By Dave Taormino
I am responding to questions raised by your readers regarding the recent article about the West Davis Active Adult Community.
The percentage of homes dedicated to those over 55 years versus younger buyers:
Federal and state law sets a minimum of 80% for residents over 55 years of age. Most active adult communities are 100%. Our 20% unrestricted is based on the philosophy that Davis residents enjoy neighborhoods that have active adults, seniors and families with children. This is the current environment for most and the typical neighborhood where they want to live. It’s the size and design of their home they primarily want to change.
We’ve expanded our approach beyond housing to increase the daily mixture of ages in the neighborhood. Our Activity and Wellness Center has a privately-operated health club with a pool available to all West Davis residents. There is no health club currently in West Davis with the closest one on Pole Line Road creating traffic on East Covell. The restaurant has a separate coffee and juice bar area open to all Davis residents. We intend to create a mini Starbuck’s / Mishka’s experience, so there are reasons to leave your home and come to a close by place where there’s activity. As an active adult, your neighbors may be predominantly older, but you will be in daily contact with people of all ages. This concept provides significant intellectual and social benefits as we age.
Our focus is exclusively on providing current Davis residents and their families a home in our neighborhood.
We have two groups in Davis that our neighborhood is designed to serve:
Group 1 (largest group): Current Davis active adults and seniors who want to right size or downsize. While most will be downsizing, some will make a lateral move in square footage into a home that’s highly energy efficient, net-zero electric and designed for their needs as they age with minimal ongoing home and yard maintenance.
Group 2: Parents of current Davis residents who want to be close to their children and grandchildren. Often these are single person households, so we are providing 2 bed cottages and condominiums around 900 to 1,000 sq. ft. While small in size, the design provides for a sense of privacy and a neighborhood environment. Some of these residences will likely be market rate rentals restricted to those over 55.
Will active adults retain their larger current residences as a rental?
Possibly, but not likely. The number of Davis single family, detached rental homes (e.g. East Davis homes) has remained relatively constant over the last decade or two at around 3,100 homes. The growth or turnover to rentals has been primarily in condominiums, ½ plexes and townhomes. The occupancy of these homes has gradually moved from primary families to more student renters with the attendance issues that raises for neighbors. A larger 2,000 – 3,000 sq. ft. home simply does not make a good rental investment. My 26 years of experience as co-owner of Coldwell Banker Doug Arnold Real Estate as well as my involvement in Springlake in Woodland (North, North Davis) indicates that 55 – 65 year-old Davis home sellers want to downsize and purchase a less expensive home for cash and pocket the net difference for retirement. Their overarching goal is to make their lives less complicated and the finances more predictable. So far, they are forced to leave Davis to do so, and that is why Springlake with single-story homes is so popular even though Springlake homes are much larger than we propose.
Proposition 13 tax basis: You can’t transfer your “old” Prop. 13 tax basis to the new home if you rent the old one. You will be paying current taxes on the new home in that case. While some larger single-family rental homes are rented to students, most are not.
How is the project’s focus on active adults and seniors beneficial to the Davis school system?
Davis imports 650 students each day to our schools which is equivalent, more or less, to two grammar schools. Davis has a growing shortage of families with school-aged children. My own experience, and the consensus of Davis realtors, is that about 2/3 of the buyers of Davis resale homes are families with children. Interestingly, while absolute numbers for children at the Cannery are not yet available, the consensus is at most 20% of the homes at the Cannery have school-aged children. Providing more resale homes is the key to increasing school-aged children. What makes resale homes more attractive to families? Larger back yards not available at the Cannery, convenience and safe bike access to elementary schools and parks for a starter. Each new home at West Davis Active Adult Community will pay school construction fees even though they will generate hardly any children.
City Finance Benefits?
Resale homes are a significant financial tax benefit to the city. Why? On resale, higher assessment values occur with no new infrastructure or services required. In most cases a much higher % of property tax going to the City results than currently happens with new home subdivisions. It’s called “tax sharing” agreements. For example, in new subdivisions often the City receives 15 – 16% of property taxes while in older East and West Davis it’s 21%. Resale older houses generate a higher percentage of property taxes that stay in Davis rather than being shared with other taxing entities.