Council Compromises with Developer on Chiles, Increases Affordable Units On-Site

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The council ultimately compromised with the applicant on Chiles Ranch, which enabled the developer to reduce the overall number of units and eliminate the condos but put more of the affordable units on-site.

The council ultimately supported a motion made by Councilmember Lucas Frerichs and seconded by Councilmember Rochelle Swanson to put 12 (rather than the proposed 6 or the current 22) affordable units on-site with an in-lieu fee of $720,000 to produce eight affordable units elsewhere in the city.

The Chiles Ranch development agreement was originally signed back in 2009, utilizing the previous Affordable Housing Ordinance.  The proposed changes reflected the current ordinance with the two sides “arriving at a midpoint” on the total affordable units, splitting the difference between what the former and current required.

City Planner Ashley Feeney explained that we recognized “the condo product is stale.”  He said that “(condominiums are) probably not the best housing choice for affordable units.”  He explained, “There is an adversity to building condos is the feedback we’re getting from the development community, especially for affordables.”

The previous proposal congregated all of the condos into one area of the project, while the new proposal will integrate them throughout and the developer, Don Fouts, pledged that the proposed duets would not be noticeably affordable and would look like the other homes in the project.

The city in particular was interested in the in-lieu fee dollars to fund some other affordable projects.  Mayor Robb Davis in his remarks noted that RDA money once funded $2 million or more annually for the city.  That stream is gone and not coming back.  The city and council are having to get creative on financing options for affordable housing in the new climate and, thus, in-lieu fees are valuable to the city.

However, this proposal drew a fair amount of public and council pushback.  Nine members of the public came forward to speak – all opposing the proposed changes.  Assistant City Manager Kelly Stachowicz reported that, on Monday evening, the Social Services Commission met to discuss the proposal and unanimously voted to oppose it and support the current design.

Three councilmembers also made it clear that the proposal submitted by the developer was not acceptable.

Mayor Pro Tem Brett Lee stated plainly, “I only will support the changes provided that all of the affordable units are on-site.”  He later added, “Ideally we wouldn’t have any in-lieu fees, that all the required affordable housing units would be required on-site.”

While Lucas Frerichs didn’t go that far, he did state that “six units on-site is not enough.”  He was overall supportive of integrating the affordable housing into the rest of the project and increasing the number of Accessory Dwelling Units.

“I do think that the building on those units is definitely the preferred route as opposed to just a very large amount of in-lieu fees,” he stated.

Councilmember Frerichs also noted with some irony that some of the people who came forward to argue for affordable housing that evening were the same people who were opposing Sterling, which had a set-aside affordable apartment component.

Councilmember Will Arnold, on the other hand, stated, “I do want to see some amount of in-lieu fees.  That would be my preference.”

He added, “Although – and I’m sure the applicant will not like my next sentence – although that doesn’t necessarily mean I don’t want to see some numbers that’s a double digit numbers of units that are built on-site as well.”

Councilmember Arnold added that he was very interested in getting the total number of affordable units closer to the 22 number they originally had, which he believed was in the spirit of the 2009 agreement.

He said, “That might be a big ask.  I’m sure the developer won’t like that ask, because they would like a lower number.”

Mayor Robb Davis said, “I think we as a council have asked for help in sort of intellectually moving us beyond RDA.  I don’t think as a community we have.

“I almost feel like we need to try to wipe our minds clean and start over,” he said.  He noted that RDA was bringing in $2 million each year.  “That money’s gone forever.”  He said, what we can do now “is much much less.

“If you see us struggling and making space for in-lieu and trying to balance it, it’s because we are trying to figure out the best way to move forward,” he said.

He said that whether they agree with staff or not, “it’s the creative thinking process that I appreciate.

“I object a little bit to the idea that somehow an in-lieu fee is a giveaway, we have real needs for that money,” he said.

“The question I kept asking myself all weekend and up until today is ‘what is the best thing for our community with this project?’  Is there a single best thing?”  he said.

“I’m very much of the mind that we need more… on-site than is being proposed,” he said.  “I say that as someone who is not a big fan of for-sale affordable at this point in history.  I’m much more of the mind that to truly meet the housing needs of people who we often talk about, who work in our community and can’t live here, that rental products are probably much more adapted to their needs.”

The mayor stated, “We’re not getting enough of those and when we do get them they seem to be very much student oriented.

“We’re going to have to figure out where we’re going to get the resources for some of these other projects,” Mayor Davis added.

The council paused briefly to allow the developer to mull over what might be workable, given the council preferences.  Don Fouts told the council that they need to bounce around the number 20 units rather than 22, given the reduced project size.

He expressed disappointment, but ultimately agreed to 12 on-site with the in-lieu fee of $720,000 to provide eight affordables elsewhere in town.

Council literally jumped on this offer and eventually passed it 5-0.

—David M. Greenwald reporting



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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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9 thoughts on “Council Compromises with Developer on Chiles, Increases Affordable Units On-Site”

  1. Howard P

    David… I believe you mischaracterize this as a “compromise”.  The existing DA was a “compromise”… entered into by both parties, arguably in good faith, each knowing what they “needed” out of the deal.

    This is a “caving”, or, a “gift of public interest”.

    Reduction of affordable housing… no apparent guarantees that subsequent sales (after first sale) would not be “market rate”, and remain “affordable”.  A pittance for ‘affordable housing’ elsewhere, with no land dedication, etc.

    IF (and that is a mighty big IF) the City is serious about affordable housing, there should be an accounting, subject to audit by the City of what the developer’s actual costs (pro-rata land value, design, materials, labor, City impact fees, pro-rata utilities, building permit fees, financing costs, etc.) are for the few “affordable” units provided within the project.  That should be the basis for the per unit in-lieu fee!. $72,000/unit, just is a really bad joke.

    This is a swindle, pure and simple.  The developer may claim ‘changed circumstances’ but with the elimination of RDA, the City has ‘changed circumstances’ as well.  All 5 of the CC members should feel shamed by agreeing to this.

    If they still can, or if the developer has even the tiniest shred of integrity, at a very minimum, the costs of providing the units provided within the project should be documented, subject to audit (as above).  At least then, moving forward, we’d all know what the cost of an in-lieu fee should be for a SF residential unit.  Rest assured, based on a minimal 850 foot,1 ba, 2 Br, 1 car garage affordable unit $72 k is WAY, WAY low!  A sick joke.

     

    1. David Greenwald Post author

      We’ll have to see what comes out of Lucas’ request to look into affordable housing more.

      In terms of compromise – the developer was not happy and the city didn’t get everything they wanted.

  2. Tia Will

    In terms of compromise – the developer was not happy and the city didn’t get everything they wanted.

    I think this is a great illustration of the limitations of a “compromise” in which no one is happy and a less than optimal result is achieved. I would contrast this with a collaborative process in which everyone puts their cards on the table with regard to their objectives and a project that meets all needs ( not necessarily wants) is agreed upon. I know that this is not the model that most of our developers, city planners, and officials have “grown up” with, and I know that competition including adversarial positioning is the model that many believe is the “best”, but I truly believe that we would save vast amounts of time, money and energy if we would at least consider trying a truly collaborative approach from beginning to end.

    1. Howard P

      Tia, the original Development Agreement was a “collaborative process”.  This is a one-sided caving.

      Here, the “collaborative process” has seemed to fail.

  3. Jim Hoch

    So why are were gifting random people with hundreds of thousands of dollars? I think I need a legal separation from my wife so she can apply for the free dinero. If I emancipate my children can they apply as well?

     

    Maybe the Vanguard can write an article on strategies to claim the money form the Davis Big Spin?

  4. Howard P

    [Damn this posting, getting ‘connection timed out’ message, and then having post going to “bit bucket” is tiresome!  Third time today…]

    People need to remember that there are two AH components… SF home ownership, and MF (in past occaisionally SF) rental.

    The SFHO has been plagued with scandals/hints of scandals. Have not heard anything negative on the rental side, MF or SF.

    If we got rid of the “ownership” portion, think most of Jim H and my concerns would be allayed.

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