A few months ago as I was interviewing students to do a story, I was informed by student leadership that the fight for housing was about to shift. Once the university agreed to go up to 8500 units with Sterling, Lincoln40 and maybe Nishi coming on-line, the housing crisis was going to take on another issue – affordable housing.
If you watch our townhall meeting from last year (still viewable here: https://www.youtube.com/watch?v=CU3ee_Yd8xY&feature=youtu.be), you will see that more than anything the students are hammering Matt Dulcich on affordability rather than building more units. And yet, on the student housing posed by the Sierra Club – posed prior to the townhall meeting that six of the candidates attended, the issue of affordability of on-campus housing barely was even mentioned and the issue of getting to 50 percent (from 48 percent) came up at least four times.
Last week, I was asked by a local resident, why aren’t the students demanding 35 percent affordable housing at Nishi? One of the two council candidates opposing Nishi, Ezra Beeman (with Larry Guenther being the other) has consistently criticized the project, claiming it needs “35-percent affordable housing.”
The problem with affordable housing is it can be a tricky issue. Toni Sandoval – a single mother who lives at Solano Park, which is purportedly affordable family housing for UC Davis students, in particular graduate students – pointed out that a single bedroom costs $766 a month at Solano Park. That comes to roughly 449 square feet. A two bedroom, which runs at about $900, is about 559 square feet. Affordability on campus is therefore done in part through designing small living spaces.
But there is a bigger problem here in trying to get up to 35 percent affordable housing – as the council has pointed out on a number of occasions, that number was created in a world of the Redevelopment Agency (RDA) funding. That meant that the city received something on the order of $2 million a year for affordable housing. It was therefore easy to require 35 percent because the city could help to subsidize the costs of affordable housing.
That money is gone – and at least under the current governor, not coming back. I still have hopes that in the future it can be recreated in form and the state has also looked into other funding mechanisms for affordable housing through fees and by proposition. The city also briefly looked at a social services tax that could have helped as well.
Ironically, many of the same people demanding 35 percent affordable were opposed to the notion of a $50 a year social services tax.
At the Planning Commission meeting for the West Davis Active Adult Community, several people who are opponents of Nishi stood up during public comment to applaud the affordable housing project in west Davis. They pointed out that this shows 35 percent is possible.
It is possible to get to 35 percent with some projects. The way West Davis is able to do it is that they are basically dedicating land to non-profit affordable housing developers, who can then apply for grants and matching funds to help finance the project and run the affordable housing.
Land dedication sites make a lot of sense if you have a larger peripheral project like West Davis. However, land dedications are not universally supported. At the meeting, Darryl Rutherford was not a fan of the affordable proposal. Many support integrated affordable housing, which mixes affordable housing with market rate housing and reduces the stigma of people living in such arrangements.
Smaller sites may not be able to sustain their own dedicated site.
But Nishi is large enough to have its own land dedication site. So why would they not do so? There is a simple answer there – if they did a land dedication site, they would not be able to provide affordable housing for students and they made the decision, along with Lincoln40, to provide affordable housing options for students, who do not have the option anywhere else in the city – and really, even on the university campus, they do not have rental housing options starting at $400 and $500 per month like they do at Nishi.
Once Nishi decided to go to student affordable housing, that took them away from a land dedication site and to integrated affordable housing. That means that no one will be able to know which students are renting affordable beds and which are renting market rate beds.
So why can’t Nishi get to 35 percent? Some have suggested that the developer can afford it – after all, they got the land itself on the cheap and have plenty of resources. For fun, I did a back-of-the-envelope calculation as to what it would cost.
Part of the problem here is that the affordable component, as it is set up, has to be internally and privately subsidized. That means that market rate renters are basically subsidizing the reduction in costs.
I calculated, based on the difference between the market rate units and affordable units, that to get to 35 percent it would cost the property owners about $1.8 million annually. In this case, it is not a matter of building the units – the units will be built regardless, it is a matter of recouping the difference between market and affordable units on an ongoing basis.
The fiscal analysis as it was suggested is that the affordable project would lower their return on investment, and one would have to assume, without knowing for sure, that it would be difficult to finance with an additional $1.8 million ongoing cost.
So the answer to the community member’s question appears to be rather simple – why aren’t students up in arms about the 35 percent figure? Because this appears to be the only way that the students get something in the way of affordable housing. At 35 percent, Nishi would go the land dedication route and students wouldn’t be eligible for affordable housing at all. In another way of putting it – 35 percent of zero is still zero.
Back in February, The council asked Aaron Latta, who has emerged as one of the leaders in the student housing fight, for his perspective and the student perspective on the Nishi affordable proposal.
He said, “At the bottom line, any level of affordability for students is a good thing. This is the second project that exists that has it.”
He pointed out, “Every single one of these numbers are people, but if we don’t get this project passed, it’s that many more people without an affordable place to live.”
Mr. Latta said that the affordable housing plan for Nishi was “beyond my expectations” and he was “amazed by the affordable housing plan for Lincoln40.”
Bottom line – the students see the Nishi proposal for what it is – the best opportunity to produce student affordable housing. The 35 percent figure is a straw man and in many ways a poison pill that would destroy any chance at all for student affordable housing.
—David M. Greenwald reporting