(a) Sales; control period. The sale price of a productivity housing unit is controlled under this subsection for 10 years after the date of original sale. During the control period, a productivity housing unit must only be sold to an individual with a household income that does not exceed the area-wide median income.
(b) Resale price during control period. Except for foreclosure proceedings, a productivity housing unit constructed or offered for sale under this Article must not be resold during the applicable control period for a price greater than the original selling price plus:
(1) a percentage of the unit's original selling price equal to the increase in the cost of living, as determined by the Consumer Price Index.
(2) the fair market value of capital improvements made to the unit between the date of original sale and the date of resale;
(3) an allowance for closing costs which were not paid by the initial seller, but which will be paid by the initial buyer for the benefit of the later buyer; and
(4) a reasonable sales commission.
(c) Resale price after control period ends.
(1) For the first sale of a productivity housing unit after the applicable control period ends that exceeds the allowable price specified under subsection (a), the seller must pay to the Housing Initiative Fund one-half of the excess of the total resale price over the sum of:
(A) the original selling price;
(B) a percentage of the unit's original selling price equal to the increase in the cost of living as determined by the Consumer Price Index;
(C) the fair market value of capital improvements made to the unit between the date of original sale and the date of resale; and
(D) a reasonable sales commission.
The Director must adjust the amount paid into the Housing Initiative Fund in each case so that the seller retains at least $10,000 of the excess of the resale price over the sum of the items in subparagraphs (A)--(D).
(2) The Director must find that the price and terms of a sale covered by paragraph (1) are bona fide and accurately reflect the entire transaction between the parties so that the full amount required under paragraph (1) is paid to the Fund. When the Director finds that the amount due the Fund is accurate and the Director of Finance receives the amount due, the Director must terminate the controls imposed by this section and execute a release of all restrictive covenants.
(d) Limits on rents. Unless the unit was previously sold under subsection (c), any productivity housing unit built or offered for rent under this Chapter must not be rented for 20 years after the date of original rental at a rent greater than the rent allowed for productivity housing units under this Article and applicable regulations. Rent may include parking but does not include utilities when they are paid by the tenant. Different rents must be set when utility costs are paid by the owner and included in the rent. During the applicable control period, a productivity housing unit must only be rented to an individual with a household income that does not exceed the limits set under this Article.
(e) Foreclosure. If a productivity housing unit is sold in a foreclosure proceeding begun by a lending institution, the Director must terminate the productivity housing controls and execute a release of all restrictive covenants if all the proceeds of the sale, if any, that must be paid to the Housing Initiative Fund have been paid. If a foreclosure sale of a productivity housing unit occurs during the applicable control period, any price paid at the foreclosure sale that exceed the price established under subsection (b) plus any reasonable costs and fees of foreclosure must be paid into the Housing Initiative Fund. If a productivity housing unit is foreclosed after the control period, subsection (c) applies. If the unit sold was a rental unit, the Department must calculate the sale price that would have been permitted at the date of original rental as if the unit had been originally offered for sale.
(f) Bulk sales. This section does not prohibit the bulk sale or transfer of all or some rental productivity housing units if the buyer is bound by all covenants and controls on the productivity housing units. (1996 L.M.C., ch. 25, § 1.)
