My View: Addressing Housing Issues at ARC Including the Possibility of Co-Housing Models

While we still do not have a specific housing proposal, from the Vanguard interview last week with Dan Ramos we have learned a few things about what the housing proposal will and will not have.

The innovation centers per the instructions in original RFEI (Request for Expressions of Interest) that the city put out in May 2014 included the provision: “Acknowledgement of community’s current desire for no residential to be included.”

As Dan Ramos explained to the Vanguard, the city actually came to them.  In 2014, there was a widespread belief that housing would be the “third rail” and harm the project’s chances for passage.

Doing the EIR, however, staff came back to them and told them, “You need to have an alternative that’s mixed-use because it’s environmentally superior.”

“We looked into it at that point,” he said.  “Low and behold it comes back as the environmentally superior alternative.

“That’s when we started embracing (housing),” he stated.  He argued this made more sense.

In a letter in December 2014, Dan Ramos wrote council: “[A]s we have proceeded over the last several months, our team has become convinced that a viable innovation center should contain a housing component such as the one reflected in the mixed-use alternative. This is interesting because we initially were highly opposed to the inclusion of a housing component in our project.”

He argues, “Over time, however, our view has changed. Why? First, because we have learned that cutting edge innovation centers now almost always contain a housing component, the primary purpose of which is to provide housing for those who work at the innovation center. This proximate housing is endemic of the unique live/work relationship prevalent in the tech industry and is essential to the effective marketing of innovation centers.”

During our interview, he was quite explicit.

“This is not a housing project,” Dan Ramos told the Vanguard.  There is a widespread belief that this project has morphed from a purely commercial project to a housing project.  That is not true.

As Dan Ramos explained: “If anything this is an accessory use to what we’re trying to do.  It helps us enhance the innovation or the research park part of it.  It helps us be successful.”

A big issue in places like Davis is to try to find housing for employees.

For many companies, Dan Ramos said, following many others we have spoken to, the need for housing is a huge consideration in where they will move their company.

He said, talking to Bay Area companies, he learned that housing is a huge issue and “so important for attracting employees.  It’s a big priority for them in terms of recruiting and everything,” Mr. Ramos said.

Not only does it give employees a place to live, but it also helps reduce GHG impacts, it reduces traffic impacts, and it helps to create an innovative culture where ideas can germinate and be discussed as more people come into contact with each other.

Thus Dan Ramos sees housing as part of the package here, although it is not the main part of the package.  It is kind of like having roads – you need to have them, but this is not a roads project.

A second key point that Dan Ramos makes is on the type of housing.

“We’re not talking about single-family homes,” he said.  This is going to be workforce housing.  It is not going to be detached single-family homes as you would find in a traditional peripheral subdivision.

This is going to be urban living.

“It will be high-density housing,” he said.  “A retail component below where we have the coffee shop, the brew pub, or whatever it might be where people might hang out, interface and do their thing.”

An inevitable question is whether students would live here.  When we posed that question, for instance, at the University Research Park – a location much closer to campus – their feeling was that this wasn’t going to be structured as student housing, but they wouldn’t stop students from living there.

There are some disadvantages for students living at Aggie Research Campus, including the fact that it will really be set up for workers at the campus rather than for students.  There are a number of ways to structure housing of this sort so that it doesn’t become student housing, including off-setting the rental schedule.

But mainly we expect that, given the distance from campus and the large volume of student housing already by campus, this won’t attract that many students.

One of the concepts we discussed with Dan Ramos was a co-housing model.  He and his development team are exploring such innovative models as they consider a more specific proposal when it comes to council.

Co-housing addresses a number of issues.  First, it makes it absolutely clear that this would not be housing for just anyone to live in.  There will likely be requirements in the development agreement, just as is articulated in the EIR, that at least 60 percent of the residents of the housing work on-site.  By creating a co-housing model that makes it far easier to achieve.

Second, there are cost-considerations.  Housing has become increasingly expensive and co-housing is a way to limit those costs.

Third, it makes the housing that much more dense and serving more people.  As we try to limit the number of commuters, having more people living on-site will reduce impacts.

Last year, we reflected on a growing trend both in places like San Francisco and Sacramento – what is known as “adult dorms” or co-housing arrangements.

On March 4, 2018, the New York Times noted: “In search of reasonable rent, the middle-class backbone of San Francisco — maitre d’s, teachers, bookstore managers, lounge musicians, copywriters and merchandise planners — are engaging in an unusual experiment in communal living: They are moving into dorms.”

They note: “Shared bathrooms at the end of the hall and having no individual kitchen or living room is becoming less weird for some of the city’s workers…  These are not micro-units, nor are they like WeWork’s WeLive housing developments, where residents have their own small kitchens, living rooms and bathrooms but share common event space and industrial appliances for parties. These are not single-family homes that are being used as group houses.”

Instead, what Starcity residents get is a small bedroom 130 to 220 square feet.  Some of the buildings have a private bath, but that is for a higher rent.

The key is, the average one-bedroom in San Francisco rents for $3300 a month (as opposed to $1200 or so in Davis), but in Starcity, rooms can go for $1400 to $2400 a month fully furnished, including utilities and Wi-Fi.

This type of model would seem to be perfect for the segment of the workforce that is just graduating from UC Davis.  They have degrees that would enable them to go into the high tech industry, but they do not yet have the families to need a lot of space or the income to buy into more conventional housing.

We have not yet seen the specific proposal here – so until then the housing, like other configurations, is a work in progress

—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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64 Comments

  1. Rik Keller

    Now the Vanguard is not just [discussing] the project, but is [discussing] the project based on project specifics and features that don’t exist. “Innovative”!

    1. Alan Pryor

      …staff came back to them and told them, “You need to have an alternative that’s mixed-use because it’s environmentally superior.”

      “We looked into it at that point,” he said.  “Low and behold it comes back as the environmentally superior alternative.

      Holy cow…low and behold…imagine that! Putting in apartments is not only the most environmentally benign alternative but Ramos never even thought of it until staff made him do the analysis in the EIR.

      But talk about revisionist history! Who does he think he is kidding? Putting in the apartments is the most profitable alternative for Ramco and was his goal from the very beginning. But now he is just portraying mixed use as him just doing the right thing by the environment and the “staff” made him do it.

      And we have already heard the siren calls from his camp…”Please just let us put in a huge apartment complex first and the companies will come running. But nobody will locate there until they can be assured they can house their workers nearby….really, I promise!”

      The public and Council did not fall for that line 3 years ago but I guess he feels we are that gullible that we just might this time around. The reality is very simple, though. The only way that housing is the more sustainable alternative is that if there is a mechanism to ensure that the people who live in the apartments actually work at the innovation center. Otherwise it is just another apartment house and will likely fill with commuters to Sac or the Bay area or people working elsewher e in Davis..

      So my question to Ramos is this, “Is he willing to put deed restrictions on the apartments saying they will only be occupied by ARC workers? Is he willing to put restrictions on construction and occupancy of the apartments that are directly tied into construction and occupancy of the the commercial side of ARC?”

      I am guessing he is not which will show that all this jabbering about the “staff made him” put in an apartment component “for the environment” is just BS designed to get his apartment-building foot in the door.

      And, surprise, surprise! Here is the Vanguard strutting right beside him helping to tout his line. Can paid advertisements or “consulting contracts” be far behind?.

      1. Bill Marshall

        Putting in the apartments is the most profitable alternative for Ramco and was his goal from the very beginning.

        Untrue, and no facts in evidence… [edited]

        until staff made him do the analysis in the EIR.

        Pretty much true, multiple sources, from staff… not personal knowledge…

        [moderated]

    2. Alan Miller

      [discussing] the project based on project specifics and features that don’t exist.

      Kind of like the front-page articles in the Bee years ago when the City’s Railyards project was proposed to have a canal with gondolas as a tourist draw.

  2. Don Shor

     I am not going to question anyone’s motives here. The purported action of city staff is probably a separate story in-and-of itself.

    But my opinion is:

    The housing market in Davis is so skewed that literally any rental housing anywhere in or near this town is up for grabs. The only way to confine it to people who work at that site would be by deed restrictions. In other words, they would have to discriminate. While that is legal (I think we have learned) with respect to seniors, I have to wonder if it is legal for something like this.

    “This is going to be urban living.”

    On the edge of town, next to the freeway, with literally no amenities nearby? That is a stretch. “Urban living” usually refers to living downtown. You know, in the urbs. Not the sub-urbs or ex-urbs. It implies being able to stroll to eateries, take in cultural amenities that are nearby, and gather in convivial open-air public squares. Things like that.

    “There will likely be requirements in the development agreement, just as is articulated in the EIR, that at least 60 percent of the residents of the housing work on-site.”

    So, you lose your lease if you lose your job? Is this enforceable?

    “An inevitable question is whether students would live here.”

    Unless you discriminate, yes.

    “… including off-setting the rental schedule.”

    If the local vacancy rate was even close to healthy, that might work. We’re a long way from that.

    “mainly we expect that, given the distance from campus and the large volume of student housing already by campus, this won’t attract that many students.”

    How can I say this nicely? That is nonsense.

    “Co-housing addresses a number of issues.”

    The earlier iteration had hundreds of units. I doubt they are thinking of having several hundred people living in co-housing models. We’ll see, but that sounds like a kibbutz and that’s not really a model most Americans embrace.

    Moreover, co-housing or not, this is a lot of renters to put on a site that was not intended for residential purposes.

     Color me skeptical, so far.

    1. Craig Ross

      “That is nonsense”

      Don – what if they simply start the rental cycle in like February – how many students are going to go off-cycle?  You say a lot of Americans don’t want to live like that, a lot of young people right out of college would love to live in such a situation, especially if it’s affordable.  Structure the housing for the workforce and you will end up with the mix you want.

    2. Bill Marshall

      While that is legal (I think we have learned) with respect to seniors, I have to wonder if it is legal for something like this.

      98% likelihood, not legal, at least in the sense of enforceable… deed restrictions that are enforceable, are very narrowly defined by law… for good reason… see the old deed restrictions in Old North, and other places in town.

      It’s good to be skeptical… but also, to be open… the proposal is not “ripe” for hard positions… yet, they come, amid much speculation, little data. And, much innuendo as to motives…

      Just saying…

    3. Eric Gelber

       The only way to confine it to people who work at that site would be by deed restrictions. In other words, they would have to discriminate. While that is legal (I think we have learned) with respect to seniors, I have to wonder if it is legal for something like this.

      I think the more viable means of accomplishing this would be through a system of preferences rather than deed restrictions. Such preferences could run afoul of fair housing laws, depending on the potential impact on protected classes (as was alleged in the lawsuit against WDAAC’s Davis-based buyers program); so, legality would depend on the specific conditions. Senior housing, which discriminates against a protected class (families with children), is allowed only because of an explicit exception written into federal and state fair housing law.

  3. Ron Oertel

    If there was truly commercial demand, that’s what the proposal would consist of.  Not tacking on a housing development which has more units than the entire Mace Ranch development, I believe.

    The claim that housing is needed to appeal to commercial tenants simply doesn’t wash.  There’s tons of inexpensive housing providing easy access to the site from West Sacramento, Woodland, etc.

    Wondering how old the EIR is, at this point.

    1. Craig Ross

      The EIR was certified in 2017.

      ”Commercial demand”

      That’s not what’s going on here.  The problem that we face is that businesses that look to come here have multiple options.  One of the determining factors for whether they take Davis over other locations is the availability of housing.

      ”Housing development”

      As Dan Ramos explained, this isn’t a housing development.  It’s a commercial development with an ancillary use.

      1. Ron Oertel

        Craig:  ”Commercial demand”
         
        “That’s not what’s going on here.”

        Thanks – I couldn’t have said it better, myself!

        One of the reasons that I asked about the age of the EIR is because they become out-of-date, providing another motivating factor for the developer to push for this, now.

        1. Craig Ross

          You don’t seem to understand how this works.  Example Mori Seiki.  They had an interest in coming to Davis.  That is commercial demand.  But it was not a foregone conclusion that they would come to Davis – Davis had to win the recruitment.  Does that make sense?

        2. Ron Oertel

          Craig:  I would agree that commercial demand is so weak (and correspondingly so highly “pursued”) that companies have to be “wooed” to relocate anywhere.  And, that’s pretty difficult to do, when they have so many other nearby, less-expensive options. With some of those locations “desperately” pursuing them.

          Not the case with housing, in Davis. We know that there’s market demand for that.

        3. Craig Ross

          What you’re admitting is that you don’t understand how commercial development works.  Read the Mori Seiki article I posted above.  It’s a buyers market, not a seller’s market.

        4. Ron Oertel

          The claim that housing is “needed” to attract commercial tenants might make sense in the Bay Area, but does not apply for Davis (which is surrounded by less-expensive options, with easy access to the site).

          I took a quick look at the article you posted (after I started writing this comment), and noticed that it didn’t say one word about needing housing to attract Mori Seiki.

          1. David Greenwald

            Along the lines of Craig’s point, Dave Nystrom, the project manager at the University Research Park, told the Vanguard “one of the challenges (businesses in the park) face is hiring people because it’s so difficult to find housing in Davis. People I think have an expectation that if they’re going to work in Davis, they’re going to live in Dixon or Woodland or West Sacramento because the housing market is just so tight.” I’ve been told more times than I can count the two biggest barriers to economic development in Davis are lack of land that is shovel ready and lack of housing for employees.

        5. Ron Oertel

          Also from the article that Craig posted a link to, above:

          “To sweeten the deal for Mori Seiki to come to Davis, the City Council shaved off half of the company’s property taxes and waived its connection fees.

          For Sarah Worley, the city’s business and economic development coordinator, those types of decisions were no-brainers . . .”

          Maybe so.  😉

          https://www.davisenterprise.com/local-news/city/mori-seiki-opens-its-doors-to-the-community/

          1. David Greenwald

            Mori Seiki generates among the biggest tax rolls in the city. Without those inducements, we would be getting 100% of $0 taxes.

        6. Ron Oertel

          David:  Regardless of how cutting property taxes in half and waiving connection fees worked out for the city, that type of “plan” will not work at MRIC.

          By the way, how long was the Mori Seiki site vacant, prior to this deal? And, why is it that they did NOT claim that they needed housing, to make it “pencil out” (or “attract themselves” to locate in Davis)?

           

        7. David Greenwald

          Ron: If they brought in a Mori Seiki it would make sense.  I think the tax take from that site is over half a million, maybe Bill M knows a ballpark.

          I don’t know the specifics of the Mori Seiki deal, but housing at that time was not nearly as an acute a problem.  I want to say that deal happened back in 2011.  I’ll check with my source for that and see.

        8. Ron Oertel

          The really odd part (for an intelligent person such as yourself) is that you simply repeat what vested development interests tell you, as if it were fact.

          Other than UCD student-generated demand (which has now been fully accounted for, in the city’s and UCD’s plans), there have been no drastic changes in population since 2011 (when the housing market started recovering from a historic crash). And since that time, the Cannery and other developments have been built.

        9. Ron Oertel

          Forgot to mention the planned Chiles Ranch “workforce housing” development, as well.  Wondering what the holdup has been, regarding that.  This large property was sold to the developer about 10 years ago, I understand.

          I’ve asked about this several times, but you don’t seem to have much interest in reporting on this relatively large, planned workforce housing development.

        10. Ron Oertel

          “Ron: If they brought in a Mori Seiki it would make sense.”

          In reference to the MRIC site, it might or might not make sense to cut property taxes in half, and waive connection fees to encourage commercial development.

          Depends on what the corresponding costs of the development are, to the city. Including costs to serve residences. The “pass-through” tax-sharing agreement with the county is another factor.

          Regardless, I suspect that it would come up during the campaign. As will a host of other concerns.

        11. David Greenwald

          Follow up on Mori Seiki, told that their biggest concern was being close to the workforce coming out of UC Davis, but as I suspected, the housing issue was not what it is now.

        12. Ron Oertel

          ”  . . . the housing issue was not what it is now.”

          This statement has no apparent source or meaning. Housing certainly was an “issue”, from about 2007-2011.

          Since the market started recovering, a lot of housing has been built. Of the nearby communities, Woodland has probably added the most (with a lot more planned for the future). No doubt, that’s where a lot of commuters to Davis come from – including to any planned innovation center in Davis.

          1. David Greenwald

            It means that in 2011/ 2012 – at the tail end of the recession, housing wasn’t the issue that it is now.

        13. Rik Keller

          Greenwald said “…but as I suspected, the housing issue was not what it is now.”

          What is this supposed to mean? Before the City watered down its affordable housing requirements? Before the City’s Middle Income Ordinance was killed by the Chamber of Commerce and developers?

        14. Ron Oertel

          Rik:  Now that I look at it again, this statement from David also has no apparent meaning:

          David:  “Follow up on Mori Seiki, told that their biggest concern was being close to the workforce coming out of UC Davis, . . .”

          Seems to me that their “biggest concern” was getting their property taxes cut in half, and connection fees waived. Again, I wonder how long that property remained vacant, before Mori Seiki made this deal.

        15. Alan Miller

          Trying to make some sense of this statement . . .

          Follow up on Mori Seiki, told that their biggest concern was being close to the workforce coming out of UC Davis, but as I suspected, the housing issue was not what it is now.

          Followed up and was told by . . . ?  The housing issue wasn’t what it is now — as you suspected?

          I suspect that as long as they have employees who can drive down 2nd Street after driving down I-80, to reach their parking lot to work, they are cool with the current situation.

        16. Ron Oertel

          David:  “It means that in 2011/ 2012 – at the tail end of the recession, housing wasn’t the issue that it is now.”

          Well, repeating the same comment (that 3 commenters didn’t understand in regard to Mori Seiki) is one way to “re-explain” it.

          Yes – housing was cheaper at the tail end of the recession.  A lot cheaper, in some nearby communities – within easy commuting distance of businesses like Mori Seiki.  Some of which still haven’t fully recovered.  That was probably one of the best times to buy, if possible.

          However, it seems like some folks prefer to “buy high”, and “sell low” – or are forced into such decisions.

          Another downturn is expected.  Surprisingly, it hasn’t seemed to fully kick in, yet.

          1. David Greenwald

            What would you say the regional housing picture was in 2011-12? When did the recognition of the statewide housing shortage kick in? Housing is a much greater concern right now than it was five years ago. That context helps to explain why housing was a non-issue for Mori Seiki, but now looms large.

        17. Ron Oertel

          David:  “What would you say the regional housing picture was in 2011-12?”

          It was in unusually/historically poor shape.

          David:  “When did the recognition of the statewide housing shortage kick in?”

          How are you defining this?  Do you see differences between places such as the Bay Area, vs. the Sacramento region, vs. say “El Centro”?

          David:  “Housing is a much greater concern right now than it was five years ago. That context helps to explain why housing was a non-issue for Mori Seiki, but now looms large.”

          Mori Sieki is located in a region with a very ample supply of existing and new housing nearby, which is relatively inexpensive.  In fact, there’s a lot more housing now, than there was in 2011.  Including the Cannery, Spring Lake, etc.

          If companies like Mori Seiki are waiting for another truly unprecedented drop in housing prices, they might have a long wait.  Alternatively, they might seek out cheaper regions/states (which might provide even more than “half-off” of property taxes, and waivers of connection fees).  With lower wages to pay, as well.

          Seems like the Sacramento region has been the “go to” region in the race to the bottom. But, it’s not really at the bottom, when compared to other regions that companies might relocate to. (Actually, I’ve heard that housing prices aren’t all that inexpensive in some places in Texas, either.)

          1. David Greenwald

            “It was in unusually/historically poor shape.”

            Indeed. And that is part of why they were not worried about housing in 2011/12 when they decided to move to Davis.

        18. Ron Oertel

          Well, since housing prices are not likely to drop like that again (and the city might not take steps to cut property taxes in half, and waive connection fees again), perhaps there needs to be a “Plan B” for whatever concerns you have.

  4. Ron Oertel

    On a related note, I attempted to purchase some lumber at Hibbert’s a couple days ago.  They already sold out of what I needed, so I ended up purchasing it out of town.

    The reason I bring this up is because I was told that there are no purchasers lined up, for re-use as a lumberyard (and that the site would likely remain empty/unused, for some time).

    The site (which appears to consist of about 1.5 acres, downtown) might make an ideal spot for start-up or other companies.  (But, I wouldn’t be surprised if it ends up as primarily a housing development, as has occurred with several other commercial/industrial sites around the city.)

    1. Matt Williams

      Ron, you really ought to make the effort to attend the Downtown Plan Update meetings (DPAC meetings).  At the one Thursday night, which was attended by the 15 members, half a dozen staff, and about 25 members of the public, the Hibbert site was actively discussed, not just at the 100,000 foot level that your comments focus on, but rather at the 10,000 to 5,000 foot level.

      You could learn a lot.

      1. Ron Oertel

        ” . . . not just at the 100,000 foot level that your comments focus on, but rather at the 10,000 to 5,000 foot level.”

        My recent experience was at the site itself, attempting to purchase some lumber.  I’m not aware of any other full-time lumberyards in Davis, so that’s another loss attributed to “progress”.

        I don’t recall any Vanguard articles regarding the site.  When I previously brought it up on here (and noted that it would likely be converted to some other use), another commenter downplayed that probability.

        But you’re right – the DPAC meetings might be informative. On a related note, it’s been reported “elsewhere” that there’s a petition to oppose the implementation of paid parking, in downtown lots. If that’s successful, it certainly will impact plans to residentialize downtown. Perhaps downtown might even remain as a commercial district, instead!

        1. Matt Williams

          Perhaps downtown might even remain as a commercial district instead!

          The DPAC process has never advocated eliminating/reducing the commercial component of downtown Davis.  However, the realities of the supply/demand ratio with the current dearth of customers for the commercial businesses, almost surely means that other than services dispensing food and beverage, downtown commercial businesses will continue to suffer, and like Mother and Baby Store go out of business.  Other businesses like Hibberts that own the land as well as the business will have a hard time finding buyers for the business when the current owners want to move on.

          There simply isn’t a robust enough supply of customers who can walk to the downtown businesses.  That means the demand for those businesses’ products and services is anemic.  Building 3 floors, or 4 floors or 6 floors of residential over one floor of commercial, preserves a street-level commercial district, and adds a significant amount of incremental demand for the products and services of the businesses in that commercial district.

          I believe the community would be wise to approve the second floor of the redeveloped buildings as flex space … initially being rented as residential, but as economic development collaboration with UCD starts to retain intellectual capital here in Davis rather than letting it “escape” to other communities, the second floor units will “flex” from residential occupancy to commercial occupancy.

        2. Ron Oertel

          Matt:  “There simply isn’t a robust enough supply of customers who can walk to the downtown businesses.”

          Strange, how that hasn’t been an issue in the past (despite a constantly-growing city and regional population).  So now that people are purchasing stuff elsewhere, the “solution” is to “throw” even more people at the problem, with the hope that some percentage of those folks will trickle out of their highrise dwellings, to patronize businesses.

          Of course, this plan will discourage anyone else from visiting downtown.

          But hey, maybe it gives the development activists something to look forward to, other than paving over prime farmland.  So in that sense, maybe it’s the “preferred alternative”.

          (Of course, true development activists prefer both alternatives.)

          1. David Greenwald

            “Strange, how that hasn’t been an issue in the past”

            You seem to lack the understanding that the economy is shifting fairly rapidly

        3. Ron Oertel

          “. . . with UCD starts to retain intellectual capital here in Davis rather than letting it “escape” to other communities, . . .”

          Funny that you should say that, as I just saw a “convoy” of intellectual capital leaving town, apparently to a place that doesn’t have a 2.2% unemployment rate.  (I believe they’re taking businesses similar to Hibbert’s with them – although they tend to “look down” upon such blue-collar types.)

        4. Ron Oertel

          Matt:  “the second floor units will “flex” from residential occupancy to commercial occupancy.”

          Never in a million years. (Now, if this was the other-way around, . . .)

        5. Ron Oertel

          David:  “You seem to lack the understanding that the economy is shifting fairly rapidly.”

          This is Vanguard code-speak when the commenter has no response or point to make, and vaguely attacks the other commenter, instead.  Unfortunately, a common tactic on here.

        6. Matt Williams

          Ron said . . . Strange, how that hasn’t been an issue in the past (despite a constantly-growing city and regional population).  So now that people are purchasing stuff elsewhere,

          That has historically been an issue for decades Ron.  The levels of discretionary spending in Davis have always been limited.  The reasons for the limited amount of economic demand have been, and continue to be the following:

          (1) Davis has never made a significant effort to attract customers for either goods or services from customers who do not live or work in Davis.

          (2) As a result, other than coffee shops and grocery stores, virtually all the businesses in Davis are local-only brands. Note: a limited number of national brands do occupy space in the 2nd Street complex near Mace

          (3) The non-local brands that have come to Davis (e.g. Borders, The Gap, Whole Foods, etc.) have suffered through underperforming reults, and eventually pulled up stakes and departed.

          (4) Making those long-standing realities worse are the changing demographics of Davis.  Discretionary retail purchasing, for the most part, is driven by the 25 year-old to 54 year-old demographic cohort.  When I say retail, I exclude groceries/food because they are not discretionary purchases, and their usefulness is of extremely limited duration.  Individual demand for new “things” peaks during the years when people are having children and building their families, and then shows a steady decline with advancing age.  Vehicle purchases are a perfect example.  Think about how often the typical person buys a new vehicle when they are between the ages of 25 and 34.  Then recalibrate the time period to ages 35 to 44.  Then recalibrate the time period to ages 45 to 54.  Then think about how often a person buys a new vehicle after the age of 55.  Answers of “every 3 to 5 years” during the first of those 10-year periods becomes “every 15 to 20 years” once a person passes the age of 55.

          (5)  The change of purchasing to the Internet is only deepening the impact of a problem that has existed in Davis for over 40 years

          (6)  The other more-recent change is the massive decline in new home construction … and first-time home occupancy.  Moving into a new home is a substantial driver of discretionary retail spending.  Suddenly there are new spaces to fill.

          (7) Another more-recent trend is the substantial growth of the 20 to 24 year-old demographic. There are four key components to that demographic

          __ (A) they are effectively unemployed, since their “job” is to get an education at UCD,
          __ (B) they have a massive “living in poverty” component, which skews the overall Davis proportion of people living in poverty to much higher levels than either Woodland or West Sacramento.
          __ (C) because of (A) and (B) they have substantially lower discretionary income to spend on retail purchases of things … and even when they do buy their things it is frequently in their hometown rather than in Davis.
          __ (D) they are displacing young working professionals from the Davis housing market.

          So, the bottom-line for Davis businesses isn’t that the Davis populace is “buying stuff elsewhere,” it is (A) that the populace simply isn’t buying much stuff at all … other than consumables, and (B) Davis has done almost nothing to attract customers who don’t either live in Davis or work in Davis.

        7. Ron Oertel

          Matt:  Regarding age cohorts, there is an inevitable “solution” for that – which we’ll all face.  Unless the existing housing stock is then occupied by a new generation of “old farts”, the age cohort will change over time.

          In the neighborhood where I grew up (and have been priced out of), I’ve noticed that many folks are now younger than I am.  There are new, younger folks moving in, who are at a different income level than my family was.

          Regarding purchasing new automobiles, you’re probably talking to the wrong person – regardless of personal age.  I’ve purchased one, in my entire life. But, cars do last a lot longer than they used to, even within my lifetime.  (Do you remember when cars often didn’t even last 100K miles?)

          In any case, it’s probably time for all communities to stop relying upon Ponzi schemes (of ever-increasing growth and development), as well as unsustainable consumerism.

          The population is aging throughout the state. But again, that will only be a temporary “problem”.

           

        8. Matt Williams

          Ron said . . .  Never in a million years. (Now, if this was the other-way around, . . .)

          Your comment shows how little you know about the management of existing real estate assets.  To help you out of your dearth of knowledge, I suggest you go to the tenth slide of Matt Kowta’s Fisacal Feasibility presentation to the joint meeting of the Planning Commission and FBC with the Chair of the DPAC.  I have provided that slide for you below.  You will note that the average per square foot rent for Residential space in a vertical mixed use building is $2.50 per square foot, while the average per square foot rent for Office space in a vertical mixed use building is $2.90 per square foot.  If you had the opportunity to increase your revenues by 16% with no increase in costs, would you take advantage of that opportunity?

          The reason that (in a new project situation) that residential is so much more attractive to Developers, is that the first-year occupancy of each square foot of the project is likely to be in excess of 95%. The reason is simple.  There is a massive surplus of residential demand over the available residential supply.  I have analyzed the Davis housing marketplace, and calculated the Latent Demand for Apartment Beds that is Unmet by Supply is over 15,000 beds.  On the other hand, the demand for office space, in large part because the community (the city combined with the university) have not collaborated at all in any efforts to retain UCD graduates here in Davis, leveraging their newly acquired intellectual capital, and thereby generating incremental office space demand.

          So, I strongly suggest you expand your thought horizons beyond the realm of real estate developers, and also walk in the shoes of real estate operators/managers.

        9. Ron Oertel

          Matt: “You will note that the average per square foot rent for Residential space in a vertical mixed use building is $2.50 per square foot, while the average per square foot rent for Office space in a vertical mixed use building is $2.90 per square foot.  If you had the opportunity to increase your revenues by 16% with no increase in costs, would you take advantage of that opportunity?”

          Sure, but this assumes that there’s market demand for commercial space.  As evidenced by the conversion of existing commercial sites throughout the city (and the elimination of the “innovation center” components at 2-3 potential sites), there doesn’t appear to be sufficient market demand for commercial space at those prices.

          And, at the potential MRIC site, housing is now being proposed.

          Also wondering what the market rate for commercial space is throughout the region.

          (As a side note, I believe there’s a “for lease” sign at a commercial property on San Rafael street, between 2nd and 5th streets.) Near the “Del Rio” site, which was converted to include housing.

          Matt: “On the other hand, the demand for office space, in large part because the community (the city combined with the university) have not collaborated at all in any efforts to retain UCD graduates here in Davis, leveraging their newly acquired intellectual capital, and thereby generating incremental office space demand.”

          I’m not sure that you have the “cause” accurately analyzed, but you certainly are confirming the lack of market demand for commercial space.

           

        10. Matt Williams

          Ron said . . . And, at the potential MRIC site, housing is now being proposed.

          Ron, you keep going off topic to MRIC over and over and over again.  The discussion here has been about (A) about the downtown commercial district, and (B) about flex configurations for the second floor of to-be redeveloped buildings within that downtown commercial district.  What does MRIC have to do with that.

          It becomes clearer and clearer all the time that you have a one-track obsession about MRIC.  Perhaps you might want to strive for some balance in your thinking.

          Ironically, it was you yourself who initiated the downtown commercial district dialogue.

        11. Ron Oertel

          Matt:  The article itself is about MRIC/ARC.

          Do you agree that it will be relentlessly promoted by the Vanguard, the developer, various activists, and perhaps some on the council – for the foreseeable future?

          You are correct though, that promotion of sprawling, freeway-oriented developments on prime farmland are my primary political concern, and that there are some powerful interests who will attempt to do so. 

          I don’t see my interest in the same negative light that you apparently do. I don’t share every single concern I might have on the Vanguard, nor do I think that I have the power to change everything on my own.

          I have no qualms about pursuing economic redevelopment downtown.

          I’m going to be busy for the remainder of the day, using the lumber that I ended up purchasing out-of-town.

        12. Matt Williams

          Ron said . . . I don’t see my interest in the same negative light that you apparently do.

          “Apparently” is the key word there Ron.  I don’t see your interest in a negative light at all.  I too am interested in what comes forward vis-a-vis MRIC/ARC; however, that interest on my part is balanced by many other interests.  “Balanced” being the key word there.  There does not appear to be any balance in your approach.  The term I’ve used in prior posts is that you are playing a “one note samba.”  Further, your obsessive monocular approach is about something that is only at the “a wing and a prayer” stage.

          Your posts are full of passion.  I have said here many times over the years that I am suspicious of passion, and highly suspicious of extreme passion.  I try very hard in my personal life to be as dispassionate as possible.  So, if you perceive a “negative light” shining through in my comments it may be because you appear to be letting your emotions run away with you … thinking with your heart rather than with your head.  That may be an appearance that only I see, and if thaqt is the case, I’ll plead guilty to biases of my own when I say that I believe passions/emotions are quite often counter-productive and even in many cases dangerous.

        13. Ron Oertel

          Matt:  “So, if you perceive a “negative light” shining through in my comments it may be because you appear to be letting your emotions run away with you … thinking with your heart rather than with your head.”

          My emotions are kept in check, as I ultimately realize that no individual has control over societal choices.  Perhaps even more so, in a town like Davis.

          But there’s a certain imbalance of power, regarding development interests.  One wealthy individual (or a small group) can essentially throw an entire community into turmoil.

          And, if you’ll note comments such as Craig’s above, you’ll “dispassionately” observe that this forum does not always encourage reasoned discussions. The articles themselves don’t encourage this, either. (They are, in fact, chock-full of one-sided “passion”, along with selective biases regarding facts.)

          If you have specific examples (now, or in the future) where you believe that I’m overly-passionate, feel free to point them out.  I do listen to what you and others have to say, even if it doesn’t appear that way.

          Your local governance interests may indeed be broader than mine (and perhaps broader than 99% of the population at large). There’s nothing “right or wrong” about that.

           

        14. Matt Williams

          Ron said . . .  But there’s a certain imbalance of power, regarding development interests.  One wealthy individual (or a small group) can essentially throw an entire community into turmoil.

          Isn’t that part of the fundamental nature of democracy?

          Ron said . . .  And, if you’ll note comments such as Craig’s above, you’ll “dispassionately” observe that this forum does not always encourage reasoned discussions.

          Craig’s comment was indeed way out of line, and Alan Miller’s response to that comment is spot on.

          Ron said . . . The articles themselves don’t encourage this, either. (They are, in fact, chock-full of one-sided “passion”, along with selective biases regarding facts.)

          That is a fair criticism.  David does use the Bully Pulpit in a fair number of his articles … and on a broad range of topics, not just land use.  With that said, David does attempt to portray “the other side” of most of the issues he covers.  In my opinion, you would achieve better balance in your comments if they included some acknowledgement of the other side and/or evidence that you have taken the time to walk in the other side’s shoes.

          Ron said . . . If you have specific examples (now, or in the future) where you believe that I’m overly-passionate, feel free to point them out.  I do listen to what you and others have to say, even if it doesn’t appear that way.

          You are always passionate.  That is your nature.  I’m less concerned about the over-passion than I am about the lack of balance in the way that passion is applied.  Said another way, you are very selective in your passions … exclusive rather than inclusive.   I personally prefer a more ecumenical approach.

        15. Ron Oertel

          Ron said . . .  But there’s a certain imbalance of power, regarding development interests.  One wealthy individual (or a small group) can essentially throw an entire community into turmoil.

          Matt:  “Isn’t that part of the fundamental nature of democracy?”

          It’s a fundamental part of capitalism.

          Ron said . . . The articles themselves don’t encourage this, either. (They are, in fact, chock-full of one-sided “passion”, along with selective biases regarding facts.)

          Matt: “That is a fair criticism.  David does use the Bully Pulpit in a fair number of his articles … and on a broad range of topics, not just land use.  With that said, David does attempt to portray “the other side” of most of the issues he covers.  In my opinion, you would achieve better balance in your comments if they included some acknowledgement of the other side and/or evidence that you have taken the time to walk in the other side’s shoes.”

          Me: “The majority of David’s articles consist of advocacy.  That’s generally what commenters (not just me) respond to.  I’m not claiming to be a reporter.  I also don’t have the resources or inclination to “walk” in a developer’s shoes.”

          Ron said . . . If you have specific examples (now, or in the future) where you believe that I’m overly-passionate, feel free to point them out.  I do listen to what you and others have to say, even if it doesn’t appear that way.

          Matt: “You are always passionate.  That is your nature.  I’m less concerned about the over-passion than I am about the lack of balance in the way that passion is applied.  Said another way, you are very selective in your passions … exclusive rather than inclusive.   I personally prefer a more ecumenical approach.”

          Well, earlier to you said that you don’t “trust” those with passion (or something to that effect.  Now, you’re stating something slightly different.

          At first, I didn’t trust you, as you don’t seem to have any grounded or discernible vision regarding growth and development.  In some ways, I “trust” those who acknowledge their views, more than those who don’t – even if they’re the opposite of mine.  However, I have since gotten to know you, and believe I have some understanding of your interests and motives. (Your “passion” is in fact there, whether or not it’s obvious or if you acknowledge it.)

          For what it’s worth (as if it were some kind of “litmus test” for you), I am not “passionate” about the majority of issues.

          I cannot engage in lengthy discussions about this today.

      2. Alan Miller

        not just at the 100,000 foot level . . . . but rather at the 10,000 to 5,000 foot level.

        More like the 42′ level, MW, if you get my drift . . .

        1. Matt Williams

          That went over my head Alan.  Why 42 feet?  That is a pretty granular perspective.  I don’t think we have a good enough sense of the broad brush strokes to warrant dropping down into that detailed a level of specifics.

        2. Alan Miller

          MW wins . . . oh, shoot, two of you have the same initials.

          MWe wins!

          MWi . . . you may want to think about the major elephant-in-the-room/point-of-discussion at the last DPAC meeting.

        3. Matt Williams

          Thanks Alan.

          Although, I would say that your elephant was one of the elephants in the room Thursday evening, but it wasn’t the biggest elephant in the room.  IMO there were at least two elephants that were bigger than that one.  MWe probably has a fourth elephant that he would put above your elephant as well.

        4. Alan Miller

          Matt, you are going to have to open a Davis animal safari for invisible, implied elephants, if you keep up this line of reasoning.

          I wonder if there is an opportunity for economic development in one of those?

        5. Matt Williams

          MWe’s elephant would probably be highly uncomfortable in an economic development zoo.  If the sign at the zoo’s front gate said “Status Quo Vadis” his elephant would go into total rebellion.  At the risk of putting words into MWe’s mouth, I suspect his choice for the theme song of the Downtown Plan process would be the Savoy Brown song Train To Nowhere

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