While Davis is struggling with its own rental crisis, a report in the Associated Press yesterday shows that the rise of renters is a national phenomenon and has moved beyond the cities to the suburbs.
The AP reports, “About 29 percent of suburbanites living outside the nation’s 11 most populous cities were renters in 2014, up from 23 percent in 2006, according to a report being released Tuesday by New York University’s Furman Center real estate think tank and the bank Capital One.”
Driving this train is the finances of home ownership since the mortgage crisis, but the study also found that the cost of renting is rising rapidly in most of the biggest cities.
“It’s the extensiveness of the affordability problem that is notable,” Laura Bailey, Capital One’s managing vice president of community development, told the Associated Press before the report’s release.
Nationwide, 37 percent of all households now rent, the highest level since the mid-1960s, Harvard University’s Joint Center for Housing Studies noted in December.
The AP reports, “Typical tenants could afford fewer than half the rental homes available in metro areas nationwide in 2014, under officials’ traditional definition of affordability: spending under 30 percent of income on rent and utilities.”
But they add, “But the picture differs from city to city, depending on the interplay of median rents and incomes. The percentage of rent-burdened tenants actually declined moderately between 2006 and 2014 in Boston and Houston, while staying flat in Chicago and San Francisco and rising elsewhere.”
Davis’ rental crisis, as we have reported in recent weeks, is largely locally generated. As noted last week, UC Davis will be welcoming 1100 additional new undergraduates beyond the size of this year’s class.
Julia Ann Easley, in a January publication on the UC Davis site, wrote that “the campus is marshaling its efforts and resources to accommodate 2016-17 enrollment growth of 1,100 new undergraduates beyond last fall’s entering class.”
Driving this train are targets set by UC President Janet Napolitano “to increase systemwide enrollment of new California undergraduates by 10,000 over the next three years, including 5,000 freshmen and transfer students in 2016-17.” Moreover, last year “the Legislature allocated an additional $25 million to UC to increase the number of in-state undergraduates by 5,000 no later than 2016-17.”
“We are committed to serving California,” UC Davis Chancellor Linda Katehi said. “We will do all that we can to help the University of California meet this ambitious goal.”
Writes Ms. Easley, “For 2016-17, the UC Office of the President is asking Davis to enroll about 1,000 California residents, or 14.7 percent, beyond the 6,741 enrolled in fall 2015.”
She continues, “At the same time, the campus will continue to implement its 2020 Initiative, a long-range plan to grow the size of the undergraduate student body. That includes plans to enroll an additional 135 new undergraduates with national or international status, for a total of 1,750 new national and international students in 2016-17.”
The whopping total here: “The total estimated growth in new undergraduates — resident and nonresident — would be about 1,100, or 13.5 percent over fall 2015, for a total of about 9,500 new undergraduates.”
Davis has a much larger than average rental market. According to the city of Davis website, “Approximately 57% of the 25,869 housing units in Davis are rental properties and 55% of Davis residents live in rental housing.”
The city notes, “More than 43% of the housing units in Davis are multi-unit structures (apartment complexes). Home ownership in Davis is 43.8% compared to the national average of 66.9%.”
While UC Davis is clearly driving the increased demand for rental housing, the city’s growth policies have bottled up the possibility, for the most part, for Davis to solve its rental crisis internally.
The city notes, in part due to the economy and in part due to the advent of Measure J, that the population grew 8.8 percent from 2000 to 2010, but less than 2 percent from 2005 to 2010.
The city writes, “Davis did not see significant new home development during the 2000s. No new land for development was annexed to the city between 2005 and 2010. There were 619 new in-fill housing units added to Davis between 2005 and 2010. The limited potential for new development will continue to affect the Davis housing market and its affordability. Further adding pressure to the housing market will be the projected increase in the UCD student population through 2010, of an additional 5,000 to 6,000 students and about 500 new faculty members, plus additional staff.”
As we noted last week, short-term solutions are non-existent for rental housing.
In the longer term, there are several potential student housing projects, but each one faces hurdles.
Voters will decide in June whether Nishi can go forward. While Nishi proposes about 650 units and perhaps up to 1500 beds, the project still faces a perilous Measure R vote in June and, even if approved, might not be ready to accommodate student housing until 2020 or 2021.
There is also the proposed Sterling Apartments on Fifth Street that may also be able to accommodate 1500 students. But it faces considerable opposition, particularly from Rancho Yolo residents.
Finally, there is the more modest Lincoln 40 proposal on East Olive Drive that could accommodate about 130 new apartments, which again could house perhaps 400 new students.
None of these are sure things, none of them are immediate fixes.
Discussions about mini-dorms has become an increasing theme in planning and land use battles in the interior. Homes that are intentionally designed at five or six bedrooms and six bathrooms are coming under increased scrutiny. But at the same time, more and more homes are being converted from single-family to multi-student use.
For students, packing them in at 10 for a five-bedroom house is a way to reduce costs of rent. But for the neighbors it means parking issues and noise.
Many are concerned that the student housing crisis is forcing families with children out of Davis. The town is increasingly becoming bifurcated between those who are students and those who are in their 50s and moving towards retirement – or in their 60s and beyond and already retired.
With the Davis periphery relatively locked down due to Measure R restrictions and vote requirements, this fight is increasingly between students and existing neighbors over infill sites.
Some have seized on this situation to pressure the university for more housing. The university is clearly willing to add some housing, while acknowledging they can’t (or won’t) accommodate all new students.
The danger that the city faces is a demographic issue. As we noted, 57 percent of housing units are rental properties and 55 percent of Davis residents live in rental housing. Right now, the majority of those are students who do not vote or do not vote locally.
However, as pressures rise, that may change and, without a long-term solution, those renters could out-vote local property owners and make major changes to long-standing city land use ordinances, including Measure R, and they could have an impact on the viability of future housing projects like Nishi.
It is not clear if that scenario would happen, but if the pressure of student growth continues to hammer into a housing market that cannot or at least does not expand, something may have to give.
—David M. Greenwald reporting