Financial Planner Acknowledges Eventually City-Wide Fiscal Trainwreck –
The meeting began where most of these meetings tend to, a staff report that laid out the fiscal analysis that would be presented tonight at the Davis City Council Meeting. The City Council tonight is scheduled to approve the developer’s agreement.
“The annual recurring revenues and expenditures from the Wildhorse Horse Ranch Development Project, updated to include the proposed Community Facilities District annual assessment of $300/unit, result in a modest General Fund shortfall of $233,660 (averaging $15,577 over the 15-year projection). The proposed Development Agreement includes a mechanism to address this deficit through a one-time General Fund Mitigation fee of $1550/unit, which provides sufficient funding to fully-offset the General Fund impacts over the 15-year projection.”
It continues:
“The establishment of the CFD and addition of the General Fund Mitigation Fee effectively offset what would otherwise be a net negative fiscal impact. This is largely attributable to: 1) the number and mix of housing units, 2) the assumption that the affordable housing units would be exempt from property taxes, and 3) the tax rate area for this property, which only provides an 11.79% share of property taxes to the City — well below the city-wide average of 17.5%.”
Finally the staff report mentions:
“The developer has stated an intention to construct the affordable apartment units. If this occurs, this would free the city of the typical subsidy associated with a land dedication site. These subsidy amounts are typically in the $80,000 to $90,000 range per rental unit or approximately $3 million for the 38 affordable units. These subsidies, however, come from restricted Redevelopment Agency Housing set-aside dollars or HOME Investment Partnership monies and
not the General Fund.”
Mark Siegler and Sue Greenwald as they have on the Vanguard, strenuously disagreed with the city’s fiscal analysis. In an effort to simplify this complaint, I will bring it down to two specific complaints and then address the matter of the affordable housing subsidy which is a matter of considerable disagreement.
The first problem with the fiscal analysis according to Councilmember Greenwald and former Commissioner Mark Siegler is that the model only looks at a 15 year time horizon. Thus while the payment rate is enough to off-set General Fund impacts over the 15-year period of the projection, the argument is that it almost immediately runs out of money after that time and the deficits explode following that time period.
Councilmember Greenwald argued more fully that the number needed to ensure fiscal neutral is around $6000 per unit in CFD fees rather than the current amount. Part of the problem here stems from the rather low proportion of property taxes that go to the city on this property (11.79% as opposed to the city-wide average of 17.5%). She also argued that Verona for instance was paying around $13,000 per unit in fees as opposed to this arrangement.
Along the same lines, Mark Siegler argued that the model assumptions themselves were suspect and that fiscal neutrality relied on around a 14% turnover of housing units on an annual basis in order to continue to escalate the property taxes over the period of time. He surmised that a more typical rate of turnover might be as low as 5%. Without this turnover, the revenue projections will fall short as increases will be limited to roughly 2% per year.
Finally there is the disagreement over the claim of a $4 million net fiscal benefit–a claim that Councilmember Greenwald in the past has called a lie.
Matt Williams came before the commission and argued that this money is akin to a scholarship that goes to a student. If there is a finite amount of money available and only enough funding for one student, if one student turns down the money, that provides the school with funding for one future student that they would not have had otherwise. He argued that in effect, this works in a similar way. The city would be required if the project passes to pay out roughly $80,000 to $90,000 per affordable unit to build the affordable housing.
These monies come from the restrict Redevelopment Agency Housing or HOME Investment Partnership monies rather than the General Fund. According to Mr. Williams, by agreeing to build these themselves out of pocket, the developer has gifted the city roughly $4 million that can be used for the next project that comes along. He argues that while this is not cash into the system, that it is a fiscal benefit.
Mark Siegler countered that this is not a fiscal benefit in that if the project is not built, the city does not have to pay the money anyway. Thus the city is not benefiting in a fiscal manner by building this project. Therefore he and Councilmember Greenwald argued that the language on the ballot argument is misleading.
John Talmud representing the developer would make the point that they could have made a project that produced huge fiscal surpluses like Verona. However, Verona did not the have the sustainability component that is costing them $30,000 per unit. Verona also had $600,000 and higher homes. This project was supposed to be both sustainable and more affordable than Verona and other projects, thus the costs are greater to the developer and the benefits lower to the city. However, they were committed to producing a project that penciled out in terms of the fiscal analysis and working with the city, they believe they have achieved that.
The Commission overall felt that they did not have enough information to sort out the competing contentions at the meeting. In fact, the discussion for the most part drastically shifted after public comment to a discussion about the role of the commission and fiscal health of the city. The revelations here were staggering and they have ramifications that make the fiscal impact of this specific project dwarfed in comparison.
Most astonishing was the acknowledgment by the City’s Financial Planning Specialist Bob Blyth that the city of Davis basically sits on a fiscal timebomb. That in the near future we have a structural gap between revenues and expenditures that will cause a huge deficit to open up. This was first mentioned in response to why the use of a 15-year time horizon for the fiscal analysis and the answer is mindboggling–unless the city makes significant structural changes somewhere between now and then–and Mr. Blyth could not pinpoint a time when asked–we will face huge deficits.
One question that arose was why a 15-year analysis. Assistant City Manager and Finance Director Paul Navazio acknowledged that the time horizon was arbitrary. He argued however that this model was used not just for this project but for all projects.
This concern grew into a more general concern about the model used for the city to evaluate projects. The concern was a generalized lack of transparency in the model and the fiscal analysis that would make it difficult for the public and the commission to evaluate the fiscal analysis of such a project.
From the commission’s standpoint they expressed frustration that there were not agreed upon criteria by which to evaluate this project. They did not have a clear sense of what fiscal neutrality meant. One commissioner expressed the belief that fiscal neutrality ought to be a minimum standard for all projects. However, Mr. Navazio argued that some projects might be in the black and be fiscally positive, others will achieve neutrality, and some that have a large number of affordable units might run deficits. The key from his perspective was the whole inventory penciling out rather than on a project to project basis.
The Commission’s overall complaint has to do with the process set forth. Chair Johnannes Troost expressed frustration that they have not been asked to evaluate other projects since Covell Village. That Covell Village was the only project they evaluated. Others expressed frustration they don’t have a clear process to establish what fiscal neutrality means and what our goals ought to be. Moreover no one was sure what happens year 17 of the project.
They made it a point to suggest that these complaints were not specific to this particular project, but rather the entire model and the process itself.
As one member pointed out this is the first project the commission has heard since he was appointed three years ago. It is coming to them after the Council already voted to approve the project on July 28 and put it on the ballot and only a day before the council will vote on the development agreement. They just got the fiscal analysis and now are asked to weigh in.
Chair Troost clearly expressed frustration when he said:
“The time has come to stop this vaguery and come up with clear criteria by which this development can be judged.”
The Commission passed a motion that would communicate to the council they would like additional time to evaluate the fiscal impact of the project. They felt they could not evaluate or make a judgment on the competing claims offered before them. They would like to take the issue up in two weeks, if the council grants them the time to do so. Otherwise they feel they need to address many of these concerns for future projects.
The development team also expressed frustration at the process and expressed sympathy for the predicament that the commission was in. Bill Ritter speaking at the end of the meeting informed the commission that they had requested nine months ago to go before a number of the commissions to make a presentation and that the city refused to allow them to do so. They were told at that time that only Social Services and the Planning Commissions had jurisdiction over this issue. Had the developers had their way, the commission could have seen the fiscal analysis for the first nine months ago.
He also pointed out that their goal from the start has been to achieve fiscal neutrality and they have attempted, often to the point of frustration, to work with the city in order to achieve that.
The problem is that the city appears to be using an antiquated and limited definition of fiscal neutrality, they have picked an arbitrary time line by which a project has to meet that threshold, and now it appears that the city’s finances in totem are problematic.
People will focus undoubtedly on this specific project right now given the timing and emotions involved. That is indeed inevitable. But for me the most appalling revelations had nothing to do with this specific project and fell to the more generalized fiscal critique I and others have had of this city for quite some time. The commission is very concerned about how this city does business, how it evaluates the fiscal impact of projects and probably other policies as well, and that needs serious inquiry outside of the heated atmosphere of a development project going before the voters in less than two months.
The city has unwittingly acknowledged that the city’s finances are headed for an unmitigated train wreck. They have acknowledged that when the council declared the structural deficit gone, they were very much wrong.
This project can be judged on its own basis, but it needs to be kept in perspective in this bigger fiscal picture. As Sue Greenwald pointed out, it would not take a tremendous amount more paid in, around $6000 per unit total to bring this to fiscal neutrality in her book, in perpetuity. I have no basis to evaluate that claim, but if that is accurate, this project is small drop in the bucket compared to the fiscal crisis the city is apparently facing.
Bob Blyth almost slipped that point in, although when I brought it back up at the end, no one seemed all that surprised by what I thought was a rather startling revelation. This should be the focus of public inquiry and the city needs to address this issue before disaster strikes.
The other issues that the commission clearly needs to deal with are how the city defines fiscal neutrality and the models used to analyze it.
This process has given us a small glimpse into how the city does business and I am very alarmed by what I see.
—David M. Greenwald reporting
Now, if they would only use the same methodology to analyze the proposed water project, we could learn what the Sacramento River water supply would cost us.
What was city staff’s reaction and/or response to the ‘unloading’?
Martin: good point! All this fighting over a small project, when the real fight should be over the Sacramento River Water project, and almost no one is engaged … I think that the surface water issue should be on a citywide ballot.
SODA’ite: If you’ve watched Navazio before, it was a typical reaction of defensiveness and sidestepping the issues and suggesting these are important issues that should be addressed..
I would suggest the Business and Finance Commission come up with their own fiscal analysis plan, and forward it to City Council, much as the Senior Citizens Commission has done with our Senior Housing Guidelines. It would seem the City Council could use some budget analysis direction from the public and its commissions.
I am also bothered by the problem of a developer not being allowed by city staff to come before commissions. I understand the concern some have, that city staff/commissioners will be deluged with developer presentations/the need to produce staff reports. But there should be some type of controlled process by which a developer comes before the appropriate commissioners FIRST, before the project is approved/disapproved by City Council. Is it not the purview of each commission to ADVISE the City Council? How can a commission advise, if it never sees a project ahead of approval? This is just wrong political process.
I am very troubled that a proper fiscal analysis of Measure P is being done AFTER ballot statements have already gone out. This is wrongheaded process yet again. It seems as if what should be a logical progresson of events is highjacked by various interests with their own agenda. As a result, decisions are made hap-hazardly, in the wrong order, without proper input from the necessary constituencies.
It is the City Manager and City Staff that are well aware what proper process is, but seem to be trying too hard to tightly control it – to lessen public input. In doing so, it has created an atmosphere of suspicion, distrust, angst, and a public perception of disenfranchisement. Political discourse in this town has become quite uncivil at times because of it.
A good leaders will call ALL advisors before him/her; LISTEN CAREFULLY to what each and every one has to say; then formulate an opinion to put before the decisionmakers. A transparent process is used to effect each step, so that everyone is aware when they can speak up and have their say. In Davis it feels too much like the public is being shut out of the discussion altogether, only certain advisors are being allowed access to the leader according to a preconceived agenda unknown to anyone except themselves. Not much of a process is in place, because there seems to be the preconceived notion there is no need for one. It would interfere with any preconceived agenda.
DISHONEST BALLOT STATEMENT ISSUE:
The affordable housing $3.2 million “subsidy” claim as net fiscal benefit to the city that can be used to fund city services has been thoroughly discredited. David, you are smart enough to know that; why don’t just acknowledge it? That is what an “investigative reporter” would do. Dishonest claims on ballot statements are a serious business that should have consequences.
I have said it many times on this blog and will say it again:
The affordable housing $3.2 million “subsidy” claim as net fiscal benefit to the city that can be used to fund city services is bogus. David, you are smart enough to know that; why not just acknowledge it? That is what an “investigative reporter” would do. Dishonest claims on ballot statements are a serious business that should have consequences.
I have said it many times on this blog and will say it again:
a)First, the affordable housing trust fund is money set aside to build affordable housing; by law, it cannot be use fund city services.
b)There is no $3.2 million subsidy even to the affordable housing trust fund. Any developer of a larger project can give a land dedication or build the affordable housing themselves. The city does not have to give a subsidy from its affordable housing trust fund if the developer gives a land dedication. We have tended to build more expensive affordable units when a land dedication is involved, but we don’t have to. The head of the social services department said that the units could built without city subsidy even if a land dedication is involved; the choice is ours.
c) Most astonishingly, the development agreement still allows the developer the option in the development agreement to give a land dedication anyway.
Concerning the last item, staff told me that the developers asked to have the option to give a land dedication included in the development agreement; they didn’t want to commit to building the project themselves. The developers tried to blame inclusion of the land dedication option in the development agreement on staff. Amazing.
Can anyone explain land dedication issue Sue is referring to? This is a bit murky for me to follow…
THE FIFTEEN YEAR TIME FRAME OF THE FISCAL ANALYSIS ISSUE:
As I explained clearly last night:
The problem is not the fifteen year time frame per se. The problem is that the developers are providing a one-time payment of $1,500 per unit to fund the remaining gap that remains even in staff’s very developer-friendly fiscal model, and that one-time payment will run out in fifteen years, after which the project runs a fiscal net deficit.
To my knowledge, staff has not used this ploy in the past to claim that a project is fiscally neutral, and it is a very dangerous precedent. To honestly claim that a project is fiscally neutral, the annual service costs must be funded from a revenue stream that is permanent – not one that will run out in fifteen years.
The project could use a one-time revenue to create a permanent stream of revenue, but the revenue would have to be large enough to generate an income stream sufficient to fund the shortfall without eating into its capitol.
According the Paul Navazio, that amount would be about $6,000 per unit, not the $1,500 per unit that the developer has agreed to pay (this is an underestimate, because it relies on staffs’ developer-friendly fiscal model, which I will discuss later).
The finance director gave me this almost $6,000 figure, and discussed the distinction between a sustainable revenue stream and one that ends abruptly in fifteen years quite straightforwardly in private. He seems loathe to be as straightforward in front of a member of the council majority.
These calculations are easy enough to derive yourself from the fiscal model.
It was abundantly clear from the get-go that the plan of former Planning Department Director Emlen and those Council members who abhor Measure J) was to change the game after their Covell Village debacle when vigorous citizen input,transparancy and in-depth analysis brought down Whitcomb’s flawed plans for his Covell Village. No amount of diversionary rhetoric by the project’s proponents,(i.e. let’s focus on the “bigger” fiscal crisis rather than this insignificant tiny project) can hide the fact that Measure J is being assaulted and must be defended with a NO measure P vote . Councilman Heystek, unlike Saylor and Asmundson who in the past have openly stated their anti- Measure J positions, appears to have abandoned his principled defense of the Measure J process during the Measure X campaign in favor of a “means justifies the ends” political calculation. This will come back to haunt him in June.
“means justifies the ends”
…..of course, it’s ” ENDS JUSTIFIES THE MEANS”
The arguments given re no real transparency re the fiscal analysis for this project and that after the fifteen years of fiscal neutrality, the bottom falls out can be used for every development the city approves. At least this developer is making the project fiscally neutral for the fifteen year period. Are Chiles Ranch? is Verona? Did any of the other dozens or hundreds of projects large and small approved by the city ever do that?
This is a small project. It is at least fiscally neutral to the city for the fifteen year period. It DOES result in a fiscal benefit to the city via the affordable housing. If the project does not go forward, nothing happens. If it does go forward, under normal circumstancs, the city would end up subsidizing the affordable housing to the tune of roughly 3.2 million dollars. But in this instance, the developers are going to cover that cost themselves, so the city is not out $3.2 million. That is a benefit no matter how you look at it. Mark and Sue: can you name other projects recently approved where this was done?
I do agree that it would have been good for the Commission to review this AND ALL THE OTHER recently approved projects before they were approved by council. Isn’t that what the Commission is for? But why are we singling out this project? The city ignored the Commission on several other projects. Where was/is the outcry there? ALL of these developments ultimately cost the city. We know that. But I find it interesting that we are screaming about this one, small, very innovative project. If this were not a Measure J vote, no one would even be talking about this project.
Harrington is right, “the people” should vote on the water project.” How should “the people” be educated about the project to make an informed decision? We have repeatedly been told many things. The people need to understand about need, water rights, conservation (including water catchment/cisterns, and use of grey water), use of river water in the mix so the waste-stream is diluted and it puts off another upgrade of, or need for new waste water treatment plant, state regulations that developpers must show they have 20-years of water, while it is city public works and city council that actually approve projects and hook ups – with new water, hook-ups and development continue.
We need a sound, realisitc fiscal analysis and clear-headed plan for financing (what will cost to developpers vs rate-payer), competitive bids for construction (not a give-a-way to any one corporation – drooling to get their hands on this project and profits), and a commitment that our public water utility remain under local, public control. If you’ve got other questions and concerns add to the list.
DEVELOPER FRIENDLY FISCAL MODEL ISSUE
This project isn’t fiscally neutral even using the developer-friendly fiscal model. The fiscal shortfall would be substantially larger with a more realistic fiscal model. The fiscal model is developer-friendly for many reasons, including the following reasons:
a)It assumes the temporary sales tax and parks tax overrides will continue indefinitely.
b)It assumes a higher housing resale rate than is realistic, resulting in higher property tax revenue assumptions.
c)It assumes higher property value appreciation than is realistic.
d)It underestimates expenditure increases.
e) It doesn’t take into account our unfunded retiree health and rapidly growing pension obligations.
The unfunded health and pension liabilities will come due shortly after the one-time $1,500 per unit fee is spent down in 15 years.
“No amount of diversionary rhetoric by the project’s proponents,(i.e. let’s focus on the “bigger” fiscal crisis rather than this insignificant tiny project) can hide the fact that Measure J is being assaulted and must be defended with a NO measure P vote .”
First, Measure J is DEAD. It has been killed by the incompetence or complicity of city staff. That’s a dead deal.
Second, this is an insignificant project in terms of the budget picture. If your issue is the fiscal analysis, then you need to focus on the big picture.
Third, that leaves the merits of the project, if you are against the merits of the project, then be against it. But let’s not blow the fiscal impact out of the water when it’s crystal clear that there will be a fiscal catastrophe that most of us had no idea was as bad as it appears from the statement made last night–if this is quoted correctly.
I saw Sue’s conduct last night at the CC liason to the Commission, and it grossly violated the standards that CC members have to follow. She improperly argued positions with the Commission during its deliberations. The Mayor was there, and in my humble opinion, I think that the CC should bring the matter up, remove her as liason to that commission, and take other steps to ensure that a sitting CC member is not improperly pushing or steeting or manipulating a Commission. I think that the Commission itself should protect the integrity of its process and pass a motion asking Sue to refrain from doing it again.
Sue: you should be ashamed of yourself.
Sue:
Surely you don’t expect this project to make up for all of the city’s fiscal shortfalls! You need to separate the city’s general over-all fiscal mess from the impacts of this project. Jeez! Our unfunded health and pension liabilities are coming due WHETHER OR NOT THIS PROJECT GOES FORWARD! And the mess the city is in with those has absolutely no connection with this project. This one little project cannot be held responsible fo all our future problems, but that appears to be what you are implying. This has clearly become an obsession for you. You need to take a few steps back and figure out why you are so irrational about this.
“First, Measure J is DEAD. It has been killed by the incompetence or complicity of city staff. That’s a dead deal.”
No, Measure J is alive and well if the Davis voters reject its death sentence with a NO on P vote.
“But why are we singling out this project?”
Another classic diversionary tactic. Other projects are irrelevant to THIS discussion about THIS project and ITS attack on the Measure J process. The citizen focus on this project is EXACTLY because Measure J gives Davis voter’s the decision-making power.
THIS PROJECT IS WORSE FISCAL DEAL THAN OTHER RECENT PROJECTS ISSUE
The City only receives 11.79% of the property tax on this project, vs. about 17.5% of the property tax on other recently approved projects such as Verona and Chiles Ranch. Thus Verona and Chiles Ranch produce a fiscally positive revenue picture, at least according to staffs’ developer-friendly fiscal model.
Yet Verona pays $12,000 per unit fee over and above its “fiscally positive” status for each market-rate unit and $6,000 per each affordable unit. Chiles Ranch pays $3,000 per each unit over and above its “fiscally positive” status (remember, we are talking about a developer-friendly fiscal model in all these projects). Yet Wildhorse Ranch, which runs a fiscal negative, is paying only $1,500 per unit, which provides nothing extra to the city and which only brings it to “fiscal neutrality” for the first 15 years.
“DEVELOPER FRIENDLY FISCAL MODEL ISSUE”
Does anyone remember the city’s analysis for Covell Village that projected an annual 6% increase in property values indefinitely into the future??
OVERPRICED HOUSING WITH COSTS SHIFTED TO BUYERS ISSUE
According the figures supplied by the developer, staff says that the lowest-priced units in this project will be attached townhouses which will sell for an average price of $451,000 when they are scheduled to go on the market. Since this is an era of stagnant and declining take-home pay, these prices are very steep. Yet, in order to come closer to breaking even, the developer is shifting the costs of almost breaking even to the new owners in the form of a $300 dollar CFD, making the houses even less affordable than they already are.
Again, this is a very bad precedent.
Mike Harrington will do anything to divert the topic from the fact that his cronies/tenants’ project is not good for the city under current conditions. Switch the topic to Sacramento River water — what a good way to carry water for the developers, no pun intended.
To Mike Parlington, aka I.Leen.Sanwich: Your paying clients, Lewis Homes, will never, ever get their sprawl project through city approval unless it meets the public benefits test.
I know you are angry that your clients did not prevail, but why are you taking it out on Bill Ritter and the other progressives who support this small, reasonable, affordable, and very green project? Spite. You are willing to risk everything you have ever stood for, out of spite, due to your failure to get in Lewis Homes, like you did with Wildhorse Ranch years ago. I saw their brochure: you were the Queen Bee with front page photo for Wildhorse Developers, in the late 1990s.
I will never, ever let you wreck our air and clog our streets with your client’s junk traffic from Lewis Homes. My kids are going to be riding bikes in that area, and you can tell your client that their project has to conform to accepted city standards or the progressive leadership will knock it down.
Stop using crass and vindictive personal attacks against anyone who disagrees with you in order to divert the discussion from the fiscal problems and the overpriced housing of the Wildhorse Ranch project.
DPD: please switch to a public names requirement. There are 2-3 hate-filled posters here, and they are totally using your Blog to spew their stuff. You can selectively determine, as the owner of this Blog, who the violators are. Tell them to post under their correct name, or you will make it happen.
I mostly agree with Sue, and sometimes I don’t, but at least she posts with comments that she is proud of, publically.
This is one of the many issues that should have been addressed before our Council allowed this to go to the voters. What is the rush??? Why the push?? Why now???
Maybe we should look at the developers gain if they push the voters into voting for something that has not stood scrutiny of our Finance and Budget Commission and Open Space Commission to name a few.
From the staff report: [i]”The developer has stated [u]an intention to construct[/u] the affordable apartment units. If this occurs, this would free the city of the typical subsidy associated with a land dedication site. These subsidy amounts are typically in the $80,000 to $90,000 range per rental unit or approximately $3 million for the 38 affordable units.”[/i]
My read of the agreement is that there is nothing legally stopping Parlin from making a land dedication for the affordable units and not building them at all. If that happens, the rather dubious claim of a $3.2 million net benefit to the city from Parlin constructing these units becomes a big net loss of whatever subsidies the city must make for them. My guess, because the project is so nice and has so many energy conserving features, is that the subsidies for WHR will be [i]much higher[/i] than they have been for past projects. As such, it seems [i]more likely[/i] to me that Parlin will not want to build these units, but will instead opt for a land dedication, saving themselves a lot of green.
[u]Question to anyone who knows[/u]: Am I misreading the agreement? Is there anything binding on Parlin which would stop them from choosing the land dedication approach?
Going forward, it does seem to me a poor fiscal policy of the City of Davis to allow this kind of a “choice.” While I think the whole idea of forced low-income housing is a horrible idea in almost all respects*, if we are going to have it, we should not have a development model which ends up causing the City of Davis to scrape together the funds to cover the costs of a land dedication. Rather, it would make better fiscal sense to tell the developer: you build it; or, if you don’t, you cover any further costs to the city from its construction.
*This nutty model is a huge money loser for the City. That is just one reason why this policy should be scrapped. The second is that unlike market-rate single family homes, which generate almost no marginal need for more police services, low-income housing units (according to the City) generate the highest number of police service calls per capita of any units in town. And third, low-income housing projects DO NOT help low-income people as a class. They only help the small percentage of low-income people who get the small number of low-income units. Insofar as they stifle other construction, they HARM the interests of low-income residents as a class. There are two things the City could do to actually help low-income residents without creating the fiscal hole that this nutty policy generates: 1) Build a lot more market-rate apartments, and thus increase the vacancy rates for all apartments in town. That would greatly help all renters; and 2) Tax the developers an equal amount of the loss they are taking by having to build these low-income units; and then expend that money to subsidize housing or other services for the poor in Davis.
The last time we heard from you, you promised you were no longer going to blog on WHR, and now you have resurfaced!!!!
Mike Harrington writes…”who support this small, reasonable, affordable, and very green project?”
I also get a visit from a paid college student from Yes on P on Sunday telling me this project is “really green and really affordable”…I read the flyer (which is printed on “recycled paper with soy-based inks”) and it states that this project will provide “affordable” housing for Davis workign families….
Putting aside the green arguments (and soy-based inks), let’s focus on this recurring “really affordable” claim that Yes on P and its supporters are arguing….
Let’s go back to 2006 (No on X, Covell Village campaign)…included in the No on X campaign’s materials (which Mike Harrington was listed on the endorsement card) is the following (which I pulled from archived material on Davis Wiki):
“The City’s analysis indicates that “middle-income” families (those making less than $96,000 a year) cannot afford housing costing more than $387,000. Yet 92% of the for-sale houses in the subdivision will cost more than $400,000. The least expensive single-family detached house will cost $538,000.”
THIS WAS ONE OF THE KEY NO ON X POINTS! Remember the green and black signs that had “Un-Affordable on them”
Now let’s fast track to the present election and read the following from the Yes on P website (yesonpdavis.com) “FAQ” section:
“Is this project affordable?
There are 191 homes at Wildhorse Ranch—apartments, townhomes and single-family detached homes.
• 40 apartment homes or 21% of the project will be affordable to very low income families.
• 78 townhomes will range in price from $350,000 to $450,000, with an average price of $425,000.
• 73 single-family homes will range in price from $450,000 to $550,000.”
So, we have a project that is being touted as “affordable” with a current MEDIAN price of 425,000 (and in two years time, that number has been estimated to grow to 451,000), and we have the former arguments from NO on X campaign two years ago, that pointed out anything above 387,000 is considered “unaffordable” for Davis families making $97,000 or less per year…
So I ask two questions (of Mike Harrington or any non-anonymous posting Yes on P individual):
1. Do you consider a CURRENT MEDIAN price of $425,000 for an attached townhome to be an “affordable” option for Davis families? If so, I have some two-income small business owning friends in Davis that would be more than happy to talk with you about how they couldn’t afford such a price…
2. If you say it is only a MEDIAN price, then how many townhomes will be in the previous affordable range (from three years ago) of 387,000 or less? less than 40? Is that solving any “Affordable” housing needs for this city?
I welcome your responses (and hopefully from named bloggers)
Thank you,
Greg Sokolov
Vote NO on P! Really un-needed and Really un-affordable!
Greg Sokolov,
Who do you think is going to buy the houses for sale at WHR? Is it not the case that by definition, they will be Davis residents who can afford to pay the prices charged and prefer to own one of the new homes there more than they prefer any other house for sale in Davis at a comparable price?
I realize that in the jargon of politics, that does not mean these homes are “affordable housing.” However, in the jargon of the real world, they will be affordable to their buyers. The developer cannot sell them for a price greater than the market will bear.
Also, while I think those who make the point that (when the housing of West Village is factored into the supply chain in Davis) it will harm the financial interests of existing property owners in Davis to have an excess supply of housing, making older homes probably worth less in a buyers’ market, it is inherently true that overbuilding the market will inevitably [i]lower the cost of for-sale housing[/i] in Davis. Therefore, on that score, if your interest is in providing conditions whereby more people can afford to buy a house in Davis, you should favor the development of more single family homes and other for-sale housing.
Granted, you may have other reasons to object to WHR — perhaps you see this as damaging to the city’s finances; or you live nearby and feel it is damaging to your home; or you feel the loss of the horse ranch is not worth the benefit; or you travel on Covell and feel the added traffic will harm your interests; or you fear you won’t be able to sell your home for as much money 5 years from now if your house must compete with these 151 new houses — but it rings false to claim that these added houses will harm the interests of people with a median family income who would like to become homeowners.
Rich:
In reply to your queries/statments:
“Who do you think is going to buy the houses for sale at WHR?”
According to the Yes on P flyer that the paid college student dropped off at my door:
“The neighborhood is designed to be affordable so those who work in Davis can live in Davis, icnluding our teachers, police, and families with children”.
So according to Yes on P (Parlin), that’s who the the buyers of these homes will include…do you agree with this statement?
“Therefore, on that score, if your interest is in providing conditions whereby more people can afford to buy a house in Davis, you should favor the development of more single family homes and other for-sale housing.”
Let me also refer you to the current Davis MLS (real estate listings) for homes priced in the “Affordable” range of 399,900-229,000 (median price of 349, 500):
27 properties currently remain unsold
“Granted, you may have other reasons to object to WHR”
I oppose this project (as many others who I have spoken with at Farmer’s Market, at the City parks, and other city places) because WE DON’T NEED MORE HOMES CURRENTLY, and if you feel we do, please cite for me these housing shortages that need to be addressed.
Thanks
Greg
“According to the Yes on P flyer that the paid college student”
You mean the college democrats who have been active politically in this community longer than you have?
“You mean the college democrats who have been active politically in this community longer than you have?”
College Democrats working for GOP (Grand Ole Parlin); google Masud Monfared and you will see he donated to Republican campaigns in 2004, only to turn around and donate to Davis Democratic Club in 2009, right before a Measure J election; strange how politics works, isn’t it????
I wonder why no one has responded to E. Roberts Musser yet. So much of what she says is true and essential for figuring out how to responsibly participate in politics, not only here, but anywhere. But with WHR, as long as the process involved is so flawed (numerous examples have been pointed out in David’s article and in Elaine’s comments, too) then discussion of anything depending on that flawed process is arguably beside the point. I am voting No on “P”. Why? Because I am increasingly aware that voters are being asked to make a complex decision without access to the proper tools for doing so responsibly. WHR- – and any development project on which we as citizens give our input- – involves fiscal issues, growth sharing issues, real-life philosophical and moral issues (environment, sustainability and affordable housing to name three), and if we don’t have time to properly consider the consequences and repercussions of a vote one way or another before we cast that vote, what is our vote worth? Just on that basis alone I’d urge everyone to vote no this time, and then let’s get to work and fix the process that brought us to this place where there’s so much rancor and anger at each other.
[b]”Who do you think is going to buy the houses for sale at WHR?” [/b]
[i]According to the Yes on P flyer that the paid college student dropped off at my door:[/i]
I understand that you are, in this instance, objecting to misleading rhetoric from the project’s proponents. But that’s not really what I was asking. I wanted to know [i]who you think will be the buyer’s[/i] of the WHR houses?
[b]”The neighborhood is designed to be affordable so those who work in Davis can live in Davis, including our teachers, police, and families with children”. [/b]
[i]”that’s who the the buyers of these homes will include…do you agree with this statement?”[/i]
Yes. If the teachers include faculty at UC Davis, I suspect some of the buyers will be teachers. The average income of K-12 teachers in the DJUSD is around $65,000. So could a couple of teachers making a combined $130,000 a year afford a $450,000 house? I don’t know. I am sure it depends on whether they have other debts and how much of a downpayment they can afford to make. However, in general, I would say no. As to police officers, we have cops in Davis (not counting sergeants, lieutenants, captains or other officers) making more than $100,000 a year(in salary plus overtime). So, again depending on spousal income and other debts, it seems likely cops in Davis could afford that. However, I don’t know how many Davis police officers actually live in Davis. Of our firefighters, only about 20% live in Davis. I suspect the percentage of the DPD which lives in town is higher than that.
[i]”Let me also refer you to the current Davis MLS (real estate listings) for homes priced in the “Affordable” range of 399,900-229,000 (median price of 349, 500): 27 properties currently remain unsold.”[/i]
That sounds like a low number to me, given how soft the real estate market has been. Is that your point, that we have very few homes available in that price range?
[i]”I oppose this project (as many others who I have spoken with at Farmer’s Market, at the City parks, and other city places) because WE DON’T NEED MORE HOMES CURRENTLY …”[/i]
That’s not an unreasonable point of view. I, however, don’t see why I should personally look at the total demand equation, the “need factor,” if you will. It seems to me that if there is “no need” for these homes, the loss will be on the hands of the developer, who believed buyers wanted the product he was selling. If the prices he asks are too high for the market, then I expect he will have to sell the homes he’s built for less. If that happens, then there will be far more affordable housing available in Davis.
[i]”… please cite for me these housing shortages that need to be addressed.”[/i]
I don’t think there is currently a housing shortage for single family homes for sale. There is, though, a shortage of rental apartments. We have a very low vacancy rate. However, as a resident of Davis who plans to live in Davis for a very long time and who has no financial interest in the profits of Parlin (or in any Parlin contractors), it doesn’t matter to me if Parlin faces an overbuilt market. That will hurt Parlin and will help all first-time homebuyers, here.
You mean the college democrats who have been active politically in this community longer than you have?
So is Wildhorse Ranch development now a “Democratic” cause? Why don’t guys foucs on fighting for healthcare reform and not helping a greedy developer’s cause?
A few points:
1. AS reported in the Vanguard article, the Commission voted that the City Council should take more time to properly evaluate the fiscal impacts–this is one of the key problems with the process here–what’s the rush? Why are folks so desperate to push this project through?
2. The model used for the fiscal impact analysis was originally developed by Bay Area Economics, who do a huge amount of work justifying Wal-Mart Supercenters across the state. Their model has assumptions that Mark and Sue pointed out are indeed “developer friendly,” so the fiscal impact analysis may very well be much worse than what the analysis says. Parlin keeps saying this project is affordable–can’t we see if its affordable for the City?
3. The implicit contract in most development projects in California is that developers make money off the market rate housing in order to subsidize affordable hosuing. Parlin is taking Ag land and turning it into gold by developing it. Even with Ag offsets and affordable housing this project will be extremely profitable (if not–why are they pushing so hard?) Further one can’t count affordable housing as a fiscal benefit because it does not generate money for the City–in fact its exactly the opposite.
Whats the rush? Lets look at this more carefully. Thanks Phil
[quoteThe last time we heard from you, you promised you were no longer going to blog on WHR, and now you have resurfaced!!!!][/quote]I believe it was Mike Harrington, not Mike Parlington, who made that promise.
It is also Mike Harrington, not Mike Parlington, who is known for making personal attacks.
Rich:
“Who do you think is going to buy the houses for sale at WHR? Is it not the case that by definition, they will be Davis residents who can afford to pay the prices charged and prefer to own one of the new homes there more than they prefer any other house for sale in Davis at a comparable price?”
There is no particular reason to assume that these will sell primarily to Davis residents.
“I realize that in the jargon of politics, that does not mean these homes are “affordable housing.” However, in the jargon of the real world, they will be affordable to their buyers.”
By that rather self-evident definition, any home which sells at any price is “affordable.” But as was hashed out in some detail on prior threads, “affordable” has some specific meanings regarding housing cost.
For example, when the developer says that WHR is “affordable” he may be saying that it meets the city’s requirement that 20% of the housing units be priced within 80 – 120% of the Yolo County median income. That is true, because 20% of the housing units are apartments.
A somewhat broader definition of “affordable” is any housing priced such that buyers within 50 – 150% of the region’s median income could buy them. Wildhorse Ranch? Nope.
As was described on those prior threads, that requires some assumptions about how much down payment would be required, current interest rates, homeowner association fees, etc. But using commonly available mortgage calculators, and with input from someone with real estate expertise, we were able to conclude that the annual income required to purchase these townhouses will be at least about $100,000.
I think to most people, using the term “affordable” for housing available only to people making $100K or more is quite a stretch.
I think we have enough approved but unbuilt housing for now. I have obtained a more detailed official breakdown of the numbers.
According to city staff, the city now has between 541 and over 641 units unbuilt entitled units.
According to the University, West Village has:
1015 student apartments
474 faculty/staff houses
65 units in mixed-use buildings
1,554 total units:
http://westvillage.ucdavis.edu/overview/construction-phases
This comes to well over 2,000 units between the City and West Village.
That said, if the council majority really wants to put another development on the ballot, they should at least make sure that the public gets a fair break in the fiscal department, and that the ballot statements are honest.
At a bare minimum, that means that the developer must AT LEAST promise to build the affordable housing himself at the specified stage in the development, as he has promised on the ballot statement and in the Davis Enterprise WITH NO EXCEPTIONS ALLOWED
, which means a change in the draft development agreement tonight, and another change requiring a $6,000 fee from easch unit, which is what would be required to provide for the current shortfall with permanent revenue stream equal to property tax or a CFD, rather than for only 15 years.
Remember, the Verona project produced a net fiscal benefit of according to the city’s developer-friendly model, and it also paid a per unit fee of $12,000 per market-rate unit and $6,000 per affordable unit.
For the life of me, I don’t know why this developer is getting favored treatment, particularly since he is building on land that provides the city a very low share of property tax.
The public interest should come first, and it isn’t.
“…we were able to conclude that the annual income required to purchase these townhouses will be at least about $100,000.
I think to most people, using the term “affordable” for housing available only to people making $100K or more is quite a stretch.”
Don, I couldn’t agree more with your arguments. Aside from Rich Rifkin, no other named blogger from Yes on P has offered to explain how this project serves an “affordable housing” option for Davis residents, even though the Yes on P flyer is out there circulating such assertions.
Thanks,
Greg
“According to city staff, the city now has between 541 and over 641 units unbuilt entitled units.
According to the University, West Village has:
1015 student apartments
474 faculty/staff houses
65 units in mixed-use buildings
1,554 total units:
http://westvillage.ucdavis.edu…ion-phases
This comes to well over 2,000 units between the City and West Village.”
Thanks Sue for posting these numbers. This certainly answers the question of whether this project is necessary (clearly, it isn’t!); if and when the need for more housing arises in Davis, then let’s look at the merits (i.e. “green” features) of them, but right now, we are not looking at any housing crisis in Davis and we DON’T NEED NEW DEVELOPMENT (“green” or not), and that’s what I’m hearing from other folks in town.
2000 Homes Are Enough!!! Vote No on P!!
DS: [i]”There is no particular reason to assume that these will sell primarily to Davis residents.”[/i]
I recognize that my argument is circular. But when I said the homeowners of WHR properties will be “Davis residents,” I meant [i]after[/i] they buy their houses and move into them. Of course, they very well may not live in Davis, now. However, if they buy at WHR, then they want to live here. I personally don’t see it as more positive if a person now living in Woodland or Natomas buys one of these WHR places and becomes a Davis resident than if the buyer now lives in El Macero Vista or Covell Park.
Regardless of the current city of residence of the homebuyers, a development like WHR will increase the population of Davis. So if the WHR buyer is now renting a house in Old East Davis, someone from outside Davis will move into her rental (or in theory into the home of the person who moves into the East Davis place).
[i]”By that rather self-evident definition, any home which sells at any price is “affordable.” But as was hashed out in some detail on prior threads, “affordable” has some specific meanings regarding housing cost.”[/i]
Your criticim of my wording is well taken. I tried to make it clear that I don’t use “affordable housing” as it is used in a political sense. I think more in economic terms, where “unaffordable” would mean a price in which the market will not clear. Yes, my definition, as philosophers would say, begs the question.
At Redwood Barn, you sell a wide variety of plants and garden inputs. Some of what you sell may be too expensive for my meager resources. However, you don’t sell those items at an unaffordable price. You sell them at the price you believe demand exists for them, where the market will clear. Hence, they are affordable, though perhaps not to me. The houses at WHR will be affordable, though perhaps not to “median income families.”
I should note that I just got the Parlin advertisement in my mail box. I understand the argument of people who think Parlin is dissembling by headlining its flier, “Really Affordable.” The implication, of course, is that these houses will cost far less than other homes for sale in Davis. However, I think the biggest falsehood, though perhaps unintentional, is this line: “The homes in the Wildhorse Ranch neighborhood reduce greenhouse gas emissions by 90%.”
My understanding — tell me if I am wrong — is that they don’t reduce GHGs at all. Rather, these units (on paper) are supposed to generate 10% as many GHGs per capita as would a standard California house.
For what it’s worth, one thing I’ve learned as a member of the Historic Resources Mgt. Commission is that the greenest construction technology is adaptive reuse of older buildings. In other words, when you consider the energy it takes to tear down an old place and all of the energy inputs in a new building, you will harm the environment much less in most cases rehabilitating the old structure, rather than building a new place. (This was pointed out by Rand Herbert, our chairman, during the deliberations over Maria Ogrydziak’s B Street condo proposal, which would have torn down an existing building and replaced it with “very green” new structues.
[i]”I think to most people, using the term “affordable” for housing available only to people making $100K or more is quite a stretch.”[/i]
That’s a fair point. But it is a political rationale — which in a political debate makes sense — not really a legal, economic or linguistic rationale.
Correction: “I personally don’t see it as more positive [b]or more negative[/b] if a person now living in Woodland or Natomas buys one of these WHR places and becomes a Davis resident than if the buyer now lives in El Macero Vista or Covell Park.”
“It seems to me that if there is “no need” for these homes, the loss will be on the hands of the developer,……. “
Rich… your lenghty rhetorical backpedaling speaks for itself. As for the above statement, you yourself raised the issue of the developer not being obligated to build the “affordable” apartments nor is there any penalty in place if he finds it too unprofitable to meet his promise of 90% GHG emission reduction on-site. If it comes to the developer or the city taking the hit, who do you think Parlin will choose if there are no explicit penalties for non- performance. The Davis voters should not leave these questions to city staff and the Council,both having a long history of overly developer-friendly development agreements. A No vote on P will allow these issues to be “nailed down” BEFORE it is put to the citizens for their Measure J vote.
[quote]Rich… your lenghty rhetorical backpedaling speaks for itself.[/quote] I’m sorry, but I have no idea what the hell this comment means. [quote]… you yourself raised the issue of the developer not being obligated to build the “affordable” apartments nor is there any penalty in place if he finds it too unprofitable to meet his promise of 90% GHG emission reduction on-site.[/quote]I did. Does it make me a terrible interlocutor if I am not a partisan* on this topic, but rather one who understands that there are points to be made pro and con? [quote]If it comes to the developer or the city taking the hit, who do you think Parlin will choose if there are no explicit penalties for non- performance.[/quote] I’m surprised you are asking me this question. Did you not understand where I wrote above that the developer will do what is in his best interests? Unless the agreement forbids it, that might mean giving a land dedication, which likely will harm the city’s coffers. Thus, I think the development agreement ought to either force him to build the affordable units himself, or pay any marginal burden a land dedication would cause to the taxpayers. [quote] The Davis voters should not leave these questions to city staff and the Council, both having a long history of overly developer-friendly development agreements.[/quote]With Measure P, the Davis voters will decide the question. [quote] A No vote on P will allow these issues to be “nailed down” BEFORE it is put to the citizens for their Measure J vote.[/quote] That is a confusing statement. It sounds as if you don’t understand that [i]the Measure P vote is the vote of the citizens via the Measure J process.[/i]
*I am not a partisan on WHR. I think there is merit to arguments on both sides. However, on balance, I think the merits are greater than the costs.
Rifkin wrote “I realize that in the jargon of politics, that does not mean these homes are “affordable housing.” However, in the jargon of the real world, they will be affordable to their buyers.”
Maybe but maybe we are just setting up more people for foreclosure.
Mike Harrington wrote “I saw Sue’s conduct last night at the CC liason to the Commission, and it grossly violated the standards that CC members have to follow. She improperly argued positions with the Commission during its deliberations.”
I didn’t see the meeting but I have no doubt that Mike is accurately describing Sue’s behavior and anyone who has been around Davis politics for a while would know it too.
To Greg Sokolov: You seem like the classic nimby. Do you think you would be so hot and bothered if this wasn’t near where you live?
Mike Harrington wrote “To Mike Parlington, aka I.Leen.Sanwich: Your paying clients, Lewis Homes, will never, ever get their sprawl project through city approval unless it meets the public benefits test.
“I know you are angry that your clients did not prevail, but why are you taking it out on Bill Ritter and the other progressives who support this small, reasonable, affordable, and very green project? Spite. You are willing to risk everything you have ever stood for, out of spite, due to your failure to get in Lewis Homes, like you did with Wildhorse Ranch years ago. I saw their brochure: you were the Queen Bee with front page photo for Wildhorse Developers, in the late 1990s.”
Oh this is so delicious to see all these progressives fight it out over their own developer associations. At least Sue is true to her ideals, even though I think she is nuts, with the caveat that she only wants to protect her already existing financial interests in Davis real estate.
The City only receives 11.79% of the property tax on this project, vs. about 17.5% of the property tax on other recently approved projects such as Verona and Chiles Ranch. Thus Verona and Chiles Ranch produce a fiscally positive revenue picture, at least according to staffs’ developer-friendly fiscal model.
Sue Greenwald wrote “Yet Verona pays $12,000 per unit fee over and above its “fiscally positive” status for each market-rate unit and $6,000 per each affordable unit. Chiles Ranch pays $3,000 per each unit over and above its “fiscally positive” status (remember, we are talking about a developer-friendly fiscal model in all these projects). Yet Wildhorse Ranch, which runs a fiscal negative, is paying only $1,500 per unit, which provides nothing extra to the city and which only brings it to “fiscal neutrality” for the first 15 years.”
But Sue you were also opposed to these other projects. It also raises another point that new housing doesn’t pay the city the costs of services so what should we do then stop building altogether?
Oops there should be quotes around the paragraph that starts with: The city only receives 11.79%. It was written by Sue Greenwald.
“With Measure P, the Davis voters will decide the question.”
No, unless these issues are “nailed down” in the baseline agreement prior to a Measure P vote, it will be up to the Council majority if and how they will deal with Parlin about these issues in the final development agreement. This would be taking place AFTER the voters have been removed from the approval process with their Yes on Measure P vote.
….just caught the exchange between Sue and Parlin at the Council meeting tonight. Parlin stated that he would absorb the subsidy necessary to build the affordable housing if no outside subsidy could be found. Sue then asked him, based upon his statement, if he would agree to strike the clause in the development agreement that gives him the option of NOT building the affordable housing but rather going with a land dedication. Parlin refused to answer Sue’s request for a simple yes or no. Asmundson characteristically attempted to interrupt Sue’s questioning of Parlin. When Sue persisted, Parlin would only angrily repeat his non-response by saying that the agreement had been negotiated by staff at their request. Sue responded by stating that staff did not support Parlin’s assertion that the land dedication option was at their request. Councilman Heystek looked decidedly uncomfortable as Parlin repeated his evasive non-response to Sue’s question.
“To Greg Sokolov: You seem like the classic nimby. Do you think you would be so hot and bothered if this wasn’t near where you live?
“
Hey Typhoid
At least I post with my real name; I voted against Measure X and will vote No on P; only two Measure J elections (that I or any other Davis voter have voted in, NIMBY or not); so why don’t you tell us your real name now?
I have come to recognize that if you are going to not use your name you should not attack people by calling them names but I didn’t think nimby was too strong an insult or that Sue, being an elected official, was not afforded the same deference.
There have been other development votes; measure J, the Richards undercrossing, Target, Wildhorse. Also there have been plenty of issues that didn’t come to a vote; West Village and the Cannery come to mind. All of a sudden this guy is leading the charge, out in front against P, and you know what he is a neighbor. I just wanted to raise that issue because it is such a great example of Davis residents protecting their own property values first. Maybe Nimby wasn’t the right term. Maybe Davis has its own special form of Think Globally Act Locally mentality as someone said on the vanguard the other day ” Davis: If you don’t build it they won’t come.”
[b]”I realize that in the jargon of politics, that does not mean these homes are “affordable housing.” However, in the jargon of the real world, they will be affordable to their buyers.” [/b]
Typhoid: [i]”Maybe but maybe we are just setting up more people for foreclosure.”[/i]
That’s a fair point. Even in normal times, there are buyers who get in over their heads with mortgage debt, often due to a business failure, job loss or some other problem (like unforeseen medical expenses) and fall into foreclosure. Yet what has happened the last two years, with the explosion of foreclosures, is not really normal. I expect that going forward lenders and buyers of mortgages will do a much better job assessing the risks they are taking on. As a result, far fewer loans will be issued to marginal and undercapitalized buyers. But, that said, history has a way of repeating itself, and maybe another generation or two down the road, the mistakes the financial industry made over the last 8-10 years will be repeated.
Wishful thinking Rich
[quote]Wishful thinking Rich[/quote] What is the wish, Hilly?
Really Rich even an old redneck like me can see that the Obama and Scharzenegger administrations are trying to prop the banks up by keeping the are from coming out of property values by allowing the banks to keep their losses off their books and giving tax breaks to new home owners and first time buyers. So somebody gets a tax break and buys a house they can’t afford and the whole thing perpetuateds itself.
Hilly, you must have a friend who can translate that “thought” of yours into English. Get that done and post it and I’ll be happy to reply.
I’m leaning towards a “No on P” vote. I supported the project originally, due in large part to its “green” features and support by environmental stalwarts such as Pam Nieberg.
But now I’m having second thoughts. Although I disagree with many assertions by the “No on P” folks, I do agree we need more time to examine the potential fiscal impacts of this (albeit small) development on our City resources.
And, no matter how green or small this project might be, I just don’t see it as a model for supplying truly affordable housing for first-time home-buyers or empty-nesting seniors looking to down-size.
Something just doesn’t sit right about Measure P (including the claim that the developer is having to pay people to campaign for the project). If I’m missing something, hopefully a more astute blogger will educate me.
Meanwhile, I’m leaning (~ 90%) towards a “No on P” vote.
[quote]I just don’t see it as a model for supplying truly affordable housing for first-time home-buyers or empty-nesting seniors looking to down-size. [/quote] Rick, setting aside the “really affordable” sales pitch of the developer, why does WHR have to be “truly affordable housing for first-time home-buyers or empty-nesting seniors”? Why is it worse (or even beyond the pale) if it meets the needs/desires, say, of folks who want to live in Davis, like that location, want a home with all of the “green” features that Parlin is offering and can afford to pay whatever Parlin is asking?
I’m at a loss to understand why every new housing development (or any new housing development) has to include small, bare bones starter homes on very expensive land in Davis.
I do agree that we ought to have policies which serve the housing needs of lower income residents and students as a class. The first aspect of that would be to greatly increase the supply of market-rate apartment complexes in town, so that we don’t perpetually have a 0% or near 0% apartment vacancy rate.
“I’m at a loss to understand why every new housing development (or any new housing development) has to include small, bare bones starter homes on very expensive land in Davis.”
I guess you haven’t been paying attention to previous posts on the subject. Many of us don’t like densification (some have likened it to tenement living), but would hold our nose and vote for it if, and only if, the project 1) was not a net fiscal negative for the city; and 2) it provided “affordable” work force housing. It appears as if WHR provides neither affordable work force housing nor a net fiscal positive to the city. That is on top of the problem with Parlin printing a fairly misleading ballot statement on both issues. Couple those things with the fact that the Finance and Budget Commission was never really able to weigh in on the issue of fiscal neutrality, and you have a lot of “NO ON MEASURE P VOTES”.
Rick Entrikin’s analysis is spot on.
[quote]Many of us don’t like densification (some have likened it to tenement living), but would hold our nose and vote for it if … it provided “affordable” work force housing. [/quote] You may well know something I don’t about real estate development*, the cost of land and the cost of real property improvements. However, it is my understanding that your stated desires are in stark opposition to one another. That is, you cannot have low density housing in or around Davis which meets our standards of quality and is low cost.
Because of our schools, library, parks, greenbelts, shops & restaurants, UCD and so on, Davis is a very desirable community to reside in our region. Therefore, the cost of land here is very high. It has been that way for a long time and will remain so (hopefully) long into the future. Expensive land is not a bad thing. It’s a sign you live in a nice place. But expensive land precludes low density, low cost development (unless you are talking about building extremely poor quality improvements).
Back in the 1960s, when my family moved to Davis, land was cheap (in part because Davis was itself less desirable; in part because the land:People ratio was much greater). At that time, homebuilders like John Whitcombe and Bill Streng and Stanley Davis built (nice enough) houses on generally good-sized lots which most middle and lower-middle income families could afford. But that is impossible today. It’s been impossible for more than 25 years in Davis.
If you want for-sale housing on this desirable land which, say, a couple of DJUSD teachers could buy, it cannot be on a large lot. It’s going to have to be on a very small lot, packed in with other houses on very small lots. It likely will have to be a multi-story townhouse. And it will likely have to be very plain. (The WHR proposal, on the whole, is not plain. Buyer will pay a great amount extra for the added “green” features.)
*I used to work in real estate development in the Bay Area. My company bought old industrial buildings and warehouses and rehabbed them into live-work lofts and other similar products. But it’s been a long time since I’ve been in that industry, so I don’t mean to paint myself an expert.
so…. let’s review this again. We are being asked to approve more housing that we do not need(2000 units already approved to be built) at this time, ignore SACOG’s housing numbers for Davis and by increasing them, under SACOG’s formula, our next SACOG fair- share housing number will be greater than it would be otherwise, build housing that will be too expensive as workforce housing, throw out the year-long work of the citizen Housing Steering Committee, shred the normal Measure J processes for an informed Davis electorate, approve a project that at best has a small negative impact on the city coffers due to special development agreement arrangements to offset the expensive nature of the project’s construction…. all this to build expensive townhouses with 90 less GHG emissions(this like many other claims are described as “intentions” with no penalties for non-compliance in place)and we are not told what the real relative amount reductions are, only the % reduction, all this…..so that we can experience that feel-good glow for addressing global climate change, even though it is established that the technologies being used cannot remotely be increased to the scale necessary to have any real impact on the problem.
“Something just doesn’t sit right about Measure P (including the claim that the developer is having to pay people to campaign for the project). If I’m missing something, hopefully a more astute blogger will educate me.”
Hi Rick:
I don’t know you, but welcome your thoughts…I attended the City Council meeting on Tuesday night (as a clear NO ON P person) and Tues night only made me know that this is the right position to take based on the following points ( and I encourage anyone who disagrees with any of the following to watch the streaming video of the 9/15 as evidence):
I will be called a “classic nimby” for the following (by the likes of “Typhoid Mary”), but only presenting what I saw and heard at the Council meeting, but so be it, I can take insults from anonymous bloggers..
1. I had a college student come to my door on Sunday afternoon, nice young woman who was working very hard and admitted that she was being paid $15 a hour for her time (great job! when I was college, I worked as part-time clerk in the college bookstore unloading trucks, and at that time, would have made 1/3 of today’s $15 per hour!) This young lady told me we should vote on P because it is “really green” and “really affordable”; I have heard this “really affordable” mantra from others at City Planning and City Council meetings, including testimony from Ms. Tansey Thomas and others as to why citizens should support the project….Then on Tuesday night, when the developers and the Council were finalizing the Development Agreement, John Tallman comes to the podium at 11:45pm and states that Parlin was NOT willing to give up the “land dedication” clause in the agreement, which meant they wanted to have an “escape clause” that if they were unable to build the affordable housing units in the project, the land would be given to non-profit developers and the city would have to pick up the $3.2 million subsidy for the affordable housing tag! This is something which Parlin already stated in their ballot statement they would do and they are paying their campaign workers to spread this message, yet only after firm admonishment by the ENTIRE Council in unanonymity (about the only thing the entire Council has agreed with this project); Parlin returned after midnight and agreed that they would build the affordable units themselves….WHY say in your campaign literature you will build affordable housing but then have to wait until midnight to declare that it will happen???
2. It was also reported at the Council that the “affordable apartment” part of the project (and confirmed by the City’s Affordable Housing director Danielle Foster) would consist of 23 “low income” apartments, which would rent for “market value”!!! leaving only 15 apartment units for “very low income” renters…does this solve any “low income” housing needs for Davis…cleary debatable!
3. It was also reported by Councilmember Souza that Parlin paid about $2.5 million for the parcel in 2004 (that figure can easily be confirmed by a visit to the County Assesor’s office with a public document search) and Souza claimed that if the measure passed on Nov 3, the value of such a “paper lot” after Nov 4 would rise to over $9 million! WOW, what an immediate profit surge (and incentive to sell the land for an immediate economic windfall)! Developers are in the money making business and Parlin is no different than the rest; in fact, look at their website, which reports of Parlin:
“…we have formed several limited liability companies that have purchased numerous parcels of land in various stages of the development cycle and sold several projects that have generated substantial profit margin for our investors.”
What is White Rock LLC (that is listed on their website)? Is it the development corporation I have googled out of Dallas, TX??? Do they have any different plans for this site???
Some interesting things to ponder for undecided voters, and thank you very much Rich for posing the questions….
“You may well know something I don’t about real estate development*, the cost of land and the cost of real property improvements. However, it is my understanding that your stated desires are in stark opposition to one another. That is, you cannot have low density housing in or around Davis which meets our standards of quality and is low cost.”
Well we certainly can’t with your attitude. How about if the City of Davis starts striking better deals with developers for a start? Part of the problem in this town is that developers pretty much strike deals very favorable to them, at great profit, and the city does not get what it needs. Unlike you, I’m not for accepting the status quo, if we can do much better, and I think we can. It should be the cost of doing business in Davis.
Anon:
I agree with you that the City of Davis needs to strike better deals with developers. Whether one is no-growth, slow growth or fat growth, we should all agree that the City’s interest should come first over a developer’s. I think a healthy skepticism about any developer’s intentions is also warranted.
“Anon, I agree with you that the City of Davis needs to strike better deals with developers. Whether one is no-growth, slow growth or fat growth, we should all agree that the City’s interest should come first over a developer’s. I think a healthy skepticism about any developer’s intentions is also warranted.”
Healthy skepticism about any developer’s intentions is also warranted?
What a novel idea! And how right you are!
Phil, if we demand a positive cash flow for the city how much would each new unit cost? My guess is close to a million dollars so we would never build anything again by your standard.
Rich, land is only expensive because we have restricted growth. Open lots of land to development and watch values return to the old days.
Rick, Seniors don’t want to live in three story townhouses.
“Phil, if we demand a positive cash flow for the city how much would each new unit cost? My guess is close to a million dollars so we would never build anything again by your standard.”
According to Sue Greenwald, this project would have pencilled out if the developer were forced to pay $6,000 per unit, which is what other developers have been expected to do…