Commentary: Why LincolnLift Represents an Innovative Approach to Affordable Student Housing

Just before the break we were evaluating the Lincoln40 affordable housing component known as LincolnLift.  It proposes to create an on-site affordable housing component at the project, in perpetuity.

The initial proposal on the site calls for 71 affordable beds.  A number of people have suggested that that 71 number is too low, while critics have also questioned whether the units are really affordable.

On Wednesday last week we compared the West Davis Active Adult Community proposal to the Lincoln40 affordable proposal, and there are a few points that need to be made.  First, the West Davis proposal can effectively subsidize the affordable component with a large number of for-sale homes.  That is something that Lincoln40 does not have the luxury of doing.

Second, Neighborhood Partners, which is building the affordable portion of the project, can seek tax credits that will not be available to Lincoln40.

And third, the developers can come back to the city for a further subsidy.

On the other hand, Lincoln40 is doing this with 100 percent internal cross subsidy, meaning that the student renters are effectively the only thing subsidizing those who will received the reduced
rates.

As was pointed out to me, that is a huge difference as the community is effectively subsidizing the seniors while the students are subsidizing themselves.

I point this out because it is easy to nitpick the project but if you don’t understand where the money comes from, you are flying blindly here.

The next question is why is the cost of the beds between $670 and $800 per bed.  As one commenter pointed out: “That’s supposed to be a ‘low income affordable student bed’? Seriously?”

Part of the problem, I think, is that most of the critics here do not rent.  They don’t realize that a two-bedroom unit in Davis is typically at least $1800 and a three-bedroom is at least $2300 a month.

There is actually a formula by which affordable housing rates are calculated.  They take 100 percent AMI (average median income) and they divide it by 12 and then multiply it by .3.

60% AMI

1 person: 32,297.5
32,297.5/12= 2,691.46
2,691.46*.3= 807.4

50% AMI

1 person:  26,906.25
26,906.25/12= 2,242.19
2,242.19*.3= 672.6

But actually the deal is better than you think.  In addition to rent, the tenants in the affordable units get free internet and cable.  They do not pay for electricity.  They do not pay for water.  They do not pay sewer and garbage.  Lincoln40 is located close enough to campus so that they can walk or bike, or at the worst ride the bus (which is also subsidized for students) – meaning that they can get away with no transportation costs.

So a student living at Lincoln40 would simply have to pay for rent at $670 or $800 a month, and food.  And low income students who have families would qualify for food stamps and WIC potentially, which would subsidize the cost of their food as well.

The question becomes, how affordable would that be?  Is it more affordable than splitting your $3000 rent seven ways and then paying for your utility costs?  There are clearly ways to live cheaper than this, but this is a way to provide someone with a more normal living arrangement while holding down the costs.

Perhaps there are ways to subsidize this project to make it even more affordable or increase the number of students that it serves.  But I do think we have to understand that a project like this lacks a lot of the funding opportunities that a senior project like West Davis has.

There are three key additional points that are worth considering.

First, the nice thing about holding this to AMI is that the project will become more and not less affordable over time.  That is because our rental rates are increasing far faster than the AMI will, and these will be held to increases in AMI in perpetuity.  That means if the AMI doesn’t change but rents double in the next decade, these rooms will rent for the same rate as they are today.

Second, while the number of units was immediately a focus for critics of the project, the developer points out that they could have simply paid their in-lieu fee and been done with it and they would have ended up paying quite a bit less than they are now.

Third, that being said, I do think we should try to figure out how to get the number of beds covered by this up to 100 beds.  Can the developer pay more than they have?  Easy for me to say.  Are there funding streams that are available?  Available in-lieu fees from other projects that can go into this?  Can the city make use of state affordable housing funds?

I think all of this should be explored.

Nevertheless, I think we can easily lose sight of the fact that this fills a real need in the community.  There are students who cannot afford the current rents.  A student living independently who is not being subsidized by their parents easily fits into the 50 percent AMI range, and they can pay just $670 for everything but food.

Given we have students living in their cars and on couches because of the lack of affordable housing, this is a major step forward.

Is it perfect?  By no means.  But it represents a good start and an innovative approach to dealing with a very real problem.

—David M. Greenwald reporting



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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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5 thoughts on “Commentary: Why LincolnLift Represents an Innovative Approach to Affordable Student Housing”

  1. Ron

    From article:  “So a student living at Lincoln40 would simply have to pay for rent at $670 or $800 a month, and food.”

    Just to clarify, this proposal is for income-qualified individuals, is limited to approximately 10% of the beds (in a shared room), and (in the example provided) that they pay no tuition.

    Also, no discussion regarding whether or not this program can be limited to students.

     

    1. David Greenwald

      There was a discussion in the column about whether and how it can be expanded beyond 71 beds – which seems like a reasonable question to ask.

      There was a discussion at the social services commission on the issue of whether the affordable housing can be focused on students but no definitive answer as of yet.  Today the topic of discussion is the issue of affordability.

      1. Ron

        O.K.

        Just wondering – does Lincoln 40 plan to charge for parking (for any of the occupants)? And, what is the rent projected to be for the non-subsidized beds?

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