For much of the last two years, the Vanguard has been discussing the impact of the growth of UC Davis on the housing and rental market in the community. The focus has been on the need for UC Davis to build more on-campus housing as a means to relieve pressure on the impacted 0.2 percent vacancy rate in the city of Davis.
But we haven’t paid nearly enough attention to the regional housing picture and the impact that it is likely to have on Davis and UC Davis students.
The Bee on Wednesday published a story entitled, “Rents are rising faster in Sacramento than any other part of California.”
The reality is that Davis lies physically in between the San Francisco/Silicon Valley housing market – which is the most expensive market in the state if not the nation, with monthly rents averaging nearly $3000 per month – and the cheap Central Valley market, where average rents are the cheapest at $985 per month.
However, “rents are rising faster in Sacramento and the Central Valley than any other part of the state.”
The report goes on to say: “Sacramento’s rental market had the biggest year-over-year increase compared to all other markets across the country, and throughout California.”
“The current economics of supply and demand in the Sacramento market favor property owners and not the renter,” said Doug Ressler, director of business intelligence for Yardi Matrix. “Limited supply and demand continue to increase rental rates.”
Sacramento saw a 9.9 percent increase in rent between June 2016 and 2017. Compare that to Silicon Valley and San Francisco, which only had 1.6 and 0.9 percent increases respectively.
In fact, Sacramento had the fastest increase not only in the state, but the nation, just ahead of Seattle.
The implications for this are huge.
First, those who believe that students can simply rent housing in other communities and commute to UC Davis should now consider the likelihood that these students will be competing for housing regionally with people being displaced from Silicon Valley.
Second, the other areas where students traditionally rent and commute are now likely to be impacted as well.
That puts even more pressure on the Davis housing market and the UC Davis housing market. The university factored in a 10 percent out-of-area figure when projecting housing needs.
As Assistant Vice Chancellor for Campus Planning and Community Resources Bob Segar explains, “The way we got that number (90 percent) — and I don’t know if it even matters — was historically, 90 percent of students have lived either on campus or in town. So when we said we’ll take 90 percent, the intention of that statement was we’ll take all the growth.”
But if the markets that students used to inhabit are becoming more impacted, that calculus figures to change.
The university thus far has not committed to exceeding either the 90 percent of new students figure or the 40 percent of overall students figure for on-campus housing.
Another problem we will soon face is that, right now, UC Davis’ plan calls for 2775 beds by 2020. But UC Davis will have added about 3000 new students between 2015 and 2020.
Will the new housing come on line on time? That seems questionable at best. We believe that it is more realistic to project an opening of 2021 or even 2022. What that means is that there will be 3000 additional students with no new university housing projected for four or five years.
In the best case scenario, both Sterling (which has been approved by council) and Lincoln40 (which still has to go through the entitlement process) will be on-line by September 2020, but that only amounts to about 1500 beds.
The fallback position of many in the community has been that students can simply commute. But if the Sacramento housing market is impacted, that will have repercussions everywhere in the region.
Yesterday we had a discussion of homelessness in the community – and Robb Davis made the point that, in addition to the visible homeless, there is also the student population that ends up homeless.
As we pointed out early this month, student homelessness may not mean that students literally end up on the street – instead many will “couch surf” or live in their car. Student homelessness is a big and growing issue for students in Davis.
Samantha Chiang, ASUCD Senate President Pro Tem, said at the Sterling meeting that many students are “forced to start their housing search in November of their first year, only to not find a house and be forced to couch surf in the following year.”
Georgia Savage warned that “from a student perspective, not passing this project is risking homelessness for students, which I would argue is a significantly more present issue.”
As another student put it: “I struggle from April to August to find a place to live in Davis and I had to prepare myself to be homeless if I could not find a place.”
Many dismissed these warnings, believing that areas like Woodland and Dixon and Sacramento can provide a relief valve from housing pressures of Davis, but the emerging reports out of the Sacramento market suggest even if those options were available to some students, that window may also be closing.
The Vanguard continues to support the city position asking for the university to commit to provide 100 percent of new students with housing on campus and increasing their overall on-campus housing provision to half the student population.
However, whether or not UC Davis ultimately sticks with 90/40 or goes to 100/50, the city is in need of more apartment and rental housing for students – we figure that gap is at least 4000 if the university sticks with the 40 percent on-campus housing plan.
—David M. Greenwald reporting