Planning Commission Recommends Chiles Road Project, Pending Affordable Housing Action by Social Services Commission

Planning Commissioners from left to right: Emily Shandy, Greg Rowe, and Herman Boschken listen to the applicant explain the project

The Planning Commission was largely supportive of the Chiles Road Project, although wary of jumping the gun before the Social Services Commission weighs in on modifications to the affordable housing ordinance on February 25.   They ultimately in a series of 7-0 votes recommended forwarding the project to city council – although they gave it a caveat that this vote was “subject to the concurrence of the Social Services Commission.”

Chuck Cunningham, who along with Lawrence Shepard is the project applicant, explained that they wanted to do something which they could be proud of, but also that met community needs.

“What we ended up with is what we’re calling housing for the Davis workforce,” he said.  “It’s not a student housing site.  What we found early on is talking to some local employers that many of their employees do not live in Davis.  The employers would like that to change.

“The choices aren’t great,” he explained.

Aside from meeting the needs of “the missing middle,” one of the distinctive features of the project is the affordable housing proposal.

Chuck Cunningham explained, “We knew a long time ago based on our pro formas that we couldn’t meet… the 35 percent (affordable housing requirement) was totally beyond reach.  Even the 5-5-5 for our product type is impossible.”

That was later confirmed by the Plescia study.

Mr. Cunningham said, “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.”

Why are some of the projects able to get to 15% – he showed a chart that illustrated the vast difference in revenue generated in rental units that rent by the unit versus the bed.

“The income economics are substantially different,” he explained.  “That’s a big deal.”

There are other factors on the cost size.  For instance, the amount of square footage per bed is substantially higher for their project than for student housing.  Beds per unit are under two for their project versus over 6 for student projects.

Parking is a factor – students do not have to have as much parking next to campus while they have the expectation that people will expect to have a place to park their car.  Connection fees and impact fees also work against them since they don’t distinguish between number of rooms.

The idea of the revenue stream was a way to replace funding from redevelopment agencies.  “How did we get to 1.65 percent?” he asked.  “We basically looked at the internal subsidy that was involved with the median and moderate income units… and that then translated to 1.65 percent of gross rent.  The fundamental reason is that it’s what the project can afford.”

The applicant team with Lawrence Shepard on the far right and Chuck Cunningham in the center taking notes

He explained that they are willing to take below industry standard returns from the project – but the financial industry in order to finance the project need to see a certain return on their investment in order to pull the trigger.

Public comment was generally very supportive of the project. 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 that 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.”

Commissioner Stephen Mikesell called it “the right project for Davis at this time and satisfies a huge need.”  He added called the affordable housing project innovative and was happy to hear that the Social Services Commission initial response was positive.

He added, “The project is also affordable in a small “A” sense, that it is satisfying a need that just isn’t being met, the missing middle as people have said.  I think it’s the right project at the right time.”

Darryl Rutherford called it a fabulous project, but had some concerns about the affordable housing proposal.

“I was fairly disappointed in the way that conversation went this evening around how people talked about workforce housing,” he said.  He noted that while this project might meet the needs of those making $60 to $80 thousand per year, “but nothing about our lower wage workforce.

“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.”

He acknowledged, “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.”

Greg Rowe was more supportive of the affordable housing portion noting, “What I find as one of the more attractive things about the affordable housing plan that’s been proposed here coming from having worked in a re-development agency is with the dissolution of redevelopment agencies, we lost the opportunity for tax increment financing whereby you could issue a bond and then pledge against that bond the income stream from the tax increment in the RDA to pay back that bond.”

He noted that this was an opportunity for the city to float a bond and pledge against this revenue stream.

“It could be a replacement or substitute for the loss of redevelopment,” he said.

There were a lot of concerns that the redevelopment project was in the words of Commissioner Cheryl Essex, “not ripe yet.”

She said, “I understand the concern, I understand the challenge, and I understand the need.”

Mr. Mikesell stated, “I’m inclined to the defer to the social services commission.”

Ultimately, they were able to support the recommendations on affordable housing by crafting the language as being contingent on their support of the overall affordable housing plan.  That earned a pair of 7-0 votes to recommend the affordable housing proposal to the council.

In another change, newly-appointed Commissioner Emily Shandy was concerned about the proposed widening of Chiles. She said, “I have concern about widening Chiles and concerns about the speeds already on the road.”  She said, “Widening the road tends to increase vehicle speeds.”

She said, “I don’t love the fact that we’re widening this road by ten feet.”

Chuck Cunningham pointed out that what is happening is that they would create two seven-foot bike lanes along the stretch of Chiles where the project lies.  He noted that the vehicle travel lanes itself are actually narrowed which could act to slow cars down, rather than speed them up.

Ms. Shandy pointed out that this is a small stretch of Chiles to begin with, and they should be looking to create bike lanes on the whole stretch, not just one narrow segment.

She was able to support the motion when they agreed to have staff evaluate reducing speeds overall on Chiles.

In the end, the planning commission supported the staff recommendations – all on 7-0 votes with some modifications in their recommendations for council to take up when the project comes to them for final approval.

—David M. Greenwald reporting

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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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