We Talked to Students – They Don’t Agree Nishi Is Unaffordable

Adam Hatefi

In a provocative piece published yesterday in the Vanguard, Rik Keller argued that the market rate units at Nishi “will be among the most expensive, if not the most expensive rental units in town, and even the majority of the ‘affordable’ units will be more expensive than average current city rental rates.”

He writes, “Overall, the projected average unit rents for the whole project (including both the ‘market’ and the ‘affordable’ beds) are 35% and 51% higher than the Davis average for 2-bedroom and 3-bedroom unit leases.”

But while adult critics of the project have been quick to criticize affordability, student renters have embraced the project.  I have yet to talk to a student who is concerned about the Nishi project due to its affordability.

Tim Ruff, the project manager, explained that the affordable to market rate comparisons are not necessarily apples-to-apples.  He notes that the shared bedrooms, while not determined yet on size, are designed to be larger than the single room.  They will have two people with two closets, two desks and two beds.

Mr. Ruff projects the rent at $407 or $670 for the affordable units with a $800 per bed market rate.

He told the Vanguard, “Renting by the beds would go away if the market wasn’t so lopsided. It’s a new phenomenon and growing.”

Mr. Ruff also points out: “Nothing new is cheaper than old. Compare it to a used car vs. a new car.”

He also points out this is a matter of supply versus demand, and without alternatives being built in the market place, the rents will go up across the board further.

Mr. Ruff points out that Nishi will be paying for everything and providing affordable housing even as costs for construction skyrockets.

Sandy Whitcombe noted in response to whether there would be doubled-up market rate beds: “The buildings/unit plans have not been designed or costed-out yet.  We have the option of providing some double up rooms if necessary, and if so they will specially-designed for two people and will be provided for both affordable and market rate beds with no distinction between the two (besides price).”

Aaron Latta, a student who has helped to organize his fellow students to push for housing, pointed out in a comment that “the average bed lease for a two-bedroom apartment in Davis is $1,147/month—a figure conveniently left out. In fact, the per bed cost the article quotes is less than that for an equivalent apartment.”

He points out, however, “That being said, it should also be relatively expected for the market rate units to be more expensive than the average. Brand new apartments are objectively nicer and should catch a higher price. What does happen is that similarly priced apartments that are not as new will have to compete with nicer and newer units. The only way to compete would be to drop prices.”

His larger view as he told the Vanguard: “Market rate will continue to be expensive until we increase our supply.”  He said, “Even if market rate at Nishi is a little higher, it’s still to fund a needed affordable program and is contributing (to fix) the main underlying problem – that problem is supply.”

Another student, Maiya De La Rosa, said that she currently lives in a single room with three people in it.  Right now that costs her $700 to $950 a month, not including her meal plan.

“The affordable housing option Nishi is providing will save students money. Most students double up on rooms to get the same rate as one affordable bed in the Nishi project,” she said.

Adam Hatefi said, “Honestly, for me, the prices at Nishi seem pretty good considering the fact that next year I’m going to be paying $960 a month for a single room in the U apartments, which are pretty far from campus as well.”

He added, “Nishi is (both) cheaper and closer to campus, so in my opinion it’s pretty good for most students.”

ASUCD Senator Alisha Hacker added, “The average rental prices in Davis are continuing to skyrocket and the rent for Nishi is pretty standard for living that close to campus in that nice of a facility.”

She added, “Additionally, Nishi has an affordability program which is one of the first of its kind in Davis as it will allow students to qualify for reduced, affordable units.”

Don Gibson from the Graduate Students Association said, “Go on to any UC Davis meme facebook page and look at housing memes. Housing drives students nuts on how hard it is to find a place in Davis.”

He pointed out, “New construction will be more expensive than older buildings but actually having units subsidized for students would be a first and a step in the right direction.

“Go anywhere in the West Coast, housing is getting more expensive every day,” he said.

Mr. Gibson adds, “Homelessness is an issue now in Davis. Any significant number of new units helps relieve demand and lowers the increase in rent because there would be actually competition.”

He also points out: “The vast majority of students do not know about Measure R/J and the history of land use planning in Davis. And why would they? Most have been here for less than a few years and many have never voted before because of their age. It feels unjust that people who are never going to live in the Nishi project are the ones who get to decide if it gets built or not.”

The bottom line is that of the students we talked to – none seemed concerned that Nishi would be unaffordable.  Others have pointed out as well that the market would act to drive down costs.  Most believe that the key is adding supply and without new supply – something that critics really do not address – issues of affordability will remain problematic.

—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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  1. Rik Keller

    This article was sloppily and hastily put together and merely repeats the same mistruths that the campaign has been pushing all along. It does nothing to contradict my analysis of actual projected project rent rates compared to actual existing Davis rent rates, and, in fact, reinforces it by continuing to demonstrate how the Nishi proponents are trying the sell the project as something that it is not.

    The best available data we have for existing rental rates across the city of Davis are from the BAE Urban Economics study “2017 Apartment Vacancy and Rental Rate Survey” (http://housing.ucdavis.edu/_pdf/vacancy-report/2017-vacancy-report.pdf). It is a comprehensive and accurate survey of market rates (it does leave out all below-market rate rentals from the survey). To try to contradict that information by cherry-picking a selection of students–some of whom are project campaigners–for anecdotal information about their rent rates and situation is just sloppy journalism.

    In the article, Tim Ruff provided a rent projection for the “market rate” units of “$800 per bed”. This contradicts the information that was provided to the City Council at their 2/6/2018 meeting. There is a memo dated 2/1/2018 included as Attachment 10 “Economic Analysis Summary” in the City Staff Report that states that the single occupancy leases are estimated at $1,000 per bed, while the double-occupancy leases are $850 per bed. This means that the double-occupancy rooms have a total room lease rate of $1,700.

    While Mr. Ruff won’t commit on the record to information on the increased room size for the double-occupancy bedrooms, an extra $700/month seems like a massive premium for just an extra closet and desk. This demonstrates the fundamental problem with bed leases and why greedy developers are so eager to embrace them. Students are unable to double-up voluntarily to save on rent as they are able to in unit leases and instead are required to pay massive per-room premiums to do so.

    The “Economic Analysis Summary” memo for the project directly lists the “average monthly rate per unit” for the whole project (average across both “affordable” AND “market rate” units) as $2,243 for 2-bedroom units and $3,423 for 2-bedroom units. That works out to an average of $1,122 and $1,141 per bedroom, respectively. Again, citywide average Davis unit rent rates (from the BAE survey) are $1,660 ($830/bedroom) for 2-bedroom units, $2,270 ($756/bedroom) for 3-bedroom units, and $2,858 ($715/bedroom) for 4-bedroom units. When accounting for some doubling up of bedrooms, the per-bed rates are even lower than this.

    I am certain that had you gone out and interviewed students and told them these actual figures, you would have gotten vastly different responses than you did. There would be an exception, of course, with the student project campaigners. One of these who you interviewed in the article, Aaron Latta, is so far in denial about the project facts, that as recently as mid-day yesterday he was arguing incorrectly on social media posts that the project did not call for 100% of the affordable beds to be in doubled-up rooms. This underscores the misinformation being pumped out by project proponents and the importance of my article yesterday in seeing through the propaganda and setting the record straight.

    1. Craig Ross

      I didn’t get a chance to respond yesterday to your article, on account of studying for finals and writing a term paper.  But your argument defies believability and strikes in the face of economics.  Your basically arguing that we are going to get jobbed on the Nishi deal by greedy developers.  Except the problem is that if they charge too much, students will go elsewhere.  Students aren’t stupid, we’re not going to rent a place that’s way too expensive.  The market will regulate cost IF and this is why I’m supporting Nishi, if there’s enough supply out there.

      1. Rik Keller


        As I clearly delineate in my article, the projected Nishi rents are at the very top end of market rates in Davis. There is clearly a market for those since they are being paid. There are also clearly not affordable to the vast majority of Davis renters.

        There are a whole host of reasons why supplying high-end rentals will do nothing for increasing affordability in the mid- to lower tiers. I touch on some of these briefly at the conclusion of my article.  This article written by the co-directors of San Francisco’s Council of Community Housing Organizations touches on the debate on the market effects of  high-end housing. The article references a nexus study done for SF by economic consultants in which it was found that high-end housing actually induces a greater need for affordable housing that increases prices more than the dampening effect that an overall increased supply would have: http://www.sfexaminer.com/dont-believe-the-hype-affordable-housing-does-not-depend-on-market-rate-development/

        My article points out that the developers are targeting the highest end of the Davis rental market and that the promised “affordability” is just a smokescreen. They apparently think their projected rents will be met as they came hat in hand to the City Council claiming that their project barely penciled out. David Greenwald of the Davis Vanguard is also on record in the context of a different Davis projects as agreeing that, given pent-up demand, these types of high-end projects can essentially act as price-setters: “In essence, the problem is this. In a more equitable market, the home buyer could negotiate the cost of the CFD off of the cost of the initial purchase. But the problem in Davis, with limited supply and large amounts of demand, the seller doesn’t have to agree to reducing the cost to offset the future CFD costs; instead, they can simply find someone willing to pay their asking price and eat the cost of the CFD later.” http://www.davisvanguard.org/2015/03/analysis-cannery-developer-stood-to-make-a-large-profit-even-before-cfd/

        If we want affordable housing, let’s advocate for affordable housing and hold developers to high standards in this regard, rather than accept these kinds of Trojan horse projects that are “affordable” in marketing only. Let’s not pretend that an increased supply at the high end of the market can significantly help overall affordability.

        1. Craig Ross

          I’m not buying your argument.  First of all, what do they have that makes them “very top end”?  Second, if they are very top end, and you have 2200 of them, and if they are not affordable to the majority of students, and it’s not going to help the rental market situation – who is going to rent them and why?  It flies in the face of supply and demand.  You argue it’s a smokescreen, but why build a project that people won’t rent.  Your argument makes no sense.

        2. Rik Keller


          What they have that makes them top-end is price.

          Your simplistic Econ 101 arguments about supply and demand in housing markets do not hold water. Housing markets are WAY more complex that. I listed a bunch of reasons why that are well-documented in studies on the issue, as well as arguments made by community housing advocates in SF based on studies on by economic consultants. You have provided no arguments or evidence to counter these.

        3. Matt Williams

          Craig Ross said . . .  “I’m not buying your argument.  First of all, what do they have that makes them “very top end”?  Second, if they are very top end, and you have 2200 of them, and if they are not affordable to the majority of students, and it’s not going to help the rental market situation – who is going to rent them and why?  It flies in the face of supply and demand.  You argue it’s a smokescreen, but why build a project that people won’t rent.  Your argument makes no sense.”

          Good questions Craig.  Here are my thoughts that your questions prompt.

          First, I don’t know what makes them “very top end” but given the massively unbalanced state of the housing supply/demand marketplace in Davis, any “top end” argument has very little resonance for me.

          Second, with respect to who is going to rent them? I have compiled data from UC Davis, the US Census and the California Department of Finance to create a the work-in-process Davis housing supply/demand picture (1996-present).  The majority of the Demand side data is in, and what it shows is that since the Fall of 1996 the median Vacancy Rate in Davis has been 0.8% and the most frequent annual Vacancy Rate has been 0.2%.  In 7 of the 23 years since 1996 Davis has had a Vacancy Rate of 0.3% or below.

          Since 1996 the 3-Quarter average student enrollment at UCD has grown 14,363 students, and as a result Faculty has grown by 2,000 and Staff has grown by 4,000.  That is a combined Housing Demand increase of over 20,000 beds … and that 20,000-bed increase in demand doesn’t even include the impact on demand from the spouses and children of the Faculty and Staff, nor does it include the impact on demand from people who are not students, Faculty or Staff at UCD, nor does it include the impact on housing demand from the 7,500 employees of UCD Medical Center who choose to live in Davis and commune across the Yolo Causeway to work.

          In summary,
          ~~20,000 beds = combined Housing Demand increase from UCD sources (70% students, 10% faculty, 20% staff)
          to be determined = combined Housing Demand increase from non-UCD sources
          ~~5,000 beds = Housing Supply increase on campus from 1996 to present
          ~~5,000 beds = Housing Supply increase in off campus apartments from 1996 to present
          ~~10,000 beds = Unmet Housing Demand (net of 20,000 minus 5,000 minus 5,000)
          From an age cohort comparison of the 2000 and 2010 Census data I worked on with the California Department of Finance in 2016-2017
          — 20-24 year olds in City of Davis increased 3,502
          — 25-54 year olds decreased 1,540
          — 0-19 year olds decreased 867
          My sense is that those numbers represent (A) displacement of non-student apartment tenants by student apartment tenants, plus (B) your aforementioned increases in PPH density in apartments, plus (C) conversions of Single Family Residences in traditional neighborhoods to mini-dorms.
          All of that means there is a wealth of UCD students seeking housing.  We also know that the substantial rise in out-of-state and international enrollment means a whole lot of those students have considerable financial resources, so the price of their housing is not a concern.  However, the convenience of that housing is indeed a concern, especially for the international students.  Having housing where they can easily walk to campus will be a substantial plus.

          Bottom-line, for the next 10,000 plus beds in the Davis marketplace the possibility that there will be a project that people won’t rent is very close to 0%.

        4. Matt Williams

          No David, I’m saying Craig’s comment is 100% wrong.

          I haven’t said anything about Rik’s article because I feel the need to do some due diligence on his sources before speaking.

          Rik’s message is very compelling on the surface, but I want to know more.  Rik and I have never met.  I don’t believe we have ever spoken.  So the article yesterday was my first “encounter” with Rik or his thoughts. With that said, I do look forward to meeting him sooner rather than later.

          The points Rik makes in his article are highly compatible with the long-standing supply/demand situation in the Davis housing market.  The basic economic principle of the Philips Curve says that prices rise when you have too much demand chasing too little supply.  Rik appears to be saying that the Nishi Affordable Housing program is designed to take advantage of that Philips Curve reality by controlling the Supply side.

          John Whitcombe’s presentation in Council Chambers touted a calculation of $800,000 per year that the Nishi Affordable Program will cost his partnership.  Rik’s article challenges that calculation.  Rik appears to be saying that the $800,000 only exists if you compare the Market Rate “by the bed” rental rates to the Affordable “by the bed” rental rates.  However, if you compare the revenue generated by a 2-bedroom Affordable unit rented by the bed to the revenue generated by a 2-bedroom Market Rate unit rented by the unit, Whitcombe’s $800,000 evaporates.

          To put Rik’s argument (as I understand it) in student tenant terms, four UCD students given a choice between a unit-rental of a Nishi 2-bedroom Market Rate unit versus a by-the-bed-rental of 4 beds in a a Nishi 2-bedroom Affordable unit, will find the Affordable unit is more expensive each month than the Market Rate unit.  That is a compelling argument if the source data Rik has used is correct.

          So, no David, I’m not saying Rik’s point is misplaced, I’m saying Craig’s comment is 100% wrong.

        5. Rik Keller

          Matt W.: interesting numbers. Let’s get together sometime to discuss. Another thing to work into the long-term supply/demand analysis is that there there are secondary effects from UC Davis expansion that create even more housing demand than the direct students/faculty/staff needs (essentially the consumer spending creates more jobs and housing need for these workers).

          Your statement that “To put Rik’s argument (as I understand it) in student tenant terms, four UCD students given a choice between a unit-rental of a Nishi 2-bedroom Market Rate unit versus a by-the-bed-rental of 4 beds in a a Nishi 2-bedroom Affordable unit, will find the Affordable unit is more expensive each month than the Market Rate unit.  That is a compelling argument if the source data Rik has used is correct.” is spot on. But it’s actually worse than that. Below is a summary of a response to Matt P. below (see that thread for further detail) where I broke down the Nishi rent figures per-bed compared to Davis average market unit rents at both single-occupancy bedrooms and double-occupancy bedrooms.

          * even the lowest tier of ELI  “affordable” beds at Nishi ($404) have generally higher rents than the existing market rate unit rents in Davis ($356-415) when comparing double-occupancy to double-occupancy
          * when you move up to the VLI “affordable” level, the Nishi beds ($757) are FAR more expensive than existing market rate rents in Davis ($356-415) when comparing double-occupancy to double-occupancy
          * even the least-expensive Nishi “market rate” units (which are double-occupancy) ($850) are more expensive than existing market rate rents in Davis for single-occupancy ($715-830). In other words, you would pay more at Nishi for a double-occupancy bedroom than you would at the Davis average for single bedroom!
          * the single-occupancy “market rate” Nishi beds have rates 20-40% higher than existing market rate rents in Davis when comparing single-occupancy to single-occupancy.

    2. Ken A

      I’m wondering if Rik can post some (or all) of the “same mistruths” that are in this article.

      Rik’s “analysis of actual projected project rent rates” does show that apartments rented by the bed cost more than full apartments.  I’m waiting for another “analysis” that shows that rooms in Davis rented by the night are more expensive than rooms rented by the month or an “analysis” showing that cigarettes sold by the pack are more expensive than cigarettes sold by the carton or an “analysis” that beer sold by the bottle in bars is sold at a “massive premium” to beer sold by the six pack at Safeway.

      UC Davis charges $1,894/month for a single room and $1,587 per person ($4,761 total) for a triple room.  With UC charging $2,867 MORE for a triple room  “an extra $700/month” does not seem so “massive” and maybe why so many students want the new Nishi apartments.



      1. Rik Keller

        Ken A., you do realize that those UC Davis residence hall rates you linked to include meal plans + Aggie Cash, right? You are not very good at this “analysis” thing. You are good at muddying the waters.

        1. David Greenwald

          It does make it harder to analyze, but we did run the rates without the meal plan and they are still well higher than market rate in Davis and meal plans are generally more expensive than students eat for without meal plans (by a lot).

        2. Rik Keller

          I think that a good, hard look at UC Davis residence hall rates would be in order. This would have to examine the differences in provided amenities between on-campus and off-campus housing, construction quality, and living area, while also accounting for transportation time/costs and other convenience factors. And then if these rates are determined to be unreasonable, we should put pressure on UC Davis to modify them at the same time that we put pressure on them to take responsibility for housing a substantial portion their large enrollment increases.

          The larger point of is that for an off-campus development like Nishi, we should compare it to the overall existing rental stock in the city of Davis. Your article does not do that, and instead merely repeats mistruths about both the projected Nishi rental rates and existing rental rates in Davis.

        3. Ken A

          Yes I do, that is why I posted the link since I don’t want to hide anything.

          I just wanted to point out that while the Nishi proposed rents are high they are nothing compared to the rents on campus (since three people could rent a big room in a Davis home vs. on campus for about $700 and have over $1,500 a month EACH to pay for food)…

          The Nishi rents are high since they are new and nice.  The cost of a new and nice car is a LOT more than an older beat up used car.

          No one is forcing anyone to live at the new Nishi apartments and they can rent an older beat up apartment (or room that used to be a garage or screened porch) in town for a LOT less (or an apartment in a Woodland or West Sac bad neighborhood for even less).

          P.S. I’m wondering if Rik can’t find even one of the “many” “mistruths” to post…

      2. Rik Keller

        Ken A.

        One really easily refutable mistruth in the article are the projected project rent rates. I have referenced the actual figures in the actual City Staff Report numerous times. Go look them up.

        You just post a bunch of garbage that is easily refuted. And once that is done you don’t acknowledge anything and just pivot to the next garage heap. Dunning-Kruger effect manifested in blog-commenter form.

    3. Matt Palm

      If all the affordable beds are in doubled-up rooms, then Rik Keller is correct about the comps with off-campus market.

      On campus Davis apartments is less clear: if you are in a double bedroom and NOT getting a meal plan, you are paying $3,537.03 in a term so… for what, four months? http://housing.ucdavis.edu/_pdf/s/2018-sha-fee-schedule.pdf

      So that’s $884 a month for an on campus bed in an apartment in a double room.  Nishi’s “affordable” components are lower than that.  I don’t know if that answers the general question of this being appropriately affordable. I’m inclined to think so for that 15% of units, only because there is no legally defined “affordable student housing” and, in this light, the ‘affordable’ doubled beds are meaningfully lower than on-campus costs while giving students what will amount to an on campus experience, although I suppose that is debatable. There are only federal and state definitions of affordable housing that exclude most students entirely. We need state and federal legal frameworks to guide affordable student housing, but that work is just getting started at the state level. And the federal level, well…

  2. Jeff M

    As someone that works for a business that provides public-side financing to assist with projects like affordable housing including student housing, Davis does not qualify in any of the designations recognized as “under-served”.   Without public-side financing options all projects for housing within and around Davis must be built with private capital.  The state does not really have much to offer after Governor Brown and his public sector union cronies raided the RDA program and killed it.  Local government can offer some fee and tax relief, but these are scraps with respect to the actual cost of the development… and they are generally offset by the ever increasing cost levied by the California nanny-state that incrementally layers additional code requirements.  Title 24 requirements have increased California housing development costs by 20-25% for example.  Those that expect private capital investors to just suck-it-up-buttercup are ignorant… these costs are passed on to the buyers and renters.

    Private capital in invested with the expectation of returns.   The investment choice of which is complicated by the options for capital to derive returns.  So the growth of the economy has an impact on the expected returns for a development project because otherwise the investment would go elsewhere.  And lending rates are on the rise… this too impacts the total cost of the project.

    Again, those that expect private developers to just absorb these costs for the good of the “great liberal society” pursuit are silly if not dumb as a brick.

    Those that seek to kill development projects because they don’t deliver enough great liberal society benefits generally are the same that vote for state and local politicians, initiatives and measures that keep jacking up the price of development.   Few votes in this state are doing the math that factors the long-term costs… they just focus on the immediate benefits filling the hole in their hearts for being a champion of virtue.

    The point being made here is that we the people have made the bed of high development costs while raiding and destructing public-side financing mechanisms so state employees can keep retiring in their 50s with fat pensions.  And so we the people have no rights to blame private developers who have to use their own private capital for having to raise rents to cover the costs.

    I think UCD needs an undergraduate business school.

      1. Jeff M

        The federal government tends to use them both interchangeably.  I don’t mean a difference.  It is a broad definition of there being some measure or identification of economic service to the members of the community that is below average.   Rural is another category.  USDA owns the definition of that particular sub-category of the under-served or undeserved designation.

        Davis does not meet the criteria for any sub-category that I am aware of.

  3. Matt Palm

    So the major point of this piece, the real place where it offers something insightful, is in pointing out that the ELI and VLI numbers are applied by Nishi on a per-bed rate, rather than a per apartment rate.  That’s a valid critique of Nishi. Because it means the “student affordable” is not the same as how it is practiced by the affordable housing sector that serves the chronically homeless, veterans, and low income families.  I’m ok with that.

    We should also recognize that real ELI and VLI apartments would not be open to most students anyways due to restrictions tied to various pots of federal and state money (some of which have lost their value under Trump’s new tax system, as Im sure the author knows).

    So Nishi is doing this without the kinds of capital and rental subsidies that traditionally support ELI and VLI units (LIHTC, Section 8, etc.).  So while it’s not ideal, I think it’s a little impressive given, again, it is being done without any actual subsidy.  Look at the inclusionary component of Sterling.  Do you think Mutual is going to build 34 units with just the land donation and a $2 million cash contribution from the developer?  No, they are going to get large subsidies from something like 4% or 9% tax credits, MHP, Section 8, or something else.  They have to, because $404 per studio, or whatever bedroom size that rent equates to under HUD income limits for this county, cannot finance the building and maintenance of a $100K to $300K unit.  That would require some very, very negative interest rates on their permanent financing.

    I guess what I’m saying here is that while I agree with Rik Keller–this is not “affordable housing” as defined in state and federal law, I am not going to oppose a project that is trying to pull something off in a policy environment where subsidy for affordable student housing doesn’t exist, and where there is little legal framework guiding what affordable student housing is or should be.  Sacramento is just now, this session, debating how to make density bonuses apply to affordable housing for students.  Nishi is a useful case study for that debate.

    More importantly, I don’t think affordable student housing should be as deeply targeted (e.g. rents as low as) as real “affordable housing” is in statutes because I don’t want it competing with limited state and federal funds that should be going to the chronically homeless, veterans, and VLI families.

    Affordable student housing is going to have to look different (e.g. higher rents) than the current legally defined affordable housing because there isn’t enough funding for the latter as is now, and I don’t want the former taking resources away from the latter.

    This is an innovative way of creating lower-rent opportunities for a transient population that will go on to be moderate and above moderate income earners upon graduation.  They will not need the same depth of subsidy as those chronically shut out of the economy.  And if they do, then they are probably already part of the small segment of the student population that is eligible for federal and state programs and need only be directed to where they can apply.

    $404 a bed across the street from campus is great.  Definitely below-market if you’re doing an “apples to apples” comparison.  And if its at least 10% below market, then it meets the minimum requirements put on tax credit housing (because LIHTC can often get built in areas with cheap, ageing units that are cheaper than LIHTC rents–a secret often hidden in plain sight).   That said, Nishi is not real “affordable housing” as legally defined, not by a long shot.  But if it was, the people we are trying to serve with it would mostly be shut out, or, alternatively, it would mean that funding for low income families at the margins of our society had somehow been redirected to students. I’m not in favour of that.

    Yes, you can call this a bastardization of the inclusionary law.  I think that’s a valid criticism.  But it is a bastardization that is piloting something new, and something specifically targeted to a group not served by the affordable housing sector.  So I think its worth a try.

    1. Rik Keller

      Matt P.,

      I agree with some of your points about complications in developing affordable student housing.

      However, I do disagree with your description of the project as an “innovative way of creating lower-rent opportunities…” If we just look for a minute at the very-lowest income tier that the project is targeting–Extremely Low Income (ELI)–these will only make up about 22 of the 700 total unis in the, or 3.1% [note: 110 beds = 55 bedrooms = 22 units ] (Very Low Income units will be another 44 units). That is a tiny percentage, but is being used as one of the main selling points of the project.

      Previously I had tried to do apples-to-apples comparisons by using the per-unit rent numbers for Nishi compared to existing per-unit rent numbers across Davis. Let’s turn that around right now and look at per-bed rents. The following are the projected per bed rent levels for Nishi as described in the City Staff Report for the project [double-occupancy rates in bold: a small portion of the “market rate” units and 100&% of the “affordable” units]:

      * single-occupancy market: $1,000
      * double-occupancy market: $850
      * double-occupancy VLI: $672
      * double-occupancy ELI: $404

      Here are the current existing market rate average unit rents in Davis from the 2017 BAE survey converted to a per bed basis [note: these averages are for 87% of the existing market rate rental stock surrveyed; no subsidized/affordable units surveyed]:

      * 2-bedroom single-occupancy: $830
      * 3-bedroom single-occupancy: $757
      * 4-bedroom single-occupancy: $715
      * 2-bedroom double-occupancy: $415
      * 3-bedroom double-occupancy: $379
      * 4-bedroom double-occupancy: $356

      Briefly, a few key conclusions:

      * even the lowest tier of ELI  “affordable” beds at Nishi ($404) have generally higher rents than the existing market rate rents in Davis ($356-415) when comparing double-occupancy to double-occupancy;
      * when you move up to the VLI “affordable” level, the Nishi beds ($757) are FAR more expensive than existing market rate rents in Davis ($356-415) when comparing double-occupancy to double-occupancy;
      * even the least-expensive Nishi “market rate” units (which are double-occupancy) ($850) are more expensive than existing market rate rents in Davis for single-occupancy ($715-830). In other words, you would pay more at Nishi for a double-occupancy bedroom than you would at the Davis average for single bedroom!;
      * the single-occupancy “market rate” Nishi beds have rates 20-40% higher than existing market rate rents in Davis when comparing single-occupancy to single-occupancy.

      The above are the reasons I have called it a “fake” affordable housing program. The “affordable” units are not and the “market rate” units are way above average market rates. If the project were simply required to rent at existing Davis average rent levels (which are sky high according to everybody), and occupants were allowed to voluntarily double-up, the project would actually be creating a lot of affordable housing. Instead, the only “innovation”to really be found is expansion of the developer’s bottom line



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