The Vanguard yesterday reported that the university is generating huge housing demands with their policies of increasing enrollment by at least 1000 students next year, and likely continuing that expansion. Many in the community, opposed to additional peripheral growth, have pushed for UC Davis to take on the responsibility of housing more students.
For their part, while the new LRDP (Long Range Development Plan) calls for the university to provide more housing, they acknowledge that even at its maximum efforts, they cannot supply housing for all new students.
One problem that we face, as we ask the university to supply more housing for students, is that housing done by the university is more costly than typical residential housing.
A case in point is the ongoing struggle by UC Davis to avoid prevailing wage requirements for West Village. In 2008, the West Village development was contracted to be constructed in phases on land owned by the University of California.
On August 25, 2008, UC and the developer entered into a ten-year master ground lease for a 130-acre project. Under the terms of the deal, the developer would construct, at its own expense, over 300 residences for faculty and staff, and apartments for almost 2,000 students.
The hope by the university was, by turning the project over to private development construction, by having no state aid or participation they could circumvent prevailing wage requirements.
As a 2013 letter notes, “UC’s policy for construction on UC land provides that, under specified conditions, UC will not require prevailing wage rates where the project cannot be constructed economically if the payment of prevailing wages is required. The specified conditions are that either the cost will be paid entirely by non-state funds furnished principally by students, faculty, staff, hospital patients, outside corporations, or donors, or the project is built for sale or lease to students, faculty, or staff without any funds being furnished by the state. The policy also provides that in case of exceptional need, the UC vice president may authorize an exception to the prevailing wage requirement. Prevailing wages were not required for the Project.”
However, the unions objected, claiming among other things that the community college lease on the site triggered state participation. The 2013 letter from Christine Baker at the State Department of Industrial Relations writes, “Based on my review of the facts of this case and an analysis of the applicable law, it is my determination that the construction of the West Village development at the Davis campus of the University of California is a public work subject to prevailing wage requirements.”
This triggered about $18 million in additional prevailing wage costs. A follow-up letter dated February 8, 2016, notes that “based upon a stipulated agreement between the interested parties and the unique facts of the case, the Determination in this matter, West Village Development, University of California, Davis Campus, Public Works Case No. 2010-024, dated December 20, 2013, is hereby vacated.”
In this case, apparently a deal was cut that would mitigate costs for this project.
But the bigger issue still remains intact. The costs for developing housing on campus are far higher than they are for a private residential project. This means that the labor costs double and the project costs could increase by 25 percent or more.
In the broader policy arena, that means that housing on the UC Davis campus is always going to be a net fiscal drain on the university. Students can purchase housing far more cheaply off campus because, not only can they get net lower rents off campus, but they can pack housing more tightly, splitting the rent among more people, therefore lowering the costs even more.
Already community members have focused on UC housing policies as a driving force in the growth pressures on the city.
As Eileen Samitz put it at the Vanguard Growth Discussion, just as she did in a December column, “UCD’s negligence in providing this on-campus student housing is a main driver of any housing demand that exists in Davis. It is gross negligence, and simply unfair to the UCD students, that the university is not providing them with long-term, affordable, on-campus student housing.”
It seems that the problem of student housing is recognized by most as the driving force behind the broader housing crisis. While there may be emerging consensus on the cause of the problem, the solution is more elusive.
Bob Segar from the university reiterated a couple weeks ago what he told the council last fall, that while the university is looking at ways to develop more housing on campus, they cannot provide enough housing to accommodate all new students. Some of the areas where the university might look at new housing are likely to clash with existing residents.
But it turns out the university may not be the best equipped to solve this problem, especially if private developers can develop more housing, more cheaply, than the university.
This reality figures to hamper efforts by community members hoping to avoid city residential growth by pushing the university to supply more student housing.
How will this impact the overall discussion of growth in Davis? It adds another complicating twist to an already complex problem.
—David M. Greenwald reporting