By Jeff Boone
It was during the mid-late 1990s when the Wildhorse and Mace Ranch housing developments provoked the voter backlash that led to the passing of Measure O (Open Space Protection Special Tax Fund) and Measure J (Citizens Right To Vote On Future Use Of Open Space And Agricultural Lands).
For those that don’t know about these two voter-approved changes to City land use policy: Measure O – a new 30-year term, $24 per year supplemental parcel tax that would allow the city to purchase surrounding open space to prevent unwanted development on our periphery – passed its 2/3 voter approval threshold 70.5% to 29.5% in 2000. Measure J – requiring an ongoing 50% +1 vote majority to approve annexation of peripheral land for development – passed its 50%+1 voter approval threshold 53.6% to 46.3% in 2000, and was later renewed as Measure R, passing 76.7% to 23.3% in 2010.
Since about 1975, after a previous three decades of aggressive population growth, Davis residents have generally favored and achieved slow growth. The City’s General Plan was updated to include specific language to provide for limited growth only “to meet internal needs of households whose work or study activities are or have been focused in Davis.” Since 1975 Davis has experienced a population growth rate much lower than that of the region.
But then the 1990s’ Wildhorse and Mace Ranch developments inflamed concerns that developer special interests had too much control and could circumvent voter slow-growth demands, and that greater voter-control of peripheral land was needed. Voters approved these two measures in 2000 and during the subsequent 15 years there has been no significant peripheral development.
Ironically enough for me, this slow growth period started about the exact same time I moved to Davis and later met a beautiful, smart and sweet local girl that I would marry and together we would raise two wonderful sons.
Forty years have gone by really quickly; but as they say, times have really changed. And, as times change, so do the impacts of our previous policy decisions. It is for this reason that we should periodically revisit our assumptions and ask if we are still being well-served by our historical policy decisions… especially those that control our land use.
There are things we know today that we did not know in 2000 when we approved these initiatives, and even in 2010 when we renewed Measure J in an overwhelming majority vote for Measure R.
City financial problems
The Great Recession of 2008 was a time of fiscal reckoning for the entire country and much of the global economy. It laid bare the challenges previously hidden or denied by those enabled by the wild exuberance of easy money from the bubble of real estate financing and equity returns. Davis, like many cities, quickly headed into a post-recession budget crash… tax receipts plunged while expenses continued to grow. The surpluses we had previously saved vanished quickly. City leadership was forced to cut city staff and reduced some employee benefit expenses and a temporary sales tax increase was passed.
But during this time the residents of the city started paying more attention to City finances. The painful layoffs of some city employees, cuts to employee benefits, the leaking city pools, the cracked and potholed roads and rutted bike paths, the poorly maintained parks… all of these things helped awaken a greater interest in understanding the true financial situation of the city.
And that understanding became, frankly, alarming.
What we learned is that Davis faces hundreds of millions of dollars in unfunded future expenses for employee retirement benefits, and deferred road and infrastructure maintenance. Previous city leaders had “kicked the fiscal can down the road” increasing the pay and benefits of city labor, while reducing the needed spending on these other needs. These other needs became long-term unfunded liabilities that politicians simply did not want to deal with, and would leave for future city leaders and voters to deal with.
Inadequate local economy
With respect to our fiscal problems, we began to understand that Davis’s per capita tax revenue from business is significantly less than any comparable city. In fact, Davis’s per capita sales tax revenue is only about half of the state average of all California cities. And this does not take into consideration the Davis advantages of a relatively affluent fixed population plus the large seasonable “captive-consumer” UCD population.
Our stingy land use policies have expectedly slowed housing development; but they have also stifled business and economic development that cannot exist without a location.
Chico, Santa Cruz and Palo Alto are three like-sized college towns with about the same population as Davis; however, all three have a much larger local economy than does Davis. And all three benefit from a larger city general fund budget than does Davis. In fact, Palo Alto’s general fund budget is three-times the size of Davis, even with a smaller local population.
Because Davis relies more on local property tax revenue, the City’s climb back to a post-recession balanced budget took much longer than it did for most other comparable cities. Without a larger local economy, the next recession will cause a repeat of a slower than average recovery and greater financial pain.
Growing bedroom community
Since Davis put the brakes on growth over the last 40 years, because of the related lack of business development, it has become a greater source of commuter traffic. About 50% of working residents work outside of Davis. If you are one of the few lucky people to live AND work in our great city you will likely have already noted the rush hour traffic around the freeway on-ramps in the morning, and also noted all the cars coming back to Davis in the evening.
Our slow growth position – ostensibly driven by a strong dislike of traffic – actually generates more traffic because too many residents lack adequate employment and career opportunities in Davis. This then contributes to more road congestion and more pollution as more people have to commute outside of Davis for their jobs.
Growing planning incompatibility with UCD
Forty years ago UCD was receiving a greater share of its operating funding from the State. But ongoing state budget problems resulted in a reduction in funding to all state colleges; including UCD. As a result tuition rates have been increased to help make up the difference. However, the Governor and the legislature, responding to criticism from students and parents facing skyrocketing college education costs and mounting student debt, have mandated that the state universities stop raising tuition. These changes have necessitated that UCD implements new funding strategies and plans.
At the same time UCD’s reputation as a world-class research university has grown. The last three years UCD has been recognized as the top agriculture and food science college in the world!
The need for new funding combined with this global recognition has led UCD to seek new revenue sources from development of private-public partnerships for technology transfer. This is not a new idea. Other top universities in the country have been doing the same: leveraging the intellectual assets from academia to partner with innovation business in the private sector to develop new products and services that can be marketed for profit and return royalties to the university.
However, the innovation business needs to locate next to the university to generate the private-public creative synergy required. Davis’s slow-growth policies have prevented the availability and use of land required for innovation business to locate here. Consequently, Davis’s growth policies have become incompatible with UCD plans, and detrimental to its ongoing operational success.
Inadequate rental housing supply
In addition to a lack of business development, as UCD’s reputation as a world-class university has increased, so too has the demand for student attendance. UCD has responded to this demand by beginning to grow by 600 students per year.
The current rental vacancy rate when school is in session is an alarming .3 percent. This contrasts to 4.2 percent in 2005. The growing lack of rental capacity is due to the growth in the UCD student population combined with Davis’s land use policies that have prevented adequate rental housing development.
The shortage of rental properties also drives up the price as landlords respond to the principles of supply and demand. Currently the average unit rent is $1,414. This compares to $992 in 2005 when the vacancy rate was a more reasonable 4.2 percent.
The consequences of such high rent inflation are: greater student debt, more single-family homes converted to student rentals and more students living outside of Davis and commuting to and from Davis.
Also, inadequate student housing supplies causes a corresponding shortage of single family housing and other housing for UCD employees. It also causes local business to struggle to attract and hire employees as the cost of housing exceeds their means, and commuting increases their monthly expenses.
UCD certainly shares some of the blame for inadequate housing supplies. While other UC campuses manage close to 50% of all student-housing, UCD only covers about 30% of their need. The City of Davis shares a larger student housing burden than do other cities hosting UC campuses. It is clear that UCD should do more to cover student housing needs.
However, in consideration of the purpose and intent of the City’s slow growth and land use policies, if we are honest, it really does not make much difference if the City or UCD develop the needed housing. Regardless if new housing is on UCD property or City-annexed peripheral land, it will be peripheral land. It will have similar traffic and population impacts. It will eliminate some open-space “viewscapes.” It will change the look and feel of the city… although in my opinion much, much less than those more extremely opposed to growth would have us all believe.
In addition, if UCD develops the housing the city will receive zero fees and taxes from the development. Lastly, if UCD develops the housing then UCD will have control over the planning and design. Davis residents would have less of a say, and would face greater risks of having to accept peripheral development that they dislike.
Our land use policies combined with UCD growth have caused an alarming shortage of housing. The impacts are many. The solution is simple: allow the development of more rental housing. But doing so will require voters eliminate the roadblocks for developing on peripheral land.
The City of Davis has a population of 66,000 with 6,000 students living on campus. That puts our population at 72,000. Meanwhile, due to our past and present stingy land use policies, the geographic footprint of the town has stayed a meager 10 square miles. 7,200 people per square mile puts Davis’s population density closer to large urban areas than it does any medium-sized rural city. For example, the population density of our neighbor Woodland is 3,264. The population density of Santa Cruz (where property is also very expensive) is 3,800. And when you consider that our retail footprint is on average much less than other comparable cities, we are really cramming a lot of people into a small area.
The result is growing congestion… especially downtown.
Even the problem of our homeless and panhandler population seems bigger in Davis as they all congregate in our small downtown.
Although we want a vibrant city and downtown, congestion is not a good thing. Congestion keeps people away that might otherwise shop and spend money. Congestion causes stress. Congestion causes more pollution. Congestion causes more accidents.
Davis downtown is one of the most challenging places to drive, bike or walk around without getting into an accident. The primary reason is that we are very congested and population-dense.
And without peripheral development, if we are to deal with the lack of tax-revenue-generating business and the lack of rental housing, we will need to build taller buildings. This then increases population density and congestion. It is a consequence of our land-use policies, and we have to ask if we are really well served by them in consideration of growing congestion.
Our land use policies have a disproportionate negative impact on millennials. In fact many don’t move here, and for those that grew up here or attended UCD, many of them leave and never come back. Davis’s growing demographic profile is increasingly both gray-haired and student-aged.
With already high and growing rents, and limited access to good jobs, Davis’s young people develop a gradual feeling that they are not wanted here. Many that stay end up stuck in low-paying service jobs and struggle to make ends meet.
Local business that hires millennials faces problems attracting and retaining qualified workers. And millennials lucky enough to land one of the few good jobs available complain about the lack of social life because of the dearth of other young professionals and young families.
Lastly, in an effort to hold on to these development-blocking land use policies and in recognition of the City financial problems, taxes have been increased, and future tax increases are being discussed. While the more affluent older Davis residents can handle a larger tax burden, tax increases have a proportionately larger negative financial impact on young people just starting their careers.
Swapped developer special interests for extreme land preservation special interests
As a 40-year resident of this great city, I am certainly not in support of uncontrolled growth. If allowed, I would vote down any mega-large peripheral housing development. My vision for Davis is one where we allow some peripheral growth: primarily commercial (e.g., innovation parks that work closely with UCD and support its technology transfer strategy), and minimal-required rental housing to meet the needs of UCD growth and to contribute some housing supply to support regional growth. But I want all of it absolutely designed and developed with state-of-the-art SMART principles.
Within the innovation parks I would support some retail. Davis is large enough and the downtown busy enough that we can and should support more peripheral retail. We need to relieve some of the congestion downtown, and return it to a pleasant and vibrant destination of choice.
But my expectations for the land-use policies of Measures O and J/R included usable open space. There had been talk of a greenbelt surrounding the city. Unfortunately none of the land acquired by our Measure O dollars is accessible. And none of it is on the periphery of Davis.
I had envisioned more parks and accessible natural areas. These have not happened even thought the city has spent millions on Measure O land acquisitions. Palo Alto for example is 26 square miles, but with 4,500 acres (7 square miles) of accessible parks including paths. Contrast that to Davis, with a larger population, only 10 square miles, and only 400 acres of parks… a measly 10% of what Palo Alto has.
What has happened?
Unfortunately, with our remedies to take away control from developer special interests, we have given too much control to open space land preservation special interests. Their pursuits don’t always align with voter’s best interests just as developers’ interests don’t always align with voter’s best interests.
Did we really want to ring the city in a farmland and natural habitat moat that we cannot access and where we become increasingly congested and negatively impacted? Did we really want to force UCD to look to other parts of Yolo County and Solano County to build innovation parks to support their technology transfer strategy?
Did we really want to burden our young people, including college students struggling under huge student debt loans?
We all need to ask ourselves these questions and revisit our land-use policies. Maybe the majority of Davis voters are happy with the way things are going. Maybe they would support another $1000 per year parcel tax and more sales tax increases… both likely required to pay for all of our long-term liabilities assume we do no more can-kicking. Maybe they don’t care about the number of local residents having to commute to and from their jobs. Maybe they don’t care about the congestion and the impacts to young people. Maybe they don’t care that the university will go elsewhere to execute their technology transfer strategy. Maybe they are fine with UCD building housing on UCD-owned City-peripheral land instead of other peripheral land that allows the City would to exert more design control over. Did we really want a city that lacks economic resiliency and will struggle more than others with each economic downturn? Do we accept all of these things as a cost of preventing growth?
Some people might say “yes” to accepting all these things just to prevent growth. After 40 years living here it is still hard for me to accurately guess what Davis voters want.
But we at least need to start asking these questions. And if we are going down the wrong path with 40 years of slow and no-growth land-use demands, we need to make some changes.