Commentary: Housing Issue Figures to Be Tricky to Thread the Needle

A poll released over the summer showed that the top issue among Davis voters was the issue of affordability of housing.  We have seen some other polling that internally bears that out as well: affordable housing, not necessarily subsidized big “A” affordable housing but housing that is affordable, leads the way in Davis in what is a sea change.

Given the perhaps surprising robust support for housing at the polls last year in June on Nishi and in November on WDAAC (West Davis Active Adult Community), it seems the polling is borne out.

But that’s where it becomes tricky.  Affordability itself is a difficult matter.  While Davis is not the Bay Area, the cost of housing here is quite high.  Market rate housing figures to be costly.  The average home price in Davis was around $600,000 by one measure – that’s more than other areas in the Sacramento region but pales in comparison to the $1.4 million cost in San Francisco.

Still, the question of how you achieve affordability for homes is vexing.

All the more so because all signs point to a renewal of Measure R by the public next year.  We have not seen polling numbers on that question as of yet.  We have also not seen a council discussion on what renewal looks like.  But based on past results, we would estimate that Measure R would be renewed somewhere in the range of two-thirds to three-quarters of the vote.

That is significant because not only does Measure R figure to restrain any peripheral growth, it also puts a limit as to how much the city can create affordable housing through the increase of supply.

That means there are two other possibilities.  One is affordability by design.  There has been talk about tiny houses.  But given the cost of both land and construction, even small homes figure to be costly.  It would be hard to imagine getting the cost of a new home much less than $400,000 – that would clearly be more affordable than median and well below the cost of new homes at the Cannery, but the cost remains prohibitive.

Affordable housing – big A – remains difficult.  To date, the legislature has dealt with some affordability – for instance, through the affordable housing package signed into law in 2017.  But that is not a replacement for RDA (Redevelopment Agency) funding.  As a result, most of the affordable housing that will be available in Davis will be bootstrapped to market rate housing.  In addition, most of that housing will be rental rather than ownership housing.

With the likelihood that Measure R will remain in place another decade and the current lack of RDA funding for affordable housing, locations for housing seem quite limited.

For the most part, the city and university have provided about 13,000 or so new beds for student housing.  At least for the time being that would seem to meet current needs for increases in student housing.

Increasingly, people have looked to the need for workforce housing as well as family housing.

As I have argued previously, for the most part we should be looking toward houses rather than apartments to meet the needs of housing for families.  Apartments tend to be expensive for families, they are small, and they lack a lot of the desirable needs for children.

But again, looking at maps, it is hard to see where there is going to be a good deal of single-family homes or even a lot of townhouses in the future for families.

Workforce housing seems a bit more likely.

We have the approved project on Chiles that will provide some workforce housing.  The University Research Park (URP) is looking at a mixed use project that could provide for some workforce housing, particularly for employees at the URP.

We see a draft EIR for the University Commons which has been designated for student housing, but we think, given the 4000 beds approved by the city already, that housing might be better suited as workforce housing despite the proximity to the university.

Finally, while it is in its early stages, there are roughly 850 units proposed at the Aggie Research Campus, which would be primarily workforce housing for the employees at the new park.

One area of interest is also the downtown.  We have noted it is underutilized in terms of overall land use, and the downtown plan which has been released in draft form contains proposals to consider mixed-use there as well.

Housing is a key component.  But that comes with some caution.

As the plan indicates: “The analysis of market conditions has shown that there is adequate housing demand, but supply has been hampered due to constrained infill conditions (such as small parcel sizes) and a cumbersome regulatory process.”

Housing in the downtown figures to be small and dense, but amenable to workforce housing needs.

Given the cost of housing, we will likely be looking at greater intensity and density for development in the core.

But Matt Kowta from BAE Urban Economics told the Vanguard, “While variance from project to project could be significant, I think the financial analysis demonstrates that it will be challenging for developers to put together feasible projects in the downtown area, particularly if they have to acquire sites in the open market that most likely include an existing structure with some economic life left.”

The analysis shows that if the city wants redevelopment, they are going to have to reduce costs and risks.

Finally, outside of the immediate issue of housing are issues like jobs-housing balance, where we have a large number of people who work in Davis, but are not able to afford to live in Davis and thus commute into town.  At the same time, a large number of people who live in Davis have not been to find jobs in town, and thus commute to Sacramento or the Bay Area.

The result of this along with regional housing-jobs issues has created huge traffic problems internally in Davis, as well as on the freeways.

On the one hand, voters and residents of Davis are concerned about the cost of housing and availability of housing – but on the other hand, many are complaining about things like traffic congestion and the lack of available parking, especially in the downtown.

All of this will make the issue of addressing housing very tricky in the coming years.

—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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33 Comments

  1. Don Shor
    Small ‘a’ affordable housing in Davis —

    6 homes for sale in Rancho Yolo as of 11/13/19:

    $85,000
    $150,000
    $219,800
    $189,500
    $140,000
    $199,500
    Sq ft range from 1000 to 1536.
    1. Bill Marshall

      Third rail in Davis… manufactured housing/mobile home parks… no one wants to talk about it…

      Rancho Yolo works. Look at the $/sf Don cites.  Of course,in addition to the cost of the unit, there is still the ongoing cost of the rental of the space…

        1. Bill Marshall

          How so?

          Affordability?  School District and City use “manufactured housing” all the time for offices and classrooms… My entire career in Davis was in “manufactured” structures, most in a double-wide trailer… (“trailer trash” for 27 years… and proud of it!)[ we were told it would be 5 years, tops… est. off by a factor of 6 (mine was just removed)]

          Replicable?  Ahhh… now we are talking political acceptance, political will?  Yeah, the third rail that no one wants to touch… and I ask, why not?

          It works.

        2. Bill Marshall

          Where’s the next mobile home park going?

          Anywhere ANY new development, within or without the City limits is going… can see that you don’t even want to touch that third rail… just want to dismiss it…

          But to respond, lower half of Covell Village site?  Nugget fields?  Vacant parcel east of intersection of Cowell/Drummond/Chiles?  Any would work by infrastructure and transit.

          So… is it politics, or feasibility, or affordability?

          Or, do you have a problem with manufactured housing, trailer parks?

          1. Don Shor

            Apparently you have to call them “tiny houses” to make them trendy and acceptable.
            With manufactured housing, an owner can build equity even if they don’t own the land. It’s a simple, market-based answer to the question of how to provide affordable housing. Every new subdivision should include the option of small housing units on small parcels of land.

        3. Richard McCann

          Having worked with mobilehome park industry on utility issues the last two decades, I don’t think that there will be any new communities that use the home owner/land rental model in the future. Park owners see too much state regulation and they are now largely prevented from converting their land to higher value uses. Very few parks have been built since 1981 and almost none since 1997. (The number has been shrinking for decades.) MHPs were intended to be transitory land uses in the 1950s and 1960s so landowners were willing to accept below market rents as they waited to replace the mobilehomes with foundation-built residential and commercial space. (Even the energy utilities viewed these as temporary–they refused to provide the line extension allowances given to other developers, and as a result the MHP owners built private utility systems.) That option was foreclosed in 1977. Now, the MHPs are managed by long-time owners (often families) who have paid off the land cost long ago. Due to high land costs, there no incentive to build new MHPs under current conditions compared to other rental properties. The only MHPs that might be build in the future will have MHP-owned housing that is rented out, not owned by the residents.

        4. Rik Keller

          As far as Don Shor’s assertion that MHPs would be a “market-based answer to the question of how to provide affordable housing,” they are as viable as other market-based answers—that is, not very much at all.

          1. Don Shor

            As far as Don Shor’s assertion that MHPs would be a “market-based answer to the question of how to provide affordable housing,” they are as viable as other market-based answers—that is, not very much at all.

            There are hundreds of people living in manufactured homes in and adjacent to Davis right now, at some of the lowest costs of housing per square foot in the area. So obviously it is one option. As rental housing, the existing parks are very beneficial to local workers who are in lower-wage jobs. I suggest not dismissing the utility of portable housing in addressing affordability. My opinion is that it’s going to take a mix of market approaches, mandates, rezoning, and probably annexation to get anything like affordable housing in Davis.

          2. David Greenwald

            But there are two variables here – only one is construction, the other is the lack of land ownership.

        5. Rik Keller

          As R McCann points out, MHPs are simply not going to get get built by the free market because of a lot of reasons, one of which being they aren’t as profitable as other development options.

        6. Alan Miller

          I don’t see how tiny houses pencil out, when developers are claiming you can’t even make a profit on three stories.  Even tiny houses are only gonna so many people on an acre of land, even with tiny backyards and a tiny driveway.

  2. Rik Keller

    This article that supposedly discusses affordable housing in Davis somehow manages to avoid discussing how affordable housing actually gets built in Davis. The City’s inclusionary housing requirements were severely reduced last year on a “temporary” basis. But the City never ended up producing the reports and analysis it promised at the end of last year.

    So instead of the historic production of about 25% of all units as affordable in the past 10-15 years, now it is looking like around 10% with the various loopholes that developments like Nishi & WDAAC have taken advantage of.

    Why is the Vanguard avoiding the real issue?

    1. Craig Ross

      The real question is why are you debating 15 or 35 percent when you know full well that the only way to build affordable housing these days is in conjunction with market rate housing.  And you’re against market rate housing.

  3. Rik Keller

    You keep using that word “bootstrapped”. I do not think it means what you think it means.

    [hint: “In general, bootstrapping usually refers to a self-starting process that is supposed to proceed without external input.”]

  4. Ron Glick

    “But based on past results, we would estimate that Measure R would be renewed somewhere in the range of two-thirds to three-quarters of the vote.”

    Past results are no guarantee of future returns.

    Your speculation is based on nothing. You might as easily have used the first Measure J results where there was some opposition and it barely passed. Now with 20 years of experience you are likely to see a vigorous opposition campaign and anybody’s guess as to the outcome.

    Vote no on renewal!

  5. Bill Marshall

    Having worked with mobilehome park industry on utility issues the last two decades, I don’t think that there will be any new communities that use the home owner/land rental model in the future.

    Please note I made two points… manufactured housing, and mobile homes…

    Note that UCD has and continues to use “the homeowner/land rental model”… Aggie Village, for ex., and I believe in West Village… they use 99 year leases (land rental)… the structure can appreciate in value…

    But it is clear that no one really wants to talk about the possibility of different models, and/or manufactured housing… I still believe there is real potential in those that would provide affordable housing in a pragmatic way… but is clear that nearly all are dismissive, so…  whatever…

    1. Don Shor

      But it is clear that no one really wants to talk about the possibility of different models, and/or manufactured housing… I still believe there is real potential in those that would provide affordable housing in a pragmatic way… but is clear that nearly all are dismissive, so… whatever…

      Yep. It seems the views are some combination of
      — nothing can really be done,
      — try to force developers to build more affordable housing
      — try to shoehorn more affordable housing into high-density infill projects.
      If you want families to move to Davis, you’ll need houses with yards. Kind of like what they’re building in Woodland. If you want them to stay, they need to be able to build equity.
      Basically I hear a lot of lip service for affordable housing and family housing, and a whole lot of people using the vague term “workforce housing,” but no discussion of any actual ways to get stuff built.

      1. Rik Keller

        Don: like I said before, this article is ignoring how affordable housing has actually gotten built in Davis. There is plenty that can be done. Why hasn’t the City Council taken any action to address revising its affordable housing requirements like we were promised by June 2019? Why aren’t you addressing that?

        Or you could just keep bemoaning the fact that the free market is keeping new mobile home parks from being built.

         

         

         

         

         

         

         

         

        1. Don Shor

          I’ve made my suggestion several times. Rather than repeat it, I’ll just cut and paste.

          Davis, like every city, needs to plan now for what housing is going to be built over the next 10 – 30 years.
          — 8/7/19

          IMO it is time for Davis to consider a new subdivision as it updates the housing element of the General Plan. If the region is growing, Davis will need to grow along with it. I don’t personally believe that higher-density infill is going to meet the needs of most of those who are seeking housing in this area.— 8/7/19

          But in any event, you are not going to get to the numbers that are likely needed just with infill. Annexation of land for a new subdivision is realistically the only way to get enough new housing units, with prescribed percentages of variously-affordable housing units. Since I don’t think the owners of the Covell Village site are interested in another ballot fight right now, that leaves pretty much the northwest quadrant.

          Affordability will only happen if it is mandated. — 7/22/19

          If there is a desire to provide housing for people who work in Davis, we can start talking about housing development further north inside the Mace Curve, or actually building on the Covell Village site (yeah, right), or creating a new subdivision out by the hospital. — 7/5/19

          Better get going on planning for the northwest quadrant. You know what gets planning underway? Proposals by developers. There’s always a lot of talk about revising the General Plan and all, but planning in this town takes years and years – until someone comes along who actually wants to build something. I think WDAAC is an excellent start, and that subsequent housing over the next couple of generations in the northwest quadrant should be planned to meet the needs of other market segments. — 10/12/18

          If you really want to provide affordable housing, you’ll need to provide direct housing vouchers, adopt rent control, or annex some new land to build a new subdivision and mandate high densities. — 9/17/17

        2. Rik Keller

          Don Shor stated “ Affordability will only happen if it is mandated.”

          I agree. So why don’t we discuss the City reducing its mandated affordability percentage on an “interim” basis last year. and why it has not provided the analysis it promised and the updates to that mandate? How many other projects are going to slip thorough under these highly weakened mandates?

        3. Rik Keller

          Don Shor. Let’s be really clear here—most of your suggestions for addressing “affordable housing” do nothing to address affordability. They do support people who want to make a lot of money building market-rate housing for the well-to do. And many of them will exacerbate the affordability problem.

        4. Bill Marshall

          … how affordable housing has actually gotten built in Davis.

          Where is the currently affordable housing in Davis?

          Looking for clarification. You say, Rik, that it has been built… so where is it? Is it currently affordable?

      2. Alan Miller

        I hear a lot of lip service for affordable housing and family housing, and a whole lot of people using the vague term “workforce housing,” but no discussion of any actual ways to get stuff built.

        I saw comedian Lewis Black recently, and he did a whole segment on how he learned that “If I think it . . . IT IS!”.  The bit was about Donald Trump, but could just as easily apply to the Vanguard.

        The fact is simple . . . it costs a lot to live in Davis, and it always will.  And the more you try to manipulate that with government well-intentioned schemes (A-ffordable housing, Measure R), the higher the price will be overall, with a few people benefitting . . . a few tenants, a few government bureaucrats and a few developers who play in the so-called A-ffordable housing game.

        1. Ron Glick

          “Addressing the housing affordability crisis requires all sectors – business, philanthropy and government – to step up and collaborate on solutions that make significant contributions toward housing production,” said Governor Newsom. “No single approach will solve this problem.”

          I’ve come to the realization that demanding A-ffordable subsidies from developers isn’t going to help the overall situation much. Newsom is right to try to shake some money free from the private sector statewide. Here in Davis the state should pony up and subsidize building housing on campus for low income students. The public/private for profit model might be good for those with education accounts or rich parents overseas but large numbers of students don’t have those advantages and are coming out of school deeply in debt. Students who don’t want to live on campus might be enticed into doing so if they could get cheap rent in apartments subsidized by UC.

          Newsom could accomplish several goals at once by building not for profit, subsidized housing, for poor students on UC land. This would help the overall supply demand balance in Davis if UC housing production continued to exceed growth in enrollment.

        2. Bill Marshall

          who play in the so-called A-ffordable housing game.

          In the highlighted word, you nailed it, Alan… it is just that.  A game…

          Where very many are ‘playing’ or being ‘played’…

          Noble concept, ignoble results…

  6. Bill Marshall

    Maybe the gov’ment should own all the land . . .

    That’s actually what an amazing # of people in Davis believes already exists… that they should have exclusive rights to determine what gets built, when, and how (time, place, manner)[a sign of “ownership”]… Measure R is a good example… as are the outcries over any rezoning, or even uses within existing zoning… many examples…

    Many citizens (collectively, the government) have this strong need to have power over, control others… to their own ends, fitting their own views… so much for ‘self-determination’… many feel justified in that view, as they see ‘developers’, or others, as having power over, controlling them… irony?  The “H” word?

    [edited]

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