By Mathew Palm
With a 0.2% vacancy rate, one of the lowest in America, Davis is an extremely hostile market for renters. The implausibly short supply of rental housing creates conditions where landlords can raise rents quickly and practically at will. According to Zillow ZRI metric on local rents, Davis rents rose 12% year over year this past March when many students were looking for housing. As the Davis campus continues to grow, the failure of both the campus and the community to provide additional housing means this crisis will only worsen.
However, with the upcoming vote on June 7th, you have the power to remedy this crisis with your vote.
As a fellow Aggie who also does research on housing policy, I strongly encourage you to vote “Yes” on Measure A.
On one hand, the major argument for students to support Nishi is obvious to anybody who has tried to rent in this town: we need more housing, and the 1500 beds in rental units at Nishi will help relieve local housing pressures. The additional reasons are as follows:
- It will provide $23 million in renovations to Davis streets that will ease congestion where I-80 meets downtown
- It will provide a million dollars in funding for affordable housing
- It will increase Davis’ resources to fund Davis schools
- It was ranked the #1 project in the state by the Strategic Growth Council in competition for sustainability grants
- It will create at least 1500 jobs
On the other hand, the central rebuttal to these claims put forward by No on A – which you may have seen on some lawn signs – is that it is “unaffordable housing.” As I’ll show, their claims are not only wrong, but also absurd. You might also hear opponents express concern about the “gentrification” Nishi will cause – this assertion is ludicrous. I’ll not only debunk it but demonstrate that the failure to build Nishi will actually increase gentrification in communities where it matters, like Sacramento.
Comparing Nishi’s Rents to The Davis Market: How Expensive Is It?
The first “No” argument is that Nishi will cost renters $2400 for a two bedroom. This is bogus. For my research, I have access to over 9,000 rental listings in Davis from 2015. Of the over 3,000 two-bedrooms listed in Davis in that year, only 13 were more expensive than this. (Or, for stats nerds: the No side’s estimate is 4 standard deviations from the mean, and we are supposed to delete observations three standard deviations above the mean as you may have learned in your stats class)! In everyday terms: these estimates are laughably high, and you should dismiss them.
So what are the REAL rents at Nishi?
I reached out to the YES on A campaign, and they reported the actual rents will probably be between $1500 and $1800 for a two bedroom, depending on inflation, labor costs and market trends. You might think, “wow that’s high!” But these estimates actually compare well to rents offered today.
Nishi is adjacent to campus. Housing adjacent to campus or in downtown is generally the most expensive in town, as shown by this heat map of those for rent listings mentioned earlier:
So how much of Nishi’s high cost is a function of its adjacency to campus? Nishi rents will be less expensive than 27% to 38% of existing for-rental listings near campus on a per bedroom cost basis. For a project that’s brand new and pumped up with all the green bonuses I mentioned above, this is actually impressive. Brand new buildings that aren’t publicly subsidized are usually more expensive in their first couple years of operation.
The fact is, Nishi student rents will be well within the market range given their adjacency to campus and newness, and the No on A campaign’s “independent analysis” claims of extremely high rents are so extremely high as to be ridiculous. You might think that you yourself cannot afford $1500 for a two bedroom. In that case, you still benefit. As other students choose to live at Nishi, the number of people you will be competing with for housing in other parts of town will go down, making it more likely you will find the kind of housing you want. Despite the rumors flying around, the latest research suggests that market rate housing construction does in fact help slow growth in rents in the long term, just not as quickly as subsidized housing.
The second argument I’ve heard some express against Nishi is that it will “gentrify” Davis. In fact, the opposite might be true: if Nishi and other Davis housing projects fail, gentrification may get worse–in Sacramento. According to the definition of gentrification developed by the federal government and decades of researchers, gentrification isn’t something that can happen in Davis. As it’s defined, gentrification can only take place in a previously affordable community (usually community of color) which had previously experienced some form of public disinvestment or neglect before being “discovered” by yuppies and the developers who cater to them. By this definition, many of the neighborhoods that young Davis grads are flocking to, like Oak Park in Sacramento, are experiencing rapid gentrification. This trend of people living in Sacramento and driving to Davis is significant that our regional planning agency, SACOG, openly weighed in to support Nishi.
In fact, it is the unwillingness suburbs like Davis to build more housing that encourages young families to gentrify other communities like Oak Park. In this way, Davis is analogous to Mountain View–home of Google–whose inability to produce housing for Google’s growing workforce has contributed to gentrification in San Francisco proper. The results are the Google Bus wars you now see playing out on national news, with the employees of suburbs like Mountain View (and Davis) pushing people of color out of core urban communities like the Mission (and Oak Park).
If Measure A fails, it will send a message to other developers that building in Davis on any site that needs voter approval is not worth it. This would mean that new housing in Davis could stagnate while the demand by students and professionals continues to grow. Who knows, maybe students priced out of Davis will start gentrifying Woodland and displacing people there… Is that the future you want for this region?
So if you’re pro-Housing and Anti-Gentrification, what do you do?
The answer is you vote Yes on A. Davis’ history as an exclusive community that doesn’t build enough housing to meet the need must end. The failure to do this means ever higher rents in Davis and more gentrification of neighboring communities. Measure A comes with $23 million dollars in investment to improve traffic conditions in town, plus other benefits for local schools and the tax base. It also has 1500 more beds for students at a time when the student population is growing. It’s time to vote yes on Measure A.
Matthew Palm is a Davis resident and UC Davis Grad student who is currently wrapping up a doctorate focusing on the intersections of housing and transportation policies at the state and regional levels.