Sustainable Demographics: Challenge and Opportunity for the Davis Economy

By Doby Fleeman

I read with interest the recent Davis Enterprise coverage of Assemblywoman Mariko Yamada and her cautionary observations regarding the rising tide of senior citizens in the Yolo County region. Referring to the “silver tsunami,” the article identifies many of challenges facing our growing senior population.

Quoting Yolo County Supervisor Jim Provenza: “Problems are only opportunities in work clothes,” and the next step “is to begin working on these problems.”

How true.

In addition raising funds to help augment underfunded social services, we see the senior community evolving new models of support with opportunities to establish new friendships, share skills, and arrange transportation, household and other services that make it easier to live independently in their communities of choice. These are some of the many opportunities that accompany such changes.

By virtue of the university and our large number of residents who have devoted their careers to public service and planned accordingly for their retirement, Davis may not face the sheer numbers of those requiring special assistance, but inevitably, there will be a growing need to support such programs both in and around the community.

These needs will result in new pressures for new programs, and for which the funding has not been identified. And therein lies the challenge: How do we plan to generate the funding to support this new demand for growth in services — on top of everything else now before us?

This week, I chose the issue of demographic trends because they have very real planning and fiscal implications for our community. And, likewise, they once again help to emphasize the unique opportunities available in Davis to address this approaching wave.

As a population ages — not unlike our roads, our pools, our schools and our parks — we are requiring more care and more expensive maintenance. And, at the same time, many of us are spending less, hoping to reduce expenses and thereby extend our financial resources during retirement. This natural tendency to downsize purchasing, together with a growing preference for “aging in place,” tend to result in both reduced per-capita spending and reduced property tax generation.

In other words, what works well at an individual level in terms of savings doesn’t translate too well when it comes to generating new revenues to support our increasingly expensive municipal service requirements. I broach these issues, because it seems only a matter of time until our City Council presents its latest budget and we begin the long-overdue discussion of our best options to fund reinvestment in our community infrastructure.

What, then, are our best options and opportunities for working our way out of this imbalance?

At the other end of the aging spectrum, our community enjoys a continuing expansion of college-age students. Unlike the population of more permanent residents, this demographic does not “age” over time. Rather, it is perpetually replaced with each new class of students.

This critically important and vibrant segment currently represents about a third of our resident population. It is also important to recognize that this population is traditionally regarded as having more limited spending power and is least able to afford additional new financial burdens as the community grapples with how to pay for its increasing cost of municipal services.

By the same token, this same group of young college students represents an incredible pool of talent for our next-generation economy. One of the younger generation’s greatest challenges is finding a suitable place to work. While we have some amazing and exciting examples of new startup companies, they’re certainly not for everyone. For the vast majority of graduates, Davis offers few viable career opportunities. It strikes me as such a missed opportunity, and yet, it is something within our power to address.

This juxtaposition between the generations seems the perfect opportunity for a constructive pivot to the next economy — growing important new jobs, while reinforcing our local economy.

As we consider options for the future direction of the community, I would encourage young and old alike to thoughtfully consider — and preferably engage in — the conversation around the economic and social ties that unite our generations to help ensure a healthy, prosperous and sustainable future for all.

Doby Fleeman is a co-owner of Davis Ace Hardware. This editorial originally appeared in the Davis Enterprise and was submitted to the Vanguard by its author.

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Disclaimer: the views expressed by guest writers are strictly those of the author and may not reflect the views of the Vanguard, its editor, or its editorial board.

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63 Comments

  1. South of Davis

    I forget who said it but “Demographics are Destiny”…

    Not a lot of people are like me and know a large number of older Davis residents “and” a large number of students and recent grads.  People my age are doing fine while things are real tough for the young people (that are not still supported by their parents).

    While most boomers who bought homes in the 90’s in North or South Davis for ~$300K check Zillow waiting for them to go over a million again (while telling me that they are already over a million since Zillow does not know that they spendt $100K to remodel the kitchen with a Wolf range and Sub Zero fridge) young kids look at their student loan balances that are over $100K for most kids that went to grad school.  It is amazing how tough things are out there for the next generation.  I have posted before that I don’t know (and have even heard of) a single person under 40 that bought a home in Northern California in the past 5 years without help (money) from family.

    Back when I graduated from college (without any student loans like most people) just about anyone that got a decent job could buy a home (and if you had a crappy job you could buy a condo).  Below is a link to some charts that show trends that are not good for America or Davis:

    http://www.zerohedge.com/news/2014-10-28/us-homeownership-rate-drops-1983-levels-heres-why

    1. Frankly

      Thanks for posting the article SOD.  I actually do not have too big of a problem with falling home ownership only because home ownership itself is part of a giant Ponzi scheme perpetuated by our stupid social engineering politicians.  The benefits derived by us older folks have been unsustainable and largely a product of government meddling and not a true representation of appreciation from basic economic principles.

      A home mortgage should be a 30 or 15 year fixed at 6-10% requiring 20% down.  Nobody should be a mortgage at subprime credit risk.  Nobody should be getting a mortgage that is structured and priced in anticipation of collateral appreciation.  Nobody should be getting rich off the appreciation of their home… they should be working to pay off their mortgage so they have can eventually retire without that expense.  Nobody should be getting rich flipping homes.

      Thanks to CRA, stupid political-motivated too low rates, Freddie and Fannie… the residential real estate market is all screwed up.

      The day that our neighbor struck up the conversation about how much his home is worth was the day that we should have recognized things were broken.

      I don’t see falling home ownership as a big problem because I see home ownership as a being part of a broken system.  Renting is fine.  Renting makes for a more mobile and transient workforce… which I think we need.  But rents are way too high.  We are simply not building enough rental units.

      And if you think about all the economic problems impacting young people, including run away rent inflation, they are all related to personal greed.

      Here in Davis we have people greedy to protect what they enjoy to the detriment of others that might otherwise benefit.  We don’t build enough rental units and we don’t provide enough jobs because we like to look at fields at the edge of town.  We build a farmland moat to ensure nobody can change their mind about this.  We like certain types of people living here and not others so we constrain the opportunities to keep out the “riff raff” as we see them.  We like fat government pay and pensions and so we tax the crap out of everyone and cause hyper inflation of necessities like education and healthcare.

      We like what we like and to hell with others unlucky enough to be born too late.

      What is greed if not to pursue your own wants to the detriment of others?

      The right thing for Davis to do is to build more rental units and develop our economy so there are more jobs.

      I hope enough of us vote to do the right things.

      1. TrueBlueDevil

        If we had 20-40 million less residents, rents would also be lower. (Decreased demand.) FYI, the Obama administration recently put out an RFQ for up to 34 million green cards.  So much for 12 million undocumented immigrants.

  2. Aggie

    Agree that UCD students represent “an incredible pool of talent for our next-generation economy.” Unfortunately, our stagnant housing stock means that almost all of them are forced to leave every year.

    1. Don Shor

      If we were going to try to overcome the rental housing deficit by building single-family homes (trickle-down housing supply), we would need thousands of them.

      1. Aggie

        DS: More accurately, I should have used the term dwelling units. Our entire housing stock is stagnant. Multifamily rentals, condos, single family attached, single family detached, trailers … you name it.

        I’m a little disturbed with what I’m reading on conversion of single family houses to “student dorms.” That seems like a leading indicator of a very serious problem. The inhospitable ecosystem is adapting in a way that the existing homeowners are going to find pretty unpalatable. Most student are going to do whatever is necessary to live in town, and they have bid up the price of a bedroom to the point where a homeowner with a nice house in an expensive neighborhood can make a healthy profit by renting to a bunch of students (without remodeling to add bedrooms or parking spaces). It’s not clear what the city government can do to stop this.

         

        1. Miwok

          Aggie I made a comment about SFRs being “student dorms”. Maybe other people did as well , but I base this on living in Davis for about ten years, and finally moving away. Look at the number of remodeled houses where garages are filled in as living spaces. Go to the advertisements for housing in Davis and surrounding communities where the “extra room” or the whole house is rented to students, or the Parents of students rent out all the rooms for their “student” then leverage that to finance their kid’s education. I have talked to contractors from areas doing work on housing downtown where bunk beds are being built to house a dozen kids in one residence. No extra bathrooms either!

          Enforcing code compliance would stop a lot of this, since any street you drive around is packed with way more cars than they should have. Because the family’s student lives in the house, they probably work the system accordingly. The city could stop it if they enforced codes, but I have lived in apartments and homes like this, and I think it is a crazy situation. As a result, the infrastructure is stressed beyond what it is designed to serve.

          UCD is not keeping up, and won’t due to State budget cuts. The new dorms being built are replacing lots of old buildings, and they are going to need replacement in 20 years. If you look at the dorm rooms they are putting students in, I am surprised they ever sleep there.

      2. Matt Williams

        Agreed Don.  Further, the invasion of single family residential neighborhoods by mini-dorms would change the way that young children grow up in those neighborhoods where the residents of the mini-dorms have no children to add critical mass to neighborhood child activities.

        In addition, the cachement areas for neighborhood Elementary Schools will be challenging to manage as fewer and fewer SFRs are able to contribute children to the Elementary Schools.

        1. Miwok

          Good point Matt. As a worker at the UCD campus, I was appalled at the frat house atmosphere on some streets. And I kept late hours in those days, working graveyard and swing shifts.

    2. Sam

      It is funny that in a town full of liberal individuals who believe that income inequality and home ownership are very important issues that need to be addressed are the same people who are firmly against growth (no jobs or additional housing) in their town. Kind of the “We have ours, other people really should get theirs, just not in my town” attitude.

        1. Tia Will

          Frankly

          Sam – I think you nailed it.

          Part of our Davis DNA is unfortunate in that is conveys that exact message and result.”

          And just when I thought that you, Don and I were finally in agreement on something, you post this.

          From my point of view, the Cannery, which I certainly did and do oppose is the antithesis of what we need. I do not believe that Davis has a dearth of single family residences in the mid to high price range. I rather agree with you that what is truly needed is more apartments. In my experience, based on long practice here in town with many undergrads, graduate students and recent grads in my practice as well as my children and their colleagues is that affordable housing ( not homes in the $400 – 600,000 range) is what is needed for those who want to stay. Also being overlooked in this conversation is that many students want to spread their wings, have some experiences in more exciting, larger cities before returning here to settle down with their families. By the time many of these Davis kids are ready to return they will have established their careers, maybe bought a starter house in a less expensive location and are now ready to move up which is exactly what many of us “boomers” did. Now, it is true that many of us did not have as high a student loan debt, but I do not see that as a housing or even a jobs problem, but rather a choice to effectively abandon affordable higher public education in California. With regard to that we have for being unwilling to support that education with tax dollars and our willingness to outsource it for payment to out of staters such that our own children have little chance of getting in.

        2. TrueBlueDevil

          Tia, I am curious as to your thoughts on this specific issue.

          I have noted repeatedly the campus choosing to tear down moderately older apartments, with a big emphasis on “energy conservation”.

          But at what cost? The figures I have heard for the new West Village are sky high. So now we tear down the older Castilion, and other older on-campus (Aggie Villa?), modestly priced housing, which makes no sense to me. Double-pane windows are modest in price, and insulation is cheap. Further, construction uses lots of energy!

          I’m not against some new construction, but I also think we should preserve affordable housing.

          1. Matt Williams

            TBD, I’m doing some research about the amount of on campus housing UCD provides, and how that has changed since 2002. In the process I may have run across the answer to your question . . . earthquake resistance requirements. “In January of 2011, a seismic evaluation found the Pierce Hall buildings seismically deficient. “The concrete structures employ steel connections to connect floors to supporting walls, which was consistent with then-current building codes but do not comply with current seismic standards. Under University of California seismic policy, the buildings were determined to be ‘poor’ to ‘very poor.'”

      1. Davis Progressive

        the problem with your comment is that you assume that liberal is monolithic.  there are different kinds of liberals and some of them frankly don’t give a crap about income inequality.  in davis, you have a large percentage of what one poster called “prius” liberals – they are wealthy, they are liberal on environmental issues, on some social issues, but they have their expensive homes and drive their expensive cars.

        1. Sam

          I am not saying that all liberals believe in the same thing However, the people that the community elects to represent them constantly talk about income inequality and lack of affordable housing.

          When measures are put on the ballot to build anything in or around the town it is met with fierce opposition (racetrack, West Village lawsuit).

          (I’m not sure how the Target measure ever passed!)

          1. David Greenwald

            Target passed because enough UCD students voted and voted for it to swing a close election.

      2. Don Shor

        Most of the ones I’ve actually discussed housing issues with feel that the university should build a lot more housing before anything gets annexed for development, at least for housing. I’ve noticed more openness to annexation for business development, particularly when you mention Schilling and other home-grown businesses needing room for expansion.

        1. Matt Williams

          The problem is that UCDMG has shown no evidence that it is going to increase the number of units it offers on campus to students.  It has indeed added units in West Village, but at the same time it has taken essentially the same number of older units out of service.

        2. Aggie

          Agree with MW. Waiting on UCD is like waiting on Godot. A lot of talk but nothing happens.

          But maybe that’s the goal?

          Most UCD students will go to great lengths to live in town.  Mini-dorms are sign that our broken ecosystem is starting to evolve in ways that existing homeowners are not going to like.

          1. Don Shor

            Agree with MW. Waiting on UCD is like waiting on Godot. A lot of talk but nothing happens.

            I agree. That’s one of the reasons I support the Nishi project.

          2. Matt Williams

            My problem with the Nishi Progect as it is currently being discussed is that its number of student-focused housing units is less than half of what it should be.

        3. Miwok

          An interesting point about the Med Center as well. A teaching hospital who just started a new Nursing School, with no dorms or housing for any of them. UCDMC, UCDHS that is.

        4. Aggie

          MW: Agree 100%. If the Nishi site – the best ground for tech startups in a 50 mile radius – is going to be pissed away on apartments and condos … at least have the common sense to go big.

          1. Matt Williams

            Aggie, I think that we can have our cake and eat it too on the combined Nishi-Gateway (Nishi plus Solano Park) properties. In a holistic Davis Innovation Ecosystem, the space available to start-ups at the Nishi-Gateway will be “nurturing” for those businesses that are still holding onto the apron strings of the Ivory Tower pure research environment of the University. Those businesses will more often than not be making the transformation from pure research to applied research, not quite ready to go into unfettered product rollout. In effect it will be an incubator, with the East and West and Downtown (Bisch Central) Innovation Centers providing homes for the innovation businesses that have outgrown the incubator stage.

            In addition to providing student residences, the multi-story residential complexes built on the Nishi/Solano Park site will provide a perfect living environment for the young recent UCD graduates who populate those “incubating businesses” with their innovation-oriented, applied-research, employee workforce.

        5. Aggie

          MW: My opinions on the issue:

          (1) The Nishi property is the only major piece of property adjacent to downtown and the university and is too precious to waste a single square foot on residential.
          (2) The only way the land will be annexed by the voters is if they understand and agree with the city-wide fiscal sustainability sustainability strategy (the so-called dispersed innovation strategy).
          (3) The current proposal is not responsive to this strategy.
          – High density residential is revenue negative.
          – Tech space is revenue positive.
          – The current proposal for only 300,000 to 500.000 of tech space is insufficient to have a significant fiscal impact on the city-wide innovation-related revenue goals.
          (4) In general, innovation centers are more prosperous if they include on-site residential – however – this is not a good strategy for the Nishi parcel because of (a) the limited acreage, (b) the challenges of densifying the site enough to make room in the fiscal model for residential, and (c) most importantly, the availability of adjacent land for residential development.
          (5) 100% of the residential at this location should be on the university side of the tracks to maximize the positive fiscal benefit to the city from the annexation, provision of city services, and development of the property.
          This land on the north side of the tracks was previously residential.
          Shifting tech space to this side of the tracks benefits the county at the expense of the city.
          (6) The residential should be considerably more dense than currently proposed to maximize the number of beds and minimize the impacts to the city from the university’s ongoing failure to prove its fair share housing under its prior agreement with the city.

          1. Matt Williams

            Aggie: Thoughts prompted by your thoughts:

            (1a) As the only major piece of property adjacent to downtown and the university, Nishi-Solano Park is indeed very precious.

            (1b) Looking at its potential use, downtown appears to not need more retail space. The evidence for that is that what we have is being converted out of retail at a very fast pace. We clearly need tech transfer incubation space. The question is how much of that space is needed. My past discussions with Monsanto and ConAgra about locating some of their applied research on the Nishi site were illuminating regarding the perceived drawbacks of the Nishi site. Going through the UCD campus on Old Davis Road was seen as a major drawback. Access from I-80 would mitigate those drawbacks considerably, but the economic feasibility of a Nishi exit of I-80 is challenging.

            (1c) The University’s commitment in 2002 to house 40% of its student population on-campus which means 14,000 available beds. Further, since the 1st year student goal is 85% (which means 6,000 of the incoming 7,000 freshmen in 2020) and the goal is that all 7,000 of those freshmen will not have an automobile, UCD needs beds withing walking distance of the Main Quad. Where do you propose they get those 7,000 beds, especially since their goals for 2nd year students are another 3,000 beds (48% of 7,000 subject to dropouts), plus another 3,000 beds for new transfers (39% of 8,295 in 2014 see http://admission.universityofcalifornia.edu/campuses/davis/transfer-profile/), plus 20% of all juniors and seniors, plus 30% of graduate and professional students?

            (2) Agreed

            (3a) Given the proposed demographics of the proposed housing on Nishi-Solano Park, I’m not sure that I agree with you that high-density housing will be revenue negative. My suspicion is that the City services provided to students have a much narrower range than the services provided to non-students, and as a result much more focused cost.

            (3b and c) Agreed, but I wonder if the kinds of startup companies that will be in need of incubator space will generate much in the way of taxable product for resale. I could be wrong, but I see it as much more of an intellectual capital building environment, and that once a company no longer needs the supportive womb of an incubator environment, they will move out into the East Innovation, West Innovation or Bisch Memorial Downtown Innovation space.

            (6) Agreed. Just for grins let’s say my SWAG is that it should contain 7,000 beds, which would put a substantial dent in UCD’s shortfall documented by the 2002 Umiversity of California Housing Task Force.

            UC Housing in the 21st Century - Housing Goals

            UC Housing in the 21st Century - UC Davis specific plan

        6. Aggie

          MW: Thoughts prompted by your thoughts on my thoughts:

          (1b1) Agree that retail on Nishi is inappropriate. Retail will return to downtown when there are more people walking around with more disposable income. This won’t be dictated by the planners, politicians, or voters. It will be driven by private parties looking at risk/reward. Hopefully the planners and politicians will get out of the way and let the free market work, rather than trying to protect existing incumbents.

          (1b2) “Tech transfer incubation space” is the wrong way to characterize this. We need space for small technology companies. The concepts of incubation and tech transfer aren’t germane. Whether a company comes out of a local or regional incubator, UCD, the bay area, or somewhere else in the world is also not germane. The city should not even think about trying to micromanage this. Where there is a role for the city is in establishing the appropriate zoning restrictions so that (a) a large user(s) does not come in and crowd out the small companies, (b) UCD does not come in and crowd out the tech companies (as they did on 2nd Street), and (c) users that are not traditional tech park users are, at a minimum, subject to a CUP.

          (1b3) How much space is needed. No upper limit. Absolutely as much as the site can accommodate under CEQA. None wasted on a Whitcombe student housing project.

          (1c1) Vertical development on the Solano Park site could accommodate a healthy portion of this 14,000 bed backlog.

          (3a1) The fiscal impact of multifamily is something that can be accurately estimated. I’d have to see a economic analysis before I would concede on this point. Whether student/multifamily housing is negative, neutral, or even positive – non-retail commercial definitely has a much high net fiscal benefit.

          (3b/c1) Small technology companies typically generate less fiscal benefit than larger established companies. Lower salaries, less equipment, etc. But we need both small and larger companies to create a healthy vertically-integrated ecosystem.

          (3b/c2) The fiscal benefits to the innovation economy –

          downtown < Nishi << peripheral technology parks

          1. Don Shor

            (1b3) How much space is needed. No upper limit. Absolutely as much as the site can accommodate under CEQA. None wasted on a Whitcombe student housing project.

            (1c1) Vertical development on the Solano Park site could accommodate a healthy portion of this 14,000 bed backlog.

            Waiting for UCD to build student housing just means no more rental housing will be built any time in the near to mid future. Nishi needs to provide some housing. It’s not ‘wasted’; it helps meet an urgent need for rental housing.

          2. Matt Williams

            Aggie: Further thoughts:

            (1b1) I could be wrong, but I don’t expect retail to ever return to downtown. I believe that that will be the free market result, because tThe demographic profile of Davis is progressively getting older and older at the top, while increasing the student age proportion at the bottom as UCD expands its enrollment. Neither of those demographic cohorts spend any appreciable amount of retail money, and the type of retail they spend on isn’t going to be a Davis staple. Look at how little value that advertisers of products place on the the 55 and older demographic. The younger demographic will spend lots of bar and restaurant dollars, but they are highly unlikely to ever be buying their clothes, etc. in Davis.

            (1b2) I agree that the City shouldn’t micromanage how/where the technology companies land. However, there is a fundamental growth reality of small technology companies like Digital Technology Labs and Marrone Bio Innovations and AgraQuest and Calgene and Schilling . . . which is that the growth of the successful ones will be rapid, with the resultant conundrum that they will need significantly more space when they move from the forming, storming, and norming phase into the performing phase of their evolution. The 25 net buildable acres of the Nishi-Gateway isn’t going to be able to accommodate the needs of those companies once they start performing. If such a performing company insists that Nishi-Gateway accomodate its growth, then the space identified for incubation infrastructure will be rededicated to the performing functions of the growing company.

            The market reality for the companies that succeed is that they will have already planned their eventual departure from Nishi-Gateway before they even arrive in Nishi-Gateway . . . and they will only go to Nishi-Gateway if there is a “nurturing advantage” to be derived as the result of close physical proximity to the Mother Ship.

            When you say “Whether a company comes out of a local or regional incubator, UCD, the bay area, or somewhere else in the world is also not germane.” I completely agree with you, because a company that has progressed far enough to have “come out of an incubator” will be dependent on Mother Ship walking distance proximity. Locating in other parts of the Innovation Ecosystem will be sufficient proximity, just as it currently is for DMG Mori, Schilling, AgraQuest, Marrone, HM Clause, etc.

            With the exception of the incubation support infrastructure (Venture Capital firm offices, Law offices specializing in intellectual capital, etc.), I don’t expect that the market dynamics for these small technology companies will result in any of them staying for more than 5 years. They will either succeed and follow an up-and-out path, or fail and disappear to be replaced by new candidates for success.

            (1b3) I agree with your first three sentences. However, your fourth sentence assumes an either/or reality, which I believe is much more a both/and reality. The kind of “Mother Ship” reliant companies that will want to locate at Nishi-Gateway will attract employees who will want as close to a live-work environment as possible. They will want to live within the Nishi footprint.

            (1c1) I agree, but UCD has to see it that way. Because of its direct access to Downtown amenities and close (immediate) proximity to the core UCD campus, vertical development of thousands of beds on the A Street Intramural Field just west of the intersection of 3rd and A Streets makes incredibly logical sense, especially for Freshmen who are prohibited from having cars, but UCD isn’t likely to do that.

            (3b/c1) I agree, and with the market driving short tenures on the Nishi-Gateway portion of the Innovation Ecosystem, we will indeed have both, with the more mature, mid-size and larger companies naturally gravitating to the non-Nishi sites.

        7. Aggie

          MW:

          The 25 net buildable acres of the Nishi-Gateway isn’t going to be able to accommodate the needs of those companies once they start performing.

          That’s why the zoning needs to put a cap on the maximum number of square feet for a single end user.

          they will only go to Nishi-Gateway if there is a “nurturing advantage” to be derived as the result of close physical proximity to the Mother Ship.

          Not true. They will go for lots of reasons. Small leasable spaces. Appropriate TI’s. Proximity to peers. Proximity to downtown. Etc.

          Proximity to UCD will be material to some and others won’t care.

          employees who will want as close to a live-work environment as possible

          This is not specific to Nishi or company size. The obvious extension of the argument is that the innovation parks on the periphery should have housing integrated into them as well. If it’s good for Whitcombe, then why not Ramos?

          1. Don Shor

            The obvious extension of the argument is that the innovation parks on the periphery should have housing integrated into them as well.

            But they don’t, so this is a moot point. Why do you keep mentioning Whitcombe?
            More to the point: Nishi is an innovation park. Those include housing. As many of us have noted, the other projects are not innovation parks, regardless of what they and others here choose to call them. They are business parks. Business parks don’t usually have housing.

        8. Aggie

          “Nishi is an innovation park. Those include housing. As many of us have noted, the other projects are not innovation parks, regardless of what they and others here choose to call them. They are business parks. Business parks don’t usually have housing.”

          This is nonsense.

          1. Don Shor

            No, you can look up the definition of an innovation park.

            What is an Innovation Park?

            Innovation Centers are usually within
            three miles of a major university or
            research facility.
            • University proximity is complemented
            by close political, administrative,
            or financial relationships with the
            university. These relationships are
            characterized as mutually beneficial:
            the center provides a site for
            employment, particularly in the realms
            of research and development, while
            the university provides a steady stream
            of qualified staff, collaborators, and
            consumers. The university can also
            provide access to campus amenities
            and resources for innovation center
            employees. Often the community,
            innovation centers, and universities
            work together to apply for research and
            development funding.”

            Centers are near housing and a major
            downtown area. Research suggests that
            quality of life as it relates to community
            livability and access to cultural,
            entertainment and recreational amenities
            play an important role in a center’s
            success in attracting businesses.

            Innovation centers do not focus on
            recruiting a particular business or
            industry but instead try to attract a
            wide range of businesses whose
            only similarity maybe that they are
            innovative or cutting edge. Many centers
            include incubators for new and emerging
            companies to nurture cutting edge new
            technology.

            Centers have shared spaces of varying
            sizes and types in order to nurture
            creativity and innovation. Shared spaces
            that bring together center occupants,
            such meeting and conference rooms,
            shared recreation areas or cafes, are key
            components of the built environment.
            This is also why proximity to downtowns
            is valued. Innovation centers and mixed
            use innovation districts provide amenities
            and support flexible creative live-work
            and desired sustainability focused
            lifestyle choices.< ./blockquote>

            http://extension.ucdavis.edu/unit/land_use_and_natural_resources/pdf/innov_study.pdf

            In other words, sites where employees can live and work, walk to downtown, closely interact with the university, and where businesses will interact in shared spaces. Nishi meets all those criteria.
            Most of the focus on Mace 200 has been about finding space for one particular business: Schilling. There is no housing component. Neither the Mace nor NWQ proposals has significant connectivity to the downtown or to UCD. They appear to be pretty standard-issue peripheral business parks, which I am sure will be well-designed to meet Davis standards. But they aren’t Innovation Parks. They are Business Parks.

  3. Anon

    What an odd conversation, IMO.

    Building home equity has always been the American dream.  Start by both husband and wife working, living on one spouse’s salary while socking away the other’s salary to save for a house.  Then purchase a very modest starter home/townhouse.  Keep saving, and eventually use more savings plus the equity gained in the first house to purchase a larger home to meet the needs of spouses and any children that are a product of the marriage.  And with any luck, eventually pay off the mortgage, so that as senior citizens, a couple can comfortably age in place once the children have left home.

    Paying rent money does not build equity, nor does it generate the pride of ownership working for a home provides.  Even low income folks will attempt home ownership by commuting farther if the housing sought is cheap enough for them to afford.  I’ve seen truck drivers live far, far out of town, in very rural areas, sometimes owning a mobile home out in the sticks – but still owning a home on some land.

    The situation in Davis is somewhat unusual/unique.  Because UCD has no obligation to provide adequate housing for its students, and it can foist its housing problems on the city, it has caused two problems: 1) overly expensive housing because so many homes are snatched up by investors to rent to students; 2) UCD will not build enough housing to accommodate its students.  I’m not sure I am willing to put the onus on the city to provide the necessary rental housing for students, to relieve the housing pressure that has built up as a result of UCD’s housing policies or lack thereof.  But I also don’t have a good solution to Davis’ odd problem.  Question: Do other college towns have this problem?  If yes, which ones, and how do they address this issue?

    1. Davis Progressive

      a few years ago there was a statistic that showed ucd provided the lowest percentage of on-campus student housing of the uc schools.  i’m not sure if that’s changed as it’s probably been six years since i’ve seen that stat.

      1. Miwok

        if you need info, http://housing.ucdavis.edu/prospective/

        What I have been told by Resident Advisers is that all Freshmen are required to stay in dorms, pretty cozy, and then they are on their own unless they have room on campus.

        http://housing.ucdavis.edu/current/parks-communication-2014-06-06.asp has some info on present progress, there are many other articles.

        As an aside, some of the campus housing was explained with fanfare as housing for Students, Staff, Faculty and Retiring. When I inquired about them, they said they have a “list”, and I would never make it (not prominent enough).

    2. Tia Will

      Anon

      Building home equity has always been the American dream”

      Maybe the truly progressive approach would be to start developing a different American dream. One that centers on being comfortable and living a contributive life rather than acquiring a fixed amount of possessions for fulfillment. If we were guaranteed as a member of society to always have a roof over our head, enough food, clothing and medical care, we would not have to spend much of our lives worrying about how we are going to acquire our basic needs, let alone goodies.

      Oh, my gosh, freedom from ( worry and unnecessary hardships) as opposed to freedom to attempt to acquire ever more material goods. What a dreadful, socialist scenario.

      Just a thought.

    3. Matt Williams

      Building home equity has always been the American dream.

      One of the earliest lessons we learned in the Wharton MBA program was that a simple fiscal analysis of the choice between home ownership and home rental more often than not produced a better short-term and long-term fiscal result for home rental rather than home ownership. The reason the professor took us through that analysis was that human beings often make decisions based on the feelings that arise from their “dreams” rather than from the facts that fiscal analysis provides. Since the average age of the 48 students in that MBA program was 39+ years, and most of us had actively been through the home ownership vs. home rental decision in our lives, it was a lesson that had personal resonance.

      The application of that Wharton lesson in Davis is that we probably have an over abundance of home ownership options and an under abundance of home rental options. Adding to the home ownership supply and ignoring the home rental supply has every appearance of a dream going backward.

      1. Gunrocik

        We’ve made home ownership incredibly lucrative from a personal income tax standpoint and from a financing standpoint by keeping interest rates incredibly low.  And we’ve provided huge subsidies to home builders via the interstate highway system opening up new areas for development, allowing tax free financing for infrastructure and from promoting a culture that espouses owning your own home.

        Conversely, we’ve made it incredibly difficult to assemble sites for infill, created building codes that make it far more expensive to build density and allowed our city and inner ring suburb schools to rot as we provide subsidies for families to move further and further from the city center.

        Now we are in a permanently stagnant economy, the cost of both building and maintaining single family homes has increased substantially over the past decade and we’ve tightened up underwriting criteria for financing.  And our next generation of home buyers is going to desire smaller close in homes because they prefer a more urban lifestyle and they can’t afford all the starter castles we’ve built the last 15 years.

        And to top it off, we can no longer to maintain all of the sprawling roads to connect all of these subdivisions.  We’ve essentially developed our community in a sprawling, inefficient manner which is expensive to maintain for the city/county/state and the individual castles have become very expensive to maintain as well.

        Homeownership is going to drop, many suburban locations will deteriorate as families move out, boarders move in, cities no longer have the money to maintain infrastructure.

        In Davis, as I noted below, our lack of supply will continue to make more of our homes students rentals and we will essentially be a student/empty nester ghetto.

    4. Don Shor

      Because UCD has no obligation to provide adequate housing for its students, and it can foist its housing problems on the city

      But UCD has promised to provide adequate housing for a certain percentage of its students. I can’t remember the details. I know they have not come near to meeting their promise. Eileen Samitz knows the details; I believe she was involved in some of the discussions with UCD about that a few years ago.

      They’ve certainly spent a lot of money tearing down and rebuilding on-campus housing. But other than West Village, they haven’t added much housing stock. And West Village doesn’t even cover the increased enrollment from the 2020 Initiative, much less the 8000 student enrollment increase of the previous decade+ that occurred without any increase in rental housing.

      1. Matt Williams

        Don, the following images are from the 2002 Final Report of the University of California Housing Task Force. It clearly lays out UCD’s commitments to on campus housing.

        UC Housing in the 21st Century - Report Cover

        UC Housing in the 21st Century - Housing Goals

        UC Housing in the 21st Century - Planned New Beds

        UC Housing in the 21st Century - Public-Private Split

        UC Housing in the 21st Century - UC Davis specific plan

        1. Gunrocik

          Thanks for posting that, Matt.  It is highly unlikely that UCD will build any more campus housing than necessary.  It isn’t a profitable proposition for a number of reasons, some of which I am not at liberty to disclose.

          As the campus continues to grow, there is going to continue to be pressure on the adjoining community — particularly those neighborhoods in close proximity to campus.

          As long as the community sticks to its no growth stance — it is going to continue to put more upward pressure on demand, which will put upward pressure on rents, which will create more overcrowding in homes, and motivate more homes in Davis to be purchased by investors instead of homeowners.  And it will continue to crowd out any young families interested in purchasing a home in Davis.

          The no more housing crowd isn’t going to stop the university from growing and you can’t legally keep owners from renting out their homes.  Unless more land is made available for housing — Davis will continue to transition to a student/empty nester ghetto.

           

          1. Don Shor

            It is highly unlikely that UCD will build any more campus housing than necessary.

            But they are nowhere near their stated goal of 40%.

          2. Don Shor

            As long as the community sticks to its no growth stance — it is going to continue to put more upward pressure on demand, which will put upward pressure on rents, which will create more overcrowding in homes, and motivate more homes in Davis to be purchased by investors instead of homeowners. And it will continue to crowd out any young families interested in purchasing a home in Davis.

            I’m more concerned about young adults in the work force than young families. But after harping on this topic for a few years now, it’s clear to me that the situation you describe doesn’t actually matter to current homeowners, Davis voters, or anyone who makes policy. The last council was evidently more concerned with young families than young adults who rent locally, or they would have pushed for greater density and more rental housing at the Cannery.
            We need more rental housing. UCD needs to keep their promises and build a lot more rental units. Until those issues are settled, building homes for ‘young families’ is pointless.

    5. Gunrocik

      Aggie:   “100% of the residential at this location should be on the university side of the tracks to maximize the positive fiscal benefit to the city from the annexation, provision of city services, and development of the property.”

      Please read my comment further below regarding prevailing wages.  Putting the residential on the University side is not economically feasible.  I think we need to take a look at the city fiscal analysis before determining whether or not high density residential is as fiscally negative as single family homes.  I’m not sure that is the case.  If it isn’t revenue neutral, Whitcomb (the likely builder) can make sure the apartments cover their costs when the City and Whitcomb put together the Development Agreement.

      1. Aggie

        Gunrocik: I’m arguing that the best financial outcome for the city is 100% tech park on the Nishi parcel. It’s the university’s responsibility to figure out how to finance their fair share of student housing.

        Navazio did the fiscal analysis on residential that showed the only revenue positive housing product was single family selling for more than approximately $450K. Everything else was a fiscal burden on the city. Would be worth doing some due diligence on this point.

        The Nishi Gateway project is being marketed as a unique partnership between the city, university, and the private sector. If it comes forward as currently designed, a Whitcombe student housing project with a thin facade of “innovation hub,” it’s likely to fail at the polls.

         

  4. Gunrocik

    Take a look at the market rents for new construction.  The uniform building code, in its attempt to make multi-family homes as fire safe and handicapped accessible as possible, has made the cost of new construction for apartments 50% to 75% more per square foot than for a single family home.

    You are looking at rents in the $2.50 to $3.00 per square foot for new construction rentals.  That translates to $2500 per month and up for a 2 or 3 bedroom unit.  The only folks who are going to pay that sort of rent are students doubling up in the bedrooms.

    Even if apartments were built here — your young adults are going to be priced out of the market by students.  If a non-student oriented building were put up — it would likely be a luxury project which also wouldn’t meet your needs.

    In pure economic terms, there is such pent up demand at the student end of the market and the luxury end of the rental and home market — that our no growth posture has priced young adults … and most young families out of our housing market.

    No growth has many casualties and only a few beneficiaries.

    By the way, I can’t believe there will be any commercial demand for most of the land fronting Covell at the Cannery.  Why don’t you push for housing there — it could be built directly adjacent to the affordable housing site.

    1. Don Shor

      The university needs to supply several thousand more beds. That would be a good starting point.

      By the way, I can’t believe there will be any commercial demand for most of the land fronting Covell at the Cannery. Why don’t you push for housing there — it could be built directly adjacent to the affordable housing site.

      It’s way too late to make any changes to what it happening there, and the developers got exactly what they wanted. All they had to do was wait for a council majority.

      1. Gunrocik

        Developers don’t like to hold on to improved land any longer than they have to.  If there isn’t immediate demand for that land — which I doubt there will be — reinforcing how wrong the folks were that claimed this should be a totally commercial site– higher density housing is definitely something I’m sure they would consider.

        The only ones that could stop apartments on that site are the same folks who will fight any development on that site or anywhere else.

    2. Aggie

      Take a look at the market rents for new construction.  The uniform building code, in its attempt to make multi-family homes as fire safe and handicapped accessible as possible, has made the cost of new construction for apartments 50% to 75% more per square foot than for a single family home.

      You are looking at rents in the $2.50 to $3.00 per square foot for new construction rentals.  That translates to $2500 per month and up for a 2 or 3 bedroom unit.  The only folks who are going to pay that sort of rent are students doubling up in the bedrooms.

      Gunrocik:  Absolutely fascinating information. Thank you. I’ve been curious for years about why developers are not building apartments in Davis given the low vacancy rates. What’s the solution (if any)?

  5. Frankly

    Someone posted a good bit about the average net revenue derived by certain development types.   Multi-unit housing had the highest negative… costing much more than it produces in tax revenue.

    If this is the fact for a city, would be true for the university too?

    UCD would not realize property tax revenue from the rental properties, but it would be the landlord and earn the rental income.   You woud think this would be a money-making enterprise for a univeristy.   Can anyone explain why a university looking for more revenue would not want to pursue money-making enterprises?

    1. Miwok

      They get a lot for the room and board. IF you walk in to a Dining Common and eat, it is over $13 for Breakfast, over $16 for lunch, and over $18 for dinner.

      The other statistic is the shared housing in town, mostly by students from the Bay, sometimes further. They have classes organized they can drive up, attend classes, and sleep on the street, on a couch, or a dorm room with an extra bed or couch and drive home after the week’s classes. With an ARC membership (workout place) or the pool, they can always have a shower.

  6. Gunrocik

    The Labor Union controlled Department of Industrial Relations (DIR) is one of the main hindrances to cost-effective multi-family construction for UCD.

    If you read this letter:

    http://www.dir.ca.gov/OPRL/coverage/year2013/2010-024.pdf

    You will find out that the West Village Project, whose project finances were dependent on not paying prevailing wage, was determined subject to prevailing wage by DIR.  If  you know anything about construction costs for residential projects, you will discover that requiring prevailing wage likely DOUBLES the labor cost for a residential project — and likely increases the overall cost by at least 25 percent.

    For West Village, I’m guessing it increased the cost of the project by $30-$40 million.  And if you are wondering why the faculty housing hasn’t been built yet … just do the math.  Those faculty units are not going to be very affordable for faculty and staff if subject to prevailing wage.

    So while we can dream all day long about the campus providing their own housing, it is an expensive pipe dream thanks to the labor bullies over at DIR.

  7. Anon

    Tia Will: “Maybe the truly progressive approach would be to start developing a different American dream. One that centers on being comfortable and living a contributive life rather than acquiring a fixed amount of possessions for fulfillment.”

    It is hard for me to believe that someone could put a negative connotation on the desire for home ownership, as if somehow it is selfish to want to provide security for one’s family.  Good grief!

    1. Davis Progressive

      i don’t see the desire for home ownership as selfish, but it is interesting that the millennial are increasingly looking to other goals in life.

  8. Tia Will

    Anon

    I think that at least some of the millenials interpret home ownership differently than the boomers did. It was a major goal for us. Some of them have seen how much it costs in terms of both money and maintenance headaches and would rather spend their time, energy and money of other endeavors.

     

    1. Anon

      I strongly disagree.  I think the younger generation would love to own their own home, but find themselves completely prices out of the market, so have no choice but to rent, which has to be pretty discouraging.  I very much doubt “maintenance headaches” has anything to do with their decision.  And I would add, apartment maintenance can be a real headache too, if you don’t get to know the super or landlord.  And some landlords are more cooperative than others.  Conditions of rentals can be deplorable, especially Sec 8 housing.

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