One of the concerns I have with the argument against the West Davis Active Adult Community is the point it implicitly makes against land dedication sites for affordable housing.
The opposition argues that there is “no guarantee that the required low-income housing will ever be built.” They write: “West Davis Active Adult Community will not build ANY low-income housing itself like every other major development in Davis has done in recent years. Instead, the developer is donating less than 10% of the total project land on which low-income housing MAY be built – but only IF another non-profit can raise the millions of grant monies needed for construction. In this time of shrinking government budgets, there is no assurance these funds will EVER be available to build this required low-income housing.”
Part of why the land would revert to the city is to make sure that affordable housing gets built on the site.
This is from the development agreement: “If building permits for a minimum of sixty (60) units on the affordable housing site have not been issued within three years of recordation of the final map creating the parcel, the affordable housing site will be transferred to the City.”
While it is probably true that affordable housing will get built there, they are technically correct that there is no guarantee (and no way to guarantee) that the affordable housing will get built there.
The one thing we can say is that the way a land dedication site works, there is no financial incentive for the housing not to get built. The land is dedicated regardless, it won’t revert back to the developer if it doesn’t get built, they can’t put market rate housing there, and the costs for the affordable housing are borne by the non-profit affordable housing developer through grants and subsidies, not through the developer.
One of the big challenges for affordable housing is to get land where the affordable housing can be built. Even if cities have available in-lieu fees or grants, they might not have land. So Davis has traditionally used land donated by market-rate developers to facilitate the development of affordable housing.
The way a land dedication works is that the developer dedicates a portion of land for affordable housing to be built on. They then find an affordable housing developer, who then has to find the financing through a combination of grants, government programs, and potentially the affordable housing funds.
There are advantages and disadvantages to this type of affordable housing. One of the disadvantages is that the affordable housing will be separate from the market rate housing. At Nishi for instance, the affordable housing was integrated into the rest of the site, and no one will ever know whose place is affordable and whose isn’t.
However, the big advantage of land dedication is we really can get to the 35 percent affordable housing level. That is because the housing is developed by non-profits and others who specialize in developing affordable housing communities. They have access to grants and government funding that the developers of an on-site, integrated affordable housing project do not have.
I find it ironic then that some of the same people complaining that the city has reduced the affordable housing requirements, from 35 to 15 percent, are now complaining about this affordable housing project.
One of the authors of the ballot opposition argued that they do not support land dedications because they believe it will be abused. They believe that each developer should be made to actually build their own low-income housing on-site.
The city could have done that. They could have compelled this developer to build affordable housing that was integrated and to set aside 15 percent of the units as affordable. But that would have come with a cost as well.
Instead of having 150 affordable housing units which this site has, it would have 60, as required by the city ordinance.
There is a trade-off here.
Given the loss of RDA (Redevelopment Agency) money, affordable housing resources are scarce. But if we are going to make the argument as the opponents of this project do, that we can’t guarantee the affordable housing can get built, and therefore we should require the owners to do it on-site and pay for it themselves, then what we are really arguing against is the concept of land dedication itself. We are precluding probably the one way we can approach 35 percent affordability in a post-RDA world.
I think at the very least we ought to have the discussion over whether that is really what we want. Clearly some of the opponents of this project are simply against land dedication. But I think the broader community needs to understand the implications.
We also have to understand, there are not going to be many land dedication projects. They require land to be set aside and that means, for the most part, only peripheral subdivisions are going to have land dedication sites.
This also means that pretty much only Measure R projects will have them. Although Sterling Apartments is the exception, they set aside a separate parcel created for their 38-unit affordable apartment community, which will be developed by Mutual Housing California.
We can’t have it both ways. If we want more affordable housing, there is a trade off in a post-RDA world. We have external funding, and for the most part that requires land dedication to pull it off. With land dedication, we are reliant on an affordable developer and funding to get the project built.
There should be enough safeguards to get it done, but the opponents are right about one thing – there is no guarantee. There rarely is.
—David M. Greenwald reporting