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The Carlsbad City Council approved the sale of 11 affordable units in Bressi Ranch during its March 8 meeting through the city’s Affordable Housing Resale Program.
The Carlsbad City Council approved the sale of 11 affordable units in Bressi Ranch during its March 8 meeting through the city’s Affordable Housing Resale Program. Photo by Steve Puterski
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Carlsbad approves sale of 11 affordable homes

CARLSBAD — After reviewing thousands of applicants, the city is in contract to sell 11 affordable homes in Bressi Ranch.

The Carlsbad City Council approved the sales during its March 8 meeting allowing its Housing Services department to carry out the sales in the Mulberry and Rose Bay developments.

According to Nancy Melander, a senior program manager with Carlsbad’s Housing Services, said her department was overwhelmed by the number of applications. In total, more than 2,500 people applied once the city announced the sale of the homes on Nov. 19, 2021. The deadline was Jan. 17, according to the staff report.

The city paid about $2.7 million for the units, which ranged between $230,000 to $360,000 per unit, Melander said.

“Staff knew there was going to be a lot of high interest,” Melander said. “We definitely didn’t think we were going to get applications in the thousands. In the first week that applications were open, we had phone calls non-stop at all hours. What that says is we don’t have enough affordable housing.”

The affordable units are part of the city’s reselling program, where the city purchases affordable units at risk of becoming market rate, or not, when they become available. The city vets each applicant and ensures no home is sold to an investor or unqualified prospect, Melander said.

The homes are bought using funds from the Community Development Block Grants and Housing Trust Fund, she said.

The city checks a couple’s or individual’s income, credit score, assets and must be a first-time homebuyer and reside in the county, to name a few, she added. She said an applicant must be at 80% or below of the area median income, or AMI.

However, the sales went to households with 50% or less of the AMI. A household of four at 50% of AMI has an annual income of $60,600, Melander said. Of the homes sold, eight have two bedrooms, while two have three bedrooms and one with four bedrooms.

The city’s Inclusionary Housing Program restricts sale prices and requires any development of more than six units to provide 15% of the homes to be affordable. Those projects not meeting those requirements pay a fee to the city for future purchases or funding of projects, per the staff report.

Additionally, under the housing program, the city is given the first option to buy affordable units through agreements with developers, Melander said.

“There is a lot of high demand, but supply is very low,” she explained. “Unfortunately, our program is based on the market. We purchase these units when they come available on the market.”

Councilman Peder Norby said while the program is great, he would like to see a more robust program to allow home sellers more flexibility with a home’s equity plus more stock. He also said it may be wise for the city to reinstate a program where they help cover closing costs.

Norby said when he bought his first home, the city helped cover those costs making it easier for him to get into the “housing ladder.” Currently, the city splits a home’s equity with the home seller, although it’s on a case-by-case basis, Melander said.

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