Council to Look at Vertical Mixed Use Provisions of Affordable Housing Ordinance

Back on November 27, the council put forward interim provisions for extending the city’s affordable housing requirement.  But they also put forward potential changes to the requirements for vertical mixed-use developments which were previously exempt from affordable housing requirements.

The proposal that came up was the idea that they would replace current exemptions with a more flexible requirement for projects located within the core area with a lower threshold for project located outside of the core area, with a 5 percent target for low income housing.

In addition, the council wishes to clarifying alternative affordable rental requirements by explicitly stating that “the City Council may adjust the inclusionary percentage up or down based on project size and/or the income/rent levels provided.”

Councilmember Will Arnold said that at the bottom line, “we want to see these things built.”  He was concerned that if they made the requirements too high, nothing would be built.”

He stated, “35 percent of nothing, is nothing.  So if the thing doesn’t get built because we’ve put an onerous requirement on there, then no one gets to live there…  So that’s the balancing act that we have in front of us.”

The question was what the right level is and there he was less certain.  “Fifteen percent is not feasible,” he said.  But, then again, “zero percent is unacceptable.”  He said, “I would be hard pressed to approve either of (the current proposed mixed use projects) if the affordable number were zero.”

Mayor Brett Lee recommended eliminating the full vertical mixed-use exemptions and suggested they set the number to five percent, but, as a nod to the fiscal difficulty, only require that five percent be for low income (as opposed to very low or extremely low) income people.

“The idea here is that it’s not zero,” he said.  “We’ll work with you.”

Will Arnold pushed for a core area carve out, which he felt along with adding flexibility “gives me a comfort level.”  He said, “We don’t want people not to redevelop because of this.”

Brett Lee stated that “while vertical mixed-use and stacked flats (in the core) do not have a numerical requirement, there is an expectation that they will provide some level of resources for the city’s affordability program.”

Thus at the November 27 discussion, the council decided that “the inclusionary requirements for vertical mixed-use and stacked condominiums should be lower than other residential development prototypes” and “the inclusionary requirements for vertical mixed-use and stacked condominiums should be more flexible in the core area than other parts of the City.”

The language then is that residential development constructed as either vertical mixed-use or stacked condominiums “are exempt from the standard and alternative affordable housing requirements as long as they provide an individualized affordable housing plan.”

The plan must comply with one of the following stipulations.  For projects within the core area, they are required to provide “some percentage of on-site affordable units, bedrooms, or beds, some payment of in-lieu fees, or another mechanism as deemed appropriate by the City Council.”

For those projects outside of the core area: they must provide “a target of 5% low income units, bedrooms, or beds or another mechanism as deemed appropriate by the City Council.”

Staff notes that if a developer submits an application “that is eligible for the by-right process and the project is located within the City’s core area, staff will incorporate the determination of an appropriate inclusionary amount into its administrative review process.”

In addition, “the proposed amendment will not impact applications currently under review.”  That means neither the University Research Park nor the University Mall are impacted by this change.  Staff adds, “the amendments will only apply to applications submitted after the ordinance takes effect, which will be 30 days following the ordinance’s second reading.”

Finally, the council has codified in its alternative affordable housing requirements “that the City Council has the discretion to adjust the inclusionary percentage up or down based on project size and/or the income/rent levels provided.”

Staff notes that “This change is meant to address and acknowledge that larger sized projects may have greater economies of scale and therefore may be able to provide more affordability than smaller sized projects. This change is also meant to address and acknowledge that providing units, bedrooms, or beds at the very low and extremely low income levels is more costly than providing units, bedrooms, or beds at the low income level.”

—David M. Greenwald reporting


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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18 thoughts on “Council to Look at Vertical Mixed Use Provisions of Affordable Housing Ordinance”

  1. Ron

    From article:  “That means neither the University Research Park nor the University Mall are impacted by this change.”

    I believe that this is different than what David previously claimed, in regard to University Mall.

    In any case, does this mean that neither of these developments will have Affordable housing?

    1. David Greenwald

      Ron – They put a provision into the interim ordinance which would exclude them from the provisions of the update.  Obvious that changes any previous thinking if it’s passed as recommended.

      Does these mean neither will have Affordable housing?  Not necessarily. That’s ultimately up to the council.

      URP does propose a 5% affordable housing project – https://cityofdavis.org/home/showdocument?id=12175

    2. David Greenwald

      For the University Mall, the representatives from the development team are not sure if there will be affordable housing.  They previous said that given the costs, an affordable houting would not be financially feasible  under the city’s current affordable housing rules, but I wonder if they could make 5 percent work.

      Bottom line: neither project is required to do so, URP is already planning 5%, we don’t know what U-Mall will do.

    1. David Greenwald

      That’s entirely possible under this provision:

      Finally, the council has codified in its alternative affordable housing requirements “that the City Council has the discretion to adjust the inclusionary percentage up or down based on project size and/or the income/rent levels provided.”
      Staff notes that “This change is meant to address and acknowledge that larger sized projects may have greater economies of scale and therefore may be able to provide more affordability than smaller sized projects. This change is also meant to address and acknowledge that providing units, bedrooms, or beds at the very low and extremely low income levels is more costly than providing units, bedrooms, or beds at the low income level.”

      1. Ron

        That provision does not address what I’m referring to.

        For example, WDAAC includes an Affordable housing component that will be constructed using external funds.

        1. David Greenwald Post author

          It does address what you’re referring to, because it gives the council discretion to adjust percentage. Although now that I think about the specific issue you are raising, I don’t know how you would know in advance about available funds and for the most part, those are only going to go land dedication sites which are not going to be applicable to vertical mixed use projects (except for like a Nishi 1.0)

        2. Ron

          The wording states that the council’s discretion is based upon project size or income/rent levels, and not the potential of external funding.

          I have not seen any evidence that external funding for Affordable housing is limited to land dedication sites.

          Regardless, University Mall and University Research Park may have sufficient space to incorporate such a component.

          Perhaps more importantly, there may soon be a very large, peripheral mixed-use development in the form of MRIC. Surely, they have the space to include an Affordable housing site.

          1. David Greenwald Post author

            Like I said, as I think about it more, I don’t know how you would know that in advance and given we are talking about vertical mixed use, I’m not sure funding is going to be available anyway.

          1. David Greenwald Post author

            My read is that this interim policy gives them a lot broader discretion than they had previously and I really don’t see external funding as being a considerations for anything other than land dedication. Recall in the main ordinance, the numbers are viewed as targets anyway.

          1. David Greenwald Post author

            Also nothing prevents the developer from going higher than required if they get access to funding.

        3. Ron

          Seems like you’re trying to avoid what I noted, so I’ve repasted my 10:03 comment, below.

          Developers do not necessarily know in advance if they will obtain external funding, as is the case at WDAAC.  However, the city’s proposed policy does not address this possibility.

          The wording states that the council’s discretion is based upon project size or income/rent levels, and not the potential of external funding.

          I have not seen any evidence that external funding for Affordable housing is limited to land dedication sites.

          Regardless, University Mall and University Research Park may have sufficient space to incorporate such a component.

          Perhaps more importantly, there may soon be a very large, peripheral mixed-use development in the form of MRIC. Surely, they have the space to include an Affordable housing site.

          If you’re going to continue avoiding discussion of these points, I see no reason to continue on this thread.

        4. David Greenwald Post author

          ” However, the city’s proposed policy does not address this possibility.”

          Actually it does.  I didn’t have a chance on Friday to look up the ordinance, but it clearly states in Section 5 (b)(5): “Whether the proposed affordable housing component may be partially funded by public subsidy or other public financing from a source other than the City.”

           

  2. Alan Miller

    Strange how ‘affordable’ (subsidized) housing is just a given nowadays, as if we were a semi-socialist country.  Not even ‘should we do this’, just ‘what percentage’.  #sigh#

      1. Howard P

        In theory, yes… if told what it ‘cost’ them, to provide the subsidy including indirect (aka hidden) costs associated with the subsidy, maybe not so much… still probably a majority, but surely not at the 80% number.

        If it was disclosed how many “affordable” units eventually became ‘market-rate’, that %-age would erode further.

        Still, probably a majority, but not near the 80% level if all costs and abuses were disclosed when polling…

        Just saying…

        I support the concept, knowing the costs, and the abuses.  It is said business doesn’t really “pay taxes”… it’s built into their products/services.  Same is true for developers and affordable housing… the one-time, and ongoing ‘costs’ built into the price of their product, and for MF, built into the rents that go @ market rates.

        TNSTAAFL..

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