Commentary: Rising Housing Prices Force People Out of Davis, How Will Davis Respond?

Share:
Cannery was the most recent single-family housing development built in Davis – but the cost of housing there has been prohibitive

While the council has spent much of the year focused on putting out brush fires, the city’s released poll and several other private polls show that the biggest concern – by far – among voters is the affordability of housing and housing supply.  How that will manifest itself in the coming months where the voters will face a number of choices at the ballot box is anyone’s guess.

Yesterday, the Sacramento Bee featured a story capturing one aspect of the Davis housing crisis – the notion is one that we have heard anecdotally for a number of years – Davis residents are moving up Road 102 to what some have called “North North Davis” and what the Bee article calls “Wavis.”  (Link – warning, it is a subscriber-only article).

The article tells the story of Dave Heard, who raised his family in Davis, he describes his “heart and soul” is in Davis, but as his kids grew up, the upkeep on the house no longer worth it, and the search for homes in Davis found slim pickings – he and his wife moved up County Road 102 to Woodland “where hundreds of brand new homes were opening in the city’s southeast corner.”

Reports the Bee: “Woodland houses sell at roughly half the price of those in Davis. And the Spring Lake housing development off Road 102 was just a six-minute drive to Davis. It made Woodland an attractive new home.”

The Bee reports: “Davis real estate agents who once never sold properties in the blue-collar town now see a steady stream of sales every year. Builders are securing more than 100 building permits for new homes every year, eager to develop the cheap land buttressing a thriving metro area. Woodland officials hope with the city’s farming reputation — and the proximity of a major research institution in UC Davis — the city will bolster its economy by becoming a leader in agriculture and food technology innovation.”

The article quotes Woodland Councilmember Tom Stallard saying, “About half the home sales, I’m told, are to Davis residents.”

Of course, there will be repercussions in Woodland.  They note that the small-town feel of Woodland could be lost and the families fleeing “fleeing high-priced Davis” could end up driving “up the cost of real estate to a point where long-time Woodland residents will be forced out.”

They quote Woodland real estate agent Don Sharp saying, “It kind of moves one population out as the price goes up.”

They also quote Kim Eichorn, another real estate agent who said “most people looking to move from Davis to Woodland used to be empty nesters.”  But that is changing too.  She said that she “is more often helping young parents find new, relatively affordable homes in Woodland to raise their children while taking advantage of a school district policy that lets them keep their kids in high-performing Davis schools.”

The Bee reports: “The median home price in Woodland hovers around $420,000, roughly double what it was in 2012, according to data compiled by real estate agents and listing services. In Davis, the median listing price is closer to $675,000.”

“When you look at the commute distance to Davis and it’s only 10 to 15 minutes to most location,” Mr. Sharp said, “that’s very attractive to people who can afford a $550,000 new home in Woodland and that same home would cost $750,000 in Davis.”

There are a few other pretty interesting discussions.  One is that Woodland is now considering a “new zoning approach” in order to encourage denser housing with built-in retail and commercial space.  They have made some progress with this, but Woodland Councilmember Enrique Fernandez told the Bee “more needs to be done to entice developers to build high-density housing.”

But there remains the debate as to whether that is what potential Woodland home buyers are looking for.

They quote Davis real estate agent Cory Gold.

“Davis is talking about the same thing – a goal of 1,000 beds in the core area in the next general plan – and I can’t see that many people willing to give up their cars and start walking everywhere,” Mr. Gold said. “I think some people will, but the majority of people with families still want a yard, still want a garage for two cars.”

This provides us with some good data and some food for thought.

First of all, the issue of affordability of housing is a huge issue for Davis.  This is just another example that the cost of housing is forcing people out of town.

Second, the rallying cry for communities is preserving the character of the town – but the preservation of the character of the town leads to policies that end up changing the character of the town in other ways.

There is a lot of growing evidence that as the cost of housing rises – there will be fewer families with children and more and more Davis will become both a more exclusive community, with only those able to afford to live in Davis, staying here.  And it will become a more bifurcated town with more older residents and more college students, but fewer in the middle ground in the 30 to 50 range – the range with families and children.

We have discussed the district’s policy of allowing for out of district transfers – so people can move away from Davis but keep their kids in Davis school.  That has been a subject of much discussion and it would be interesting to explore whether that ends up being a good or thing for this community.

And there will be impacts on Woodland – people there will start to be priced out, will Woodland start to impose more growth control?  How will Woodland respond to these changes.

Finally the question is where Davis goes from here.  Voters have shown more of a willingness to approve Measure R housing projects.  How that impact things into the future?

We have a lot of questions and the city is nearly ready to embark on the General Plan process.

—David M. Greenwald reporting


Enter the maximum amount you want to pay each month
$USD
Sign up for

Share:

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.

Related posts

58 thoughts on “Commentary: Rising Housing Prices Force People Out of Davis, How Will Davis Respond?”

  1. Matt McPherson

    Agree this is a big issue driving the future of Davis.   Our workplace has always struggled to hire people from other areas of the country and keeps getting harder.

    All the questions sound important.   Seems like there should be answers from other college towns.   Thanks for helping gather information.

  2. Eric Gelber

    There is a lot of growing evidence that as the cost of housing rises – there will be fewer families with children … And it will become a more bifurcated town with more older residents and more college students, but fewer in the middle ground in the 30 to 50 range – the range with families and children.

    And “How will Davis respond?” the article asks. The answer is—by approving a major housing development (WDAAC) specifically designed to exclude families with children. Yeah, that makes sense.

    1. David Greenwald

      It does in one sense.  To the extent that a number of empty-nestors are moving out of Davis, but would prefer to stay in town, this captures that market while freeing up SFHs in the core to younger families.  There are some problems with that theory, but the voters apparently were more interested in approving some housing than parsing the nuances of the proposal.

      1. Eric Gelber

        Yes, I’ll say there are problems with the theory. The idea is that empty nesters will downsize from their larger homes—i.e., those homes that are now unaffordable for younger families—to move to smaller, relatively affordable, homes from which families with children are excluded. And outright discrimination against families with children is hardly a “nuance.”

        1. Ron Oertel

          David: “That is in fact what the Bee article chronicled.”

          In reference to your response to Eric, I’m not seeing any mention of WDAAC in the Sacramento Bee article that you’re referencing.

          The houses in Spring Lake are “upsizing”, if anything.

        2. David Greenwald

          I’m referring to the story of Dave Heard, who found his large house in Davis too difficult to care for after his kids moved out, attempted to find a smaller house in Davis, and ended up moving to Woodland.

        3. Ron Oertel

          That’s not what Eric was referring to.

          Did Mr. Heard move to a “smaller house” in Spring Lake?  (I doubt it.)

          Perhaps a one-floor one, though. There’s an entire, new development of those – which are nevertheless quite large.

        4. David Greenwald

          It is what I’m referring to.  They probably did or what was the point of telling their story: “ But when his four children had grown up and moved out of the family’s six-bedroom, six-bathroom house, and when Heard still found himself every weekend cleaning out the gutters and trimming the bushes for a mostly empty home, and when he realized it had been three months since he had even been upstairs, that’s when he finally told his wife: “Honey, it’s time to move.””
          Read more here: https://www.sacbee.com/article238467228.html#storylink=c

        5. Ron Oertel

          Six bedrooms, and six bathrooms – in Davis?  Really?

          Nevertheless, the average size of houses (including one-floor houses) in Spring Lake “dwarfs” the average house size in Davis.

          Although any new house shouldn’t need major repairs/maintenance – they still have “gutters”.

        6. David Greenwald

          I know it’s incredible.  But the point would be – why are they going to move out of their current house if it wasn’t a downsize?  Especially the point that the article was making.

        7. Ron Oertel

          I’d suggest that Mr. Heard’s Davis house is a definite “exception” to the rule (and to the larger/general trend described in the article, itself).

          Ultimately, it all comes down to what you get for your money – among a set of alternatives.

        8. Eric Gelber

          Whether the Heards moved to Woodland or to WDAAC, it would not address the concern that families with children cannot afford to live in Davis. Freeing up their 6-bedroom, 6-bath McMansion will not help. Wasting limited land resources on a development like WDAAC was an opportunity lost. It was not only unhelpful for addressing the local need for affordable/Affordable housing for young families and the local workforce, it was intentionally designed to prohibit home ownership by those groups.

        9. David Greenwald

          Here’s my question Eric – whether you think WDAAC will help or hurt, at this point, it was approved by the voters a full year ago.  What purpose does it serve to raise it at this point?

        10. Rik Keller

          Did I miss something where that 6 bedroom/6 bathroom house that was “freed up” somehow became magically affordable for workforce/family housing? What was the point in bringing up this anecdote at all?

        11. Rik Keller

          Greenwald said: “Here’s my question Eric – whether you think WDAAC will help or hurt, at this point, it was approved by the voters a full year ago.  What purpose does it serve to raise it at this point?”

          Well, you did ask: how will Davis respond? That project is one indication of how developers have recently responded: high-end senior housing with a pittance for affordable units (less than 10% of project total) that are exclusionary in both price, age, and locational  status.

          Another indication: the ARC proposal that is supposedly providing some housing for its workforce but is trying to get out of any affordable housing requirements on-site—and of course which would create the need/demand for much more housing, pushing prices higher.

          Where are the policy proposals for strengthening the provision of affordable housing? Richard Rothstein (The Color of Money”) spoke several weeks ago about the key importance of governmental intervention in the form of strong inclusionary requirements. Are we ignoring his message?

        12. Rik Keller

          Eric G stated “There are lessons to be learned from past mistakes so they are not repeated.”

          Did someone say something like that before? If not, you should definitely patent the phrase! 😉

           

        13. Mark West

          E.G. “There are lessons to be learned from past mistakes so they are not repeated.”

          I’m curious to hear what ‘mistakes’ you are hoping not to repeat?

          WDAAC came about because it was what the developer believed would pass a Measure R vote by the community (he was right). I opposed the project because it was discriminatory housing, but I completely understand why the project was proposed, just as I understood why the same developer worked to create Springlake. From what I see, the mistake that keeps on giving is Measure R.

      2. Eric Gelber

        Mark West: I’m curious to hear what ‘mistakes’ you are hoping not to repeat?

        The whole concept was a mistake. The failure to address local housing priorities was a mistake. Housing for empty nesters, who own homes and are looking to downsize, is not an identified priority. Housing for young families with children—who are intentionally excluded from WDAAC, by design—and housing for the local workforce, on the other hand, are priorities.  Thinking that the large homes those empty-nester homeowners will be looking to sell will be affordable to young families and local workers is a mistake. The basic mistake I’d hope not to repeat is Council and voter approval of housing developments that not only fail to address housing priorities, but directly contravene them.

        1. Mark West

          “The whole concept was a mistake.”

          I agree, but your list ignores the political environment and prior community decisions from which the ‘concept’ arose. Why would you expect a different outcome if you don’t address that underlying basis?

  3. Tia Will

    David,

    I would be interested to know how many of the homes in The Cannery have been purchased by folks who at the time of their purchase lived or worked in Davis, vs how many have been purchased by those being driven out of the Bay Area by the rapidly increasing costs of living there. Any idea or way of obtaining this information?

    1. David Greenwald

      I haven’t gotten the exact figures on it and not sure if we ever can, but I’ve heard anecdotally those numbers are not good.  This was exactly not the type of development we needed.

      1. Ron Oertel

        And yet, it’s the type of development that families apparently prefer. And, probably did NOT “lower the average price” one bit, in Davis.

        If it was “over-priced”, it wouldn’t sell.  (With a “nod” to Tia’s point.)

        The question that’s never asked on here is “how large do you want Davis to become”? And, “how much sprawl do you want to allow”?

        Ultimately, the only way to ensure affordability is to mandate it.

      2. Ron Oertel

        Tia’s point (regarding Bay Area folks “displacing” Davis residents) is the very same issue that the article describes regarding Woodland (with Davis residents “displacing” Woodland residents).

        And many Davis residents were previously “displaced” from the Bay Area – permanently.

        It’s all the same issue, and is ultimately the free market (and freedom of movement) at work.

    1. Ron Oertel

      Even prior to Measure R, there was a significant difference in price between Davis and surrounding communities.

      Housing in those surrounding communities “keeps a clamp” on Davis prices (e.g., in reference to the article above).

      Pursuit of economic development/jobs (in excess of what a given community needs) is what drives demand in the first place. (See the Bay Area, for example.)

      UCD is the primary reason that Davis commands a “premium”.

      1. Rik Keller

        Ron O. stated “Even prior to Measure R, there was a significant difference in price between Davis and surrounding communities….UCD is the primary reason that Davis commands a “premium”.”

        This is all true.  And there are other amenities that drive things too. It’s very strange that folks forget the old real estate saw about “location, location, location” when discussing housing prices.

  4. Tia Will

    This was exactly not the type of development we needed.”

    As was pointed out to the City Council of that time on many occasions. It seems to me that this is not the only project in which the current citizens of Davis have had to adjust, modify, or move, not for the needs of other citizens, but rather for the profits which will accrue to the developers/builders/investors ( whether local or not) as they build projects that are only affordable to those fleeing the Bay Area or the very affluent. This is not to say that those people do not need housing also, but just to point out that this is not the high minded “providing housing for members of our community” that some would like to portray.

    1. Ron Oertel

      In my opinion, “slicing and dicing” types of housing in hopes of meeting a particular need/goal doesn’t work very well – with the exception of certain categories (such as housing intended/restricted to students, seniors, Affordable housing, etc.).

      The Cannery was a “model” of the type of housing that normally appeals to families (and which is already forced to “compete” with alternatives nearby – which are significantly less-expensive).

      Which ultimately leads back to the point:  Given that Davis cannot “control” other communities, how large should Davis become?  How much sprawl should be allowed?

    2. Mark West

      “As was pointed out to the City Council of that time on many occasions.”

      We don’t live in a command/control society, so the City Council does not have a direct say in what types of projects are proposed by private property owners.  What they get to do however is encourage or discourage certain types of developments through their zoning decisions and the various exactions and requirements that they enact. Open space mitigation, Affordable Housing requirements, LEED building standards, FAR values restrictions, net-zero energy demands, parking minimums, and many others (not to mention the demands from the dais for additional kickbacks) all impact the types of proposals that are put forth. Then you have Measure R as the icing on the cake.

      Each of these prior decisions impacts the cumulative risk and costs associated with proposed projects and in turn, determines which projects will be viewed as feasible by developers. When those costs and risks are too high, then virtually no project will be viable. If the community is not happy with the types of projects that are being proposed, then we need to work to reduce the risks and costs of your more ‘desirable’ developments such that those projects become more viable.

      1. Rik Keller

        Mark West stated “If the community is not happy with the types of projects that are being proposed, then we need to work to reduce the risks and costs of your more ‘desirable’ developments such that those projects become more viable.”

        With your policy prescription what happens is that developer rates of return get larger on the same types of projects they are doing now.

        1. Mark West

          No, what happens is that more projects are proposed allowing the City to make reasonable choices while allowing the community to have sufficient housing to match the need and the commercial development needed to help pay the bills.

        2. Rik Keller

          Mark West stated “…allowing the community to have sufficient housing to match the need” Nope. That doesn’t happen. Just a free market fantasy.

          Look at all the high-growth areas with housing costs skyrocketing. Ron O. mentioned a few in this comment section. And in our region, some of the areas with the highest growth rates have the highest housing cost increase rates (and have cost increase rates higher than Davis).

  5. Ron Oertel

    Frankly, I doubt that (relatively) high housing prices are a “concern” for most Davis residents (at least for homeowners and those living in Affordable housing) – regardless of what the survey says (or how it was worded/designed). Of course, the student population likely influenced any result.

    I suspect that there’s a general concern regarding housing prices rising faster than wages, throughout California. (Which, according to some articles I recently posted, is NOT expected to continue – to say the least.)

    On a related note, here’s some (at least minimal) protections regarding market-rate renters for the coming new year:

    https://www.sacbee.com/news/politics-government/capitol-alert/article238443508.html

     

  6. Ron Glick

    I’ve been making the case against Davis’ exclusionary housing policy that results in leap frog development in Woodland for 12 years on the Vanguard. Better that you came around late instead of  never David. Now if you will finally recognize that Measure R is one more impediment to start trying to address the situation we will be making real progress.

    Vote against Measure R renewal.

    1. Rik Keller

      Ron G. stated “…that results in leap frog development in Woodland…”

      That’s not “leapfrog development”.

      This captures the concept:

      Leapfrog development is defined as the development of lands in a manner requiring the extension of public facilities. The development is made from their existing terminal point through intervening undeveloped areas that are scheduled for development at a later time.

      Leapfrog development is also referred as urban sprawl as the development of lands in a manner requiring the extension of public facilities. In addition the services are extended on the periphery of an existing urbanized area where such extension is not provided for in the existing plans of the local governing body.

      https://definitions.uslegal.com/l/leapfrog-development/

  7. Ron Glick

    I have often referred to Spring Lake as de facto leapfrog development because housing that could have been built on the periphery of Davis has instead been built in Woodland  resulting in longer commutes for Davis workers. I did leave out the word de facto. Although this isn’t true leapfrog development it is somewhat equivalent.

    1. Rik Keller

      Ron G.: really though, with that expanded definition of ‘leapfrog’, any housing built in a less expensive place than somewhere else meets the criteria. It’s not a useful term generalized like that.

      One of the big reasons hat leapfrog development is discussed so much in the planning literature is because of the cost/inefficiency of extension of services when you skip over intervening land to develop past the urban periphery.

      Woodland really isn’t leapfrog development at all, “de facto” or otherwise.

      1. Ron Oertel

        Woodland would allow development up to their urban limit line regardless of what Davis builds.

        Some leaders in Woodland are also hoping that the government pays for levee improvements, so that developers can build in a deep-water floodplain (along I-5, southeast of Woodland).  Most of that land is already owned by a major Sacramento-area developer, I understand.

        Woodland is not a place to as a “model” for responsible development.  However, it’s extremely likely that it’s having a dampening effect on Davis housing prices – especially Spring Lake. And if Woodland wasn’t doing so, then West Sacramento, Dixon, and Winters would.

         

  8. Ron Oertel

    If I were constructing a survey, I’d probably ask a question like this:

    “Assume that a 500-acre development on the periphery of Davis will have some minimal impact on rental/for sale housing prices.  Or, will at least keep them somewhat more in check – given the rampant/uncontrolled development within 10 miles of Davis which provides alternatives for those seeking lower-cost housing.”

    “Given that you have no say whatsoever in what those communities do (and that they’d likely pursue development regardless of what Davis does), would you support the 500-acre proposal, on the periphery of Davis?”

  9. Ron Oertel

    Another survey question I might ask:

    “Assume (based upon actual facts) that Davis already has access to an “excess” number of quality jobs, at an adjacent university.  And, that these jobs are already attracting a net inflow of commuters, from less-expensive communities.”

    “Setting-aside the documented traffic concerns (from cell-phone applications redirecting traffic off of I-80, for example), would you support a commuter-oriented, 4,340-parking space development that would create additional demand for housing?  While simultaneously claiming to be concerned about housing prices?”

    Bonus Question:  “Would you support development proposals such as University Commons/Mall, which provides no Affordable housing whatsoever?”

  10. Ron Oertel

    Last “survey question”, unless someone else chimes in:

    Assume that Davis follows the lead set by other nearby communities, and allows “overbuilding” of houses (as occurred during the housing crash).

    Since this impacts property taxes (as values decrease) and can decimate a community and city finances (of which there are local examples), do you support Davis following the same path as these communities?

    Bonus Question, for those who purchased at developments such as The Cannery: 

    “Assume you just paid $900K for a house.  Do you support pursuing additional development, for the specific purpose of lowering the value of the house you just purchased – even though it simultaneously wouldn’t achieve that purpose despite that claim”?

    Perhaps even more so, if it’s on the large open space property literally next door to your development, for example?

    (Note to self: I’m starting to think that I might have a promising potential career, in survey creation.)

    1. Don Shor

      (1)would you support the 500-acre proposal, on the periphery of Davis?”

      (2)Would you support development proposals such as University Commons/Mall, which provides no Affordable housing whatsoever?”

      (3)Do you support pursuing additional development, for the specific purpose of lowering the value of the house you just purchased – even though it probably wouldn’t achieve that purpose”?

      (1) I believe it is time for Davis to begin planning for a new subdivision. I don’t really know how may acres would be likely. I consider the northwest quadrant to be the likeliest location, since the former Covell Village site is probably not going to be in consideration any time soon.
      (2) I don’t really care how much “affordable housing” is included at University Commons, since the only method for providing it there entails making most tenants pay higher rent to subsidize lower rent for some others. That isn’t an effective way to get affordable housing. Adding a subdivision allows for land to be set aside for affordable housing development.
      (3) This is an odd question. Adding housing in Davis is not likely to appreciably lower the value of existing housing. At the most, it might reduce the rate at which housing appreciates over time, though even that is doubtful.

      Now that I’ve answered the questions, please explain to me what method you would suggest for getting more mid-priced housing built in Davis (comparable, perhaps, to homes in Mace Ranch), and how you would provide effective affordable housing.

      1. Ron Oertel

        Thanks for at least “playing along”.

        You haven’t really made a case regarding your response #1, given your response to #3.  (Which is also related to your question for me.)  But having said that, I’m wondering what the holdup is regarding Chiles Ranch.

        Your conclusion regarding #2 is not supported – and would not be unless the developer “opened his books” for examination to show this.

      2. Ron Oertel

        Regarding #2, the developer of University Mall/Commons would charge the maximum rent that the market will permit, regardless of costs. There is no evidence (“NONE”) that they would charge lower rent as a result of lower costs.

        That would likely be true even if they had NO construction/acquisition costs.

        1. Ron Oertel

          Perhaps the questions don’t really have viable answers.  But again, much of the information is hidden from the public.

          Developers didn’t become wealthy as a result of engaging/disclosing on here.

          What do you think of the German model (mentioned on here a couple of times), where cities (rather than developers) capture the difference in value (when farmland is converted housing)? At the very least, this would “change the conversation”.

          Not a chance in hell that this would fly, here.

      3. Rik Keller

        Don Shor stated:

        “I don’t really care how much “affordable housing” is included at University Commons, since the only method for providing it there entails making most tenants pay higher rent to subsidize lower rent for some others. That isn’t an effective way to get affordable housing. Adding a subdivision allows for land to be set aside for affordable housing development.”

        1) Inclusionary requirements coupled with density bonuses is one of the few effective  method LW we have for providing and subsidizing affordable housing.

        2) How is “setting land aside” for affordable housing any different than requiring a percentage of affordable units? If that land has any value, forgoing market-rate development on it effectively does the same thing.

         

  11. Ron Oertel

    Meanwhile:

    “California Population Growth Slowest Since 1900 as Residents Leave, Immigration Slows”

    I found this quote/conclusion rather interesting:

    Myers noted that a big part of the lack of growth is the decline in birth rates — something he attributes to young couples’ inability to “find a nest,” or affordable housing, where they would want to raise children.

    He added: “We better get our act together pretty darn quick. This is as good as it’s going to get. People should be flourishing. The fact that the number of babies is going down is really worrisome.”

    Although perhaps not the most “ideal” method of controlling population, let’s just say that I’m not personally “worried” about the result.  😉

    The fact that some are “worried” about it demonstrates an outdated, unsustainable way of thinking – which is ingrained in our system.

    https://www.latimes.com/california/story/2019-12-21/

Leave a Reply

X Close

Newsletter Sign-Up

X Close

Monthly Subscriber Sign-Up

Enter the maximum amount you want to pay each month
$ USD
Sign up for