A recent email from Eileen Samitz put out information that was blatantly inaccurate. In addition to other more subjective claims, Ms. Samitz writes: “The deceptive and inadequate student only “affordable housing” proposal would be run and managed by the landlords. So unlike standard practice, with there is State or Federal oversight of affordable housing programs, the Nishi 2.0 landlord would get to make the selection of which get to be considered for the student ‘affordable housing.'”
What she writes is simply a falsehood. The city of Davis has its own Affordable Housing program, with an office that you can call or email.
Nishi’s affordable housing is no different than any other in the city. They have an annual review and can take it over if the landlords do not comply with the provisions. Moreover, even for standard or traditional affordable housing, the city itself is the compliance agency, not the state or the federal government.
The Nishi affordable housing program is governed by the Development Agreement.
At the very bottom of Page 59 of the Development Agreement, it is titled, “Reporting for Affordable Beds.”
Here the city lays it out: “Developer will provide an annual report to the City of Davis demonstrating compliance with this program.”
There are also claims that in case the landlords fail to find suitable tenants to qualify for affordable housing, they can rent the affordable units at market rate.
It is important that people read these agreements as they lay out the conditions of approval.
Here on page 60 of the agreement it clearly states: “In the event that Developer fails to lease all of the Affordable Beds in any year, after diligent efforts, Developer will pay the City of Davis’ Housing Fund an amount equivalent to the difference between the total annual market rent and the rent for the Affordable Bed for each bed that is not rented to an Extremely Low or Very-Low Income student, as applicable for that year, and may lease those beds at market rate.”
So the answer here is yes – they can rent at market rate, but not as a benefit to the developer, as they will then have to pay the city the difference in the rent which would go into the affordable housing fund.
But, more than that, there are provisions that if the developer fails to fully rent the required number of beds for two consecutive years, the city in effect can take over the affordable housing project.
In the regulatory agreement: “The required number of Affordable Beds shall be maintained and rented in the Nishi Multifamily Units in perpetuity and shall be implemented through a Regulatory Agreement and Restrictive Covenants…”
The idea that the city has allowed the developers some sort of benefit here is completely false. The idea that there is state or federal oversight into local affordable housing is also false.
The irony is that both Nishi and Lincoln40 are on the cutting edge of providing affordable housing to students. Those who argue that this project is a benefit to developers are losing sight of the fact that, under normal conditions, students would not even being able to rent affordable housing.
Eileen Samitz makes the argument again, “On top of that only students being allowed access to the 15% ‘affordable’ beds. Meanwhile, the City’s long-term ordinance has required 35% affordable housing in multi-family housing for years.”
As we pointed out previously, why can’t Nishi get to 35 percent? 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.
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.”
The reason the students aren’t complaining about 15 versus 35 percent is that they know, without this project, they would get no affordable housing.
As a Cal Works eligibility worker pointed out, the panelist who is a single mother and living at Solano Park has limited options for attending UC Davis. The family can either live in Solano Park – under apparently intolerable conditions, provided that they are accepted – or they can live outside of Davis, commute, and incur even greater transportation and childcare costs.
There are thus very limited options for students who need affordable housing.
—David M. Greenwald reporting
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