On Monday, the Social Services Commission was unable to support a motion that would have recommended to the city council an amendment to the Affordable Housing Ordinance to allow the alternative proposal by the Chiles Road Apartments to go forward.
Due to limited projected revenue, the developers were proposing creating a revenue stream of 1.65 percent of gross rental income be generated for the city’s Housing Trust Fund in perpetuity. The estimate is that the first year it could contribute around $125,000 and go upwards of $300,000 as rents increase over time.
One of the concerns is that the fund does not establish a baseline – in case rents were to go down rather than continue in their upward trajectory.
A motion put forward by Commissioner Matthew Wise would have adopted the staff report and added a recommendation to put in a revenue floor, as well as specify that the revenue stream would continue in perpetuity.
However, that motion failed on a vote of 3 to 3 with one abstention. The majority of those opposing stated their “discomfort with the information that we had.”
Commissioner Don Kalman indicated that he was flat out opposed to it. “I just don’t believe it,” he said, referring to claims from the developer that they and others would not be able to build housing without a change in the affordable housing policy.
He said that developers want to build in this town “and they’ll find a way.”
Matthew Wise, who made the motion, noted that “we’re talking about what we’re going to do for the next couple of months.” He noted a more permanent ordinance would come forward in June and they will have additional time to vet what is going to happen beyond June.
There were a number of public comments – most of which were positive. However, Martha Teeter expressed concerns that this type of proposal would not be “advantageous to the affordable housing stock.” She pointed out that Paul’s Place would be contributing $5 million for affordable housing while this is proposing about $100,000 per year which in her mind was not nearly enough.
Matt Williams ran through the numbers, however, and noted that, given the rental increase of 5.26 percent per year, the affordable housing fund is likely to increase at a rate much faster than a simple in lieu fee. He believes that given a $2.5 million baseline contribution, the fund established by the in-lieu fee would be exhausted by about year 15 while the fund proposed by the developer’s alternative would be still contributing its full amount that year and every year thereafter.
Greg Rowe pointed out that “one of the real strengths (is) to have a fourth mechanism for funding affordable housing in the city.” He argued that the loss of RDA (Redevelopment Agency funding) was “a real significant loss to being able to provide affordable housing.”
He said this type of flexible approach would produce $5 million over 30 years and the city could sell a bond to create several million up front. He likened it to “sort of like RDA 2.0” and called it a “really innovative approach.”
Eileen Samitz also called it a really innovative idea but warned that she did not want to this to become the default affordable housing type. Ultimately, she believes that land dedication is the best way to go in terms of generating land for affordable housing.
Finally, Darryl Rutherford said that the need for a housing trust fund “is huge” and said he regretted that this proposal came around so late. He said that allowing the project to go through could go a long way toward allowing them to set up a housing trust fund, but he was less sure about an amendment to the affordable housing ordinance.
During commissioner comments, Don Kalman again called the income stream nice, but worried that “it doesn’t seem like it’s that much money.” He said, “I’m torn because, while it is a nice idea, I’m always in favor of building units.
“I just don’t know that it’s enough money that it’s worth negating units that we could be building,” he said. “Certainly not enough money that you can build units with.”
Claire Goldstene called herself in the ambivalent category. She told the commission, “I’m not entirely comfortable supporting this change” and said that she wanted to do more research about the amount of money coming in and what it would look like.
She noted in her time on the commission, “we have really prioritized the building of units and the need for housing.” She said, “I do share the concern that if this is approved, this serves as an attractive example of other developments coming forward.
“But if we create a precedent where workforce rental housing choose the revenue stream,” she said, “we’re not going to see affordable workforce housing.”
Georgina Valencia who supported the motion, said, “I would hate for us to kind of throw the baby out with the bathwater and ignore this whole idea of a housing trust fund because we’re concerned that we don’t understand it well enough,” noting that the housing trust fund gives them money to do a number of things that the city is doing at this time.
Ultimately though, not enough of the commissioners understood the proposal or were comfortable with their level of understanding to support the motion.
The exception was Don Kalman, who was adamant that he wanted to see affordable units build in Davis.
“My message,” he said. “I want affordable units built in this town. There’s a crisis.”
The Planning Commission had passed their recommendations “subject to the concurrence of the Social Services Commission.” The Social Services Commission did not put forward any sort of recommendation, given the failure of that vote, and now it will be up to the council to decide how they want to proceed.
The concerns of the Social Services Commission will be forwarded to council.
—David M. Greenwald reporting