by Alan Pryor and Pam Nieberg
Davis already has by far the oldest average population in the region and this project will compound that population imbalance. Despite the abundance of young University students, according to 2016 US Census Bureau estimates the percentage of people in Davis under the age of 18 is 16.1% compared to 25.5% in West Sacramento and 26% in Woodland. Looking at younger children, the disparity is even greater with 3.8% of the Davis population under the age of 5 compared to 8.1% in West Sacramento and 6.7% in Woodland.
“I do think that this community is growing older and that we need to start thinking about how to make Davis affordable and accessible once again for families with children.” David Greenwald – Commentary: If You Think the Community is Angry and Divisive Now… You Should Have Seen Twelve Years Ago – June 28, 2018
Clearly, because of the age-restrictions imposed on buyers, this project will do little to directly increase the housing stock for young families. And because of this dearth of kids in town, our schools are so starved for young students that we need to import over 650 students per day just to keep school doors from shuttering and moth-balling our existing neighborhood schools. And we pay dearly for schooling those imported students with the highest school-related parcel taxes in the region. We clearly need more young families with children in town to fill our schools and maintain our vibrancy in Davis yet few families can afford to come to Davis because of sky-rocketing home purchase and rental prices.
What Davis really needs is smaller-scale, more dense, and affordable housing designed for both seniors AND families of modest means. The last thing we need is a sprawling, senior-only Sun City-lite developments like you see in sunbelt states. A development with smaller homes laid out in a curvilinear fashion with different designs (instead of rows and rows of near-identical box-like houses) would attract far more seniors AND the families preferred if the project were designed with a close-knit neighborhood setting in mind.
- WDAAC Does Not Meet our City’s Real Demographic Needs for More Diverse and Affordable Housing for Working Families and Those of Moderate Income.
If there is a demonstrable need for senior housing in Davis, that should first be a component integrated in every future housing development proposed for our city, with affordable and accessible, age-in-place accommodations that are close to services and the downtown with excellent connectivity.
The criteria for senior-focused housing and housing developments were first clearly articulated in the City’s “Guidelines for Housing that serves Seniors and Persons with Disabilities” recommended by the City’s Senior and Social Services Commissions and adopted by the Davis City Council on July 27, 2010. As discussed later, this development falls far short on many of those criteria including those concerning location and connectivity.
What Davis really lacks is more diverse and affordable housing suitable for BOTH seniors and working families of more modest means. It has become increasingly more difficult for even middle income families to afford a home in Davis.
Middle income generally includes those who earn between 60% and 120% of the area’s median income The median family household income for Davis is roughly $114,000. That would mean that middle income would range from $68,000 to $137,000 in Davis.
Home Values and Affordability in Davis(1)
The cost for a median priced home in Davis in June 2018 is $658,600.
To determine what a middle-income family (defined above as between $68,000 and $137,000 per year) can afford in Davis, we used the following assumptions:
Length of mortgage: 30 year fixed, including taxes and insurance
Interest rate: 4.4% (current)
Down payment: $20,000
Other Assumptions: $1000 of other monthly debt (insurance, other loan payments, etc.) /
36% Maximum Debt to Income Ratio
Using these values and assumptions in a standard affordability calculator, the following Maximum Affordable Home Prices are obtained for different income levels
Thus, to be able to buy the median price Davis home (currently $658,600), a family would need an annual salary of at least $180,000, depending on size of down payment and other debts.
Middle income workers include school teachers, some office workers and university low- and mid-level staff, medical support personnel, and some retail workers, among others. These moderate or middle income jobs are essential to a strong functioning economy and quality of life in Davis.
And yet these critical jobs do not generate enough income to buy any homes in Davis much less a median priced home. Most of these middle-income families cannot easily afford a home above $400,000. But only 7 out of the 75 homes recently listed for sale in Davis were even in the mid $400,000s according to a recent survey of local homes for sale.
For comparison purposes, the median cost to rent a home in Davis is $2,400/mo or $28,800 per year. Without doubt, there is a demonstrable need more affordably priced work force housing in Davis.
The Critical Need for Affordable Family Housing in Davis
The term “affordable family or workforce housing” refers to housing for those who are sufficiently gainfully employed to be not eligible for low-income housing programs. Affordable family housing is based on income levels ranging from 50% to 120% of the Area Median Income or AMI.(2)
The maximum cost of a house affordable to such a family is determined by mortgage lenders who typically require that a maximum of 28% to 36% of household income be used for principal, interest, taxes and insurance.
When a community’s workforce chooses to live elsewhere due to high housing costs such as exist in Davis, our community also loses tax revenue to neighboring jurisdictions because people typically spend money where they live, not where they work. Thus, the lack of affordable housing options in a community poses an existential threat to the ultimate prosperity of that community.
It is important that people have the ability to live near where they work, in particular those workers who are essential to the local economy but find that the housing is priced beyond their reach. When people can live near their jobs, the entire community benefits.
Neighborhoods are more diverse and economies strengthen when employers can attract and retain workers. Insuring a supply of affordable workforce housing is thus a critical component, and should be a priority in the City’s economic development program. Because employers will want to locate in a community in which their employees can thrive, it is unlikely that new high tech companies will want to relocate or start up in Davis just because we got our own Leisure World-lite subdivision.
West Davis Active Adult Community Does Not Fill This Need
The majority of homes proposed for the West Davis Active Adult Community are in the range of 1,400 to 1,800 square feet. At $384 per square foot (average new home construction sales price in Davis), a 1,800 square foot home would be $691,200. Even the smallest 1,400 square foot home will be $537,600.
And these costs are just for the homes. The large lot sizes for the 161 Greenway homes are nearly 4,600 square feet and for the 51 “custom builder” lots almost 5,200 square feet. Because of the costs of these huge lot sizes and landscaping and other amenities needed to fill the excessive space, net sales prices would increase costs by about 15% – 20%. These are hardly “affordable” units and would not even be obtainable by most middle income seniors. Thus one could expect that WDAAC will be populated almost entirely by wealthy seniors.
Davis must begin to make greater efforts to provide housing for its working citizens and young familes AND non-wealthy seniors – those earning middle incomes who cannot afford to live in the community where they work or want to retire. This is the type of housing that the City Council must begin demanding from those who want to build in Davis. This is the type of housing Davis needs. The WDAAC is just another example of the expensive single-family, single-story, expensive, and exclusionary sprawl development that Davis does not need.
- (1) Figures for housing costs and affordability were obtained from Zillow, Trulia, and realtor.com.
- (2) Information on importance of helping the middle class, middle income families is from the Urban Land Institute’s Advisory Services Report on Collier County’s (Florida) workforce housing strategy.
- WDAAC Does Not Meet the Needs of Seniors of Ordinary Means.
First, because no independent marketing analysis was ever done for this project, the question is whether seniors even desire this type of housing. According to a 2015 survey by the American Association of Retired Persons (AARP), 78% of aging adults want to age in place in their current own homes, meaning only 22% are interested in moving within the city where they currently live or relocating to another City. Even fewer state they are interested in moving into a “senior-only” community.
Second, this proposal does not meet the needs of most local seniors who might otherwise want to move to a senior-only development because most could not afford homes in this expensive, expansive development unless “poor old mom” happens to be a millionaire.
The project developer asserts that the proposed sprawling single-home layouts will meet the needs of most seniors even on limited budgets. But in reality, the proposed single-story homes in WDAAC will hardly be “affordable”. At a build-out sales price of $400/sq ft, a 1,800 sq ft home will cost $720,000.
Knowing full well that a developer would lack objectivity, the City’s “Guidelines for Housing that serves Seniors and Persons with Disabilities” specifically calls for an independent consultant (not the developer) to determine true market need. That document states:
“INDEPENDENT MARKET ANALYSIS – Market analysis of the true community need for housing should be done by an independent consultant. This analysis is paid for by the project applicant and contracted by the City in order to ensure its independence.
The analysis should speak to:
Affordability – in which the term is used in its broadest sense to include households of any income within the City of Davis and their existing cost burdens including consideration of expenses such as medical, care-giving, utilities, etc.
Marketability – a project-specific determination if there is a true local and current demand for the specific types of housing proposed.
Preferences of Seniors and Persons with Disabilities – For age-restricted and age-qualified senior housing include:
- consideration of senior majority preference to remain in their own homes in Davis, known as aging-in-place.
- other senior preferences related to amenities and unit size/downsizing.
For housing to serve persons with disabilities consider:
- housing features necessary for the person being served and whether space for a caregiver is necessary.
- preferences for independent living with support services available.
Current Wait Lists – current wait lists for similar projects existing within Davis should be considered and this information should be included in the analysis.
In determining the local need for senior housing, age definitions and restrictions must be well defined (e.g. age 55 and over, or age 62 and over).”
In fact, by ignoring these specific City “Guidelines,” no such quantitative needs assessment was performed by an independent entity, and the only estimates of senior housing needs in Davis were made by the developer himself.