Chiles Road Apartments Come to Council

In recent months, the need for workforce housing has been highlighted on the Vanguard and elsewhere.  Coming before the council on Tuesday is the proposed 3820 Chiles Road Project which “would redesignate and rezone the existing commercial property to a high-density residential use and demolish the existing building (an eligible historical resource) to redevelop the site with a 225-unit apartment project.”

The result is unlike previous apartment projects, as this project does not target student population but instead “focuses on meeting the demand for workforce, professional, and family rental units.”

In addition, unlike other recent projects which focus heavily on three to five room apartments, the proposed three and four-story buildings consist of more traditional one, two, and three-bedroom units – rented by the unit.

A big matter of concern, tracked in the Vanguard and elsewhere, has been the efforts at addressing affordability-related concerns.  Staff notes that “a recent economic analysis of multi-family residential housing prototypes, prepared for the City by A. Plescia & Co. and Gruen Gruen + Associates, identified economic challenges for this type of development.”

Staff writes: “For the Large Traditional prototype, which is similar to the proposed project, the analysis determined that the project is marginally feasible without affordable housing requirements and would be infeasible with affordable housing requirements under the scenarios reviewed.”

Thus, as covered previously, “The project’s Affordable Housing Plan takes an alternative approach and proposes to create an ongoing contribution to the City’s Housing Trust Fund to help fund the City’s affordable housing programs.”

The proposal requires an amendment to the Affordable Housing Ordinance, which is being processed concurrently with the subject project.   (This will be addressed Tuesday, as well, as a separate item).

Overall, “Staff believes that the proposed project would be compatible with the surrounding mix of commercial and residential uses and would enhance the neighborhood. It meets a housing need and provides a housing type, which has not been constructed in the City in recent years, with a new approach to the affordable housing issue.”

The applicant is requesting to redevelop the current 7.4 acre office property located at 3820 Chiles Road.  It proposes a new multi-family residential project which would demolish the existing office building, remove 92 trees, and construct three residential buildings with 225 apartment units and other amenities.

The project will also provide a maximum of 319 vehicle parking spaces and 361 bicycle parking spaces.

Staff notes, “The primary benefit would be the development of a housing type for groups that have been recently underserved.”

Of paramount importance, staff notes: “Although a number of single-family residential subdivisions, student-oriented apartment developments, and affordable housing projects have been approved or built in recent years, no sizeable market-rate apartment project catering to the local workforce, working professionals, mature singles, or small families has been constructed in the City for some time.”

The need for workforce housing was seen as a critical driver of this proposal.  Staff notes that the applicant met with various stakeholders and dialogued with neighbors, community leaders, employers and employees, and ordinary citizens.

“Particularly vocal were owners of businesses ranging from fledgling enterprises to established firms in industries ranging from retail to tech. According to the applicant, these employers see the limited and expensive housing stock in Davis as impediments to attracting and retaining qualified staff,” staff writes.

Companies they talked to noted that “more than one-half of the employee workforce travels daily from Woodland, Sacramento, Dixon, and beyond.”

Staff adds: “Employers and employees alike cite the existence of a ‘Missing Middle,’ a cohort of middle income residents who earn too much to qualify for below market rate housing, but too little to be able to afford suitable rental housing in Davis. This project begins to fill the demand.”

Affordable Housing Plan

The current plan calls for the project to “make an on-going annual payment to the City’s Housing Trust Fund of 1.65 percent of the total gross rental income in perpetuity, with a minimum annual payment of $100,000.”

Staff estimates that approximately $125,000 would be generated in the first year of implementation and it “would be expected to increase over time commensurate with rents.”

Both staff and the developer believe that the structure and amount of this payment is feasible for the developer who would not have been able to pencil out a more traditional arrangement.

Importantly, “it provides a dedicated revenue stream to implement the City’s affordable housing goals and programs. The proposal would be allowed under the Alternative Affordable Rental Housing Requirements of the Affordable Housing Ordinance with approval of the amendment mentioned.”

Staff notes – and this will be discussed separately – that council will be asked “to consider an amendment to the City’s Affordable Housing Ordinance. It is necessary for consistency with the project’s Affordable Housing Plan.”

The amendment would add ongoing funding for the city’s affordable housing program.  The Social Services Commission reviewed this proposal two weeks ago, saying, “While the Commission expressed general support or interest in the concept, there were also comments requesting more analysis and research on the possible alternative, as well as concerns about setting a precedent and a comment wanting to prioritize on-site affordable units.”

—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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  1. Matt Williams

    “Both staff and the developer believe that the structure and amount of this payment is feasible for the developer who would not have been able to pencil out a more traditional arrangement.”

    Just as importantly for both the City and the people needing affordable housing, the proposed method for funding Affordable Housing produces a perpetual annual annuity … yes, from now until forever … that is protected against inflation.  It is a true Win-Win for all involved.

    1. Bill Marshall

      Matt… I agree with your ‘thrust’, but anything  promised “in perpetuity”, however well-intended, raises my eyebrows… heck, the sun, that provides for life on earth is not a “forever” thing… (see emoticon with grin and wink!).  RDA funding was thought to be ‘perpetual’… yeah, right… (the rare phrase where two ‘positives’ = a ‘negative’!)

      The promised, intended ‘annuity’, is a great concept, if set at a reasonable level, adjusted for inflation, and enforceable… sure beats pure land dedication or one-time payments…  with the ‘characters’ currently involved with the current project proposal, I’m comfortable… concept is good, the devil will be in the details…

      Am speaking to the proposed affordable component, not to the merits of the project itself…

      1. Matt Williams

        Good point Bill.  I’m assuming it will be legally memorialized as a deed restriction.

        Since I am 71 years old, “in perpetuity” has a different meaning than it has (for example) for Craig Ross, due to our difference in age.

  2. Rik Keller

    The opening sentence is classic historical revisionism by David Greenwald: “in recent months, the need for workforce housing has been highlighted on the Vanguard…” While it is true in a broader sense, it has been by highlighted by outside contributors, while the Vanguard’s editorial stance has actually been  hostile to this.

    Greenwald has taken a stand against the notion that workforce housing is the primary housing need in Davis as expressed in the City of Davis General Plan and other policy documents. He has pushed other types of projects, including student housing primarily for upper-income students (Nishi) and for upper-income seniors (WDAAC) at the expense of focusing on workforce housing. He has also ignored the efforts that his patrons and funders in the development community have made in the past to kill workforce housing efforts, including the suspension of the City of Davis Middle Income Ordinance.

    A lot of this is described in detail in my piece here:

    “The history of the language in Measure R (2010) regarding the policy goal of an “adequate housing supply to meet internal City needs,” stretches back to 2002 and includes numerous studies from that time up to the 2007 City of Davis General Plan Update regarding “the primary reason for city residential growth to provide housing opportunities for the local workforce.”

    However, policy support for programs that have been put into place to address this internally-generated need have been weakened by development interests: the City’s Middle Income housing program that was intended to partially address the internal housing need for the moderate-income workforce was suspended in 2009, and the provisions for low-income housing in the City’s Affordable Housing Ordinance were dramatically weakened on an interim basis this year.

    There has been a flood of development proposals this year seeking to gain approval before the City’s affordable housing requirements are possibly strengthened again by the end of 2018. These proposals should be evaluated with additional scrutiny to determine whether they are truly addressing the City’s official policy directives and intent in Measure R, the General Plan, and other supporting documents that make up the land use policy framework.”

      1. Rik Keller

        Matt Williams: the point of the comment is to put the very opening sentence of the article in context. If, as a side effect, a reader came away with evidence that the Davis Vanguard is not an honest broker regarding the discussion of housing and other planning issues, that would be good too. If a reader also became more educated about the history of the failures to address workforce housing and who has been behind that, that would be useful too.

        1. Matt Williams

          Okay Rik, I will bite.  From the perspective of the community’s deliberations about workforce housing and/or affordable housing, how does “putting the very opening sentence of the article in context” advance or enhance the dialogue?  It has every appearance of an ad hominem digression … attacking the messenger rather than engaging the message.

          Further, how does the history of past failures vis-a-vis workforce housing impact the discussion of this particular project?

          You appear to be spending a lot of time looking backward in your rear-view mirror, rather looking forward through your windshield

  3. Craig Ross

    Since Matt already made a comment I would make – I think there is a logical fallacy in Rik’s post.  It has to do with “primary housing need.”  I think there are a lot of critical housing needs in Davis – student housing, workforce, affordable, family housing, etc.  Just because you don’t agree that workforce is “the primary” housing need doesn’t mean you don’t think it’s important.  To my mind then, there is no contradiction and Rik’s still fighting a personal vendetta.

    1. Bill Marshall

      The “primary housing need”, is in the eye of the person needing housing… and the type of housing they expect… by that I primarily mean “ownership”, vs. “rental”… have lived in both, and strongly gravitated towards “ownership”… have relatives who prefer/preferred “rental”…

      “ownership” housing is more problematic for lower/median income folk, particularly in Davis, than “rental”…

      One of the problems in previous iterations of the affordable housing policies, was assuming everyone was entitled to ‘affordable’ ownership housing… led to various machinations where some ‘affordable housing’ ended up being ‘market-rate’… defeating the purpose…

  4. Sean Raycraft

    The 1.65% number still seems arbitrarily low in my opinion. Where did this number actually come from? Why isn’t it say… 5%? I think the idea of an ongoing revenue stream is a good idea, but I’m having a hard time accepting this number.

    1. Rik Keller

      Sean: that’s a very good question! We need much more transparency in the process to determine what actually “pencils out” and what doesn’t. Just as an example of how this is playing out in larger policy, the Plescia report that the City is analyzing for modifying the affordable housing requirement is highly incomplete and, among other things, doesn’t even consider the effect of density bonuses on increasing project feasibility.

    2. Matt Williams

      Sean, I asked you this same question the last time you posed your 5% question.

      — What financial indicator are you looking for 5% of?

      — How did you decide 5% was/is the appropriate amount?

      — You are saying that you are having a hard time accepting “this number.”  What is it about “this number” that makes you uncomfortable?


  5. Alan Miller

    We need much more transparency in the process to determine what actually “pencils out” and what doesn’t.

    How in God’s name do you propose THAT even happens?

    1. Craig Ross

      Rare time I agree with Alan.  Everyone is telling us the same thing – multiple consultants across multiple areas – people are not believing it because it doesn’t gibe with their world view – but the reality is the reality – projects are sitting right on the margins – some of it is our fault – some of it is not.

  6. Bill Marshall

    We need to assure that developers only break even, or, better yet, lose money… we need to establish a City panel to monitor this, pay them well for their efforts, and charge those costs to the developer.

    With that, we’d not need a Measure J/R… but I may be too liberal in suggesting this (favoring the developers) … in some folk’s eyes…

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