While the city of Davis will continue to toy with the exact requirements for affordable housing – what is becoming more and more clear is that we need a funding mechanism in order to provide the revenue needed to pay for that housing.
The loss of RDA (Redevelopment Agency funding) is one big problem for the city – because that represented an annual $2 million of money that is no longer available. While we saw the voters approve WDAAC (West Davis Active Adult Community) with its 150 units, the number of peripheral housing projects with land dedication sites that can be turned into subsidized housing from grant and other sources figures to be quite limited in the next two decades.
Finally, as the reports have indicated, even though we figure to add some infill sites, the type of development we figure to have – namely redevelopment and vertical mixed-use – figures to curtail even more of that potential affordable housing.
Along those lines the Chiles Road apartment project might give us a way forward – not only to workforce housing and affordability by design, but also in terms of the potential for a new way to do affordable housing within the revenue and funding limitations that we have.
As developer Chuck Cunningham explained in his comments to the Planning Commission on Wednesday, when they looked at their project, they figured out that there was no way to get to the previous 35 percent affordability mark. But more than that, even the 5-5-5 proposal was a problem.
As Mr. Cunningham explained, “We had to do something. We began looking at alternatives.”
He said, “It turns out we could do 3.5% total without even extremely low units.”
He also explained why most of the student housing projects could get to 15 percent affordability – they are renting by the room and thus get more rent per room than other complexes. That allows them the leeway to get to 15 percent affordability in most cases.
This is yet another reminder that without redevelopment and without site dedication, it’s going to be hard to consistently build affordable housing in town.
But there are two solutions her, both to be found within the confines of the Chiles project. The first is that they are going to attempt to create an annual revenue stream. This isn’t just an in-lieu fee, which is one time. This is actually an ongoing stream that could generate upwards of $300,000 per year at some point.
There is a difference. The in-lieu payment simply places an amount of money, in the place of actually building housing, into a fund that can be tapped at a later point in time. But by creating a funding stream it produces not only on-going money, but as some of the commissioners like Greg Rowe and Darryl Rutherford pointed out, the city has the ability to bond against an ongoing stream.
If the city were to implement this plan for the next several projects, perhaps they can create enough of a stream to start replacing RDA. That is something at least worth exploring.
In addition to finding new ways to provide big “A” affordability, there is an acute need for workforce housing.
If MRIC (Mace Ranch Innovation Center) is coming back – and signs suggest that some sort of proposal is forthcoming – and if the city is serious about economic development, one of the biggest shortfalls in the city is finding housing that meets the needs of that group.
In this case, they are looking at a project that creates affordability “by design” for the so-called “missing middle.” These are people making $60,000 to $80,000 that we might not think of as low income but who cannot afford to buy homes in Davis.
These are the same concerns that were targeted over at University Research Park and their vertical mixed-use proposal for housing for employees of URP.
At the same time, we need to acknowledge Darryl Rutherford’s point from Wednesday’s meeting. This project does not address a number of groups that are in need of housing in Davis.
There is a whole host of lower income people that are not being served by this project. That’s naturally by design and Mr. Rutherford also recognizes, “We can’t have every project solve every problem but I’m a little disappointed that we haven’t seen something worked out in this project that could actually meet the needs of these individuals.”
But for lower income workers, this project probably won’t work.
“This project doesn’t meet that need,” he said. “That is one of the biggest challenges we have getting to this affordable housing conundrum that we’re in.”
Still, a big barrier to actually attracting companies and high tech to Davis will be housing. Obviously, if we lack commercial space, that’s a structural problem that we must address as well. But when it comes to recruiting companies, a selling point is that they have to be able to hire quality employees. And many will want to live in this community.
This is a point made loud and clear by a public commenter on Wednesday.
Eric Johnson is a partner in an IT firm that has several major Davis companies as clients.
He explained that these businesses employ a total of 500 people and “share a common trait. That trait is that they employ professionals who make solid incomes – $60 to $80 thousand per year – yet their employees have a difficult time finding housing locally.
“Many choose to commute to Davis,” he said. “Their Davis housing choices are quite limited if they prefer not to live in student rentals and they don’t have high enough incomes to afford the typical Davis single dwelling.”
He said, “A project that’s geared toward Davis working professionals is sorely needed in this city.”
We agree. This project will help with that. The advantage of this project is that it checks several important boxes and does so in a location that makes sense and that should not adversely impact either the near-neighbors or the others in this community.
And they have found creative ways to help address issues of affordability, both in terms of the missing middle and in terms of lower income people who need subsidized housing.
—David M. Greenwald reporting