Rental Assistance Vouchers as a Means for Affordable Student Housing

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rent-forby Matt Palm

Rental assistance vouchers may be a far more cost-effective way for UC Davis to support students on housing than building on campus units.  Researchers have long known that ‘demand-side’ assistance such as vouchers are far more cost effective (DiPasquale, Fricke, & Garcia-Diaz, 2002; Shroder & Reiger, 2000).  The downside of demand-side programs, however, is that they can inflate area rents (Susin, 1999).  This negative impact might be even worse in Davis, where the supply-side response to such increases appears to be politically constrained.

How might student rental vouchers work?  Advocates pushing for more affordable student housing have demanded that rents for graduate students be no more than 30% of their Teaching or Research Assistant stipends.  This mimics State and Federal policies in which residents of affordable housing projects generally pay no more than 30-33% of their incomes on rents. In a voucher program, as is done with Section 8 vouchers, the graduate students would be expected to pay somewhere between 30% and 40% of their monthly stipend on rent, and the rest would be paid by UC Davis.  As with Section 8, there would need to be a rent limit on voucher use to prevent anybody from taking advantage of the system and renting a luxury apartment with spare bedrooms.  But these thresholds would be easy to determine using publicly available rental market data.

How much might this cost? This year the UC Davis Campus Travel Survey included critical questions about rents students faced.  The average graduate student living off campus paid $944 dollars per month last year.  A Teaching Assistant in the middle of the campus’s TA salary schedule (let’s say STEP III) working at half time makes roughly $1800 a month.  Under a voucher program, this median TA would pay $545.25 on rent (a third of the stipend) and the remaining $398.75 would either be paid directly to the landlord.  That would cost about $4,785 per year.

Is this more cost effective then building a unit?  According to the governor’s May Revise, constructing an affordable housing unit statewide costs around $330,000 per unit.  Let’s assume UC Davis costs are comparable and that a unit built today by UCD can last 30 years before needing major rehabilitation.  According to data on American Fact-Finder, I can compute that rents rose an average of 4.8% a year in Davis while under the latest UAW contract wages have and will rise an average of 4% per year.  Based on these inputs, over a 30 year period UC Davis would lose $30,000 over the 30 year time span if students contributed 30% of their incomes, but would save $31,000 and $98,000 over the same time span if students put in 35% and 40% of their incomes towards rent respectively.  And we can get these results before factoring in the declining value of money over time (too many people can ‘fudge’ analysis by tweaking this component, so I’ll skip it for now).   But including it would only improve cost savings for Davis in these scenarios.

There are non-fiscal upsides and downsides to the approach.  Concentrating graduate students, particularly those with children, on single sites can foster a sense of community and mutual support.  As friend of mine with baby told me, it would be much harder to be a grad student with a baby if he didn’t live at Solano Park, UCD’s family student housing.  Because he lives around other families he sees at the site’s park, he can ask neighbors to watch his son if a quick, urgent errand needs to get done.  Were he alone, he’d have to find a sitter.  On the upside, a voucher approach gives students freedom to choose where they want to live.  Many students prefer not to live in Davis out of a feeling the community is racially and culturally exclusive.   A voucher could provide those students with the opportunity to afford to live in a neighborhood in Sacramento or Woodland where they feel safer, where it feels more like home.

Either way, UC Davis and UC System should explore a voucher based approach as an alternative to building on site.

References for those interested:

DiPasquale, D., Fricke, D., & Garcia-Diaz, D. (2002). Comparing the Costs of Federal Housing Assistance Programs. Washington, D.C. Retrieved from http://www.cityresearch.com/reports/Federal Housing Programs.pdf

Shroder, M., & Reiger, A. (2000). Vouchers versus Production Revisited. Journal of Housing Research, 11(1), 91–107.

Susin, S. (1999). Rent Vouchers and the Price of Low-Income Housing (No. W98-004). Berkeley, CA. Retrieved from http://escholarship.org/uc/item/67d5x29s

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77 thoughts on “Rental Assistance Vouchers as a Means for Affordable Student Housing”

  1. Barack Palin

    This has so many holes.  Is it just for grad students that work?  How about the grad student that’s working 30 or 40 hours a week vrs. someone who’s only working 15 or 20 hours?  How about the grad student who’s not working at all and getting money from their parents or loans?  Would they not qualify because they aren’t working and you can’t base it on their income because they don’t have any?  How about undergrad students, would they be part of the program?

    UCD needs to build on campus housing.  A voucher system as proposed here would just serve in driving off campus rents even higher.

      1. Matthew

        As the author, I quite agree.  If the vouchers could only be used in Davis, they would have a definite upwards pressure on rents.  In a normal market this would be counter-balanced by robust building. But Davis voters are extremely cautious about any new housing.

    1. Delia .

      BP someone anyone rx me some xanax because I think we just agreed on something and I’m suffering a major anxiety attack.

      I agree that each student’s income (including income from wealthy parents) needs to be considered.

  2. Roberta Millstein

    Vouchers for what?  You can’t get blood from a stone. We need more housing, and it should be on campus (just not on the Russell fields). The university needs to shoulder its share of the burden, and thankfully, it seems finally to be taking steps toward doing so.

      1. Biddlin

        “UCD you need to build and build now, and we’re going to tell you where you can and can’t build.”

        And some folks there wonder why that’s so unreasonable. As the purest and smartest town on the map, aren’t they entitled to dictate terms?

      2. Roberta Millstein

        BP, David addressed this yesterday in his article:

        I see that argument akin to complaining about a rising crime rate and then turning around to complain when the police violate the constitutional rights of those accused of crimes.  Violating rights isn’t necessary for curbing crime rates, and building in bad locations isn’t necessary for solving a housing crunch.
        In this case, it is not like the university doesn’t have not only other available land, but also better locations.  Leaving the open space along that corridor contributes to a lot of positive qualities, including a sense of transition to the university.

        1. Barack Palin

          Here’s a different analogy?

          My neighbor complains that my dog is urinating on his plants so he asks me to build a fence to keep my dog in.  So I give in to keep the peace and tell him I’ll build a fence on my property.  Then he responds “great, but I want the fence built 3′ from my property line, it has to be 6′ tall with maple stain and lattice trim around the top”.

          At that point I’ve had it and all he will get is the finger.

        2. Biddlin

          Other than the last sentence, I have no idea what David is trying to convey in that gobble-gook quote. I have no idea why, after years of intransigence on building in town, you think you have the right to dictate where the university builds housing.

        3. South of Davis

          BP wrote:

          > At that point I’ve had it and all he will get is the finger.

          The next time Roberta or Eileen complain to UCD about housing they will politely remind them that they wanted to build housing on Russell, but they (and others) said no…

          On the bright side the graduate teaching assistants making $22K/year can smile as they drive to and from Woodland every day knowing that the rich people living on College Park won’t have to experience the horror of looking at another apartment or dorm building as they drive down Russel heading toward their million dollar homes…

          P.S. Tearing down the Primero and Segundo dorms to replace them with lawn would make the drive down Russell even more pleasant for the folks on College Park…

        4. Roberta Millstein

          BP says:

          Here’s a different analogy?

          My neighbor complains that my dog is urinating on his plants so he asks me to build a fence to keep my dog in.  So I give in to keep the peace and tell him I’ll build a fence on my property.  Then he responds “great, but I want the fence built 3′ from my property line, it has to be 6′ tall with maple stain and lattice trim around the top”.

          At that point I’ve had it and all he will get is the finger.

          Your analogy fails because the fancy fence isn’t necessary to prevent harm, but building elsewhere on campus is necessary to prevent harm.

          Here’s a better question: Why, when we agree that this article is mistaken, do you still go out of your way to pick a fight?  Why not take the opportunity to rest from the acrimony and relish points of agreement?

        5. Barack Palin

          Here’s a better question: Why, when we agree that this article is mistaken, do you still go out of your way to pick a fight?  Why not take the opportunity to rest from the acrimony and relish points of agreement?

          So I’m picking a fight?  It’s you that had to put “We need more housing, and it should be on campus (just not on the Russell fields)“.  Why did you feel you needed to add that into this conversation about vouchers?

        6. Roberta Millstein

          BP asks:

          So I’m picking a fight?  It’s you that had to put “We need more housing, and it should be on campus (just not on the Russell fields)“.  Why did you feel you needed to add that into this conversation about vouchers?

          Because I knew that if I didn’t someone would call me out on it.

        7. Biddlin

          “Biddlin, what exactly are you referring to when you mention my supposed ‘years of intransigence on building in town’?”

          The collective, pun intended, “Davis” you.

          The town’s record of rejecting all attempts to build within the city limits is now legendary.

        8. Roberta Millstein

          “Biddlin, what exactly are you referring to when you mention my supposed ‘years of intransigence on building in town’?”

          The collective, pun intended, “Davis” you.

          The town’s record of rejecting all attempts to build within the city limits is now legendary.

          Thank you (Biddlin) for the clarification.

        9. Barack Palin

          Your analogy fails because the fancy fence isn’t necessary to prevent harm, but building elsewhere on campus is necessary to prevent harm.

          My analogy is dead on because harm is all subjective.  Maybe my neighbor feels he’s being harmed by my not building a fancy fence just like the neighbors of the Russell fields feel harmed by having part of the fields developed or the frisbee players feeling harmed by having to play on a different field.  But in both cases is anybody really that harmed?

        10. hpierce

          South of Davis… Primero (Becket/Hughes/Struve/Titus) is long gone… all that is left is my memories of living in Hughes, and the rude pun we made about the gals who lived in Titus (use your imaginations)…

          Think they (Primero) are all student apartments now… Segundo still seems “intact”, but was only 2-3 stories… I was a Campo rat…

        11. Roberta Millstein

          My analogy is dead on because harm is all subjective.  Maybe my neighbor feels he’s being harmed by my not building a fancy fence just like the neighbors of the Russell fields feel harmed by having part of the fields developed or the frisbee players feeling harmed by having to play on a different field.  But in both cases is anybody really that harmed?

          Yes.  Unnecessarily so, when there are other and better places to build.

        12. Grok

          after years of intransigence on building in town

          There is no need to exaggerate. Building has happened and continues to happen, you just don’t think its enough.

      3. quielo

        “but building elsewhere on campus is necessary to prevent harm” You have this backward. You will harm everyone who wants to participate in town life by forcing them to live 2 miles out in the fields for the benefit of the moneyed class.

        1. Roberta Millstein

          I don’t know why you persist in repeating the myth that retaining the athletic fields is intended only to benefit the people on College Park.  As we discussed yesterday, having fields rather than apartments benefit students, staff, and faculty, and the campus more generally, as well as citizens of Davis.  It doesn’t reflect well on your when you misrepresent what others have said.  It looks like you’re just trying to spin your own side rather than engage in a genuine dialogue.  And we went over this at length yesterday, so not sure why’d you’d want to hash over it again today.

        2. Barack Palin

          There’s no perfect answer.  Either the neighbors will have to look at student housing and the students will have to play frisbee on different fields or the students will have to travel much farther to get to class and downtown.  There are trade-offs either way but no side can claim the high ground on this.

        3. Roberta Millstein

          BP writes:

          There’s no perfect answer.  Either the neighbors will have to look at student housing and the students will have to play frisbee on different fields or the students will have to travel much farther to get to class and downtown.  There are trade-offs either way but no side can claim the high ground on this.

          I basically agree with this.  There are trade-offs either way (more than you have described here), and which side one comes down on depends on how one weighs the pros and cons.

        4. Grok

           Either the neighbors will have to look at student housing and the students will have to play frisbee on different fields or the students will have to travel much farther to get to class and downtown. 

          It is not as simple as this statement. The Russell fields are currently used by a much larger number of students than there will be bedrooms in the proposed apartments. Having the fields in a central location benefits far more students.

        5. Grok

          forcing them to live 2 miles out in the fields

          First off, it wont be fields after West Village is built and if it is done well it could be a beautiful community dense enough and large enough to have restaurants and stores.

          Second it is much closer than many of the places students are currently living in Davis.

        6. Frankly

          I have a better location for some high density rental housing that would help make significant progress in relieving the student housing deficit and would also help support the car-less society that Davis’s scarcity activists seem to want, let’s put it on the Nishi property!

          Oh wait, already tried that and the Davis NIMBYs prevented it.

    1. Don Shor

      Vouchers for housing in Woodland and Dixon maybe? I am utterly baffled by this whole proposal. It seems narrowly focused on the impact of the current rental market on graduate students.

    2. hpierce

      No problem… with vouchers at a high enough value, landlords can not renew/cancel leases with young families… very sensible… that can provide more housing for students, without adding new housing units…

      Also decreases need for schools… can save money there, too…

  3. dlemongello

    Additional space is needed much more than subsidies for existing space. And yes, some sites already have a very good current use so given the abundance of other space, I wish UCD would get it.

  4. quielo

    : Many students prefer not to live in Davis out of a feeling the community is racially and culturally exclusive. ”  this is an interesting statement David.  Can you share what you are basing it on?

    1. Barack Palin

      David didn’t write it, but that said it is right up his alley.

      You think maybe the author is referring to white flight?  Naw, that would be considered racist for white people to leave an area where they didn’t feel the community was racially or culturally inclusive.

       

      1. quielo

        Good morning BP. I’m using the mobile browser on my phone and under “about the author” it says David but scrollbar  up I see you are correct. Sounds like the author is micro aggressive

      2. quielo

        They could send a delegation to USC in South Los Angeles to see how the students there create “safe spaces” within a “racially and culturally exclusive” community. I believe the answer has a lot to do with gates and guns. Of course at USC, rather than micro-aggressions, the local community chooses to interact with the students through macro-aggressions such as armed robbery and homicide.

        1. Delia .

          I doubt Pete Carroll would agree w/ your assessment. He frequently ventured out of SC’s sanctuary to visit his neighbors, even in the dead of night. Gotta love that guy.

          And, no, it wasn’t just about recruiting. He truly cared about his neihhborhood.

  5. Edison

    The economic analysis of vouchers provided by the author purports to show significant fiscal advantages to UCD if it were to provide housing vouchers versus building more on-campus housing. This analysis is limited in scope, however, and excludes from consideration other important factors. For example, even if one assumed that Davis had an unlimited supply of available rental housing, the increased number of commuting students would further burden the City’s infrastructure (even if all of the students biked to campus). Those commuting by car would further add to declines in local and regional air quality, and create the need for more parking spaces on campus.  (A good example is the recently vacated student mini-dorm around the corner from my house.  Each of the 5 students had their own cars, drove to campus daily, and made neighborhood ingress and egress difficult because they invariably parked at the corner entrance to our neighborhood.)

    The far more environmentally sustainable and student-friendly alternative is construction of dense, high-rise student apartments on campus. Interspersing such facilities among existing campus buildings would enable students to easily walk or bike to class, while providing easy access to downtown Davis dining and entertainment venues. As has been done at other universities, such facilities can provide many of the amenities and services students want and need, including ground-floor restaurants and coffee shops.  Even more, such facilities need not divert university capital from academic investments.  Qualified and experienced firms such as American Campus Communities (ACC) have an excellent track record building and operating attractive and well-run student on-campus student housing facilities all over the country, including campuses in California (notably UC Irvine).  One of ACC’s often used models is to totally front the cost of campus housing construction on behalf of the university.  ACC’s investment is then repaid over time from the rent paid by students.  Rather than focusing on partial and impractical solutions like housing vouchers, UCD should be encouraged to investigate partnering with experienced firms such as ACC.

    For more information and testimonials by other universities, check out ACC’s website:  http://www.americancampus.com

     

    1. South of Davis

      Edison wrote:

      > UCD should be encouraged to investigate partnering with experienced firms such as ACC.

      We know that Tandem wanted to build apartments on the Nishi site and Tandem is local and has built and currently manages apartments on the UCD campus.  Does anyone know why UCD has not asked Tandem to build and manage more apartments on the UCD Campus (Roberta and Eileen can offer to pick the spots on campus they find acceptable before any planning is started) ?

      http://www.tandemproperties.com/communities/the-colleges-at-la-rue/

      1. Eileen Samitz

        South of Davis,

        You can try beating the Nishi project to death but we have already been through that and the site is not a good site for housing due to their quality issues, traffic, access and egress issues and impacts on our infrastructure. So rather then resurrect ideas that don’t work, let’s work on solutions that do work.

        I agree with Roberta and Edison and it makes complete sense that the solution is for UCD to build much more high-density housing on campus. Housing vouchers would not solve a thing, but exacerbate the situation if anything. Housing for student can only be legally reserved for students on university land, not in the City.  So, to to ensure that the housing needed for UCD’s own growth is available to their own students the logical location is on the campus. Since UCD has plenty of land upon so there is no excuse why it can’t materialize.

        All the other California universities have done it, not UCD needs to catch up with doing what is working for campuses like UC Irvine, UC Santa Cruz, UC Berkeley and CSU Cal Poly San Luis Obispo. UCD has tons more land them, so no more excuses.

  6. MrsW

    The average graduate student living off campus paid $944 dollars per month last year. 

    The vast majority of my neighbors are retired empty nesters in 4 bedroom homes.  If $944 a month isn’t incentive enough to create a granny flat or the like, how much would be?

  7. MrsW

    I have two more questions, somewhat disparate.

    Are graduate students eligible for Section 8 vouchers?

    With respect to housing being located at A & Russell–  This morning I drove by the Segundo dorms.  The architecture and landscaping are fine.  If UCD created a similar corner at A & Russel, there is no reason for it to not look nice.  Assuming UCD builds housing there, I am wondering– would the City have more luck, working with UCD on traffic?  What if UC Davis opened up or widened some of the roads that go through campus?  For example, Old Davis Rd to Crocker Lane to California? or what if A Street were widened, west into campus, and became a two-way artery to the Old Davis Rd freeway on-ramp/exit?

    1. Matthew

      Graduate students are excluded from Section 8 as the Feds see students as “temporarily poor.” There are pro and con aspects of this, given that most grad students go on to be successful financially I can respect it.

      1. Frankly

        If they are eating the actual vouchers.

        There is a huge food shortage in Venezuela.  That was the, sarcastic, point.

        Oops. Re-read your post. I think I missed YOUR sarcasm.

          1. Don Shor

            I know that, and you know that, but it isn’t the one Frankly’s article was referring to. The greater Kansas City metropolitan area is mostly (3/4) in Missouri, and thus unaffected by Sam Brownback’s utterly disastrous economic policies.

    1. Tia Will

      Frankly

      It seems a better solution might be to find ways to import some more conservative residents to Davis.

      Given our current housing shortage and your preference for asking other people why they don’t just leave, wouldn’t it make more logistical sense to just export the conservatives that we already have ?

      1. Frankly

        You are just glossing over the point.

        Places with all those “smart” liberals have the highest housing costs and he most unsustainable public budgets.

        Sure we can find an exception or two.  And those smart liberals are sure to cherry-pick them to prevent having to take responsibility for being such dumdums.

    1. Grok

      Mathew Palm has written a few other Vanguard articles. One backs Katehi and one has very questionable analysis of what rents might have been at Nishi (it ignores information given by the developers them selves). The Nishi article says this about him:

      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.

      Palm also wrote this letter to the editor declaring that Measure A was generational warfare – in my opinion one of the lowest points of the Measure A campaign. His letter was even broadly criticized by Measure A supporters.

      http://www.davisenterprise.com/forum/letters/no-on-a-is-a-generational-war/

      Palm can be found on Linkedin here

      https://www.linkedin.com/in/matthew-palm-07646524

      Palm also wrote this article in which he argues that building more housing in SF will not make housing more affordable.

      https://medium.com/@mattdpalm/yes-but-houses-are-not-apples-7f43d6412755#.kb5dzxqlb

       

    1. quielo

      The author mis-identifies the problem as affordability rather than availability. Likely he was doing another project using the same sources and decided, like many academics, “lets get another paper out of this work”. So he rewrites his original paper using “Davis” instead of “Westwood” and sends it to David.

      1. Matthew

        No, this was not based on any other paper.  This was based on the observation that building housing is more expensive for agencies than providing subsidies/vouchers… and Davis is seriously opposed to new housing construction, including new housing on campus (look at the Russell battle).  Given these political clashes, vouchers are a subtle way to start addressing the issue that wont trigger political backlash.

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