Commentary: UC Davis and City Plans Would Get Us Near the Five Percent Vacancy Level

In May of 2016 UC Davis announced that they would commit in the ten-year Long Range Development Plan (LRDP) to build roughly 6200 new beds on campus.  At the time, that was a big step forward as it would take the university from housing roughly 29 percent of all students to 40 percent.

However, activists and the city council continued to press for more.  By the end of 2016, the council passed a resolution calling on the university to provide on-campus housing for 100 percent of all new students and 50 percent of the total student population.  The university, in response, balked, although eventually they allowed that they would be willing to look for ways to increase their share.

At the same time, the council put together a subcommittee comprised of Rochelle Swanson and Robb Davis, who would work with the university and meet with them behind the scenes.  That hard work has begun to pay off.  Back in November or so, the Vanguard learned that the university would be coming out with an announcement in January to expand their on-campus housing.

That announcement came this week from new Chancellor Gary May and the campus agreed to increase their on-campus housing from 6200 new beds to 8500 new beds.  That doesn’t get the campus all the way to 10,000 new beds which would have hit the 50 percent mark, but it splits the difference which is just under 46 percent of all students housed on on campus.

There are those in the community who would clearly like to see the university go to 50 percent.  There are those who believe that the university should be building housing to accommodate their own housing
demands generated from enrollment growth.  There are certainly those who believe that the city should not have to adjust its planning processes to accommodate university enrollment growth.

But there are also those who are more practical.

The Vanguard was among those who made the call for the university to increase on-campus housing up to 50 percent.  But we also recognized that it was impractical for the university to do it alone.

The chancellor in his announcement indicated that he was encouraged by the city council’s recent approval of housing developments in Davis.  Said Gary May, “While we are planning the most ambitious student housing construction campaign in campus history, housing market changes cannot be resolved by UC Davis alone.”

He said, “Providing a greater abundance and diversity of housing should help ease some pressure on the Davis housing market.”

The fact of the matter is that the 0.2 percent rental vacancy rate was problematic for the community.  It created pressure and speculative buying that converted single-family homes into mini-dorms and student housing rentals.

It forced students to occupy with multiple students per room and crammed large numbers into small spaces.

It put students at risk for exploitation, with landlords failing to provide basic services and students having little to no recourse.

How serious a problem has this been?  The 0.2 percent vacancy rate means that, at any given time, of the 9969 units that were surveyed in the report (accounting for 83 percent of all multifamily housing stock) there are less than 30 units available to rent.

Some will no doubt see the increased number of student beds accommodated by campus as alleviating the need for more student housing in Davis.  We disagree.

The reality is that 10,000 new beds was a good goal, and would have helped ease the crunch, but was not going to get the city to their goal of five percent vacancy.

A five percent vacancy rate creates a much healthier market as it allows renters to move from location to location and not be locked into a bad situation.  It means that, at any time, there would be several hundred available units for people to move into.

With the university now pledging 8500 beds and another 5000 to 6000 beds in the pipeline in the city, the city and campus could be looking at between 13,000 and 14,000 new beds on the market in a relatively short period of time – with the approved development of Sterling Apartments, Lincoln40 (which was approved by the planning commission last night), Plaza 2555, and the proposed Nishi project which could go to the council by February 6.

The 2300 additional beds promised in the LRDP would be built at Orchard Park and West Village and could come on line as soon as 2020, right around the same time that you might see apartments opening at places like Sterling and Lincoln40, assuming council approves it next month.

One developer told the Vanguard that with a large number of new rental units coming on line, much of it at the same time, you could have a period of time where there is actually a glut on the market as students change their habits from piling into single-family homes and living outside of Davis and commuting.

They believe that the new market forces will force rental rates down and open up single-family homes to families.  A key point they made is that many people are buying single-family homes that are in poor shape and then converting them to multi-student rentals.  They see this sort of speculative buying as not in the best interest of families or students.

By re-shaping the market then, we can start to change the trajectory of our community.

There will always be a tension between UC Davis and the slow-growth inclined host community of Davis.  However, the planning by the university to accommodate up to 46 percent of students on campus is a clear game-changer.  Think about it, going from 29 percent to 46 percent is a nearly 59 percent increase in the amount of housing on campus.

Combine that with efforts in the city, and we can end the student housing crisis and turn our attention to other areas of policy concern.

—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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58 thoughts on “Commentary: UC Davis and City Plans Would Get Us Near the Five Percent Vacancy Level”

  1. Don Shor

    The council needs to press the university for a MOU to phase out the master leasing, since master leasing effectively takes private apartments off the market and exacerbates the current problem. Nishi could remain for master leasing. For those who are concerned about air pollution exposure, master leasing by UC could effectively limit the duration of exposure.

    They also need to get UC to commit to a construction timeline, especially for West Village. It has been subject to delays before, and needs to come on line as quickly as possible to reduce the backlog of demand.

    To get the apartment vacancy rate down, all of the private proposals need to go forward, especially Nishi. We finally have an opportunity to rectify a long-term housing shortage that has led to serious housing insecurity in Davis. It will require both public and private development. The council should move expeditiously on all of the private proposals that are coming to them and to the voters.

  2. Ron

    The finance and budget commission has apparently not reviewed the various megadorm proposals within the city, to determine their fiscal impact. However, the Nishi financial analysis (from one of the city’s finance and budget commission members) shows a net deficit to the city in the amount of $11,157,205 at year 15 (which would continue to increase every year after that). (The deficit starts in year 2.)

    http://documents.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/Finance-And-Budget-Commission/Agendas/20180108/Item-7Ai-Salomon-Revised-Nishi-Model-(1-3-18).pdf

    Another analysis posted on the Vanguard showed an ever-increasing deficit for Sterling, starting in year 15.

     

    1. Ron

      (Actually, the deficit starts in year 1, but was not carried over into the cumulative total.)

      A suggestion was recently made to the finance and budget commission to review the megadorm proposals (to determine the fiscal impact to the city), but was declined at that time.

    2. Jeff M

      Ron – Every time I read you or others write the word “megadorm” I instantly see it as indication that the speaker or writer is a “megaNIMBY”.    And in this case it appears that the former is hyperbole but the latter is not.

      With respect to housing development in and on the periphery of the city, is there anything that you would be for?

      1. Ron

        Jeff:  I’m just pointing out the $11 million (plus) deficit that one of the commissioners calculated for Nishi, by year 15.  And, that a suggestion was made to the commission to analyze the other large-scale proposals (using whatever name you’d prefer).  However, that suggestion was declined.

        For those advocating new taxes (or commercial developments that would include even more housing), you might want to look at the fiscal impact of the current proposals, first.  (Especially since some of our representatives do not seem to be interested.)

         

         

         

         

        1. Jeff M

          I am aware of some analyses that has high density rental housing eventually resulting in net negative revenue to the city.    But there are a lot of loose assumptions being used to draw those conclusions.  One is that we do not see a change in city employee costs.  I think we will see a change in city employee costs within 15 years.  It hast to happen.  It is unsustainable.   I think we will have some successful legal challenges that prevent changing of retirement benefits for existing employees.  I also think we will see more outsourcing and Joint Powers Agreement moves.

          But all housing is net positive initially.   And when married with commercial development, the secondary net positive flows (for example, more high-spending young professionals and young families coming to town… helping to make up from the low-spending students and retirees) help push it even more years as being net positive.

          Look, we keep seeing these emergency new tax measures coming up because we keep rejecting development that adds to the tax base.   It is a bit disingenuous to reject based on a 15-year horizon when the budget needs are here and now.

        2. Ron

          Jeff:  “But all housing is net positive initially.”

          Not sure that’s true.  I’ve provided an example above (for Nishi), where it may not be (even from year 1).

          Jeff:  “And when married with commercial development, . . .”

          Not sure why commercial development (now) has to be “married” to housing.  That’s what has caused some to abandon their initial support for a peripheral commercial development. Some have referred to that as a “bait and switch”, regarding the innovation centers.

          And now, one of those sites (Nishi) has totally eliminated that “pesky” commercial development.

          Also, the city receives a very limited share of property taxes paid.  In addition, the city must share these taxes with the county, for peripheral developments.

          For those interested in commercial development, I would think that their initial concern might be the proposed multiple conversions of existing commercial/industrial sites (within the city) to accommodate more housing.  And yet, we rarely hear a peep, regarding that.

          Jeff:  “I think we will see a change in city employee costs within 15 years.”

          I agree – costs for city services will likely continue to go up, especially when we’re no longer paying attention. (That is, if history repeated throughout the state is an accurate predictor of the future.)

           

        3. David Greenwald

          “I am aware of some analyses that has high density rental housing eventually resulting in net negative revenue to the city.”

          Jeff: the problem here is if you look at fiscal analysis you have all sorts of problems.  A lot of the “costs” are actually theoretical based on a theoretical adding of staff.

          Second, as you point out there are project increased costs for staff (but again, if you are not actually adding staff, it’s not really a negative).

          And third, and probably most important, I looked at fiscal analyses where 15 years out a conservative model predicted them to turn negative.  At some point you really are not looking at the costs of a development rather than costs to staff the city.

          The result is that such analyses are not particularly helpful.  The question is do we need housing and if so, where should we put it.  And then you make sure the impact fees are appropriate and fix costs and revenues at the city level (because that’s really where the problem is occurring) and that’s what Ron doesn’t want to acknowledge in his quest to defeat housing projects.

        4. Ron

          David: ” . . . the problem here is if you look at fiscal analysis you have all sorts of problems.  A lot of the “costs” are actually theoretical based on a theoretical adding of staff.”

          “Second, as you point out there are project increased costs for staff (but again, if you are not actually adding staff, it’s not really a negative).

          You’ve made this false statement repeatedly, in the past.  (Actually, your “second” point is the same as your first.)

          By making this statement, you’re continuing to disregard disregarding basic accounting principles, regarding cost allocation.

          Your method ignores increased staff time (e.g., police/fire service calls), which will occur even if staff are not added.  It also assumes that staff have “slack time” in which they are not already working.  When the “tipping point” is finally reached, then your method would inappropriately assign all incremental costs to that future development (or to the city, in general).

          David:  “And third, and probably most important, I looked at fiscal analyses where 15 years out a conservative model predicted them to turn negative.  At some point you really are not looking at the costs of a development rather than costs to staff the city.

          It defies logic to suddenly change the allocation of costs to the city in general, as soon as a particular development creates a permanent and ever-increasing deficit.  It would make about as much “sense” to for the city to “claim” the surplus (from the first few years), and then “assign” the costs solely to the development, when it starts creating a permanent, ongoing deficit. In reality, both are created by the development.

          You’ve also never been able to identify the revenues or costs associated with the model that you’re referring to.  It’s entirely possible that the model underestimated the ongoing costs to the city.

           

           

        5. David Greenwald

          Staff time is a fixed cost.  Unless you add staff, which they are not, there is no additional cost.  Again, what you keep ignoring is that by year 15, the problem of costs of “development” are simply a matter of fixing costs and revenue at the city level rather than the actual cost of development.

        6. Ken A

          At the end of the day the only reason a city like Davis has “negative net revenue” from a development is because the elected officials allow it by not increasing revenue or cutting expenses.

           

           

        7. Ron

          David:  “Staff time is a fixed cost.  Unless you add staff, which they are not, there is no additional cost.  Again, what you keep ignoring is that by year 15, the problem of costs of “development” are simply a matter of fixing costs and revenue at the city level rather than the actual cost of development.”

          Staff time is not necessarily a fixed cost (even if staff numbers remain the same to accommodate a given development).  That’s why police/fire, for example, have overtime opportunities.

          Again, your method ignores the fact that (at some point, as developments keep getting approved), a tipping point is reached, in which additional staff are needed.  You’ve totally disregarded how to allocate costs when that occurs.

          Also, you’re simply defying logic, by stating that costs associated with a development “disappear”, as soon as it starts creating a permanent, ongoing deficit (which will then be borne by the city, as a whole).

        8. David Greenwald

          What I said is that at some point you’re not looking at the costs of a development.   What you see is the cost of running the city and the way you handle it is by fixing the revenues and expenditures in the city.

        9. Ron

          You’re simply defying logic, by stating that costs to provide services for a development “disappear”, as soon as it starts creating a permanent, ever-increasing deficit (which will then be borne by the city, as a whole).

          When your argument lacks basic logic, repeating it doesn’t lend it any more credibility.

        10. David Greenwald

          Again what I said was that at a certain point, these are not the effects of development, they are an artifact of our revenue and expenditure system and solved through a citywide adjustment.

  3. Roberta Millstein

    David, in the Chancellor’s op-ed he stated, “This housing plan significantly exceeds our planned enrollment growth .”  Yet you’ve said that this new plan will not achieve the 50/100 that the City, the County, etc., asked for.  Can you shed any light on the discrepancy?

      1. Roberta Millstein

        50/100 was never mathematically possible.

        Surely you just mean to suggest that getting to 50% of total enrollment would automatically ensure 100% of new enrollment (but not vice versa), not that 50/100 is mathematically impossible.

        That being said, I do recall Eileen Samitz explaining the 50/100 numbers, but there have been so many Vanguard articles on this topic that I don’t have any hope of finding the explanation.

        1. David Greenwald

          I think the concept is pretty simply, 100 refers to the fact that they would house all of the new enrollment growth on campus.  50% refers to the fact that they will build additional housing to ensure that they house half of all students on campus.

          1. Don Shor

            http://davismerchants.org/vanguard/UC%20housing%20LRDP%20Jan%202018.png
            They were always going to exceed 90% of new enrollment. It would take much more than 100% housing units for new enrollment to provide 50% of total enrollment.

          1. Don Shor

            If you want to have a private conversation with David, email him. When you post on a public blog, anybody can and will reply.

        2. Roberta Millstein

          But you’re not answering the question either.  And since the question was about a discrepancy in what David said, I figure it’s up to him to resolve it.

          1. Don Shor

            I did answer the question.
            The Chancellor is correct that they will exceed the 100% of planned enrollment increase.
            David is correct that they will not meet the 50% of total enrollment.
            The numbers are there in front of you.

        3. Roberta Millstein

          1. You didn’t say that before.

          2. That still doesn’t tell me why David wrote what he wrote, which unless you’re in his head, I really don’t see how you can answer it.

        4. Roberta Millstein

          And if you’re wondering, “What’s my point?” my point is that I am trying to understand David’s point, which you are not helping with, since you are not David.  But thanks for wasting your time and my time.

          1. Don Shor

            But thanks for wasting your time and my time.

            Insults. The last resort of someone who has no argument.

        5. Roberta Millstein

          But thanks for wasting your time and my time.

          Insults. The last resort of someone who has no argument.

          That’s not an insult.  And as I said already, I am not trying to make an argument in this thread.  I am trying to get an answer to a question.

  4. Roberta Millstein

    One developer told the Vanguardthat with a large number of new rental units coming on line, much of it at the same time, you could have a period of time where there is actually a glut on the market as students change their habits from piling into single-family homes and living outside of Davis and commuting.
    They believe that the new market forces will force rental rates down and open up single-family homes to families.

    This is the fantasy that some developers are selling to those who want more housing for social justice reasons.  But when that fantasy never materializes, the argument will be for still more growth.  Perhaps at that time the social justice warriors will realize that they’ve been duped into a picture of growth for growth’s sake without actually getting the affordable housing that they seek.

    1. David Greenwald

      It’s not a fantasy, it’s basic econ 101.  Right now you can buy an older house and turn into a revenue stream.  Add 13,000 units of housing and the incentive to do that is greatly reduced.  And yes, over time, as the market adjusts, students will tend toward the multi-family housing rather than the single-family homes.

    2. Ken A

      If Roberta thinks that “supply and demand” is a “fantasy” maybe she can point out a SINGLE place in America where rents did not go down after thousands of apartment units came on line in a single year.

      P.S. To save time you can just call a some gray haired investment real estate guys who will tell you that EVERY time you build thousands of apartment units, self storage units, retail suites or office suites in a short period of time it results in rents going down (just like every time like right now in Davis when demand increases with little to no new supply results in the rents going up)…

      1. Ron

        UCD may choose to increase demand even further, by pursuing even more non-resident students who pay triple the amount of tuition.  There’s nothing to prevent them from doing so, as long as the demand remains strong for their service.  And, sticking the costs and impacts to the city.

        Doesn’t UCD have an ongoing recruitment effort in China, for example? (Something that I recall, from a comment on the Vanguard. Haven’t verified it, myself.)

      2. Howard P

        If supply/demand is a ‘fantasy’ why do many oppose further growth to bolster their “investment”?   SF housing is not an “investment”… it’s a ‘hedge’ against fluctuating rental costs, and inflation… and when paid off, personal security against costs in retirement…

        MF housing developers look at “investment”, based on market… anyone who “invests” in a SF residence for their own use, is ‘gambling’… but hedging their bets as to uncertainty.

        I’ve owned two houses… the first we had as a primary residence for 13 years, but due to factors in the economy, when we bought the second house as a residence, we pretty much had to turn it into a rental, but at the ‘end of the day’ it was a minor “loser” in the first years, and the net income was never more than ~ 6% of our income.   So, we ended up selling it, and got hit up big time, by LT capital gains taxes.  We did come out ahead, at the end of the day.

        Just ask Suze Orman, or most other financial advisors.

        SF purchase is not an “investment”, unless you read the fine print about “past performance is no guarantee of future performance”.  It’s a myth that a lot of folk still believe in, or want to manipulate supply to increase their “odds”.  It’s a place to live.

        Have folk learned about HARP financing?  For those who went ‘underwater’ because of supply/demand?

        To deny supply/demand is to be “in denial”… to think that doesn’t apply to Davis, research the number of defaults/foreclosures in Davis during the last 10 years… have not the time, nor inclination to prove the obvious.

      3. Richard McCann

        Ken, yes, you’re correct. The “boom/bust” cycle in real estate has been well documented in the economics literature. The 2007 housing crash is just the latest example of how overbuilding led to falling housing prices.

      4. Sharla C.

        UCD may choose to increase demand even further, by pursuing even more non-resident students who pay triple the amount of tuition.

        UC Davis has the highest number of CA resident students of any of the UC’s.  I think we are at around 24,000+ CA residents attending UC Davis.  This is where our rapid growth is – not international students.

        1. Roberta Millstein

          UC Davis has the highest number of CA resident students of any of the UC’s.  I think we are at around 24,000+ CA residents attending UC Davis.  This is where our rapid growth is – not international students.

          Fewer CA residents were admitted this year as compared to last year — it was admittedly a small reduction, but definitely a reduction.  Definitely not “growth” or “rapid growth.”

    3. Roberta Millstein

      Ken, David, you need to go beyond basic Econ 101 supply and demand models and recognize that they only apply in a closed system. When you are surrounded by a housing shortage and high prices, as we are, you cannot unilaterally build your way out of the problem. There are plenty of people in the Bay Area, etc., who would love to fill the relatively reasonably price housing that Davis offers. We are not a closed ecosystem. But I have said this many times before, as have others. Yet you continue to endorse the fantasy.

      1. Jeff M

        “Plenty of people in the Bay Area”

        Are you talking about retirees?  Because I don’t know anyone working in the Bay Area that would want to commute to and from Davis.

        Is your concern retiree housing or “megadorms” as you keep erroneously referring to the current projects on the table?  If the later, then your concerns seem very baseless.

        1. Roberta Millstein

          Jeff: “Plenty of people in the Bay Area”
          Are you talking about retirees?  Because I don’t know anyone working in the Bay Area that would want to commute to and from Davis.
          Is your concern retiree housing or “megadorms” as you keep erroneously referring to the current projects on the table?  If the later, then your concerns seem very baseless.

          I’ve never referred to megadorms, except maybe with quote marks.  You’re confusing me with someone else, probably Eileen.

          No one wants to commute from Davis to the Bay Area, true.  But some people have no choice — they cannot afford housing there.  Yes, working people.  But you’re also right that wealthy retirees (who, if they were in the right sort of tech job, might be relatively young) might seek to move here.

      2. Ken A

        When I wrote: “EVERY time you build thousands of apartment units, self storage units, retail suites or office suites in a short period of time it results in rents going down” I was not talking about a “closed system” (or “walled city”).  When you say “There are plenty of people in the Bay Area, etc., who would love to fill the relatively reasonably price housing that Davis offers.” what do you think they are waiting for?  While apartment vacancy and the supply of homes for sale have remained low in Davis, there has not been a single day in the last 20 years when a guy could not drive up from SF and find an apartment in Davis to rent.  We have the same situation with homes for sale if someone wants to cash in and sell their home in Piedmont, buy a cheaper place in town and drive to their job in Oakland every day (listening to books on tape) nothing is stopping them (again there has not been a SINGLE DAY in over 20 years when you could not drive to Davis and have many homes available for sale).

        P.S. Anyone that writes that we “are surrounded by a housing shortage and high prices” has either has never even looked at the vacancy rates and prices in Woodland, West Sac, and Dixon (the towns that “surround” us) or is just a “Mega-NIMBY” telling lies trying to do anything to stop new construction that will result in a drop in their home equity (and/or the rent the grad student is paying to rent their garage or spare bedroom)…

        1. Roberta Millstein

          There are plenty of people in the Bay Area, etc., who would love to fill the relatively reasonably price housing that Davis offers.” what do you think they are waiting for?

          They’re not waiting.  It’s happening already, e.g., in the Cannery.

          Anyone that writes that we “are surrounded by a housing shortage and high prices” has either has never even looked at the vacancy rates and prices in Woodland, West Sac, and Dixon (the towns that “surround” us)

          Yes, those are the immediate surroundings, but people can and do venture farther than that.

          or is just a “Mega-NIMBY” telling lies trying to do anything to stop new construction that will result in a drop in their home equity (and/or the rent the grad student is paying to rent their garage or spare bedroom)…

          Insults.  The last resort of someone who has no argument (and hides behind anonymity).

        2. Ron

          From article, below:

          “The weekday commute to the Bay Area from the Sacramento region isn’t easy. It can range from a 90-minute train ride to Richmond to a multi-hour slog to Silicon Valley.

          More than 17,000 Sacramento-area residents make the commute anyway, according to a Bee review of the latest census data.”

          Read more here: http://www.sacbee.com/news/local/article190050994.html#storylink=c
          http://www.sacbee.com/news/local/article190050994.html

          Of course, this also wouldn’t account for Bay Area transplants to Davis who then pursue work/careers in the region (“guilty” – as charged) 🙂 , or those who directly retire to Davis. Nor would it account for families of such individuals.

        3. Ron

          Another article, showing that “build anything/everything Sacramento” experienced the fastest growing rent in the nation last year.  (Hey, that would make an appropriate city motto, for them.)

          Who cares if it’s also largely in a floodplain, right? (Somewhere, I read that it’s second only to New Orleans in that department.)

          http://www.abc10.com/news/local/sacramento/sacramento-experienced-the-fastest-growing-rent-in-the-nation-in-2017/505203427

        4. Ken A

          I wonder who told Roberta that the new residents of the Cannery are all driving (or taking Amtrak) to the Bay Area (it might have been the same person who said they “can’t afford housing there” that was unaware that there are thousands of homes closer to the Bay Area for even less money)  It is not just in the cities “surrounding” Davis but in every county that actually touches the San Francisco Bay has LOTS of housing selling for less than the homes in the Cannery.

          P.S. It is not an “insult” to point out that many people in town don’t want to see home values or guest room/AirBnB rents drop (there are probably some people out there, but the percentage of people giving rent reductions or taking out home equity loans to donate money to charity is very low)…

        5. Roberta Millstein

          I wonder who told Roberta that the new residents of the Cannery are all driving (or taking Amtrak) to the Bay Area (it might have been the same person who said they “can’t afford housing there” that was unaware that there are thousands of homes closer to the Bay Area for even less money)  It is not just in the cities “surrounding” Davis but in every county that actually touches the San Francisco Bay has LOTS of housing selling for less than the homes in the Cannery.
          P.S. It is not an “insult” to point out that many people in town don’t want to see home values or guest room/AirBnB rents drop (there are probably some people out there, but the percentage of people giving rent reductions or taking out home equity loans to donate money to charity is very low)…

          I didn’t say that they were “all” coming from the Bay Area.  But some of them clearly did, and not by accident, because the Cannery was heavily advertised in the SF Chronicle, which I read daily.
          Your insult, so proudly lofted from your veil of anonymity, protected by the Vanguard that refuses to enforce its own “policies,” was calling me “Mega-NIMBY” telling lies.  As for a claim that I am concerned about my home equity or my Air B and B, that’s simply groundless. And has nothing to do with the fact that people from the Bay Area are interested in homes in Davis.  Nice try at diversion, though.

        6. Ken A

          I wonder why Roberta found the need to write “I didn’t say that they were “all” coming from the Bay Area.” (Did anyone say they were ALL moving from the Bay Area)?

          I was hoping she would take a look at housing prices in the Cannery and in the Bay Area and realize that (despite any ads in the Chron.) Not a single person is moving to the Cannery because they have “no choice — they cannot afford housing” (in the Bay Area).

          P.S. I get why people don’t want families moving to Davis from LA (especially of they are big Dodger fans) but why so much hate for people moving from the Bay Area (most who are moving for new jobs in Davis and/or Sacramento)?

        7. Roberta Millstein

          I wonder why Roberta found the need to write “I didn’t say that they were “all” coming from the Bay Area.” (Did anyone say they were ALL moving from the Bay Area)?

          Yes, Ken, you said it.  You said, “I wonder who told Roberta that the new residents of the Cannery are all driving (or taking Amtrak) to the Bay Area.”  Presumably you can see the word “all” in that sentence.

          I was hoping she would take a look at housing prices in the Cannery and in the Bay Area and realize that (despite any ads in the Chron.) Not a single person is moving to the Cannery because they have “no choice — they cannot afford housing” (in the Bay Area).

          Bay Area home prices hit record in November. http://www.sfchronicle.com/bayarea/article/Bay-Area-residents-moving-to-Sacramento-relocating-12460411.php
          Bay Area home prices hit record in November. Will they stay there? http://www.sfchronicle.com/business/networth/article/Bay-Area-home-prices-hit-record-in-November-Will-12460408.php

          P.S. I get why people don’t want families moving to Davis from LA (especially of they are big Dodger fans) but why so much hate for people moving from the Bay Area (most who are moving for new jobs in Davis and/or Sacramento)?

          No hate.  You’re changing the subject.  The point is that we cannot assume that we can just build and easily get to 5%, as this article maintains.  Rather, we will build, more will move in, and we’ll be exactly where we are, only with the problems of a city that has built too fast, not wisely, and without adjusting for the consequences of that building (like traffic).  And for the record, I myself moved here from the Bay Area.

  5. Jeff M

    Jeff:  “But all housing is net positive initially.”

    Ron: Not sure that’s true.  I’ve provided an example above (for Nishi), where it may not be (even from year 1).

    I have not seen this analysis, but it is absolutely not credible unless year-1 is some anomaly that gets corrected in year-2+.

    There are developer fees.  Then you take a piece of land that was not generating any property tax revenue, nor was it occupied by real people that buy things and generate sales tax revenue, and there is no way that you can make any intellectually honest case that it would cost the city city more money than it would take in.

    The analyses answering this question are numerous and well documented.  For your claim to be correct in general, then no community would ever build new housing unless it was sitting on piles of extra cash.

    The net negative happens over-time when there is inadequate turn-over of property ownership thus preventing new tax assessments and the infrastructure in the neighborhood starts to age and needs to be repaired… and the inflation of the cost of city resources to provide services to the neighborhood continues to increase greater than does the increase in revenue from the neighborhood.  But ALL developments bring in net positive revenue in the early years… unless the city provides concessions for some reason… like for attracting a big company that would benefit the community in ways in excess of the fees and taxes.

    For example, New York waved state business taxes for 10 years for their Grow New York program.  They believed that jobs added to the state were enough net positive to be justified by the offset in lost business tax revenue.

    But I am not aware of any such concessions from the city of Davis.

    1. Ron

      Jeff:  “I have not seen this analysis, but it is absolutely not credible unless year-1 is some anomaly that gets corrected in year-2+.

      Well, that’s pretty strange, since you initially responded to my comment which included a link to that analysis regarding Nishi (from a finance and budget commission member).  It does indeed get “corrected” in year 2 (and every year thereafter) – as the net deficit continues to increase.

      The finance and budget commission as a whole is (hopefully) still looking into this.  In any case, here it is again, for your reading pleasure:

      http://documents.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/Finance-And-Budget-Commission/Agendas/20180108/Item-7Ai-Salomon-Revised-Nishi-Model-(1-3-18)

      Jeff:  “There are developer fees.”

      Which are used to offset one-time costs.  And, which the city has not adjusted to properly account for multi-bedroom, double-occupied structures.  Thereby shortchanging the city, regarding megadorm proposals.

      Jeff:  “Then you take a piece of land that was not generating any property tax revenue, nor was it occupied by real people that buy things and generate sales tax revenue, and there is no way that you can make any intellectually honest case that it would cost the city more money than it would take in.

      A more accurate statement would be, “you take a piece of land that was outside of the city (and not generating costs for city services)”, and which was likely used for farming.  For housing in particular, there is no way that you can make an intellectually honest case that it would take in more money than it would cost, in the long run. (However, some certainly try to make that case.)

      Jeff:  “The analyses answering this question are numerous and well documented.  For your claim to be correct in general, then no community would ever build new housing unless it was sitting on piles of extra cash.”

      They are indeed “numerous and well-documented.”  That’s why Davis, other cities and counties throughout California are experiencing ongoing deficits, related to the ongoing and increasing cost of providing services to serve developments.  At times, cities approve developments to generate “short term piles of cash”, temporarily generated by one-time fees.  After the “party is over” and it’s time to pay the long-term bills again, some cities will then (once again) look for a short-term infusion of cash, from development.  And then, the party can continue (until cash and short-term development money is needed, once again).

      Again, I’m wondering where the “outcry” is regarding the elimination of an innovation center component at Nishi (and conversion of existing commercial/industrial land within the city for housing), for those who are concerned about lack of commercial development.

       

       

       

      1. David Greenwald Post author

        Finding by the Finance and Budget Commission: “We also generally concur with the estimate that annual ongoing revenues and costs for the
        city from the project would be modestly net positive over time.”

        1. Ron

          David:  Not sure of your source for that.  I witnessed that meeting.

          I can tell you that a couple of the commissioners (including Dan Carson, who otherwise seems quite personable) seemed to purposefully downplay the concerns from the other commissioner.  The commission as a whole agreed to consider further analysis, but were not necessarily willing to attend another meeting to discuss it, before the council makes a decision regarding whether or not to put it on the ballot.

          So again, you have a commissioner who believes that it could create more than an $11 million deficit by year 15, vs. an analysis created by city staff (who believe that it could produce a “modest” surplus, despite the lack of an innovation center component).

          Overall, there seemed to be little interest from some on the commission to dig into the analyses, or discuss the concerns raised by the commissioner.  There seemed to be much more concern about the council’s “deadline”, to get it onto the ballot.

          And of course, there’s unresolved issues regarding the cost of major infrastructure improvements, tax-sharing with the county, air quality, affordable housing . . .

          But, I’m sure that you’ll be downplaying all legitimate concerns, regardless. (Even to the point of improper allocation of costs, as noted in the comments above.)

           

        2. Ron

          So, perhaps the “truth” is somewhere between the city staff’s surplus of approximately $1.6 million (despite the lack of an innovation center), vs. an analysis from a commissioner which shows a deficit of more than $11 million.

          I can tell you that at least a couple of the commissioners did not seem particularly interested in coming up with an answer, even though the other commissioner offered to provide additional analysis (and to schedule an additional meeting, which does not seem likely at this point).

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