The debate over housing figures to define much of the next seven months before the council election, which is likely to include another go-round on Nishi. We have seen the rental market, tight as it is at a 0.2 percent vacancy rate, generate a number of new housing proposals.
As we have shown in previous articles, the vast majority of rental housing is currently occupied by students while much of the new housing demand is coming from students as well. Moreover, the shortage of rental housing is hurting not only students – many of whom have to triple up in rooms designed for one, couch surf, and even live in their cars – but it is also hurting families seeking single-family housing and pushing more and more students into single-family homes that could go to the families who are now being pushed out.
In my view then, as a member of family that rents in Davis, by providing predominantly student housing, not only is the city addressing by far the biggest need, it actually helps address what appears to be others’ concern by opening up single-family homes to families again.
But something I realized this week is that, while people can complain about affordable housing or, more precisely, the lack of affordable housing in Davis, the affordable housing we have is actually working. I live in a group of nine affordable townhouses in a nice neighborhood in south Davis. Contrary perhaps to the perception of affordable housing, where we live the people are making somewhere between 80 and 120 percent of median income.
These are people making what in many communities would be a good living, but because of the high cost of housing here, would otherwise be priced out of Davis. And here we have nine townhouses where professional families live, and all of them have school-aged kids. That is an example of a program working by design.
The problem is, of course, one of funding affordable housing and then finding locations in which to place it. Both are huge challenges.
There are a lot of questions about funding. Some have pointed out that the current thrust of developers looking at four- and five-bedroom apartments ends up both shorting the city on impact fees and shorting the affordable housing program because the contribution is based on the number of units rather than the number of rooms.
At the recent workshop on affordable housing, the council was considering whether the city should be determining requirements for rental housing based on the number of units or the number of rooms. At first glance this would seem a no-brainer.
As Mayor Pro Tem Brett Lee put it, there is a mismatch “between fees being based on front doors versus bedrooms.” He said he wanted to see the impact fees being based upon bedrooms.
“I’d also like to see density based upon bedrooms,” he said. He said it should not be how many units per acre but rather how many bedrooms per acre that is the key indicator of density. “I think it
just is a more sensible policy to track the number of bedrooms.”
Councilmember Rochelle Swanson said, “I agree that number of rooms and not number of units is the appropriate number we should be looking at.”
But she also had a word of caution, noting that “35 percent of zero is still zero.” By that she meant that if the units are not built because we have made the burdens so high for developers, there will be no affordable housing. This is a key point that I will return to shortly.
Indeed, one developer warned that one reason that we are “only seeing student housing project proposals” is “because that’s what Davis policies dictate.” Alternatives to this model, they argue, are “financially impossible because the policies we have in place result in a developer loss.
“There are some special circumstances where a for sale project or a govt. subsidized project will work, but those are the exception, not the rule,” they told me.
The bottom line is that city fees and development costs are lower for student housing than for non-student housing, while the revenue for that housing per square foot of land is higher.
“Student housing is much more efficient. It’s simple math. That the city doesn’t grasp this simple notion is extremely frustrating,” the developer told me.
One critic writes that “another reason to be concerned about the megadorm proposals, which essentially shortchange the Affordable housing program…”
There is of course an irony to the argument that the city is short-changing affordable housing through building larger student housing apartments – and that is that these same individuals argue that student housing should primarily be built on campus. If they build the student housing on campus, we end up again with 35 percent of zero being zero.
Moreover, if the developer is correct, then the city fees make it more difficult to build other sorts of housing and, if they impose those fees on student rentals, once again we end up with 35 percent of zero being zero.
The bottom line is that, through the current system, at least we are getting some on-site affordable housing in the case of Sterling and at least we are getting some in-lieu fees to fund other projects around town.
The city council is going to look into the possibility of doing more, the state is creating a new fund for affordable housing, but nothing figures to replace the $2 million annual revenue stream under the previous RDA (Redevelopment Agency).
Finally, earlier this week, I questioned whether apartments were the best way to provide housing for families. The point I made is that, from my perspective, the location where most of these apartment projects are going seem more conducive to either student housing, or young workforce housing, than housing for families – which I think are better off in projects integrated into neighborhoods rather than living by campus.
There was an interesting pushback that was fundamentally inaccurate: “While you have had the advantage of having a high enough salary to move up from renting an apartment to renting a house now, not everyone can do that. Single mothers and lower income families do not have the privilege you have, so you have no right to discard their needs.”
Actually I don’t have that advantage at all. I am fortunate to have applied for and qualified for the city affordable housing program. As I argued, affordable housing works. The problem we have – as people on a wait list will tell – is that we don’t have enough of it.
A three-bedroom affordable apartment in Davis might run you a little over $1200 a month. At market rate, the average rent in Davis is $1344 for a one-bedroom, $1700 for a two-bedroom, and $2330 for a three-bedroom.
So when you are talking about apartment rentals and new apartments in Davis, a family moving into a two- or three-bedroom apartment is going to be paying at least $1800 to $2400 a month just for rental. I can tell you, that doesn’t work very well for someone even making as much as $70,000 a year. Students can afford it because they add bodies and split the rent. Families really can’t.
You end up in a situation where you are living in a dense apartment with no yard that you really can’t afford, or you can go to another town where you can rent a home for less and it becomes a no-brainer.
The reality, as Councilmember Rochelle Swanson warns, is that Davis is becoming two communities – one of students under the age of 25 and the other of seniors over the age of 65. What we are losing is the middle, the families, the kids. If that is what we want, then we should continue as we are going. If we want to change that, then we have to find a way to get more housing that is actually affordable for families.
In my view and from my experience, affordable housing works – we just have to find a way to build more of it.
—David M. Greenwald reporting