Defect Remediation Project West Campus Point March 13

Defect Remediation Project West Campus Point March 13, 2007 1

What Is West Campus Point? • 65 units • Built in 1986 • Affordable housing for faculty • 71 ladder faculty members (9% of total) • Very successful in recruiting and retaining faculty • Managed by WCP Homeowners Association 2

WCP Homeowners Association • Governed by Board of Directors elected annually • Members usually serve 2 – 3 years • Manages property with assistance from Town 'N Country Property Management • Monthly financial reports and Board meetings • Regular maintenance “walk-arounds” 3

WCP Long-term Financial Planning • Comply with California law governing homeowners associations • Annual budgeting and auditing for both short-term and long-term maintenance • Long-term cost estimates derived from professional “reserve studies” – every 2 – 3 years – Analyze common infrastructure lifetime maintenance and replacement costs – Fully fund recommendations • Some issues have transcended scope of any HOA 4

Leak Remediation Efforts 5

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Leak Locations 11

Roof Drainage 12

Roof Drainage 13

Roof Drainage 14

Roof Drainage 15

Roof Drainage 16

Roof Drainage 17

Roof Drainage 18

Roof Drainage 19

Roof Drainage 20

Roof Drainage 21

Roof Drainage 22

Drain Outlets 23

Envelope Penetration 24

Envelope Penetration 25

Envelope Penetration 26

Envelope Penetration 27

Door and Window Leaks 28

Door and Window Leaks 29

Shoddy Construction 30

Shoddy Construction 31

Shoddy Construction 32

Rot and Mold 33

Rot and Mold 34

Rot and Mold 35

Rot and Mold 36

Additional Issues • Soil grading (flooding) • Communication between WCP and University • Cost recovery mechanism • Valuation of units 37

Guiding Principles • WCP Board needs to be an equal partner with University in shaping and approving all aspects of the solution • No one wants to go through this #$#%&! again! 38

Action Items • Regular operational meetings • Access to senior administrators • Timetable • Periodic high-level progress reviews 39

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WCP Finances • Everett Kirkelie created the first budget in 1986 • Yearly Budgeting > Homeowners’ Assessments 2007 Assessments based on reviews conducted every 2 -3 years of 30 -year infrastructure needs Operating… 2/3 Reserves… 2/3 $323 per month 1) Landscaping 2) Insurance 3) Management $168 per month 1) Roofing 2) Paint 3) Street 41

Total Monthly Payment Per Unit 2007: $491/month $177, 000/(30 Years) 1987: $135/month $48, 600/(30 years) 1987 Scaled by Faculty Salary Scale (CPEC) Original budget created by Everett Kirkelie Sources: WCPHOA Annual Reports, BLS, CPEC 42

Total Monthly Assessment Per Unit 2007: $491/month $177, 000/(30 Years) 1987 Scaled by Consumer Price Index 1987: $135/month $48, 600/(30 years) 1987 Scaled by Faculty Salary Scale (CPEC) Sources: WCPHOA Annual Reports, BLS, CPEC 43

Assessment Based on Reserve Studies Total 100% funding of recommended assessments CPI Roof/Deck/Trellis Sources: WCPHOA Reserve Studies, BLS 44

Assessment Based on Reserve Studies Total CPI Roof/Deck/Trellis Sources: WCPHOA Reserve Studies, BLS 45

Why Reexamine the WCP “Index” for Appreciation of Units over Time? n n n To restore original intent of both the University and faculty To increase the chances that WCP owners would be able to move out, thus freeing the homes for future recruits. To create a common standard to apply across all UCSB faculty housing owners at WCP, North Campus, etc. based on current published economic information. 46

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Total Percentage Change in Real Estate Prices and CPI, 1975 QI – 1985 QIV n n n This graph Approximates a graph shown to first buyers to justify using CPI as index. Shows that CPI and real estate prices rose at similar rates, on average, in base period. 48

1986 -2006 Total Percentage Change Since 1986 -IV In CPI and Three Housing Price Indices (Housing Data: Office of Federal Housing Enterprise Oversight) 450 350 California Housing USA Housing CPI National S. Barbara Co. Housing 300 250 200 150 100 50 Year 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 0 1986 Cumulative Percent Change 400 49 http: //www. ofheo. gov/HPI. asp

1986 -2006 Total Percentage Change Since 1986 -QIV in CPI and Three Housing Price Indexes n Inflation in housing prices has far outstripped the CPI in the last decade n “Santa Barbara Co. ” trend data are for the “Santa Barbara-Santa Maria Metropolitan Statistical Area” n OFHEO data cover n Single family homes n Repeat sales of same properties: “constant quality” n Conforming mortgages only, up to $417 K n Readily available data 50