On the Davis-Based Buyers Program

By Jason Taormino

The spirit of the Davis-Based Buyers Program for the West Davis Active Adult Community is a focus on our community’s needs.  Nearly six hundred Davis families have joined our interest list for the for sale homes and there are more than four hundred additional individuals on waiting lists for affordable senior apartments.  During our lengthy community outreach including more than seventeen city commission and council meetings we were asked for some methodology to ensure that we focused on this home grown demand rather than advertising in the Bay Area.

On dozens of occasions while dropping off or picking up my kids at Cesar Chavez elementary school I was approached by parents who were eager to move their aging parent(s) to Davis.  From my perspective there are two clear segments of demand that our proposed neighborhood can serve from a market rate perspective – seniors in Davis who want to downsize and those who want their aging parents to come to Davis.  Additionally, the affordable apartments and a memory care facility serve important needs.  Without the senior restriction on 80% of the homes it is highly unlikely that seniors in Davis or bringing a parent to Davis would occur as a significant percentage of the total housing.

Initially, I did not see any methodology to provide preferences based upon being a current Davis resident or being related to a current Davis resident because the demographics of Davis are not reflective of the regional averages.  Our legal counsel agreed with this opinion but suggested we should focus on a broader goal.  We could provide preference to a group of people as long as that group was large, inclusive and non discriminatory.  UC Davis and the Davis Joint Unified School district are non discriminatory organizations.  If you or a close relative have ever attended or worked at a Davis school or the university then you are eligible for the preference program.

Below is the legal opinion we provided to the City.


FROM: Matthew Keasling

DATE: January 17, 2018

RE: Analyzing the Legality of the Proposed Davis Based Buyers Program

The West Davis Active Adult Community (WDAAC or Project) applicant is proposing to implement a local buyers program for the sale of approximately 350 single-family residential units located within the Project. The objective of the program is to ensure that the Project meets the intent of Measure R, which requires the electorate to balance the preservation of agricultural land and/or open space with a civic obligation to provide “an adequate housing supply to meet internal city needs”. (Davis Municipal Code section 41.01.010(a), emphasis added.) The WDAAC proponents are ensuring that the housing constructed in the WDAAC Project meets the “internal city need” by implementing the Davis Based Buyers Program. This program promotes the sale of homes to current Davis residents, their families, UCD alumni, those with children in Davis schools, and those working in Davis. Implementation of this program will allow the Project to meet the purpose of Measure R and achieve numerous City policy goals and objectives. Though carefully designed to fulfill the explicit intent of Measure R, the question has arisen as to whether the proposed local buyers program is consistent with fair housing laws. As this memorandum discusses, if done correctly, the answer is “yes.”

Local priority programs are utilized in the context of housing throughout the nation. In fact, the City of Davis already utilizes a local workforce priority program in its distribution of new affordable housing. (Davis Municipal Code section 18.07.) As that municipal code section correctly states, to comply with the Fair Housing Act (FHA), a local preference program may not have the purpose or effect of delaying or otherwise denying housing opportunities to a protected class. (Davis Municipal Code section 18.07.010(f).). The test is two-fold: first, one must ask if the program imposes disparate treatment or has a discriminatory intent, i.e., is its objective to discriminate against any of the identified protected classes. A discriminatory intent may be inferred from the totality of the circumstances. Assuming that the program is not intentionally discriminatory but was genuinely designed to fulfill a legitimate policy objective of the City, then the second question is whether the program nonetheless has a disparate impact or discriminatory effect. If no discriminatory intent or effect exists, then the program does not violate the fair housing laws and should be allowed to proceed.

In the recent legal discussion surrounding programs that prioritize local populations in the rental or sale of housing, the focus is predominantly on whether the program being implemented has some disparate impact on a protected class. No single test exists for determining disparate impact with respect to local preference programs. This may be, in part, due to the unique nature of each local program, the unique composition of each community, the validity of the policy advanced, and/or the specific aggrievement of the individual asserting discrimination. It is, however, clear that the disparate impact must be substantial to violate the Fair Housing Act.

In applying this two-part analysis to the proposed Davis Based Buyers Program, we must first examine the intent of the program. As stated, the intent of the Davis Based Buyers Program is to ensure that the homes being built in WDAAC are helping the City of Davis to address its dramatically insufficient housing supply while, simultaneously, providing the aging residents of Davis an opportunity to move into “right sized” housing while staying in the community. The program is NOT intended to, nor will it, discriminate against any potential buyer based upon a protected class. In fact, the program has been carefully crafted to include a broad array of qualifying local connections to evidence a clear intent to avoid any misconception that the program is a veiled attempt at discrimination. For example, the program offers its priority status to graduates of the Davis school system including UC Davis. California’s local schools and the University of California have long been at the forefront of imposing anti-discriminatory policies in the context of admissions. Thus, by including any UC Davis alumni or family with a child enrolled in local schools within the local buyers preference, the developer’s intent is to make the local preference program as inclusive as possible with respect to any and all protected classes.

The non-discriminatory intent of the program is further evidenced through consideration of the legitimate City goals and objectives the program seeks to achieve. Foremost, the program is designed to fulfill a clear objective of Measure R, which was approved in 2010 by 75% of the local electorate. Measure R balances preservation of agricultural land and open space with the need to meet the internal housing needs of the City. Based upon a plain reading of the measure, it was not the intent of the proponents of Measure R to even consider greenfield development for the sake of attracting new residents to Davis; Measure R effectively opposes expansion of the City simply for the sake of growth. Rather, Measure R aims to preserve agricultural lands unless urbanization is necessary to serve the City’s internal housing needs. The Measure makes no mention of regional housing needs or the demand for housing generated by outside forces. Instead, it directs voters to consider only the “internal housing need,” which can be interpreted to mean demand generated by the natural growth from within the City. By implementing a program that prioritizes local buyers, WDAAC seeks to develop a project that serves the internal housing needs of Davis and thereby achieves this clearly stated and strongly supported growth policy.

In addition to fulfilling the objectives of Measure R, the local buyers program will also assist the City with its housing crisis, generally. First of all, as a primarily senior housing community with smaller units, the project offers the City’s aging population an opportunity to downsize while staying in the City.9 In turn, by encouraging existing Davis residents 55 years of age and over to move out of their traditional single-family homes and into the WDAAC, the program helps to free-up the existing housing stock for families living, working, or bringing children to school in Davis to purchase a family home in the City. In effect, implementing the local priority program not only builds new homes in Davis for current residents but also opens-up existing homes in Davis, thereby doubling the housing impact of the project. In short, the program is intended to provide badly needed housing opportunities for Davis residents or others with a strong local connection who are currently struggling to find the type of housing that they desire within the City. Second, it is frequently stated that the lack of housing in Davis results in those raised and educated in Davis being denied the opportunity to remain there. The proposed program will provide opportunities to these buyers, both within the portion of the project not age restricted and in the resale of existing homes, in an effort to retain the next generation of Davis families. Third, the program helps to better serve an aging population by encouraging family caregivers and those individuals that they assist to live in close proximity. Fourth, allows families with children enrolled in Davis schools and/or people employed in Davis who currently commute in and out of the City each day, to also live within the City of Davis. Altogether, the program will increase civic involvement, improve student and employee productivity, allow the City to retain those it has educated, once again fill Davis schools and shops with local residents, reduce medical care costs, create an opportunity for alternative modes of travel, reduce commuter traffic and VMT, and improve the quality of life for all involved.

Having established that the local buyers program is not intended to discriminate against any protected class of individual but is, instead, crafted to achieve legitimate policy goals and objectives of the City, the second question becomes whether the program will nonetheless have an unintentional discriminatory effect. By carefully reviewing the legal decisions and academic discussions on local preference programs, the WDAAC applicant has incorporated numerous ‘best practices’ as program components to avoid any unintended disparate impact. These components include:

  1. Crafting a local preference program with a highly inclusive definition of what constitutes a qualifying local connection. The program benefits existing Davis residents with no time duration associated with length of City residency. The program also includes family members of current residents to foster and encourage family caregivers. Broader still, the preference is given to several groups not currently residing in the City of Davis and without a family connection, including: local employees, families or individuals with children enrolled in Davis grade schools, or alumni of UC Davis or Davis Joint Unified.
  2. The program does not draw from a narrow geographic area or specific neighborhood but includes the entire City and even expands its geographic preferences area beyond the municipality’s jurisdiction to include the Davis Joint Unified School District boundary and the UC Davis campus, as well as City-adjacent unincorporated County communities. As such, the demographics of the program area are reflective of and similar to the demographics of the larger Yolo-Sacramento region.
  3. The local buyers program only applies to a portion of the for-sale units, ensuring that an adequate opportunity exists for potential buyers that do not qualify for the local preference. Furthermore, the local preference does not apply to the Project’s 150 senior affordable rental units nor to the continuing care community.
  4. Finally, by prioritizing the housing in WDAAC for local seniors, the homes that buyers vacate within Davis then become open to the population at-large. This, in turn, affords many opportunities for any would-be buyer to purchase a home in Davis that will not be subject to the local buyers program.

The enumerated program details are specifically crafted to comply with direction provided by the Department of Housing and Urban Development and the courts to be in compliance with the Fair Housing Act. Furthermore, they meet and exceed identified best practices implemented by housing authorities nationwide.

As described herein, it is clear that the intent of the Davis Based Buyers Program is to implement Measure R and, in so doing, help to meet a broad array of the internal housing needs of the City. The intent of the program is not to discriminate against any protected class of individuals, but to achieve numerous legitimate public policy goals. Furthermore, with the numerous safeguards in place and broad qualifications for program inclusion, no protected class will be deprived reasonable opportunity to obtain housing in Davis. As such, there is no discriminatory intent and there will be no significant disparate impact as a result of implementing the Davis Based Buyers Program. Therefore, the program complies with state and federal fair housing laws.


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13 thoughts on “On the Davis-Based Buyers Program”

  1. Keith O

    implementing the local priority program not only builds new homes in Davis for current residents but also opens-up existing homes in Davis, thereby doubling the housing impact of the project. 

    Um no.

    1. David Greenwald

      Why not? In theory anyway, it fills two needs – one is that it allows someone to move from an existing home and downsize. That is impact one. Second, it frees up and existing home which someone new can then move into. That’s impact two. (There are some problems with the theory, but if it works as they envisioned, it seems to me that the impact of the project is indeed doubled).

        1. Ron

          Keith:  I’m glad that someone can count, on here!

          As a side note, Proposition 5 will allow those 55 years and older to transfer their low property tax anywhere in California. I read somewhere that it’s expected to pass, in November.

          I wonder what that will mean for WDAAC, if the “Davis-based” buyer program is not effective? (Perhaps resulting in even “less than one” source, for local buyers.) Much like the Cannery, perhaps.

  2. Rik Keller

    Why is this being re-posted? This legal opinion was already posted in its entirety here on the Davis Vanguard:  https://www.davisvanguard.org/2018/01/analysis-legality-proposed-davis-based-buyers-program/

    Two brief comments:

    1) It is interesting that the entire legal opinion that is re-posted here does not cite any specific relevant case at all, and it instead relies on vague, broad assertions that the reader is apparently expected to accept at face value: “The enumerated program details are specifically crafted to comply with direction provided by the Department of Housing and Urban Development and the courts to be in compliance with the Fair Housing Act.”

    2) The other legal opinion provided by the project (also previously posted in the Vanguard https://www.davisvanguard.org/2018/01/legal-opinion-letter-city-legality-davis-based-buyers-program/) takes great pains not to mention the fair housing law and related case law at all other than an unsubstantiated assertion that “we believe the Davis Based Buyers Program is legal and permitted under California law. The Davis Based Buyers Program conforms to the Unruh Civil Rights Act (California Civil Code Section 51 et seq.), and the California Fair Employment and Housing Act (California Government Code Section 12900 et seq.).”

    For someone who had a column wanting a “fact-based” discussion yesterday, there are precious few facts being presented here my Mr. Taormino. It is just a repeat of an old column that was posted back in January that itself does not provide any documentation or evidence to supports its claims.

    1. Sharla C.

      Rik, Your response is why there will be no debate.  When the No on L team repeats its allegations over and over (as we know they will do) we should just dismiss them, because it has been said already before?  This attitude does not welcome discussion.

      1. Rik Keller

        Sharla C.: You are against any debate of the project because I pointed out the project proponent merely posted a copy of the previous article containing a vague legal opinion with no supporting evidence or case law? OK, got it.

    2. Rik Keller

      If Taormino was interested in a fact-based discussion, he could have, for example, cited the 2002 Langlois v. Abington Housing Authority decision that looks very skeptically at the exact type of circular reasoning used as policy justification for exclusionary residency preferences that the WDAAC project is using. However, neither he nor his two attorneys cited this nor any other of a large number of other similar and relevant fair housing cases.

      See this summary of Langlois: “Judge Gertner there concluded that the defendants could not simply cite the goal of wanting “to make it easier for their residents to keep living in their communities,” because this basically just reflects “the very definition of residency preferences. If I accepted these as legitimate justifications, residency preferences in and of themselves would forever justify the disparate impacts that they cause.” Rather, she held: “defendants must set forth the reasons why they want the preferences. And it is the reasons that must be legitimate.  [Defendants] must offer a record of local conditions and needs that suggests why the residency preferences are necessary, [such as] a fire in the community has left an abnormally high number of residents homeless [or] economic factors have hit the community especially hard—a plant closing, for example.” [http://furmancenter.org/research/iri/essay/the-community-preference-policy-an-unnecessary-barrier-to-minorities-housin]

      See also this admonishing statement of the judge in that case: “nowhere do the defendants demonstrate that they even considered the impact of their residency preferences on minorities and on their compliance with other civil rights obligations.”

      Taormino also uses an unconvincing argument that current diversity levels and nondiscriminatory practices at UC Davis absolves the project from “considering the potential impact of their residency preferences on minorities.” There is no attempt by the project proponents to examine the historic ethnic/racial makeup for student/staff at UC Davis when persons of current retirement age would have attended UC Davis or first started working there. There is also no attempt by project proponents to examine the racial/ethnic makeup of persons of retirement age currently residing in Davis.

      1. Rik Keller

        Just as a reminder about the 1978 Regents of the University of California v. Bakke case that struck down race-based quotas, but upheld affirmative action programs: the UC Davis medical school had reserved 16 out of 100 seats in its entering class for minorities, including “Blacks,” “Chicanos,” “Asians,” and “American Indians.” So the University was trying to get to 16% minority representation using quotas, but that was stuck down. I don’t have the stats on hand, but the actual minority student makeup was presumably much less than that at the time.

        A 21- year old in 1978 would be 61 years old today and in the targeted age group for the WDAAC project. But the project proponents are disingenuously only looking at current UC Davis diversity figures to try to absolve their project from considering disparate impacts on minorities in their targeted age group. There has been no effort by project proponents to provide any information about this topic or to address it.

        1. Rik Keller

          A simple link to the old article would have sufficed. Is the Vanguard in the habit of re-posting old content as new articles? Can any old article can be resubmitted as fresh content?

          And why, 9 months after the first article, does Taormino have nothing new to add to the discussion?

  3. Eric Gelber

    First, let me point out that the “legal opinion” presented in the article is not an objective legal analysis of the issue; rather, it’s a presentation of arguments in favor of the Davis-Based Buyers Program. An objective legal analysis would, for example, analyze case law both supporting and invalidating local preferences, addressing not only supportive case law but also how the proposed Program can be distinguished from those that have been stricken down. This legal opinion, however, merely states conclusions without an analysis of the pertinent statutory and case law.

    Second, I don’t think it has ever been made clear what the parameters of the Program are. For example, is the preference for DJUSD and UCD graduates, or is it for individuals who merely attended school in the DJUSD or at UCD? I’ve seen both. Current Davis residents and Davis employees are covered. But a retired Davis employee and former resident who now lives in Woodland would have a disadvantage compared to someone who attended (or graduated from?) UCD in the 60’s but had no contact with Davis before or after that. A relative of a Davis resident, who never set foot in Davis or California, has a preference over a resident of Sacramento, who may previously have lived or worked in Davis. There are many more such scenarios that simply do not make sense based on the purported purpose of the Program: to benefit the Davis community and those with connections to Davis.

    Most significantly, although I do not in any way assert that the Program is intentionally discriminatory, I believe it would likely have a disparate impact or discriminatory effect on protected groups. Considerable space on the Vanguard has been devoted in the last few days alone to the issue of ethnic and racial disparities in the Davis population compared to the broader region. Commenters have lamented that this is all due to decades-old intentionally discriminatory land use practices that are no longer relevant and that, therefore, there’s nothing that can be done about it now (unless all the white people move out according to one unhelpful comment).

    To the contrary, there are many things that can be done to address demographic disparities. One is to identify and address barriers to individuals from non-majority communities relocating to Davis (e.g., lack of affordable housing). Another would be to do more targeted outreach to these communities in the marketing of local housing opportunities.

    But, for purposes of this discussion, what can be done is to not establish new policies that are counter-productive and would, in fact, perpetuate or exacerbate existing disparities. Given the longstanding demographic characteristics of Davis, giving preferences to local residents and their relatives, and former residents who attended school in Davis, will necessarily be to the benefit of groups with characteristics similar to the current population, and will disadvantage those from racial and ethnic groups that do not have current or former ties to Davis. (If local residents are disproportionately white, that’s also going to be true of their relatives.)

    Whether the disparate impact of the Davis-Based Buyers Program on non-white groups would be de minimis, or would rise to the level of unlawful discrimination, is something that may ultimately have to be decided by the courts. But why would Davis voters even be asked to adopt a policy intended to disadvantage “outsiders” and with the potential of adversely impacting the diversity of the community? For me, the Davis-Based Buyers Program is sufficient reason to vote no on Measure L. (And don’t get me started on age-restricted housing developments.)

     

  4. Alan Miller

    UC Davis and the Davis Joint Unified School district are non discriminatory organizations.  If you or a close relative have ever attended or worked at a Davis school or the university then you are eligible for the preference program.

    You are also elidgable to Vote NO on Measure L.

    This sounded bad when it was Davis-based.  That these schools have some legal standing as “non-discriminatory organizations” just winds the ludicrous noose tighter.  This whole thing is a stretch that is likely to both backfire and snap.  As is my metaphor.

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