05B GAMAT Affordable Housing - City Council - City of Davis

DATE: April 9, 2013 

TO: City Council 

STAFF REPORT 

FROM: Danielle Foster, Housing & Human Services Superintendent 

Kelly Stachowicz, Deputy City Manager 

SUBJECT: Update on Rental of City-owned Affordable GAMAT Units & Continued 

Management Contract with Boschken Properties 

Recommendation 

Staff recommends that the City Council adopt the attached resolution (Attachment 1), directing 

staff to continue a property management contract with Boschken Properties for the twenty cityowned 

single-family affordable homes referred to as GAMAT Homes with a contract term 

through August 31, 2014, and a one-year option to renew through August 31, 2015. 

Fiscal and Economic Impact 

With the City Council’s November 13, 2012 direction to continue leasing the GAMAT units 

through August 31, 2014 and bringing all rents up to a standard amount based on unit size 

($1,117 for two-bedroom and $1,217 for three-bedroom), the City will continue to see increased 

revenue from these homes. Rent revenue from the homes, to-date, has been covering the costs of 

repairs, management, water, sewer, garbage, etc. For January and February 2013, the fifteen 

occupied units brought in $24,420.53 over this two-month period. By the beginning of May, 

revenues should increase approximately $3,000 per month due to the scheduled occupancy of 

three additional units, bringing total occupancy to eighteen units. Since June, expenses have 

ranged from $5,000 to topping out at $18,000 per month, due to unit turnovers. Once the units 

are fully occupied, it is estimated that total revenue will be $22,878 per month and expenditures 

will range from $3,000-$5,000. This year is likely to be the most expensive year of management 

for GAMAT Homes due to the amount of unit preparation and turnover of vacant units, plus 

completion of the warranty work discussed in a subsequent section. It is projected that rent 

revenue and expenses will break even by fiscal year end. In upcoming fiscal year 13-14, staff 

estimates net revenue of $150,000 from these homes, after accounting for all expenses, a 

budgeted portion of city staff time, a vacancy reserve, and creation of a replacement reserve. 

Boschken Properties charges the city nine percent of unit rents collected for management of the 

occupied units, ten percent of project invoices on large maintenance projects, and nine percent on 

professional services that cost more than $200 per unit in any given month. Vacant units do not 

get charged a management fee under the contract with Boschken Properties. In the current fiscal 

year, staff has been using revenue to cover typical unit expenses, as stated above. In the 

upcoming fiscal year, staff is budgeting some staff time towards this program and planning to 

start a replacement reserve for these units. Staff time covered by these rents offsets the loss of 

redevelopment and potential charges to the General Fund. Any unused funds from the GAMAT 

rent revenue at the end of the year will be added to the City’s Housing Trust Fund and would be 

04-09-13 City Council Meeting 05B - 1

Update on Rental of City-owned Affordable GAMAT Units & Continued Management Contract with Boschken Properties 

available for reuse within the affordable housing program. This revenue and future use of the 

GAMAT Homes will be considered further as part of upcoming strategic planning for the city’s 

affordable housing program. 

Council Goal(s) 

Actions in this staff report support the goal of Community Strength and Effectiveness, 

specifically working to accomplish the guiding principle of “Establish and maintain an inventory 

of permanently affordable housing units.” Actions related to these twenty affordable units, 

created under the City’s inclusionary requirements, are necessary to maintain these housing units 

in the city’s inventory of affordable housing and to recuperate previous public investment in 

these units. 

Background and Analysis 

In July 2010, the City took ownership of the twenty GAMAT Homes, as the former 

Redevelopment Agency, as the result of an Agency loan foreclosure and sale. This loan had been 

made to the Davis Area Cooperative Housing Association (DACHA) in 2008 in an effort to 

consolidate the organization’s debt, protect the affordability of the units, and ensure the 

organization’s long-term viability. Due to an arbitration judgment against DACHA, its funds 

were later levied and it was unable to pay the Redevelopment Agency’s loan, forcing DACHA 

into default. Ultimately the Agency foreclosed on its loan to protect the public investment of the 

Agency and City. 

In January, February, and June 2011, the City Council held discussions regarding future use of 

the former DACHA units. As additional background, links to these staff reports are provided 

below. 

Past staff reports on the long-term use of the former DACHA units: 

Part 1, City Council Meeting January 11, 2011: http://citycouncil.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/ 

20110111/Packet/08-CC-and-04-RDA-Longterm-Plan-for-Former-DACHA-Units-Part-1.pdf 

Part 2, City Council Meeting February 1, 2011: http://citycouncil.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/ 


Part 3, City Council Meeting June 28, 2011: http://citycouncil.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/ 


The second meeting of this process resulted in Council’s direction that staff was to release two 

Requests for Qualifications (RFQs), one to identify a potential management company for the 

units and one to identify a potential selling agent for the units. The City sent the management 

RFQ to seven management companies and received one reply, from Boschken Properties 

(Boschken). Staff believes this was primarily due to the small number of units being contracted, 

compared to apartment complexes, and the one-year term being offered initially. The City 

received two proposals related to sale of the former DACHA units, now called GAMAT Homes. 



After reviewing the proposals and discussing options, the City took action to contract with 

Boschken for management of the ten occupied homes. Council determined that retaining the 

houses and collecting rent would be the best option at that point in time. This decision was made 

(1) due to a lis pendens that was recorded against the properties (subsequently removed) that 

linked the properties to an existing lawsuit against DACHA, the City, and Agency, (2) to avoid 

displacing existing tenants from the units, and (3) in order to collect adequate revenue while 

providing time to assess options for the long-term use of the units. 

When the Redevelopment Agency later dissolved in February 2012, due to changes in State Law, 

the City took ownership as the Housing Successor to the former Redevelopment Agency. Later, 

in April 2012 Council approved contracting with Boschken for all management and accounting 

of the twenty GAMAT Homes, including rent collection, lease enforcement, and payment of 

typical management expenses. The current agreement concludes July 1, 2013, which is why staff 

is recommending continuation of this contract. 

Currently fifteen of the twenty single-family affordable homes are occupied. By early May, three 

more units are planned to be occupied, bringing the occupancy total to eighteen. Some major 

repairs were necessary over the past year, due to a defective siding product used on eleven of the 

twenty homes at the time of construction. All siding repairs and repainting of the eleven units 

under the construction warranty were completed last November. While some of those units were 

occupied or have since been occupied, leasing units mid year is challenging in Davis where the 

vast majority of leases have a one-year term from September 1 st through August 31 st . Households 

who are moving units this May have had to sublease or negotiate other arrangements to satisfy 

the remainder of their standard year-long lease term. By September 1 st all units are projected to 

be occupied. 

All fifteen of the existing tenant households in GAMAT Homes are current on their rent 

payments. Boschken has completed advertising and continues to receive applications for the 

vacant units. Additional advertising will be completed as is necessary to obtain one-hundred 

percent occupancy of the homes over the next few months. Once fully occupied, these units will 

bring in adequate revenue to offset ongoing expenses and are estimated to generate net revenue 

of $150,000. 

Income Certification and Leases for 13-14 

In accordance with Council’s direction at the November 13, 2012 City Council meeting, 

Boschken Properties has started the process of recertifying incomes of existing tenants and 

renewing tenant leases for the one year term from September 1, 2013 through August 31, 2014. 

The specific items approved by Council at their November 13, 2012 meeting include: 

1. For the September 2013-August 2014 lease year recertify the incomes of all tenant 

households, including former members of DACHA. Council had been providing a 

transition period for previous DACHA members who might have subsequently gone over 

income. Any households over income would be allowed to remain through August 2013, 

providing them opportunity to identify other rental options as part of the standard lease 

term in Davis. It is standard for affordable rental housing managers to income qualify 

tenants each year because the tenant household is receiving a subsidized rent. 



2. Begin the outreach and recertification process early in 2013 to give existing tenants 

adequate notice in case they wish to relocate. 

3. Standardize all rents to $1,117 for two bedroom units and $1,217 for three bedroom units, 

bringing rent amounts that were previously “grandfathered in” to a standard rent amount 

for all GAMAT Homes. 

4. Wait to consider any increase in rents above the current $1,117 and $1,217 amounts until 

after a year of standardizing the amounts in all GAMAT Homes. With the affordability 

maximum at rental rates affordable to low-income (80% of Area Median Income) 

households, the rents could increase by $50-$60 based on current income limits. The City 

Council has indicated a desire to preserve a greater level of affordability in these units. In 

order to get all of the GAMAT Homes to the same starting place, staff recommends 

waiting until after the 13-14 lease year to initiate any increases to the $1,117 and $1,217 

rent amounts. 

5. Include a background check as part of the application and recertification process. Staff 

did not want to initiate this requirement mid-way with new tenants and not require 

existing tenants to comply. As part of the recertification process, this check will be 

included to review criminal and credit history of potential and existing tenants. 

Based on the direction to lease the twenty homes through August 31, 2014, staff recommends 

amending the existing management contract with Boschken Properties to extend it through that 

lease period and include the option for a one year renewal through August 2015. Staff makes this 

recommendation based on the performance of Boschken Properties to date and in an effort to 

maintain continuity in the marketing, income qualifying, and leasing underway. Alternatively, 

the City Council could choose to initiate another Request for Qualifications process, but based 

on the limited response to the March 2011 RFQ and the good performance of Boschken 

Properties, staff is supportive of maintaining the existing management company. 

Attachments 

1. Resolution Extending Property Management Contract with Boschken Properties for 

GAMAT Affordable Homes 


RESOLUTION NO. 13-XXX, SERIES 2013 

Attachment 1 

RESOLUTION AUTHORIZING EXTENSION OF THE PROPERTY MANAGEMENT 

CONTRACT WITH BOSCHKEN PROPERTIES FOR GAMAT AFFORDABLE HOMES 

THROUGH AUGUST 31, 2014 WITH OPTION FOR A ONE YEAR RENEWAL 

WHEREAS, the twenty single-family affordable units held by the Redevelopment Agency of the 

City of Davis from July 2010 until March 2011 and have since been held by the City of Davis 

were acquired through foreclosure but were originally provided within the City’s inclusionary 

housing program and were originally financed by the City and Agency, and then refinanced by 

the Agency with the goal of sustaining the units as affordable housing; and 

WHEREAS, the twenty units located at 2019 Arena Drive, 3159 Albany Circle, 3165 Albany 

Circle, 3186 Albany Circle, 3192 Albany Circle, 3198 Albany Circle, 2301 Glacier Place, 2303 

Glacier Place, 2305 Glacier Place, 2307 Glacier Place, 2309 Glacier Place, 2311 Glacier Place, 

5524 Marden Street, 5503 Tufts Street, 5509 Tufts Street, 5515 Tufts Street, 5521 Tufts Street, 

5527 Tufts Street, 5533 Tufts Street, and 5539 Tufts Street were provided as low-moderate 

income housing units under the City’s inclusionary housing ordinance; and 

WHEREAS, the City indicated in its November 13, 2012 motion that it sees value in filling the 

vacant units with low-income tenants in order to provide affordable housing opportunities and 

increase revenue for the purposes of covering costs of repairs and management of this City-held 

asset; and 

WHEREAS, the City does not have adequate staffing to manage these twenty units itself and 

needs to contract with a professional management company for these services. 

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Davis that the City 

Council approves extending the current contract with Boschken Properties for management of 

the properties stated above and commonly known as the GAMAT Homes through August 31, 

2014, with option for a one-year renewal based upon mutual agreement. This contract with 

Boschken Properties will continue to include the completion of unit preparation repair work and 

obtaining rental occupancy of all twenty units. The management fee will remain at nine percent 

of rents collected, plus the cost of maintenance repairs, and additional costs associated with 

tenant eviction and/or collections. A fee of ten percent will continue to be added onto all 

substantial work contracts that exceed typical maintenance and repairs. 

BE IT FURTHER RESOLVED that the City Council approves the necessary 

contracts/agreements and budget adjustments for the revenue and expenses relating to the 

property management of the twenty GAMAT units. 


Attachment 1 

PASSED AND ADOPTED by the City Council of the City of Davis on this 9 th day of April, 

2013 by the following vote: 

AYES: 

NOES: 

Joseph F. Krovoza 

ATTEST: Mayor 

Zoe S. Mirabile, CMC 

City Clerk

05B GAMAT Affordable Housing - City Council - City of Davis

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