Commentary: Does Davis Need More Jobs, Diversified Economy?

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Assuming the project goes forward, Davis residents will be asked to vote on whether or not to approve the Aggie Research Campus.  The developers for the project are estimating that roughly 5882 jobs will be located at the proposed development.

A question that some have asked is whether Davis needs additional jobs.  There are various metrics that we can look at.  Some that have been cited are the city’s relatively low per capita retail sales leading to a low sales tax yield – as compared to both other college towns as well as other regional communities.

There is also the overall lack of diversification of the economy and the large number of people who are traveling to and from Davis on a daily basis.

From a public opinion standpoint, the polling that we have seen shows that for the most part the generation of 5882 jobs is seen as a positive – only a tiny portion of the population sees the creation of thousands of new jobs as a mostly bad outcome, and it is somewhat intriguing that about as many see it as neutral as see it as mostly good.

Adding nearly 6000 jobs is not a small thing when we look at the overall job picture in Davis.

The 2017 state of the city report estimated that the city had 13,847 jobs in 2015.  The top five industries were: Accommodation and Food Services (18.3 percent), Health Care and Social Assistance (16.6 percent), Retail Trade (16.0 percent), Government (13.0 percent), and Professional and Business Services (12.2 percent).

This figure does not include UC Davis employment on the campus.

The report notes: “According to the UC Davis Office of Budget and Institutional Analysis, 12,181 staff and faculty were employed within the City of Davis during the 2015-2016 academic year, while another 12,097 were employed outside the City of Davis in locations such as the UC Davis Medical Center in Sacramento, the UC Davis Marine Laboratory in Bodega Bay, and the Lawrence Livermore National Laboratory.”

The Draft LRDP anticipates on-campus employment, excluding student employees would increase “to 14,500 employees by the 2027-2028 academic year.”

Two pieces of data, however, paint a less rosy picture.

The state of the city report notes that “the top 10 employers accounted for 46.3 percent of all jobs in the city. UC Davis accounted for the largest share of employment (36.9 percent). Other top employers included public employers such as the Davis School District, the City of Davis and Unitrans, healthcare providers such as Sutter Davis Hospital and Kaiser Permanente Medical Center, grocery retailers such as Safeway and Nugget Market, and utility provider, Pacific Gas and Electric (PG&E). Each of these other top employers accounted for less than three percent of total citywide employment reported by the CAFR.”

That shows the city is reliant heavily on government jobs, health care, and services.

Further, the report continues to note the lack of retail in Davis.

The report writes: “Although Davis represented around 32 percent of the countywide population in 2014, according to the BOE, retail establishments in the City of Davis facilitated only 15.6 percent ($589,194) of countywide taxable sales, compared to West Sacramento and Woodland which facilitated 36.7 and 24.3 percent of countywide taxable sales.”

Finally there is the area of jobs-housing balance.

The report notes that the policy approach for much of the 20th century has the creation of “an artificial separation between jobs and residences in communities throughout the nation. Among the many unintended consequences of this policy approach are the lengthening commute distances.”

To solve this problem, the report notes that “the planning community has increasingly embraced the broad goal of promoting a better balance between the number and types of jobs available in a given place and the number, type, and affordability of the housing within the same area.”

The state of the city report finds that the ratio of jobs to occupied housing units was “equal to approximately 0.54:1 in the City of Davis” where the “ideal ratio of jobs to occupied housing units, or households, would typically range between 1:1 and 2:1.”

The report notes that there were approximately 28,465 persons employed within the City of Davis and on the UC Davis main campus in 2014, about 73.8 percent of those were in-commuters – they lived outside of the Davis area.

On the other hand, there were 24,204 employed residents in the City of Davis and on the main campus, about 69.1 percent of those employed residents were out-commuters.

Writes the report: “The intensification of cross-commuting patterns, including an increasing rate of both in-commuting and out-commuting, reflects a growing disconnect between the employment opportunities available within the Davis area and the characteristics of Davis as a residential community for workforce households.”

This is crucial to understanding the nature of the problem.  It is easy to say that there is a net-in flow of jobs and therefore we have the jobs we need.

But that’s not what is happening.  What is happening is that we have a mismatch between the jobs we have and the ability to house the people working here.  While at the same time, we do not have the jobs in Davis to support the majority of people living here.

The report notes: “[W]ith an existing net inflow of workers (i.e., jobs minus employed residents), an average residential vacancy rate of only 3.7 percent (and a multifamily rental vacancy rate of only 0.2 percent), and little new housing development, the community’s existing cross commuting patterns are likely to intensify, corresponding with upward pressure on area housing prices.”

The figure points to the need, of course, for more workforce housing in town.  But some people will argue that creating additional jobs will simply exacerbate this problem.

The Mace Ranch EIR notes that between “1,215 to 1,377 of the 5,882 innovation center employees are anticipated to live and work on the Mixed-Use Site. Therefore, 4,505 employees are not anticipated to live on-site.”

Will existing housing accommodate them?  Will many of them have to commute?  Should we build more housing on-site in hopes of housing them?  Should we build more workforce housing in Davis, possibly at the Signature site across the street?  All of these are realistic concerns.

There is one more critical area of concern that we should look at.  The decline of the working population and the age increase in Davis.  We are seeing an increase in people in the college age range, and a decrease in people age 30 to 50, with an increase in people over the age of 60.  There is nothing new in this data, but it means we have less in the way of working population – people with jobs and kids – and more in the way of students and seniors.

Moreover, we have a brain drain.  UC Davis has one of the lowest student retention rates among comparable universities, with just 23 percent remaining in the metro area.  And yet as we know the majority of graduates at UC Davis are in STEM fields – fields that would be attracted to and perhaps have the opportunity to stay if we had high tech and research-oriented jobs to offer upon graduation.

It is here that I think the story most favors the need to create nearly 6000 local jobs in STEM fields that could help to retain recent graduates, and becomes a reason for people in the 30 to 50 age range to stay in town rather than take their degrees and utilize them elsewhere.

I do think we need to be honest here though – we need housing which enables those people to not just work in town, but to live in town.  The housing proposed at ARC is probably not enough based on the EIR estimates, but in combination with other projects and workforce housing, it can help improve the housing-jobs balance and provide jobs, enabling more people of working age to live in Davis.

Will some view this otherwise?  Of course.  There are those opposed to housing growth who will see added jobs as a reason for more housing.  But I believe the overall fiscal picture in Davis calls for more of these types of jobs to improve our overall balance.

—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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58 thoughts on “Commentary: Does Davis Need More Jobs, Diversified Economy?”

  1. Rik Keller

    If you are familiar with the children’s book, this article exemplifies the “If You Give. A Moose a Muffin” approach to city planning of the Vanguard. Nothing is ever enough. The Vanguard pushes expensive student and senior housing projects that crowd out workforce housing. Then it says that—despite a jobs/housing balance that is heavily tilted to an excess of jobs—we actually need MORE jobs. Then it will say that we need more workforce housing. And then  it will push projects that don’t actually provide affordable workforce housing. Nothing will ever be enough.

    And, on a side note, why is the Vanguard using a drawing of a 1,121-foot Comcast office tower in Philadelphia to illustrate this article?

     

    1. Ron Oertel

      That’s right, Rik.  In my opinion, it’s no “accident” – but is part of a larger political plan on this blog (that one could have seen coming from a mile away).  Focus on one “shortage” at a time – which will never end.

      It’s difficult to understand why those who claim to be concerned about shortages and cost of housing (now) want to exacerbate the situation.

      If ARC (and its 4,340 parking-spaces) are somehow approved, this will almost certainly lead to more political advocacy to develop additional peripheral lands.  In fact, that effort has already been hinted about on here.

      [edited]

      1. Craig Ross

        It’s not that hard to understand.  These things aren’t black and white.  In order to deal with the decline of the middle class/ working age population, we need economic development.  This article does a good job of showing that within these trends, is a common theme – we have an imbalance.  The university provides employment, but we lack private sectors drivers that would enable young STEM grads to find jobs and shift the balance in town.

        1. Ron Oertel

          Who, exactly is claiming that the wide range of jobs at UCD aren’t occupied by middle-class/working age populations? In fact, aren’t some claiming that this is EXACTLY the population that is occupying many of those jobs?

          Many of whom (already) commute into town, from cheaper surrounding communities? Which will remain cheaper (with perhaps an even bigger discrepancy in price vs. Davis), if ARC is approved?

    2. Ron Oertel

      The effort to add more jobs than the community needs might be referred to as creating “artificial demand” for more housing.

      Also, not sure how or why some apparently expect new residents to “pay off” the city’s pre-existing bills.

        1. Ron Oertel

          ARC would be an example, if you examine the existing net inflow of commuters through Davis. 

          Or, if you “don’t like” that metric, perhaps examine the local unemployment rate.

        2. Craig Ross

          So ARC would be an example of non-artificial demand?  I agree.  You build ARC, companies want to move here now that there is space, they bring with them jobs and the demand for more housing.  I agree, that’s not artificial.

        3. Ron Oertel

          I meant that ARC is an example of “creating” artificial demand for more housing/sprawl (which otherwise wouldn’t exist).

          Low-income people would be further priced-out, by ARC – if anything. (Via increased housing costs, and jobs that for the most part – are intended for those with already-excellent employment prospects.)

    3. Richard McCann

      “The Vanguard pushes expensive student and senior housing projects that crowd out workforce housing.”

      Additional student and senior housing draws those populations out of the existing workforce housing that they now occupy. There’s no reason why we need to build new workforce housing–it already exists widely across the city. Targeting specific populations that shouldn’t be living in that housing is a good policy path.

    1. Craig Ross

      It’s weird.  Rik is constantly attacking the Vanguard.  The article he refers to is based on a Wall Street Journal article which has analysis and a data presentation.  Has he written the author of that article as well about his use of the data?  Moreover, the data that Rik refers to is more subjective than he lets on.  Several posters pointed this out.  Yet, Rik continues his attack.  All of this is basically ad hominem anyway – none of it has anything to do with this article.  But I hope Don leaves this up so people reading this can understand what’s going on here.

        1. Rik Keller

          Ron O.: Greenwald naively cited a WSJ article that talked about 2019 to 2005 data and didn’t factor in the post-Katrina shock and Great Recession reduction of travel demand. As U.S. Federal Highway Administration data clearly and unambiguously shows, U.S. per capita VMT has been trending steadily upward in the last decade, with a 5% increase in the past 5 years. With population growth, there has been about a 10% rise in total VMT in the past 5 years.

          The Vanguard then used this completely mistaken assertion that driving is decreasing as a justification to push for local  development.

        2. Richard McCann

          And I pointed out that Rik misread the US DOT data, and in fact the growth in 2019 is consistent with a FLAT per capital VMT, not a “spike”. And the correct interpretation is to look over an extended period, not the last 5 years of an economic recovery period. More data cherry picking.

        3. Matt Williams

          I agree with Richard that Rik has misread the Federal Reserve Economic Data, which is available at https://fred.stlouisfed.org/series/M12MTVUSM227NFWA and titled “Moving 12-Month Total Vehicle Miles Traveled”  The beginning value for the 10-year period is 2,958,113 million VMT and the ending value is 3,250,407 million VMT.  As Rik correctly reported that is a 9.9% increase over the 10-year period from 2009-2019. 

          During that same 10-year period the US Census website data shows a US population of 306,770,000 at the beginning of the period and 329,745,560 at the end of the period, which amounts to a 7.5% increase over the 10-year period from 2009-2019. 

          So the per-capita rise over 10 years is at most 2.5%.

          And, given the original premise of the article … about personal VMTs, it is important to note that the Federal Reserve Economic Data includes truck travel (both commercial and personal), bus travel, and taxi/ride hailing travel.  My personal belief is that truck travel is up significantly due to the increased frequency of internet commerce and its related increase in personal package delivery.  The evidence for that personal belief is the fact that Amazon has started from scratch its own delivery system that is now as large as its close rivals FedEx and UPS.

           

           

        4. Rik Keller

          McCann stated “And I pointed out that Rik misread the US DOT data, and in fact the growth in 2019 is consistent with a FLAT per capital VMT, not a “spike”. And the correct interpretation is to look over an extended period, not the last 5 years of an economic recovery period. More data cherry picking.”

          And you were wrong then as you are now. The ‘cherry picking” was the WSJ article that Greenwald naively cited and tried to claim a decline in driving.

          The actual 5-year figures for total VMT from the U.S. Federal Highway Administration (in millions of miles) divided by total civilian population estimates from the Census Bureau

          3,250,407 VMT/328,744,045 population = 9,887 VMT per capita (October 2019) = 4.7% increase in per capita VMT in 5- year period from 2014
          3,013,226/319,005,484 = 9,446 VMT per capita (October 2014)

          And over the last 5 years, total VMT has increased 7.9%.

          Based on having done the calcs in 30 seconds on Sunday morning I commented this:

          Driving is actually tending [sic] upward based on U.S. Federal Highway Administration data. In the past 5 years, per capita VMT in the U.S. has increased by about 5%. Add in a population increase of about 4% over the last five years, and that’s about a 9% increase in total driving miles.

          Yet the Vanguard article stated “Driving is Trending Down, but Don’t Tell People in Davis”.

          That was wrong.

           

           

           

           

           

        5. Rik Keller

          Matt W.: my statement was correct. See the above. And you should realize that you were not quoting “Federal Reserve Economic Data,” but rather Federal Highway Administration data.

        6. Matt Williams

          Rik, click on the link I provided.  The webpage I quoted is clearly labeled as  “FRED Economic Data.”  The underlying source of the quoted data is indeed the U.S. Federal Highway Administration, but since I did not have access to that data, I was clearly not quoting it.

          You really love to pick nits.

          Also, you may want to reconcile your two statements in this thread “U.S. per capita VMT has been trending steadily upward in the last decade, with a 5% increase in the past 5 years. With population growth, there has been about a 10% rise in total VMT in the past 5 years.” and “And over the last 5 years, total VMT has increased 7.9%. 3,250,407 VMT/328,744,045 population = 9,887 VMT per capita (October 2019) = 4.7% increase in per capita VMT in 5- year period from 2014”

          Note, according to the US Census website the 10/1/2019 US Census was 329,745,560 , which reduces your 4.7% down to 4.3%.

  2. Ron Glick

    Where I come from jobs are good. They provide people with money to support themselves, their families, other economic activity, pay taxes and give to charity. Jobs offer people experience and training  to help get better jobs. Jobs also help people rise from poverty and gain self respect.

     

    1. Rik Keller

      Ron G stated “Where I come from jobs are good.” Then it’s a good thing that Davis has lots of jobs. So many jobs–and good jobs at that–that Davis is a net importer of commuters from other areas who see the jobs as a good thing. So many jobs that our jobs-housing balance is heavily tilted toward jobs. The latest SACOG RTP recognizes this high jobs/housing ratio as excessive and calls for the Davis area to reduce this ratio. It calls for more jobs to be located closer to population centers, not on the periphery of the region–especially not in Davis where the commute times in are already the longest in the region.

      1. Don Shor

        It calls for more jobs to be located closer to population centers, not on the periphery of the region–especially not in Davis where the commute times in are already the longest in the region.

        Yes, that is why SACOG supported the 2016 Nishi project. Did you?

          1. Don Shor

            SACOG wrote a letter specifically supporting the 2016 version of the Nishi project. Did you support it? Did Rik?
            A simple way to address the jobs/housing imbalance is to build more housing.

        1. Rik Keller

          Don Shor stated “A simple way to address the jobs/housing imbalance is to build more housing.”

          You are also following the “If You give a Moose a Muffin” planning model: if a big hungry moose comes to visit, you might give him a muffin to make him feel at home. If you give him a muffin, he’ll want some jam to go with it. When he’s eaten all your muffins, he’ll want to go to the store to get some more muffin mix….

          You are supporting a project that will throw the job/housing balance even further out of whack. And this Vanguard blog has already supported giant projects (Nishi, WDAAC) that will do nothing for workforce housing. And then you’ll come back and demand even more housing.

          1. Don Shor

            You are supporting a project that will throw the job/housing balance even further out of whack.

            I support a business park on that parcel of land, and have supported that for several years, pretty much from the start of the Peripheral Park Task Force process and especially through the debate about conserving Mace 391 to the north in an ag easement. As to the specifics of the ARC proposal, I feel that the housing component is unwise.
            I have stated on this blog more than once that it is time for Davis to consider adding another subdivision. That would provide an opportunity to plan for “workforce housing” and set aside land for affordable housing, along with market-price housing with yards that would attract families. I’m not “demanding” anything. I think it would be prudent planning, and if the developers know in advance what is expected of them they will work within those parameters.

        2. Rik Keller

          Don Shor: yep, you are exactly illustrating “When You Give a Moose a Muffin.”

          In the interest of “prudence,” do you want me to run through the calcs again about how much additional housing is required just to maintain the current jobs-housing ratio imbalance in Davis with the addition of the ARC project? Or would you like to?

        3. Matt Williams

          Ron, the 2016 Nishi project was decidedly different from the 2018 Nishi project.

          The housing in the 2016 project was a (approximately 50-50) mix of ownership housing (3.6 acres) and rental housing (6.2 acres), combined with a research and development (jobs-creating) component (5.0 acres).

          The 2018 Nishi project converted the combined 8.6 acres of Ownership housing and R&D to rental housing, as well as 12.2 acres of open space, into a total of 27.0 acres of student rental housing.

      2. Richard McCann

        Rik

        You are ignoring the thrust of the article–that Davis needs to diversify its economic base. And this is exacerbated by the fact that the largest employer is outside of the city limits, so it doesn’t pay taxes directly and provides many services on campus so those quasi businesses don’t generate tax revenue either. (And it’s a fantasy if you think that will change.)

        Meanwhile, you oppose any new housing that will open up the existing workforce housing stock because you ignore the dynamics of the local housing market. Where do you think most of the Nishi residents will be coming from? I’ll tell you–the existing duplexes that now house students around town. And those duplexes will be affordable housing for our workforce.

        1. Ron Oertel

          Where do you think most of the Nishi residents will be coming from? 

          New enrollments.  The ones that UCD won’t provide housing for.

          You are ignoring the thrust of the article–that Davis needs to diversify its economic base.

          Not in terms of job availability (or stability), at least.  UCD is probably the most stable employer around.

          Regarding tax revenue, it would be reduced by any housing included within the development, and/or new housing that will be advocated for on here – in an endless “feed the moose” campaign. It’s already occurring.

          I’m still wondering why/how anyone expects new residents to pay the city’s pre-existing bills. Or, what will prevent this expectation to continue indefinitely, into the future.

          Perhaps we should examine why there isn’t sufficient market demand to prevent the city’s existing supply of commercial sites from being continuously converted to housing. Including the 2-3 other sites that were initially proposed for an “innovation center”.

        2. Eric Gelber

          Where do you think most of the Nishi residents will be coming from? I’ll tell you–the existing duplexes that now house students around town.

          How do you know that’s where most Nishi residents will be coming from, versus, for example, from on-campus dorms, or in-town large (not affordable) shared living arrangements?

        3. Ron Oertel

          By the way, can anyone “remind” us regarding the expected percentage of city property tax revenue from a development such as ARC, given the siphoning-off of the revenue from the county (e.g., pass-through agreement), schools, etc.?

          I recall a figure of around 20% or so, which generally goes to the city.

        4. Rik Keller

          McCann stated “ Meanwhile, you oppose any new housing…”

          Yet another false accusation from you. And your trickle-down housing theories are intellectually bankrupt. In higher-priced areas housing actually “filters up”. More market rate housing without strong government intervention simply exacerbates the affordable housing problem.

           

  3. Don Shor

    Myths To Live By: The Jobs-Housing Balance

    Essay by Wendell Cox

    Is it rational to try to improve the jobs-housing balance in urban areas or should people, not plans, decide where people live and work?

    Few articles of faith are more fundamental to the curriculum of urban planning seminaries than the jobs-housing balance. …. The seemingly rational response is to plan urban areas so that jobs are closer to employment. But seemingly rational isn’t enough.…

    Why does the physician living in the new urbanist development not take a job at the town centre beauty shop? Why does the urban planning firm not offer the next open position to the high-school dropout in the nearby mobile home park? Why does the resident of Tokyo suburb Honjo travel all the way to Omiya? What is it that impels the resident of Milton Keynes to travel to London’s Liverpool Street, ignoring the meticulous designs of planners intended to establish a self-contained new town in which jobs and housing are balanced?

    It is obvious enough — the job that meets the particular requirements and preferences of the employer and the employee is not next door. For the jobs-housing balance to work, other balances have to be present as well, such as the jobs-interest balance, the jobs-education balance, the jobs-skills balance and the jobs-household structure balance. In the US, more than 50 percent of households have more than one worker, and it is not unusual for them to set off in entirely different geographical directions in the morning.

    This is not to suggest that a jobs-housing balance is impossible. There were the company towns where virtually everyone worked for one employer which also served as landlord. …. There were, and still are small and medium sized towns far from large cities, but they are, for the most part, experiencing little growth or even withering away.

    These models simply cannot compete with the labor market dynamo that has become the modern metropolitan region. These are larger labor markets that draw a diversity of jobs and people to fill them. All things being equal, larger markets tend to be more efficient than smaller ones ….  [T]here is little that planners can do to develop the sub-regional enclaves that would be necessary to achieve the textbook jobs-housing balance.

    Among households that have recently moved, the [US Census Bureau American Housing] Survey found that convenience to employment was the most important reason for neighborhood choice only 22 percent of the time. If the data is weighted to reflect the actual distribution of all owner-occupied and rental housing, the number falls to 18 percent. There is little hope for planners to achieve a jobs-housing balance if more than 80 percent of households aren’t even playing by their rules. What all of this makes clear is that people do not regard optimal geographical jobs-housing balance as very important.

    The jobs-housing balance should be relegated to history, along with other discredited notions that seemed useful at the time, like high-rise public housing and alchemy. It is people not urban planning that determines where people live and work.

    https://www.planetizen.com/node/76

    1. Rik Keller

      Don Shor: I’m sure SACOG will be quite interested in your discredited discarding of the jobs-housing balance. I thought you believed in SACOG?

      In the meantime, this project would substantially worsen the problem of Davis being a net importer of commuters. From a regional planning perspective, it would be difficult to find a worse location for such a facility.

      1. Ron Oertel

        Rik:  In a sense, I view Don’s posting as more of an “acknowledgement” of the situation.  That is, people commute all over the place.  (And, residents from ARC would, as well.)

    2. Alan Miller

      DS, using an article by Wendell Cox to make your point wasn’t a great choice.  In my profession, Wendell Cox is widely disliked as a leading antagonist in media, advocating for the use of the private automobile over rail projects.  As such, his views on urban planning should be considered highly suspect.

      1. Ron Glick

        I had never heard of Wendell Cox until this exchange and then I found this interesting article by him on commute times that includes some highlights of his prestigious CV.

        http://www.newgeography.com/content/006504-revealed-preferences-the-30-minute-commute

        After reading this article I have no doubt that people at places like Sacog and other groups of urban and transportation planners don’t like his views but liking is different from challenging.

        Its also true that new geography challenges many of the Davis paradigms like densification by recognizing that  people prefer to raise children in single family homes.

        Sadly, combining single family homes with short commute times in EV’s powered by rooftop solar seems like a pleasant future somehow beyond the ability of Davis to grasp. Why? Because many in Davis are wedded to a history and culture of low value added commodity production and have as of yet failed to see that EV’s powered by solar are the future making the need for alternatives to cars less of an imperative.

  4. Ron Glick

    “In higher-priced areas housing actually “filters up”. More market rate housing without strong government intervention simply exacerbates the affordable housing problem.”

    If that is true Rik, and I don’t doubt that it is from my layman’s observation of the local market, what is the tangible solution?

        1. Ron Glick

          You can do it without RDA but you need government funding through other means. Market subsidies will only get you so far.

          I saw an interesting article in the Chronicle that compared the $60,000 cost/unit imposed by government policy in Oakland to the $160,000 cost/unit in San Francisco. The upshot is much more housing construction in Oakland than in S.F.

          The problem with market rate housing subsidizing Affordable is how to maximize Affordable housing production. How do you price the government imposed costs to achieve max Affordable. Is there some way to calculate that number? Rik? Richard?

        2. Alan Miller

          Is there some way to calculate that number? Rik? Richard?

          To build the amount of subsidized housing we should build in Davis, Alan says the best way to calculate that is to multiply zero times zero.

        3. Ron Glick

          Without subsidized housing we will never catch up on the housing deficit and will have more inadequately housed people in the future. I think the question is can we subsidize Affordable through a tax on market rate? Rik seems to think we can do a better job of doing so with the right incentives. However I’m not sure we can build enough housing that way to get caught up. Another path exists under different leadership at the federal level to assist our state leadership in a new New Deal program of housing construction to change market dynamics and relieve pent up demand.

          By the way the UCD campus would be the perfect place for such a program to provide low income students with housing instead of the current public/private model that encourages students to take on debt to pay rent.

      1. Rik Keller

        Ron G. asked “The problem with market rate housing subsidizing Affordable is how to maximize Affordable housing production. How do you price the government imposed costs to achieve max Affordable.”

        Thanks for asking! One key thing is how you set max densities and density bonuses (and other incentives). This should be done carefully in concert with real legit pro forma analysis (not the faux ones produced by Plecia & Co. for the City of Davis that the Planning Commission had problems with) to determine the the “financing gap” of affordable housing, If you set targeted density bonus correctly, you can bridge most of that gap, produce more affordable units, AND produce more total units and density.

        In my opinion, the City of Davis has done a TERRIBLE job of looking at density bonuses
        and/or modification of other site development standards such as zoning code requirements and or reduction in parking or other concessions with identifiable costs as a incentive for increased affordable housing production. Developers come in, demand these concessions up front, and also state (without any documented pro forma proof) that they couldn’t possibly afford to provide any affordable housing, and the City just rolls over.

        Two key concepts: 1) Increases in development costs do not (necessarily) equal increases in home prices and decreases in development costs do not (necessarily) equal decreases in home prices. Rates of return and market demand/elasticity have much to do with what happens.

        1. Rik Keller

          Ron G: put simply, a density bonus is an incentive that allows a developer to build more units units on a site than the standard zoning allows in exchange for providing a certain percentage of affordable units.

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