Commentary: The Impact of the Rental Housing Crisis

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I was reading a lengthy Facebook post by a friend of mine.  He overheard people, in this case workers, but they could just as easily be students too, talking about the fact that they are happy about their lease for next year.

Why?  “My rent is only going up 60 dollars a month.” Others: “My rent is going up 100 dollars a month!” Another said “200!”

As my friend put it: “I got to thinking about what that actually means. Folks are going to be paying more next year, a lot more, for the exact same living situation. Are they getting more housing or services for that money? No, they aren’t. Will their wages go up by $100 a month?”

He added, “Landlords are raising their rents because they can. Where is all that extra money going? Right into the pockets of the people who have everything already.”

It is really no different than the letter from the lady at another apartment complex which is raising the rent by $280 – not because their costs are going up, but because they know even if the current residents end up leaving, the 0.4 percent vacancy rate means there will be plenty more lined up to take their spot.

My friend writes: “Here is what gives me hope. The students are fed up with it all. They are organizing, they are pushing back against the status quo of ever increasing rents, increasing tuition,
the lack of decent housing and everything else.”

I think most people in this community now agree that we have a student housing crisis.  There is not a consensus, though, on how to handle it.  Some have pushed for the university to add more housing – a move that the Vanguard fully supports.  Some have pushed for the city to add more housing – also a move that the Vanguard fully supports.

Some believe that by adding student-oriented housing it can free up single-family homes for families.  Others want to see more of a mix of new housing options – although the Vanguard has shown that the four most recent housing proposals actually add a vast majority of housing that is two- and three-bedroom apartments with only around a quarter being four- and five-bedroom apartments.

The Vanguard has also demonstrated that the cost of housing on campus is much higher than it is off campus.  According to one set of data, UC Davis is the second most expensive UC to live on campus, at an average of $16,136 per year (with the rate even higher for a single occupancy room) while Davis is the second least expensive community to live in, with the average cost at just under $10,000 per room.

From the Vanguard’s perspective, that data suggests that one reason UC Davis has traditionally had a low on-campus housing rate is that they have not needed to add as much housing on campus.  Housing off campus has traditionally been available and relatively inexpensive compared to other schools.

That means that, traditionally, students could find housing for much cheaper off campus, where they not only paid less in base rent, but faced more flexibility in the ability to split that rent as well as food costs.

Some have argued “the City should not be enabling UCD to continue in their negligence to provide the on-campus student housing needed for its own growth.”  They add that “there is no excuse why UCD cannot provide 50% on-campus housing like UC Irvine, UC San Diego, UC Santa Barbara, UC Santa Cruz, UC Riverside, and UC Merced, particularly since UCD is the largest UC with over 5,300 acres.”

Again, one reason why UC Davis has offered less in the way of housing on campus is the combination of cost and need.  That has freed up UC Davis to focus on other things.

But clearly, given changes in Davis’ growth policies since 2000, UC Davis is going to need to re-think its approach to on-campus housing.

Data provided by some of the commenters in Monday’s article is rather telling.  In 1970, there were 23,488 people living in Davis and 12,941 students at UC Davis.

There are two key stats that the chart tracks.  One is the population increase of the city of Davis versus UC Davis.  And the second is the enrollment as a percentage of the population.

The latter number trended downward from 1970 to 2000, going from a high of 55 percent in 1970 to a low of 42 percent in 2000.  Likewise, the population increase of the city outstripped that of the university until 2010.

What that means is that until Measure J in 2000, UC Davis enrollment growth was not driving the city’s growth needs.  Rather, Davis and UC Davis were growing in tandem.  In fact, Davis was growing at the same rate or faster.

UC Davis actually grew the least from 1990 to 2000, at only 8 percent – whereas from 1980 to 1990 it grew at 27 percent and from 2000 to 2010 it grew at 21 percent.  You have to be a little careful because it is only a seven-year period, but from 2011 to 2017, UC Davis grew by 16 percent.

What that tells you is that UC Davis since 2000 has grown at about its historic rate, except for the during the 1990s when it essentially stopped growing.

What has changed then is not UC Davis policies for enrollment growth, but rather the city’s policies for growth that have slowed if not stopped since 2000.  In 2000, the city population was 60,308.  In 2016, it was 68,314.

For the first time, UC Davis had more growth, at 10,000 over the 17-year period, than Davis did at 8000.

Those arguing that the city is enabling UC Davis to continue in its negligence are clearly misreading past and current data on housing and growth.  What has changed is not UC Davis policies, but rather city of Davis policies.

Clearly the university is going to need to change – and change they are.  Yes, it is not as rapidly as some like it.  UC Davis is proposing to go from 29 percent on-campus housing to 46 percent.  You can talk all you want about what other campus are doing, but that represents a nearly 60 percent increase in the percentage of on-campus housing over just a 10-year period.

But, as we have pointed out, unless UC Davis can figure out a way to make housing more affordable for students on campus, simply providing on-campus housing only helps so much.  This isn’t just a UC Davis problem as some have let on – it is a systemwide problem and indeed a higher education problem.

It is, however, a start.

—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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77 thoughts on “Commentary: The Impact of the Rental Housing Crisis”

    1. Howard P

      Maybe crickets… or could be like watching replays of M*A*S*H… script doesn’t change, everyone says the same lines (am convinced some here cut and paste their previous posts) … short of an ‘epiphany’… not thinking there will be NEW ideas/thoughts… more like “samo-samo”

      I hope I’m wrong… but am skeptical…

  1. Don Shor

    I also read that lengthy facebook post and the replies. The bottom line is that those who are vocally opposing the various projects being proposed by private developers do not have any arguments that lead to a sufficiency of housing. Their opposition to private projects will maintain the status quo of very low apartment vacancy rates and continuously increasing rents. Their answers are to criticize developers and to criticize the university. Neither of those criticisms gets any housing built.

    For the first time in years we actually have an opportunity to relieve the rental housing shortage. Attempting to block private development or micromanage the configuration of rental housing projects simply impedes that opportunity and harms young adults.

    1. David Greenwald Post author

      “The bottom line is that those who are vocally opposing the various projects being proposed by private developers do not have any arguments that lead to a sufficiency of housing. ”

      Key point

    2. Ron

      Don:  “Their answers are to criticize developers and to criticize the university. Neither of those criticisms gets any housing built.”

      Actually, it has convinced UCD to increase the amount of proposed housing on campus.  (Despite your predictions.)

      Don:  “The bottom line is that those who are vocally opposing the various projects being proposed by private developers do not have any arguments that lead to a sufficiency of housing.”

      With the exception of student housing (largely driven by UCD’s pursuit of non-resident, full-tuition students), this is a false argument.  Those who continually support more housing never put forth any statement or goal regarding the ultimate size of a community, nor do they state how much SACOG requirements, for example, should be exceeded.  They simply view market demand as a “planning tool” regarding such questions. (In other words, the “status quo” regarding planning that most valley cities use.)

      As a side note, surrounding communities (where there is very little “growth control”) have recently experienced some of the fastest-rising rents in the country.

      1. David Greenwald

        I think what has convinced UC Davis to increase the number of on-campus housing is an assessment of the data provided above.  Moreover, UC Davis has increased their share DESPITE the fact that private developers are adding project proposals, by the way, in contradiction to arguments posed by opponents of housing in town.

        1. Ron

          David:  Let’s be honest, here.  Without Eileen and others, the increased amount of housing proposed for campus simply wouldn’t have happened.  Eileen’s efforts encouraged the city and others to get involved, as well.

        2. David Greenwald

          Yes, Eileen raised an issue that needed to be raised.  The result from her perspective has to be viewed as mixed.  The university increased their alotment of housing.  The city has seen a number of new housing projects come forward.

          The question that we can’t answer is given how bad the housing crisis has gotten, what would have been the result if Eileen hadn’t raised the issue of the LRDP starting in 2015?

          Bottom line, she raised the issue starting in 2015, I don’t see that she’s driving the boat at this point.

        3. Richard McCann

          I point out that Eileen is part of the problem as well as she was a key member of the group that forestalled meeting rising housing demand since 2000. She’s not a hero for now trying to force UCD to solve the crisis she had a hand in creating.

          David, a good  summary and analysis of the data I provided earlier.

  2. Tia Will

    “Landlords are raising their rents because they can. Where is all that extra money going? Right into the pockets of the people who have everything already.”

    I perceive this statement as a common, but needlessly divisive point of view that some use to their advantage. Where is all that money going ?  On its face, a reasonable question. But then we come to the postulated answer, and this is where the problem arises. We don’t know where that money is going. But for many, it is not going “into the pockets of the people who have everything already.” It may be going to pay another student’s tuition either at UCD or elsewhere. It may be going to pay off someone’s medical bills. It may be going to pay off the mortgage on the property itself. It may even be a main source of income for the owner who may very well be on a fixed income and struggling with increasing prices, and increasing tax assessments. 

    I do not expect students to understand this. I do not even expect young workers to understand it. However, I do expect businessmen, planners, developers and investors to understand it and not use a not so subtle form of class warfare to fan the flames of an already difficult situation for many students and other low income folks.

    1. David Greenwald

      I disagree with you here Tia.  The point that was being made is that costs were not going up, the landlords were raising the rent, because the market scarcity allowed them to do so.

      1. Ron

        How do you know that costs are not going up?  Costs are going up for many things, as the economy improves.  (This may be especially true for services related to buildings.)

        Every year, taxes and insurance go up for my home, as well. (There also seems to be a relative shortage of contractors who do repairs, and I suspect that their prices are higher than a few years ago – during the recession.)

        Again, some of the surrounding communities (where there is no “growth control”) have recently had the fastest-rising rents in the country. This is likely a sign of a recovering economy.

        1. Ron

          I don’t know.  But again, scarcity is likely not the only factor, given that surrounding communities can/do function as a “relief valve” for Davis.

          Of course, surrounding communities also have a relatively low vacancy rate at this time.  (Around 2%, I understand.) Not sure why developers aren’t responding more quickly in those communities, unless there isn’t sufficient profit (in the form of rents) for them to do so.

          In any case, it’s an ever-changing situation. (I can hardly wait for the next housing downturn, when the “crisis” will magically disappear throughout California. To be replaced by a “crisis” in the opposite direction.)

          1. David Greenwald Post author

            See my answer to Tia re:magnitude of rental increases compared to inflation rate.

        2. Ken A

          David asks “What costs are going up?”

          Just about EVERY cost is going up.  The Davis city services bills (that the city won’t allow to be in renters names) have MORE than doubled over the past ten years (my current monthly bill is MORE than my bi-monthly bills of just eight years ago).  In addition to the increase in city services costs (with more to come in order to pay for the expensive new water project).  The city of Davis just started a new “Rental Registration, Education and Inspection Program” that bills rental home owners just $15/year but property managers bill an extra $50/year since they need to fill out forms for the city on the web and print and get the tenants to sign new forms every year.  Property taxes go up by 2% every year (and so do the Davis JUSD & Los Rios bonds tied to the assessed value.)  Measure H is about $100 more expensive per year than the combined Measure C & E that it replaced and the Davis JUSD CFD #1 also goes up every year with a homes assessed value.  With the billions in recent CA fire losses almost every home insurance bill is going up (with rental home policies about 50% more expensive than owner occupant policies and going up faster).  Don’t forget that nothing lasts forever and the price of getting anything done in town (for those that don’t speak Spanish and can get “dreamers” to work cheap for cash) is going up way faster than inflation.  The strong wind this week just blew down a fence and our first bid was just about double the cost of replacing the fence on the other side of the yard ~10 years ago.  I was in Windhorse this past weekend and I saw a LOT of new wood fences supporting the rule of thumb that a wood fence lasts about 20 years.  If the rent of a home goes up by $100 next year the odds are that the owner will be able to take the family to dinner at Denny’s “once” not buying a bottle of $100 Napa Cab every month…

      2. Tia Will

        David

        Many costs are increasing. UCD costs are increasing. Housing costs in many areas are increasing. So, if you are a parent who owns one rental property, and you have a student or students attending a UC and not living at home, your costs are definitely increasing. That is fact, not opinion as it happened to me. I am not saying it is a stretch for me, but for many it would be.

        Also, what about those who are supporting an ill parent or one who requires special care, either in home of skilled nursing. Those costs also go up.

        I don’t see how you can possibly disagree, when we simply don’t know the financial obligations of many who rent out a home.

        1. David Greenwald Post author

          I don’t disagree with your last sentence, but I believe that the costs of rent is rising far faster than other forms of cost inflation and I believe if you compare the rental increase rate to the rate of inflation that will be born out and it will not be close. Do you really disagree with that? According to the BAE’s over the last five years, rental rates have gone up two to three times inflation each year – can you point to another industry that would account for that kind of rental increase?

        2. Ron

          David:  Another possibility is that rents were “artificially low” (kept in check), during the recession.  That might help explain why rents have risen quickly throughout California, as the economy improves.

          However, there is also another, larger point to make. Even if prices rise (regarding both “for-sale” housing, and rental housing), is that a reason to keep growing/developing, in response? (I’m not referring to student housing, with that comment. Nor am I necessarily limiting that comment to Davis housing.)

           

          1. David Greenwald Post author

            Point one, no. You still have supply and demand driving costs and the fact is that the economy was constrained across the board and prices in general are rising slower than rents.

            Point two: Providing more supply will lower rental costs. Is that a reason to grow? Depends on your goal.

        3. Ron

          David:  Again, during the recession, I’m not sure that your statement applies.  (Especially since the recession was directly related to the housing crash, during which the price of housing plummeted throughout California and beyond.  (At least, “for-sale” housing.)

          In any case, I think my second point is far more important, and agree that it depends upon the goals of a community, as well as a region and the state as a whole.  Therefore, I’ll repeat it, here:

          “However, there is also another, larger point to make. Even if prices rise (regarding both “for-sale” housing, and rental housing), is that a reason to keep growing/developing, in response? (I’m not referring to student housing, with that comment. Nor am I necessarily limiting that comment to Davis housing.”

           

        4. David Greenwald

          If you wish to keep rents in control, then providing more supply is a way to do that.  But of course, everyone has a different priority.

        5. Ron

          So, you’re suggesting that as long as there’s market demand/rising prices (whether it’s “for-sale” or “rental” housing), a given community should continue to respond (via more development/growth).  Beyond SACOG requirements, for example.

        6. David Greenwald

          Not necessarily.  I would not support a peripheral housing development made up of single family homes even though I think there is probably enough regional demand for it.

        7. Ron

          So, you’re limiting your growth argument to rental housing? Why?

          In the long run, are they always separate markets (ownership, vs. renting)?  And, should communities “prioritize” rental housing over home ownership?

  3. Tia Will

    David

    I think that we are crossing posts so what I will do is to just provide you with my example, without numbers, but I think that you will get the point.

    At one point I had, two students living away from home, renting in Berkeley with rent increases every year they were there. Fees and expenses increased every year they were in school. At the same time, we had a parcel tax increase here in Davis. During two of these years, I was also paying medical costs for my mother and her husband including SNF costs and the increasing cost of medications. Please do not tell me, at the time that we are discussing another increase in parcel taxes, that costs are not ( at least potentially going up).

    So for me, as an individual still working in a lucrative profession, I hardly broke a sweat. But now from the point of an individual on a fixed income since retirement, I have become more aware of the plight of others whose main asset is the home they rent out and may be living and supporting others ( with increasing costs) with that as a major source of income. They may need to increase their rent by at least that much just to stay afloat.

    1. David Greenwald Post author

      And I get all that, but numbers matter. In this case, costs are probably not rising much above the rate of inflation and yet rents are.

      1. Tia Will

        David

        I am sorry, but it appears that perhaps you do not understand. Yes, rents are rising in Davis. But they were rising even more in Berkeley where my kids were so I was using the rent from my Davis property to cover the rapidly rising rents in Berkley. Again, we don’t know the expenses being incurred by any given landlord.

        1. David Greenwald Post author

          Yes – rental rates are rising faster elsewhere. In fact, my parents just sent me an article that they are rising faster in SLO than anywhere else in the state: http://www.sanluisobispo.com/news/local/article202776724.html

          But you’re ignoring the fact that inflation in general is a controlling factor on other costs and even in Davis/ Yolo they are rising faster (well faster) than overall inflation. In general, an economist will tell you that if a cost is rising faster than inflation, that is due to market factors rather than cost increases.

  4. Tia Will

    David

    Just one more point. During the time I have described when I rented out my house here in Davis, I did not raise the rent at all to compensate for my increased costs. I had the luxury of not charging more because I did not need the money. What I believe is that this is probably rare, but the point is that what may look like an egregious amount of rent to the renter, may be what the landlord actually needs to meet their own personal obligations, not just to “line their pockets” with more money.

  5. Tia Will

    But you’re ignoring the fact that inflation in general is a controlling factor on other costs “

    But it was you who introduced the idea of inflation as the only marker. I wasn’t discussing the price of gas, or the price of groceries or utilities. I was discussing those items that can be demonstrated to have risen faster than inflation such as rent, college costs, medications, expensive elder care. It is you who keeps referring to inflation as the only marker, as though other specific costs do not rise faster. Many in my generation have been strongly affected by being sandwiched between expensive parental care and rising college and rental costs for our own children.

  6. Ken A

    The overall “inflation rate” may be low, but for people with an adjustable rate mortgage (ARM) on their rental home rates have gone up MORE than 25% in just over a year (my rate was under 3% in 2016 and is now over 4%).  For a landlord with a $500K loan a 1% increase in the interest rate will mean an increase in $5K ($416 more to the bank every month).  There are not many owners of rental property that don’t have a mortgage (I have read that it is about 15% vs. about 30% of people who own the home they live in free and clear)…

  7. Jim Frame

    All this jabber about which costs might be rising faster than which other costs isn’t getting anyone anywhere, but I’ll tell you this:  if I were in the rental real estate business and saw an opportunity to increase my profit margin because demand was outstripping supply, I’d surely take advantage of it.  I expect that most of those actually in the business probably think the same way.

    1. Ron

      Jim:  I suspect that you’re right, and that they might take advantage of it in more than one way.  For example, seeking approval for new developments that create additional fiscal and other challenges for the city, while simultaneously discouraging or downplaying the effectiveness of housing on-campus.  (Assuming that campus developers are a different group than the local apartment owners/developers.)

      I do find it amusing that some think that turning to the same developers/apartment owners who are increasing rents is a “solution” to rising rents.

      I’m not entirely sure why development interests in surrounding communities apparently aren’t building enough rental housing to get below a 2% vacancy rate.  Presumably, those communities compete with Davis, for renters/customers. And, even without “growth controls”, those communities have some of the fastest-rising rents in the nation.

      (Actually, I understand that vacancy rates are currently low throughout California.)

       

      1. David Greenwald Post author

        “I do find it amusing that some think that turning to the same developers/apartment owners who are increasing rents is a “solution” to rising rents. ”

        I take it back, I find an odd consistency in your views – you don’t believe in supply and demand.

        1. Ron

          The same apartment owners/developers who are raising rents are going to “come to the rescue”?  (In other words, they’re going to drive down their own rental amounts at their existing properties, as a result of their new developments?)

          1. David Greenwald Post author

            I don’t view it as “come to the rescue.” I view it as supply and demand.

        2. Ron

          That only works when one isn’t “competing” with oneself.  And, it disregards the other options available from a student’s perspective (e.g., attending other, less-expensive colleges and universities in less-expensive areas, on-campus housing, housing in nearby, less-expensive communities, staying at home longer while attending a local college, etc.). Those options also impact supply and demand.

           

          1. David Greenwald Post author

            That’s not a counter-argument to supply and demand. Campus housing is 60% more expensive. Your other available options are plausible now but ineffective at lowering the demand crunch and supply shortage.

        3. Ron

          Seems like your calculations regarding the comparative cost of on-campus housing keep mysteriously increasing.  And yet, you’ve declined my suggestion to look into the underlying reasons (assuming that there is a difference).  We already know that it (apparently) isn’t related to “prevailing wage”.  In addition, on-campus housing is not subject to any Affordable housing requirements.

          Seems like the campus is becoming more flexible, regarding the number of roommates allowed. Not sure if they require a meal plan for all types of housing (but this seems unlikely).

          In any case, arguments which state that off-campus housing allows more roommates does not address resulting shortcomings regarding impact fees, for example. Just another way that the campus is shifting its costs and impacts onto the city.

          If the only thing that one cares about is the amount of rent one pays, then you’d likely have a different argument than someone considered about the city as a whole.

          1. David Greenwald Post author

            I’m looking at lots of avenues, including some that are posted here that you haven’t responded to.

          1. David Greenwald Post author

            Indeed but the more interesting stuff in this article is largely uncommented upon

        4. Ron

          Are you referring to this?

          “What that means is that until Measure J in 2000, UC Davis enrollment growth was not driving the city’s growth needs.”

          If so, what are you defining as the city’s “growth needs”? (Perhaps the “needs” determined by developers and their allies? The very same “needs” that led to Measure J?) Which are ultimately the same type of “needs” that led to urban growth boundaries in many communities?

          On a related note, does the city “need” to accommodate UCD’s pursuit of non-resident, full-tuition students? (Yeah, we’re starting to repeat ourselves, again.)

        5. Ken A

          Ron may not be aware, but “prevailing wage” laws impact the cost of everything UC builds and while UC may not be subject to most “Affordable housing” laws they do provide free housing for some poor scholarship kids and some scholarship athletes (that just like “Affordable” units in the private sector reduce the cash flow that needs so come from other units to cover the expenses).

          P.S. Before giving “Eileen and others” credit for any on campus housing it should be noted that their work to try and stop almost all housing in town and on campus (like the Russell Fields project) has resulted in less on campus housing than most other UC schools (that have less people fighting development both on and off campus)…

        6. Ron

          Ken:  Another commenter noted that “prevailing wage” may not have applied, regarding West Village.  Also, Don previously provided an example regarding housing (at another UC?) where it did not apply.  In any case, there’s apparently evidence that it is not always a factor.

          Regarding Russell Fields, I always viewed that as (primarily) a benefit to UC students, and others associated with UCD.  (In addition to those who reside in the immediate vicinity.)  For the rest of us, it’s a “nice-to-have” amenity, even if we don’t directly use it.  (I also recall some mention of its ability to function as a flood control feature, but not sure if it’s currently engineered that way.)

          I can’t speak for Eileen (e.g., regarding Russell Fields), but it seems to me that her primary interest is ensuring that UCD takes responsibility for the demand that it is creating. And, the “8,500-unit” plan did not arise until well-after Russell Fields was removed from consideration. (Regardless of how many of UCD’s 5,300 acres are realistically viable for development, “lack of land” does not appear to be a limiting factor.)

          Regarding scholarships for free housing on campus, I’m not at all sure that this is directly funded via rent, from other students.

        7. David Greenwald

          “her primary interest is ensuring that UCD takes responsibility for the demand that it is creating. ”

          But what the data presented her show is that UCD can’t and probably shouldn’t try to take responsibility by building housing on campus.  It will end up costing the students far more to do so.

        8. David Greenwald

          I talked to an expert on the issue of prevailing wage.  I was told that the UC system is not mandated to pay prevailing wage on projects they can self fund or privately fund.  

          BUT, any money that comes from the legislature comes with prevailing wage requirements attached.  

          In addition, if the project includes any state agencies…in the case of West Village, it was Sac City college that triggered prevailing wage.

    2. Tia Will

      Jim

      I’d surely take advantage of it.  I expect that most of those actually in the business probably think the same way.”

      Doubtless true as written, but some of us who have single homes available to rent are not “in the business”. I know that I am not alone. My daughters landlord in Sacramento did not raise their rents for three years. She knew they were both students who could not afford more. They got to keep a highly desirable apartment and she got to keep a couple of very good renters. Win-win.

  8. Don Shor

    One likely reason that on-campus housing is expensive, and often more expensive than housing off campus, has to do with UC policies regarding how it is budgeted.

    Housing is provided as an auxiliary enterprise.

    “Auxiliary enterprises are essentially self-supporting activities which provide noninstructional support in the form of goods and services to students, faculty, and staff upon payment of a specific user charge or fee. ….Examples of auxiliary enterprises are housing operations, non-housing food service operations, parking operations, bookstores, student centers/unions, and child-care centers.”

    They must pay their own way as well as their share of other costs.

    “Auxiliary enterprises bear all direct costs and, to the extent required under the University’s direct costing policies, a share of their own indirect costs, such as utilities, custodial services, and other maintenance and business services.”

    Source: http://policy.ucop.edu/doc/3420341/BFB-BUS-72

    “Also, all auxiliary enterprises shall be charged for all indirect costs that are judged to benefit the activities. These costs include those for OMP services such as janitorial, utility, and building maintenance; and for central campus administrative services such as materiel management, personnel, accounting, and environmental health and safety.”

    The pricing of those services may be set higher than actual costs as part of planning for capital expansion.

    “Prices are to be established at a level that will provide revenue to cover all direct costs and, for auxiliary enterprises, all indirect costs, after consideration of prior year losses or excess income. Also, prices may be set at a level sufficient to accumulate funds (net worth) required to meet working capital and capital expansion needs. In establishing the pricing structure, the enterprises should take into account any non-operating revenues (subsidy appropriations) which may be available to cover costs. For indentured auxiliary enterprises, prices must also cover debt service and other bond indenture requirements…..

    Funds for capital needs (above the amount made available by depreciation) may be accumulated by setting prices above costs in order to build reserves….”

    Source: http://policy.ucop.edu/doc/3420330/BFB-A-59

    We are not privy to the contract between UCD and the private firm that manages the on-campus rental housing. But these guiding policies illustrate some of the factors likely involved in the pricing.

    1. Howard P

      Methinks you’ve pretty much hit the nail squrely on the head… I knew of the concept, but had not been aware of the underpinnings, or documentation…   thanks!

    2. Cindy Pickett

      Thanks, Don, for pointing this out. One thing that is also missing from this conversation is that the cost of living for students affects faculty directly because it impacts their ability to recruit graduate students, post-docs, and staff to their labs. It is a big issue, but I don’t see UCD students and faculty partnering on this even though both parties want the same thing.

  9. David Greenwald

    Ron writes: “it disregards the other options available from a student’s perspective (e.g., attending other, less-expensive colleges and universities in less-expensive areas, on-campus housing, housing in nearby, less-expensive communities, staying at home longer while attending a local college, etc.).”

    There is an important in Ron’s comment that I need to point out.  Ron is basically recommending as alternatives strategies that are well beyond our control.  The idea that UC is going to radically change how it builds and finances on-campus housing.  The idea that UC will cease its program of encouraging out of state students.  The idea that students will stay nearer to home.  The idea that students will lie in nearby communities all seem well beyond our control.

    The latter is not a good idea from an environmental perspective, the rest our way outside our ability to effect change or even realistically hope to influence it.  On the other hand, the idea of building student housing in our community is not only the cheapest and generally more environmentally friendly option, it is also the one that we have most local control over.

    You can hope that UC will change its policies and they may well do it in some regards, but realistically we hae less say over the UC Board of Regenets than we do over the Chancellor, and even there we have limited at best influence.

    It’s just not a realistic and viable strategy to undertake from a local community standpoint

    1. Ron

      David:  I’m not “recommending” anything, other than more of a “separation” between what’s good for the city, vs. what’s good for UCD.  I am suggesting, however, that students are not entirely dependent upon decisions that the city may, or may not make.  In fact, they will likely consider such options regardless of what’s built in the city, or on campus.

      And again, I’d ask what “responsibility” the city should assume, if UCD is going to pursue non-resident, full-tuition students (while simultaneously enacting policies which might make on-campus housing more expensive).  Should the city simply continue acquiescing to UCD under these circumstances, and making its own goals and needs subservient to UCDs?  Is that the type of “control” that you’re suggesting?

      We can certainly see which organization is more powerful (and probably far wealthier).  (Hint – it’s the “silent” one.)

      An agreement of some type is needed – for the students’ sake, as well as the entire city.

       

      1. David Greenwald

        You are recommending a course of action in several different ways, most importantly through opposition to the status quo and second through the suggestion of alternatives.  My belief is that the structure of an agreement is probably not going to create the type of arrangement you are looking for.  I don’t see more than a 50-50 split in housing on versus off campus as being viable or preferable.  Without structural changes outside of our control, I just don’t see it.

    2. Howard P

      We have zero influence over the Chancellor… and given some of the xenophobic/exclusionary sentiments I’ve seen expressed by some, I’m glad…

      Perhaps we need a “Measure C” (Davis Citizen) vote… where every person seeking to live in Davis has to get at least 50%+1 positive vote to be housed here… if I believed, as some apparently do, I’d support such a measure, and except for my respect for “no ex post facto” laws, I could support making it retroactive… to say, maybe 1990…

       

    3. Mark West

      This, in a nutshell, is what is wrong with the discourse in town. We spend far too much time arguing about things the City has no control over, instead of focusing on the things we can do and control. Housing is a City issue. It may also be an issue for the University, but that really isn’t our problem. The challenge we have the power to address is supplying the opportunity for appropriate housing for City residents. Some students are City residents, so student housing is a City responsibility.

        1. Ron

          You’re disregarding the fact that UCD is unilaterally/significantly impacting the city’s planning process, in a detrimental manner for both students and the city as a whole.  In other words, you’re disregarding the underlying cause (which is primarily voluntary on the part of UCD), and are completely/entirely focused on the “symptom” (result).

          That approach will not lead to a successful/desirable planning process for the city, nor will it serve students well in the long run.

        2. David Greenwald

          I’m not disregarding it, I just value not letting students get caught in between the powerplay of Elaine/Ron vs. the UC Regents.  I don’t think adding four apartment complexes in town is a sign I can’t impact on the city planning process.

        3. Ron

          I believe you’re referring to “Eileen”, not “Elaine”.  In any case, it’s really the city’s interests, vs. UCD’s interests.  That is, unless you believe there’s no fiscal or other impacts from voluntarily pursuing 14,000 new students to reside in megadorms (in the city and on-campus), with no say in the matter.  In a town of 67,000 current residents.

          Not to mention the “past performance” of UCD in fulfilling its promises, or future plans to enroll even more non-resident students (as long as there’s a sufficient market of non-resident students willing to pay the $42,000 per year to attend).

        4. David Greenwald

          Sorry, autocorrect apparently didn’t like Eileen.

          I guess it depends on whether you think city staff and the city council are working against city interests.  regardless, you’ve illustrated my point the people who lose in this are the students.  As Simon and Garfunkel once sang, “Every way you look at this {they} lose”

        5. Ron

          Forgot to add:  While simultaneously “ensuring” that on-campus housing remains more expensive, per your statements.

          Regarding the city as a whole as well as students, they would best be served in the long run by coming to an agreement with UCD.

        6. Tia Will

          David

          A hypothetical questions.,

          I am wondering how far you would take that argument philosophically. If UCD decided it was going to accept 20K more students instead of 10K and that it was going to house no new students going forward, would you still feel that the city had the obligation to provide housing for all without at least attempting to negotiate with UC?  Or would it be time for push back at the level of the regents or legislature ?  The UC is a public institution and as such we do have some, if very little and indirect, control over its operation. At what point would you argue that they are having too much control over the city?

          1. David Greenwald Post author

            Obviously if they proposed 50 percent growth it’s going to have local and regional impacts that are much larger than what we have now. But I think part of the point of presenting that data is that current growth projections at the university are what they have been historically. What has changed is not university enrollment growth, but rather city policies involving growth. The university is now having to adjust to a different reality. I don’t think four apartment complexes are a huge impact on the city. 20 apartment complexes would be. Where do I draw the line? Somewhere.

      1. Howard P

        Yes… and we have some “residents” of Davis who have little/no shelter, much less ‘housing’… some students are ‘lucky’ if they at least have a car or couch to sleep in/on… many of the homeless either grew up in Davis, or have ‘resided’ here for 5+ years… just saying…

    1. Ken A

      Ron:

      The link below shows that prevailing wage” was paid at West Village on the UC Davis campus (feel free to post a link that gave the OK for contractors on other UC campus projects to pick up guys in front of Home Depot and pay them $10/hour or at least post a link to the mysterious “Another commenter noted that “prevailing wage” may not have applied, regarding West Village”)…

      https://studenthousingrfp.ucdavis.edu/sites/g/files/dgvnsk746/files/inline-files/Settlementagreement_0.pdf

  10. Sean Raycraft

    Ok- So Ill fess up. I was the one who made the Facebook post. I certainly understand Tia’s point of not wanting to talk about “class warfare”, but in this case I feel she is missing the point. Year over year rent increases have been in the 10% range annually for some time now. Are actual costs for landlords going up at a clip of 10% a year? I find that highly unlikely.

    The second point Ill make is the term class warfare itself. The term is typically only used in context of people like myself pointing out the systemic inequalities that capitalism creates. Pointing out that landlords are being greedy, or exploitative or opportunistic or whatever term you prefer in this situation needs to be pointed out. Landlords are raising the rents, because they can. The system allows them to do so. The culture of Davis allows them to do so. The impossibly low vacancy rate allows them to do so.

    The city of Davis is in a rental housing market failure. If I have to be “divisive” in order to get people to realize that inherent fact, then I am prepared to be”Needlessly divisive” until something actually gets done. I realize this may come off as me getting angry with you Tia. I assure you, I am not. But make no mistake, I am angry. Im angry at the injustice. I am angry at the exploitation. I am angry that people who live comfortable lives seemingly dont want to see the suffering of others living in their midst. I am angry with those who demonize students, angry with those who try and destroy the reputations of student leaders, angry at those who raise the rent, just because they can.

    1. Tia Will

      Sean

      From my writings here, it may not be obvious to you that I favor a major redistribution of opportunity and wealth within our society. I believe that in a society as wealthy as ours, everyone should be fed, clothed, housed, educated, and provided with medical care prior to anyone having “luxuries”. You have heard me argue again and again for meeting needs such as affordable housing for students, the homeless, those on fixed incomes, the working poor…. before giving special privileges or “help” in the form of exceptions to those who are in no need whatsoever. I have frequently opined that all student expenses should be covered since they are in effect making a full time contribution to the society. On some issues, I may be more “extreme” than you are. So you and I are on the same side as far as meeting needs and decreasing inequalities. But when you start labelling an entire group of people as “greedy” or “lining their own pockets” what it shows me is a lack of understanding that this is not the situation for all. All landlords are not “rich”, just as not all students are “poor”.

      Where we differ, and I do not blame you because neither you nor David have yet experienced it directly, is that I do not define any homeowners needs based on only what is happening here in this city. For example, if one is paying for two or more students who are in universities in towns where the rent is increasing even faster than here or apace, the landlord may not be price gouging when you raise the rent on your property here. You may just be meeting the basic needs of yourself and your dependents, some of whom may be invisible to those who would judge your choices.

  11. Sean Raycraft

    After taking some time, I realize this issue really does activate the part of my personality that wants to fight everyone, consequences be damned. Here is why I get so emotional about this subject. I have been working retail in town for 11 years now. I am thankful for my good benefits, wages, etc that come with working a good union job. During that 11 years, I have seen many people in the lower rungs of the retail scene come and go. Most of these folks are UCD students. Over those 11 years, I have seen their quality of life gradually decline. Their tuition goes up, the quality of their education goes down, their rents are increasing over time, their wages do not keep up with inflation. They have virtually no privacy, as they are forced to cram into apartments just to make ends meet. They graduate with 50k in debt, and are lucky to find jobs that pay 15 an hour.

    Thanks for playing kid! Now dont let the door hit you on the way out!

    To make matters worse, there are elements in our community who loathe the broader student population. This whole town runs on student commerce, student labor, student debt, and student research. It pays my wages, along with most everyone else who lives here. Are we as a community welcoming and accommodating to these students who make everything go? There are elements who would say no. We want them to live on campus. We dont want them in our neighborhoods. Let them live somewhere else!

    I feel like there are people in the community who treat students and renters as if they are second class citizens, and yeah… that pisses me off. When they start to organize to push back against tuition hikes or the housing crisis, or corruption in the UC administration, there are elements of the community who refuse to support them. Who call them spoiled children because they have “iphones”, who will excuse the inexcusable from UC administrators, or who defend the conduct of the pepper spray cop. There are those who actively try and discredit any student leaders in town, by insinuating they are nothing more than paid stooges of the developers.

    I guess I have just had enough of it. Students ought to be full members of our community, full stop.

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