Sunday Commentary: Vertical Mixed Use Provision Does Three Things

This week the amendment to the Affordable Housing Ordinance was placed on consent, but it makes a number of key changes that we should note.  There is probably a key omission here as well – that I will discuss shortly.

The biggest thing is that the city will officially remove the affordable housing exemption for vertical mixed use.  Given the fiscal analysis of Plescia as well as BAE (in the Downtown Plan), I think there are real questions especially in the core area as to whether we can have affordable housing at all for vertical mixed use.

Clearly if we wish to have affordable housing in these types of projects, we ought to look at some of the other requirements that add cost to building these projects and figure out which ones are priorities.

Second, a key provision here is that the amendment will not impact current projects.  That means neither the University Research Park nor the University Mall are impacted by this change.

That seems reasonable given that when the applications were made, the projects would be exempted from requirements of providing affordable housing.

On the other hand, that provision doesn’t necessarily mean there won’t be affordable housing on either site.

The University Park Project does have an affordable housing plan.  They are expecting to provide affordable housing in five percent of the units at the very low level.  The expected rent would range from $728 for a studio to $936 for a two bedroom.

They note: “URP’s affordable housing program will be open to individuals who qualify for conventional affordable housing, as well as individuals who may not qualify for such housing.  All affordable housing residents must demonstrate that they meet the income criteria at the appropriate level for the housing they seek.”

As for the University Mall redevelopment project, that one is less clear at this point.  The representatives from the development team are not sure if there will be affordable housing.  They previous said that given the costs, an affordable housing would not be financially feasible  under the city’s current affordable housing rules.  But would it be feasible at 5 percent?  That would seem to be at least on the table even if under the provisions of this ordinance, they would not be required to provide for five percent.

A third key point is that the council has now built in discretion for adjusting the inclusionary percentage up or down.

Under Section 5, it states: “Until June 30, 2019, the City Council may, at its discretion, approve alternative affordable housing requirements on a project specific basis that provide for a lesser percentage of the total units to be provided as affordable housing, or provide for affordable housing in an alternative manner, including but not limited to providing affordable housing by bedroom or individual bed, in an amount as deemed appropriate by the City Council.”

The ordinance itself lists nine possible factors in determining the percentage: (1) specific housing need, (2) the ability of the market rate units to provide housing for low or moderate income households, (3) the extent to which the development furthers other land use goals (including reductions for need for private vehicles, etc); (4) high infrastructure costs or other cost burdens; (5) funding by public subsidies; (6) whether the affordable components are provided by the bed or bedroom; (7) deeper levels of affordability; (8) applications prior to AB 1505 and (9) may be adjusted up or down based on the income and rent levels provided or the size of the overall project.

The bottom line is that the council has a good deal of discretion in setting the overall percentages of the affordable housing on the site.

Clarifying this language, in my view, eliminates a lot of the debate from the Measure L process as to whether the city complied with its own affordable housing ordinance.

One thing from the campaign though that this ordinance does not address or clarify is the “individualized affordable housing plan.”  During the election for WDAAC, the city clarified that the project met the requirements of the ordinance through such a plan, though such a plan was never specified in any of the documents provided by the city.

Here the language noted b the city is that 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.”

It would seem useful if the city laid out exactly what an individual affordable housing plan is, what it looks like, and the requirements for enacting it.

Along those lines, I think we need to look at a second change. I continue to have real questions about the practicality of providing affordable housing in these projects.  The city may want to look into securing funding to help projects provide such housing.  There is no language here that acknowledges those hardships or seeks to create or secure such funding.

Given that the next wave of housing developments are likely to be mixed-use, infill projects, it would seem logical that the city would have to find a way to help fund affordable housing – if that is their priority to do so.

—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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3 thoughts on “Sunday Commentary: Vertical Mixed Use Provision Does Three Things”

  1. Michael Bisch

    If adopted, the ordinance is likely to put an end to vertical, mixed-use development in Davis (which has been anemic even with the exemption). Why would a property owner or a developer invest the time and money to assemble parcels, go through an arduous 2-year entitlement process, only to find out at the end process what kind of affordable housing requirement will be imposed on the project? When the project is initiated, the makeup of the Council will not even be known.  That is way too much uncertainty. It might possibly fly on the periphery where the returns are greater, but I can’t see it happening for infill.

    1. Mark West

      I agree with Michael. The Terner Center For Housing Innovation at UC Berkeley did a study on development fees in cities around California and one of their major conclusions was the importance of developers knowing what the fees will be before starting the planning process. This is part of the risk assessment that developers do to determine if the project is feasible. By adding yet another exaction variable at the end of the process as this ordinance will do, we are moving in the wrong direction by increasing uncertainty, not reducing it. The net effect of this ordinance will be to block redevelopment downtown.

      https://ternercenter.berkeley.edu/blog/archives/2018/03

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