By Nancy Price
On Sunday, April 10, Alan Pryor wrote an Op-Ed in the Enterprise in which he claimed that the City Council’s actions to exempt the proposed Nishi project from all low income housing requirements were a direct violation of the Davis Affordable Housing Ordinance and illegal. In a rebuttal Op-Ed on Friday, April 15, Robb Davis offered a spirited legal defense of the City Council’s decision. Ultimately, these claims will be decided in a court of law.
Both these articles also appeared as Guest Commentary on the Davis Vanguard: Alan Pryor’s on March 30 and Council Member Robb Davis’ on April 17, each followed by spirited discussion on the blog.
This article below appeared in the Sunday, April 24 Davis Enterprise, page B7.
As a former member of the city’s Planning Commission, I believe the more important question for voters to decide is whether this exclusive affordable housing exemption for Nishi is morally right or wrong and makes any economic sense for the City.
I believe it’s fundamentally wrong for the City to completely waive the requirement for any developer to build 154 units of affordable housing as is minimally required at Nishi by the Davis Affordable Housing Ordinance based on the project’s massive size. Nor are the multi-millionaire developers otherwise required to pay equivalent in-lieu fees of $11,550,000 ($75,000/Unit x 154 Units).
And what also bothers me is the complete lack of proper public process by which this categorical and complete exemption was granted by the City to the developers. For instance, this exemption was not given on the basis on any extensive independent economic analysis showing the project was not otherwise economically viable. Nor was there even a written request and justification provided to the City by the developer in an Affordability Plan as is specifically required by the Affordable Housing Ordinance. The City Council granted this exemption solely because the developers just told them they needed it or the project could not be built.
Then the City attempted to justify this exemption for Nishi and move the project forward by claiming that the project is going to be “affordable by design” with “small units…designed for students.” And the City touts that the developer has graciously agreed to otherwise donate $1,000,000 to the City’s Affordable Housing Trust Fund.
Well, as is often the case in new developments, the reality is quite a bit different than the rosy picture presented to the public. As it turns out, the rental units at Nishi will be even larger and more expensive than those at West Village which are all rented to well-to-do students – mostly from out-of-state and other countries (just look at all the new BMWs and Lexus in the student parking lots). So much for providing truly affordable housing “by design” for average or low-income students.
And what about that $1,000,000 donation to the Affordable Housing Trust Fund? Well, it turns out that is actually only going to be paid proportionately when each of the parcels (including the commercial buildings) are actually “occupied.” The earliest any construction will start is in 4-5 years and it could take 10 years to build out all the commercial space. That means the City will receive only about $100,000 per year for the Affordable Housing Trust Fund starting in year 5 and continuing through year 15.
And what do the developers get in return for this comparatively modest donation? They get a complete exemption from all affordable housing requirements for which Nishi would otherwise have to build 154 low-income units or, alternatively, pay equivalent in-lieu fees of $11,550,000 to the City’s Affordable Housing Trust Fund. Donate $1 million to save $11.5 million in in-lieu fees? That sounds like a pretty good deal for the developer to me…but not so good for the low income residents in Davis.
Another fact is that while the City has exempted this one single project from the low-income housing requirements, they have never, ever done that for any other large development project in the City. This includes the Cannery Lofts (providing extremely low to low income rental units), Grande (providing low-moderate and middle income ownership units), the Villages at Willowcreek (providing low-moderate ownership units), and Chiles Ranch (pending discussion of paying in-lieu fees or providing low-moderate ownership units). And both the proposed Sterling Apts. on 5th St. and the new apartment proposal for East Olive Dr. have affordable housing included in their proposed plans.
So just to conclude – the courts will determine whether or not the exemption of Nishi from the City’s Affordable Housing Ordinance is legal or illegal. But I think all the other evidence points to the fact that is an economically bad deal for the City. And it just seems morally wrong to me that our supposedly cash-strapped City is making a $11.5 million give-away of affordable housing money to multi-millionaire developers so they can construct luxury rental housing. Does this really reflect our Davis values?