Commentary: Are Any of These Really Mega-Dorms?

At the Social Services Commission meeting, Nishi developer Tim Ruff said, “We have a mega-housing crisis.  What you look at what we are doing here in Davis – we can do it with mini-dorms or we can do it with other larger dorms.  I think the best location for a larger dorm-like project would be adjacent to campus.”

But, while some have railed against these projects, it is not clear how well they fit into the term “mega-dorm” as used by some during this debate.

On Tuesday, Mr. Ruff pointed out that they were planning a mix of configurations – half of which are two-bedroom apartments with either one or two bathrooms per unit.  The other half will be four-bedroom apartments with either two or four bathrooms per unit.

“We’re not having a bathroom for every bedroom,” he explained.  “We’re not having five bedrooms behind every door.  These are pretty much average size units.”

Critics like Eileen Samitz have argued that these projects “are exclusionary by design because they are a rent-by-the-bed format.”  She writes, “Instead of mega-dorms, the City needs to build more traditional 1-, 2-and 3-bedroom apartments which are inclusionary by design since (they) can be occupied by local workers, families or students.”

But as we have looked more closely at the known proposals – Sterling, Lincoln40, Plaza 2555, and Nishi – several things have come into focus.

First of all, these projects are not monolithic.  In fact, the one real defining characteristic is that they will have a large capacity ranging from 540 student-oriented beds at Sterling to 2000 or so student-oriented beds at Nishi.

However, only Sterling and Lincoln40 are planning to have exclusively bed leases.  In a previous article, we have noted a number of advantages to such an arrangement, from liability to the ability
to remove troublesome tenants to efficiency.

However, Plaza 2555 is planning to rent by the unit.

There is not yet a firm proposal from Nishi, however, Tim Ruff did tell the Vanguard that they could have either bed leases or unit leases.  He said, “Either way, 3 or 4 people could get together and rent a unit or potentially a family – but we were defining affordability by bed so individual students could be served.”

Second, while Sterling, Lincoln40, and Plaza 2555 have a majority of four- or five-bedroom units, they are not exclusively so.

Lincoln40 will have the highest percentage of such units at 70 percent, but even Lincoln40 only has eight proposed five-bedroom units and it also has 38 two- and three-bedroom units.

Sterling’s market rate apartments are comprised with two-thirds of them as four- to five-bedroom apartments.  But they also have 52 one- and two-bedroom market rate apartments, plus 38 affordable units on the affordable site, both of which could provide for families or non-students.

Plaza 2555 has the most diverse mix, broken down as follows: 30 micro units, 17 one-bedroom units, 14 with two bedrooms, nine with three bedrooms, 96 with four bedrooms and 34 with five bedrooms. That means that 130 of the 200 units have four and five bedrooms.

Not only that, but a lot of these units are townhouse configuration rather than apartment configuration.  Yes, they are targeting 554 for student beds, but they have a mix of housing options and are renting them by the unit, not the bed.

The developers are seeking out groups of students to serve, rather than necessarily individual student rentals.

Finally, Nishi at this point is the least mega-dorm like proposal, with no five-bedroom apartments, and half of its units are two-bedroom apartments.

In short, as the chart shows above, none of these projects are exclusively four- and five-bedroom apartment complexes.  There is a mix and there are one to three bedrooms available at every project, ranging from half at Nishi to 30 percent at Lincoln40.

A point that keeps getting missed by the opponents of mega-dorms is that the fact that the rental market in Davis heavily skews toward students anyway.  We have estimated as low as 65 percent to as high as 85 percent of all apartment rentals in Davis are occupied by students.

We asked the city if they have an estimate on that number but, right now, they do not.  However, we hope to get something from the city in January.

The key point, though, is if the number is indeed between 65 and 85 percent, then these apartment projects are providing housing that is somewhat proportionate to the overall demographic breakdown in Davis.

With that said, I think Tim Ruff is realistic about who will live in Nishi.

He pointed out, “It’s right adjacent to campus.”  He said, “We’re not necessarily restricting to students, but the fact that it’s right next to campus…  The students won’t need cars…  The idea’s to lure students closer to campus and get them out of some of these neighborhoods.”

He offered, “I think that will help loosen up…every percentage you can take off the vacancy rate – two percent, three percent, four percent – each step you go, you are going to put more tools in the hands of the tenant, so that when they come to the landlord they can ask for pretty much (what they need), they can negotiate.”

Some of the Social Services Commissioners seemed relieved that the project had a mix of housing and could serve a variety of people, but the reality is that the project is next to campus, it has limited access to Richards Blvd., and, realistically, the people that are going to live at Nishi are students.

Tim Ruff said, “For all intents and purposes it will draw students and (be) appropriate for students.”  He pointed out that they studied apartments around town and even further away, and they found that “some of these apartment complexes are 90 percent student.”

That is one of two points that we have made from the start in this conversation – the student market is so tight that all of the rental units that become available are likely to be snatched up by students.  So, if the larger units rented by the bed are more efficient and cheaper, I don’t see a huge problem with providing those type of rentals.

The other problem, as I have pointed out, is market rate apartment housing is too expensive for most families.  Students have the ability to share rooms and split rental costs, but families do not have that ability – and for a family to live in a market rate three bedroom, for example, they would pay around $2300 per month in rent which, in general, would require around $92,000 in annual salary to be able to reasonably afford it.

That’s well above the median income for Yolo County and if you’re making $92,000, you would probably be able to buy a house in other communities, so why would you want to spend $2300 on a rental?

While Eileen Samitz argues that these “mega-dorms are exclusionary due to their design,” Don Shor takes issue with that, arguing that “anybody can live there.”

He believes it is false to say they are “exclusionary.”  He writes, “Renting by the bed is not exclusionary. Developing apartments with more bedrooms than usual is not exclusionary. Reserving housing for seniors IS exclusionary. Master leasing apartments solely for UC students IS exclusionary.”

He adds, “These units add to supply that anyone can rent.”

Bottom line that this comparison shows is that there are one- to three-bedroom apartments being built – yes, the majority of units are four-bedroom units, but, then again, the majority of the renters in the Davis market are and will be students.

—David M. Greenwald reporting

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