two years, at its discretion.

Just like a home makeover show on HGTV, two Mammoth families will be uprooted from their living spaces and temporarily relocated while their homes are upgraded. However, this time, instead of “your friends at HGTV” doing the work, it will be the Town’s own Mammoth Lakes Housing (MLH).

On Wednesday, MLH filed a Use Permit Application with the Mammoth Planning Commission to rehabilitate an existing four-unit structure at 1829 Old Mammoth Road.

“This is the first step into upgrading existing facilities rather than building new,” stated MLH Executive Director Pam Hennarty, which is what she claimed the community had been looking for since the housing authority was first formed. MLH was able to obtain the structure with grant funding and will perform the renovations with that same source of revenue. Local architect John Clark has been commissioned for the project.

MLH had tried to acquire the property several years ago, but not only did the grant funding fall through at the time, the previous owner, upon receiving a bid from MLH, countered back at more than the asking price, just because it was the housing authority trying to purchase the property.

“Now we ended up getting the property for significantly less because the market has crashed,” Hennarty explained.

Hennarty estimated that by purchasing an existing structure and rehabilitating it, MLH would pay $100 less per square foot than it had forked out to build Aspen Village. The total cost of the improvements is expected to be $230,000, which is less than the four-plex’s assessed valuation of $232,926.

The task will be to take an existing, non-conforming four-plex and upgrade the units to meet health and safety requirements. MLH will also bring the units up to a high level of energy efficiency with the replacement of window and door weather stripping, putting in Energy Star appliances, efficient water heaters, and water saving fixtures, and more.

The structure is currently comprised of three, one-bedroom units and one, three-bedroom unit. According to Town staff, the structure originally contained two, one bedroom units and one, four-bedroom unit. The previous owner made the conversion without proper permitting, turning the four-bedroom into a one-bedroom and a three-bedroom. That particular one-bedroom does not have a proper kitchen or means of controlling heat, but has still been leased as a separate unit.

“Basically the previous owner went in and chopped everything up and ruined the outside look,” Clark said. “We are just trying to salvage it.”

The net amount of people at the complex won’t change much, according to Hennarty. In fact, two of the units are already occupied and have been for 10 years. These are the families that have the right to remain in the units, even with the change of ownership, which is why MLH will move them out during the upgrades and then they will be able to reclaim their new and improved units.

“We will most likely move them into two units that MLH already owns,” Hennarty told The Sheet. State law requires MLH to pay any difference between the rent the families are paying now and an increase in the temporary locations they will be moved to. “If we put them in our units we can just charge them what they are paying now,” she said

Hennarty said that optimistically the upgrades would take about four to five months, but realistically could be more like six to seven months.

“The goal is to avoid anyone having to move in winter,” she said.

Since it will be a MLH-held building, the current market-rate property will become permanent affordable housing. MLH will lease the units to households at or below 80 percent of the Area Median Income (AMI) for Mono County.

This change did not sit well with Mammoth local Leigh Gaasch, who believed that putting workforce housing in among market rate housing would lower the value of the market rate homes.

The four-plex is located across the street from another MLH project, Aspen Village, therefore the immediate area surrounding it is a mix of deed-restricted and market rate housing.

Hennarty stated, in response to Gaasch’s concern, that “deed-restricted units are not used in the appraisal process for [market rate] homes around them. Those sales are taken out.” Therefore, Hennarty believed they do not affect the value of surrounding homes.

Gaasch still did not agree. “We’re not stupid, if a home next to you sells for 90 percent less why would someone want to purchase yours for more?”

While Planning Commissioners did not seem to share Gaasch’s concerns, they did have some concerns of their own.

Commissioner Elizabeth Tenney hoped to be able to solve the neighborhood parking issues while rehabilitating this project. She claimed that often cars at this property stuck out into, and even parked in the street during the winter. She hoped to reconfigure portions of the structure to improve the parking. Hennarty however, clarified that, with their tight budget, they were really trying to focus on the interior of the units in order to help the tenants and improve their quality of life.

Town Associate Planner Jen Daugherty explained that each of the one-bedroom units was allowed one parking spot and the three-bedroom unit was allowed two spots, for a total of five parking spots on the property. According to Daugherty, the law does not require that the Town provide any additional spots for guest parking.

The Commission agreed with an earlier request from Hennarty that the curb around the dumpster required in the application would be a hindrance to parking and snow removal, and therefore modified the language to read that not a curb, but something, should be installed to keep the dumpster, which had a tendency move about, in place. The Commission then approved the permit unanimously.

Goforth and fiancee Laura plan to go forth and marry! (Photo courtesy Goforth)

First-time homebuyer tax credit could mean opportunity for you

Congratulations to Sheet Spokesmodel Tyler Goforth on his recent engagement to local heartthrob Laura Johnson. Though this is an exciting time for the happy couple, it’s more exciting for me, seeing as Goforth is finally moving out of the “Sheet Hole” apartment we’ve been sharing. Don’t get me wrong, I’m happy for the man who finished a close second this spring in the MMSA Mustache Comp, and not just because he’ll soon be donning the proverbial “golden ring of power.” I’m happy for him because now is a great time for the young couple to further set down roots by buying property in Mammoth. This is, in part, due to a federal tax credit for new homebuyers of $8,000. Combine this Obama-cake with a beaten-down real estate market and suddenly Mammoth appears (almost) affordable.
Consider this Goforth: For what the average Mammoth renter is paying per month, you could be paying the same amount, if not less, for a mortgage.
And unlike the depressing exchange of paying rent every month, the best thing about owning a home is that it’s a financial investment.
“There are ways to be creative,” says Pam Hennarty, Executive Director of Mammoth Lakes Housing, “If you plan on living in Mammoth for the next 5 years and you can afford the rents, it makes sense to buy a home. Even if you only expect 3.0% back on your return, there are significant tax benefits to owning.”
Sounds good. But first, you’re going to need a down payment.
A Federal Homeowners Association (FHA) loan is a good option. A buyer with a good credit could secure a down payment at 3.5% of the total cost. However, the FHA loan does come with some strings attached like higher fees, higher mortgage insurance, and higher interest rates. The plus side is it puts first time buyers in homes.
“It’s difficult to get an FHA loan,“ Stanley Lupe of Sierra Mortgage told the Sheet, “because [one of the requirements] 51% of the condo complex’s residents have to be owners.” As many locals know, this type of situation is few and far between. Along with a handful of other regulations, like the fact the condo has to be built under FHA guidelines (which many older condos in Mammoth are not) makes an FHA loan hard to come by, but not impossible.
“If you have good credit,” claims Hennarty, “you’ll be able to get a loan, FHA or not.” Seeing as you currently can’t use the tax credit for a down payment their are still ways to be creative. One way, is through what’s called a bridge loan.
In a recent article in RISMedia’s Real Estate, Ken Trepeta, Director of NAR (National Association of Realtors) Real Estate Services stated, “The principal way to use the anticipated credit for a down payment is through a bridge loan secured through a state housing finance agency (HFA) or other eligible agencies. The HFA gives the bridge loan at closing and the buyer then promises to repay.” Like any loan there are risks involved, but a bridge loan is a possible solution.
But if you’re like myself and are still paying off four great years of skipping class and playing Madden [college], then you might choose not to get another loan. “Your best bet is just putting 10% down,” claims Lupe, “You gotta find a way to get that 10%.”
Since money doesn’t grow on trees, and savings accounts vanished with the advent of iPhone applications, a lot of first-time buyers are tapping the family tree. “Maybe ask Mom and Dad for a loan,” says Lupe “and then pay them back with the $8,000 tax credit.” In your case Goforth this sounds like potential wedding gift from Mom and Dad, considering all you’re getting from me is help moving your stuff out.
But asking the parents for money does come with inherited nagging and obligated family get-togethers, so you may want to start saving. “The best plan is to have a plan,” says realtor Bill MacBride of Coldwell Banker. “Most of the clients that we work with do a lot of homework. There’s no shortcuts, you’re going to need to save money, and do your research.” Now we know a large portion of Sheet readers absolutely hate doing research so we let Lupe and his 17 years of experience crunch the numbers …
From the desk of Stanley Lupe: Imagine you’re a first time buyer making $40,000 a year. Your income would probably allow you to purchase a condo listed for as much as $175,000. With fees and closing costs included, your down payment of 10% would be $22,740. Now lets say you have an interest rate of 5.38% (for 30 years). If you include taxes, insurance and fees your monthly payment would be $1495.62. Tax deductions from interest payments on your condo could potentially save you $400/month. And don’t forget to top it off with a meaty $8,000 federal tax credit!
Currently, there are several one-bedroom condos on the market in Mammoth starting in the $130,000 range.
At Aspen Village, the newest affordable housing complex, Mammoth Lakes Housing just got a grant which is good for $50,000/unit in down payment assistance. In other words, if you can come up with the $20,000 down for a $200,000, two-bedroom condo, they’ll toss in $50,000 so your mortgage would be about $130,000.
Compare the cost to buy vs. rent. Check out Blizzard Property Management’s website and you’ll find condos in Mammoth that are going anywhere from $800-$2400 a month.
“Schwing!” says Goforth. “I should buy!” But don’t schwing too long you curly haired freak, because the federal tax credit for first home buyers expires November 30th of this year.
Since time is running out, realtors are hoping to get the tax credit extended beyond November. MacBride explained to the Sheet that the CAR (California Association of Realtors) and the NAR are currently pushing Members of Congress to extend and expand the tax credit beyond Nov. 30, as well allow it to be used as a down payment.
But hopefully this opportunity will light a fire under your ass, Sheet Spokesmodel Goforth. Whether you choose to spend another year renting from a slum lord or you bust a financial boomshakalaka and purchase your first home, I’m sure you’ll make the right decision. I wish you good luck and I happily anticipate your departure as you find a shiny palace for your queen to be.
On a related note: As Goforth moves out and enters into the marriage shackles of infinite despair he must now step down as official Sheet Spokes Model. So to take his place (as well as blame) we want to fully welcome new Sheet Spokesmodel 2.0 Matt Gushka. Who like myself, would rather pay Lunch rent every month then ask his parents for a 10% down payment.
For more information on the first time home buyers tax credit check out the California Association of Realtors website at www.car.org.