Alan Pryor continues the attack on the affordable housing portion of the West Davis Active Adult Community (WDAAC), project arguing that there are “there are NO low income housing guarantees at WDAAC.”
He writes: “If Neighborhood Partners LLC, Mr. Thompson’s privately-owned for-profit firm, cannot raise enough government grant monies or government subsidized loans to construct the 150 low-income apartments, they will simply not be built. This is because neither Mr. Thompson nor his firm nor the WDAAC developer, Mr. Taormino, has agreed to separately guarantee that they will be built by either issuing completion bonds or personally guaranteeing that the construction will occur.”
Are there no guarantees, or are there simply no 100 percent guarantees that anything will happen?
We have to start by looking at the language inside the Baseline Project Features – this is important because this is the most binding language in a Measure R project and requires a new vote in order to change.
Here we see that there are some guarantees:
First, it states that the project “will also include senior affordable housing that complies with the requirements of the City’s Affordable Housing Ordinance.” That’s actually pretty important because it binds the development to the city’s Affordable Housing Ordinance.
Second, the developer is required to “[p]rovide land to accommodate 150 subsidized affordable senior apartments.”
It specifies that the senior affordable apartments must be at least 600 square feet.
It also very importantly requires that “[t]he first phase of development shall include infrastructure for senior affordable apartments.”
At minimum, then, this project is required in the Baseline Project Features to provide the land, lay the infrastructure, donate the land, and comply with the Affordable Housing Ordinance.
While others have pushed back, noting that the language is fairly skimpy, it is also not clear what more could be written into the BPF to ensure that affordable housing could be built.
Alan Pryor is correct, if the developers cannot raise enough grant money, then there is a possibly that they will not be built.
But he misses a key point – the city gets a take back clause in this. As spelled out in 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.”
That means that Neighborhood Partners will lose the ability to build the housing if they do not get building permits issued within three years.
That seems to be a strong incentive for the affordable housing developer. Is it a guarantee that the affordable housing developer will complete the work? No.
Others have argued that there are affordable housing sites in town that have not been built. They point to articles that demonstrate that Affordable Housing developments face an “uphill battle” due to lack of funding.
If that is true – and there are reasons to dispute this line – then we can come to the conclusion that, even under the best of circumstances, there is no such thing as a guarantee. So why are we holding the developers to an impossible standard?
We have reasonable provisions within the development agreement to ensure that the project has to comply with the city’s Affordable Housing ordinance, it lays out the requirements and has a clause that reverts the project to the city if the developers fail to deliver.
Neighborhood Partners – David Thompson and Luke Watkins – pointed out to the Vanguard that, over the course of 40 years, they have never not produced a project when they have committed to so doing. Is that a guarantee? No. But past history is indicative of future abilities.
Even the article a critic cited refers to what Luke Watkins said: “When affordable housing developers do manage to acquire property, they can leverage the value of the property for at least 10 times the property’s value for funding. Using the example of Creekside Courts’ land dedication, Watkins said that developers have been able to raise $25 million by leveraging the land, which was appraised at $2 million.”
Basically, the developers are granting land and infrastructure improvements for whoever develops the affordable housing.
Is there a guarantee that this will happen? That doesn’t seem to be the right question. The question that we should ask is did the city put all of the necessary provisions into the BPF to ensure that a project is most likely to happen? Is there anything that they should have put that they didn’t?
Those are far more reasonable questions and it appears from what I read that the city covered its bases. That still might not be enough to absolutely guarantee something at the end of the day – but then again, nothing actually is.
—David M. Greenwald reporting