What does the future of affordable housing look like in Davis? The council had the discussion and one thing that seemed clear from the comments, the city will no longer be able to have dedicated sites set aside on larger housing developments to build so-called big “a” affordable housing.
“Those days, for now, are done,” said Mayor Robb Davis. “We’re not getting any large developments that lead to that kind of availability to create the affordable set aside inside. The Cannery might have been the last one.”
What the council favors instead are projects that integrate affordable housing within the project. The council is in the process of reviewing inclusionary percentage in rental projects to see if they are stymying project proposals coming forward.
Mayor Robb Davis said “if our affordable 35 percent (requirement) is meaning that people are not going to build them, then it is time to review that.”
Councilmember Rochelle Swanson added, “Thirty-five percent of zero is still zero.”
She suggested that staff reach out to those building the projects to find out what some of the key financing issues are. She said, “It should probably be lower than (35 percent) so that we do see it being built.”
The council is also concerned about student housing – not just about building for students, but creating affordable student housing. Finally, with respect to impact fees, the council wants to look into a formula that is not just charging by the unit, but actually looking at the number of rooms and putting that back into balance.
Brett Lee, for example, sees a mismatch “between fees being based on front doors versus bedrooms.” He said he wanted to see the impact fees being based upon bedrooms. “I’d also like to see density
based upon bedrooms,” he said. He said it should not be how many units per acre but rather how many bedrooms per acre that is the key indicator of density. “I think it just is a more sensible policy to track the number of bedrooms.”
Mayor Pro Tem Lee noted that Sterling limited the occupancy to one student per bedroom, whereas Lincoln40 is looking at two students per bedroom. He said, “Given the extreme rental housing shortage, is it so far-fetched to say a year from now, well we’re going to have four per bedroom?” Given the shortage of rental units, “students would be willing to live in that situation.” But he wants that to count toward density.
Luke Watkins, a longtime affordable housing developer in Davis, told the Enterprise in a recent article that he views the move away from land-dedication sites means that “the city is heading in the wrong direction.”
In a lengthy email to council, which he copied to the Vanguard and others, Mr. Watkins said that one of the challenges is how a city serves households of people who are clearly struggling simply to survive.
From his perspective, the answer is not to “reduce the City’s affordable housing requirement” and it’s also not to “exempt certain project unit types” or to “allow accessory dwelling units to count as affordable units.”
He added, “And it’s not to require that the affordable units be integrated into market-rate student apartment complexes.”
He writes, “There seems to be some concern that market-rate apartments need more concessions from the City to make them economically feasible. While the City should definitely take some immediate cost-neutral specific steps to incentivize production of smaller unit types (like adjusting its density calculation and fees to reflect the size and bedroom count of each unit), it is not the inclusionary affordable housing requirement halting the production of market-rate apartments.”
From his perspective, “It is simply the lack of available zoned multifamily sites. The inclusionary requirement is of course a cost… but if the City’s inclusionary requirement can be met by having the developer donate land, or pay a reasonable in lieu fee, then it is a cost that can be absorbed into the sales price of the land.”
Luke Watkins also argues, “Exempting certain types of projects from the inclusionary requirement may seem like an innovative way to encourage downtown housing, or condominiums that will be more affordable than single family homes. However it undermines the City’s most critical affordable housing goals, and results in fewer resources to support the creation of special needs housing. There is a good reason to exempt smaller projects from the land dedication requirement, because a land dedication site needs to be big enough for at least 40 units, in order to reach the minimum necessary economy of scale.”
Mr. Watkins was critical of the Cannery agreement that allowed accessory dwelling units to meet the affordable housing requirement “without any rent limitation or income screening for the tenants.” He said, “Even if there is income screening to ensure that the units go to households that need the affordable housing, what is the chance that very many of the units will be rented to a special needs household, who would have to pay a rent that is likely more than their entire monthly income?”
His biggest concern concedes that it is desirable to integrate the required affordable housing units into the market-rate housing projects.
But, he says, “our inclusionary housing policy does not require market-rate developers to provide units that are affordable to extremely low-income disabled households. So the 10% very low-income and 25% lower-income affordable housing requirements (which actually only total 26% of the market-rate units, because a density bonus is allowed) will never be affordable to the disabled households.”
—David M. Greenwald reporting