Guest Commentary: University Mall Needs More Affordable Housing (Corrected)

by Georgina Valencia, Bapu Vaitla, Don Kalman

We have had the opportunity to review the revised Affordable Housing Program proposal from Brixmor Property Group for the University Mall project. Our Social Services Commission subcommittee is concerned with certain aspects of this proposal.

First, we note that when originally submitted, this proposal fell under the exemption allowed by the City of Davis Housing Code section 18.05.060, which is worded as follows: “(4) Vertical Mixed-Use Development. Unless exempt under Section 18.05.080, in projects comprised of vertical mixed-use units, a number equivalent to five percent of the total units, bedrooms, or beds being developed including the affordable units, bedrooms, or beds, shall be developed and made affordable to low income households, households with gross incomes at or below eighty percent of area median income for Yolo County. (emphasis added).

While the revisions are more robust than the original proposal, our subcommittee feels that the revised proposal falls short of “commitment to the creation of affordable housing in the city.”  In particular, the proposal does not advance our city towards meeting the unmet need of extremely low-income and very low-income families as specified in the Regional Housing Needs Assessment (RHNA).

The developer’s proposal

The developer’s revised proposal offers:

  • 13 studio units (5% of the total) to low-income households (80% AMI). The monthly rent for this group is $1,480/month. Given the market rent stated by the developer ($2,229), this equals a subsidy of $749/month/unit, for a total annual subsidy of $116,844 for the 13 units combined. We note that, given their studio nature, these units are suitable only for couples or a single individual. If inhabited by a single individual, that individual would need to make an hourly wage of $28.46 to attain the 80% AMI income level for a 2-person household, well above the California minimum wage of $12-13/year.
  • 13 two-bedroom units (5% of the total) to moderate-income households (100% AMI). The monthly rent for this AMI is $2,081. Given the market rent stated by the developer ($2,898), this equals a subsidy of $817/month/unit, for a total annual subsidy of $127,452. We note that, given that these units have two bedrooms, they are suitable either for a couple and an individual or two individuals. If inhabited by two individuals, those individuals would need to make an hourly wage of $20.01 to attain the 100% AMI income level for a 3-person household.

These 26 units require a total subsidy of $244,296/year.

Our proposal

We suggest the Council returns to the developer with a counterproposal that preserves the total number of below-AMI units (13) while reducing the number of moderate-income units (from 13 to 7) and redistributing the subsidy savings to finance units for extremely low-income and very-low income households. The unit mix would look like:

  • 2 studio units for extremely low-income persons. The income limit for an extremely low-income one-person household in Yolo County is $19,450, suggesting a maximum rent of $486/month. This would necessitate a subsidy of $1,743/month/unit, for a total annual subsidy of $41,832 for these 2 units.
  • 4 studio units for very low-income persons. The income limit for a very low-income one-person household in Yolo County is $32,400, suggesting a maximum rent of $810/month. This would necessitate a subsidy of $1,419/month/unit, for a total annual subsidy of $68,112 for these 4 units.
  • 7 studio units for low-income persons. The income limit for a low-income one-person household in Yolo County is $51,800, suggesting a maximum rent of $1,295/month. This would necessitate a subsidy of $934/month/unit, for a total annual subsidy of $76,546 for these 7 units.
  • 7 two-bedroom units for moderate-income households. The income limit for a moderate-income two-person household in Yolo County is $74,000, suggesting a maximum rent of $1,850/month. This would necessitate a subsidy of $1,048/month/unit, for a total subsidy of $88,032 for these 7 units.

These 20 units would require a total subsidy of $276,432, which is a delta only 13.2% higher than the developer’s proposal.

We also strongly recommend Council to follow Staff’s recommendation to include language that, to the extent units reserved as affordable are instead rented at market rate, the delta between affordable and market is paid to the City’s Housing Trust Fund (HTF). Currently there is no stated incentive in the development agreement for this additional requirement; we believe that payment into the HTF is a reasonable request of the developer and a prudent oversight action on the part of the City.
Why make these changes?

Our reasons

We suggest these changes for the following reasons:

  • To incorporate more realistic assumptions about who will be able to afford the units dedicated as affordable housing. The proposed plan works as affordable housing for couples, but not individuals. We fear that this will result in substandard, crowded housing arrangements.
  • To meet the needs of people working in service, retail, and other low-wage jobs in Davis who may currently be commuting from Winters, Woodland, or elsewhere due to lack of affordable housing in Davis.
  • To establish a precedent for future development that the City of Davis expects to see an affordable housing plan that takes into account the needs of extremely low- and very low- income households.
  • To facilitate diversity in our city, ensuring that all groups of people, regardless of income or any other demographic characteristic, can afford to live in our community.
  • To meet the City of Davis’s obligation to comply with RHNA’s assessment of unmet housing need.
  • To help the developer meet their obligations as a socially responsible company partnering with the City of Davis in a shared commitment to create affordable housing.
  • To ensure that the developer/owner handles the buyer/tenant selection process in a good-faith manner, given that there are not enough staff hours to actively oversee this process. Ensuring that commitments are paid to the HTF, if not used to subsidize affordable housing, is a strong mechanism to ensure this.

Please continue your work on this proposal to make sure our City works meaningfully for affordable housing.

Thank you,

Georgina Valencia, Bapu Vaitla, Don Kalman are part of the Davis Social Services Commission but represent their own views only

* Correct the original view cited the wrong muncipal code number and said they were representing the Social Services Commission Housing Trust Fund Sub-Committee – they are actually not representing any formal entity of the commission and speaking only for themselves.


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Disclaimer: the views expressed by guest writers are strictly those of the author and may not reflect the views of the Vanguard, its editor, or its editorial board.

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62 Comments

  1. Tia Will

    provided that in order to receive such exemption the developer shall submit to the city an individualized affordable housing plan that provides a commitment to the creation of affordable housing in the city, either through development of on-site affordable units, payment of in-lieu fees, or another mechanism deemed appropriate by the city council” (emphasis added).”

    I truly appreciate the efforts of the authors to arrive at a solution for this project that meets the needs of the very low income and low-income members of our community. I would like to note, that by design, they are hampered in their efforts by the clause I quoted. This clause hinges on the entirely subjective phrase ” …provides a commitment to the creation of affordable housing. This phrase could be interpreted variable all the way from “The developers say they are committed, in the future…” to a hard and fast policy in which the committed housing much be completed prior to or commensurate with the remainder of the project.

    Unfortunately, in my opinion, the current council is likely to fall far more to the “but the developer said they would” side of this scale. One council member even expressed the opinion that one not so distant community had redeveloped successfully by “standing aside and letting the developers do their thing”.  While that attitude may indeed have been a success for the more affluent members of the community, in my eyes, it is far from a success for those whom what amounts to gentrification squeezes out.

    If we are determined to reshape Davis into a more inclusive community, we are going to have to do far more than “provide a commitment to the creation of affordable housing.”

    1. Bill Marshall

      If we are determined to reshape Davis into a more inclusive community, we are going to have to do far more than “provide a commitment to the creation of affordable housing.”

      I hope (and will assume) by ‘more inclusive community’, you refer also to socio-economic factors that are not at all dependent on race/ethnicity… on a socio-economic basis, far from all whites are ‘privileged’… in the 70’s knew a lot of POC folk who were more socio-economically ‘privileged’ than me… many were not… there is not a 1:1 correlation…

      In you intended to include those not POC, but are socio-economically challenged, and need affordable housing to study/live/work/contribute their talents here, then, am in full agreement.  As a UCD student I needed AH… even with generous support from parents, and working summers… and, I found it, readily, in Davis… in the 70’s…

       

  2. Edgar Wai

    Could someone inform me why there is a seeming negotiation between the city and the developer?

    Why can’t the city directly build affordable housing/dorms? Or directly tax apartments to fund housing vouchers?

    1. Don Shor

      Could someone inform me why there is a seeming negotiation between the city and the developer?

      Because the city’s affordable housing policies are in flux and the requirements are not clear, so each project ends up with a lot of negotiation. That’s been a problem for a few years now.

      Why can’t the city directly build affordable housing/dorms? Or directly tax apartments to fund housing vouchers?

      Personally, I don’t think the city should be in the housing development business. Municipal governments are generally not very efficient at that sort of thing. I think land should be entitled, and then non-profit organizations can build affordable housing. We have some good models for that locally.
      Taxing apartments to fund vouchers ends up costing tenants more, since landlords will simply pass along the added costs. That has been done indirectly with some of the affordable housing that’s mandated in existing projects. If you read that the affordable housing is “subsidized” that means the other tenants are paying more so the affordable units can cost less. I personally disapprove of this method, but it seems to prevail as a sort of desperate method of getting more cheap units into an existing project.
      Until some form of redevelopment money comes back, affordable housing is going to be very challenging to provide.

      1. Ron Oertel

        If you read that the affordable housing is “subsidized” that means the other tenants are paying more so the affordable units can cost less.

        That’s a myth that somehow keeps getting repeated on here.

        Landlords charge market-rate (essentially the most that they can get), regardless of costs.  If they had ZERO costs to construct a building, and ZERO costs for Affordable units, they would still charge market-rate.

        Sterling charges market-rate, and has no Affordable units.  (They did a land dedication for a portion of their site.)

        If costs become too high (or the market won’t support the price they need to make a proposal “pencil out”), developers simply don’t build. 

        But, they don’t “pass on” costs, above market rate. If they tried to do so, they wouldn’t be able to rent out many of their apartments.

        1. Don Shor

          That’s a myth that somehow keeps getting repeated on here.

          Landlords charge market-rate …
          But, they don’t “pass on” costs, above market rate. If they tried to do so, they wouldn’t be able to rent out many of their apartments.

          This is a facile analysis. The simple answer to your comment is that “market rate” keeps going up.

        2. Ron Oertel

          Again, it will rise to whatever the market will support – regardless of developer cost (or lack, thereof).

          That’s why older apartments (built long ago, when costs were less) still rise to market rate.

          San Francisco is an example of this, except for units that have been occupied for a long time (which are then impacted from rent control). As a side note, rent control is almost brutally effective.

          1. Don Shor

            Again, it will rise to whatever the market will support

            This in no way negates my assertion that they will subsidize lower rents with higher ones on other apartments.

        3. Ron Oertel

          And again, the only possible “negative” impact from rising costs is that a (new) proposal may not “pencil out” (and therefore wouldn’t get built).  But, rising costs cannot be passed on to a market that won’t support them.

          It’s just that simple.

          As a side note, it appears that many apartment owners in Davis may not get ANY rent (for some of their units) for a period of time, due to Covid. Regardless of their “costs”.

          I’ve heard that there’s some kind of large petition, asking the city to help student renters cancel their leases. Not sure how THAT would work.

        4. Ron Oertel

          Edgar:  The document you posted a link to appears to be a form of rent control.  Wondering what the source for this document is, as it doesn’t appear to be listed.

          Regarding the petition asking the city to help with student lease cancellations, here’s an article regarding that:

          https://theaggie.org/2020/08/14/uc-davis-student-starts-petition-for-no-fee-lease-cancellations-city-concerned-over-legality/

          And, below is a link to the “UC Davis Off-Campus Housing” Facebook page.  (Interesting title, as the implication is that off-campus in the city “belongs” to UC Davis.)  Appears to be quite a few students who are desperate to find someone else to take over their lease, but still a few looking for a place, as well.  Who then receive a quick response, it seems.

          https://www.facebook.com/groups/763250590497811/

          Apparently, this isn’t a “problem” for those who rent on campus, as I understand that lease cancellations are allowed, there.

           

           

           

        5. Edgar Wai

          Ron,

          I don’t have a problem with the petition to cancel rent due to COVID. But I think that is a transient issue. Affordable housing is a long term issue.

          But if you mean that “we could postpone developing University common because there is a chance that the student population is not coming back, then the vacancy will address the housing issue for those who actually need to be in Davis.” I think it is worth waiting and see what happens.

          I made the google doc image.

        6. Ron Oertel

          This in no way negates my assertion that they will subsidize lower rents with higher ones on other apartments.

          Yes it does, Don.

          It simply doesn’t work that way. The rent that a market will support is not determined by cost.

          1. Don Shor

            No, Ron. You are wrong. Variable pricing applies to a market of mixed housing units just the same as it applies to a market of mixed retail goods. The variable pricing strategy is used to maintain the desired profit margin. The impact might be to increase the market rate overall, slightly, when the cost of these new units is averaged in to the overall housing market.
            There is no way they are going to simply absorb those costs.

        7. Ron Oertel

          Below is a link to variable pricing, if you’d care to explain this further.

          https://en.wikipedia.org/wiki/Variable_pricing

          So far, I’m not seeing any discussion regarding costs, in that article.

          But again, even if a developer has NO costs, they will charge whatever the market will bear.

          If they try to raise the price of some units above what the market will bear (due to increased costs), they won’t be able to rent them. That’s what “variable pricing” indicates.

          1. Don Shor

            If they try to raise the price of some units above what the market will bear (due to increased costs), they won’t be able to rent them. That’s what “variable pricing” indicates.

            I’m not going to get into a long discussion of variable markup, dynamic demand pricing, etc., with you. I’ll just rephrase what you said to be more accurate:
            When they raise the price of some units to adjust for the price of their fixed-price units, they may have some slight impact on the overall market rate.
            They will do it. In a tight rental market, they will get it. It will just be one of the reasons that the market rate keeps going up. I’ll just refer you to Matt’s post above so you see how it is going to work in this particular case.

        8. Ron Oertel

          I’m not going to get into a long discussion of variable markup, dynamic demand pricing, etc., with you.

          Probably a good idea to not continue what appears to be an attempt to deflect.

          I’ll just rephrase what you said to be more accurate:
          When they raise the price of some units to adjust for the price of their fixed-price units, they may have some slight impact on the overall market rate.

          Again, they won’t be able to do so, if the market won’t support it.  And if the market will allow it, they will raise their prices anyway.

          They will do it. In a tight rental market, they will get it.

          They will do so regardless of their costs.

          It will just be one of the reasons that the market rate keeps going up.

          Market rate is a reflection of what customers are willing to pay, and what sellers are willing to provide at a given price point.  Cost can be a factor, if there’s no “competition”. (Which is what I believe you are incorrectly implying, in this example. Further discussion below, regarding that.)

          I’ll just refer you to Matt’s post above so you see how it is going to work in this particular case.

          There is nothing above from Matt, and his reference below does not demonstrate what you’re claiming.

          Part of the problem with what you’re claiming is a failure to acknowledge that demand itself is variable, depending upon price.  For example, renters might double-up in rooms, rent in other cities, stay at home and attend local schools, increasingly take online courses – thereby allowing broader residency opportunities, rent on campus, etc.

          We’re seeing an example right now of “extreme” flexibility, due to Covid (and folks not wanting to rent a room at ANY price.)

          Here’s another example, which you’ve brought up yourself before:

          Let’s say that garden shears cost you $10, and your business model requires you to sell them at $15.  And yet, you can get them online for $12.

          Can you guess where most customers would then buy those garden shears?  And, what then often happens to local businesses?  (In that case, it would be similar to not having a proposal “pencil out”.) But, you’re not going to be able to sell very many garden shears for $15, in that case.

           

           

          1. Don Shor

            I’m not going to get into a long discussion of variable markup, dynamic demand pricing, etc., with you.

            Probably a good idea to not continue what appears to be an attempt to deflect.

            There will be a number of different types of housing units in this complex. Some will have greater price sensitivity than others. They will raise the prices of those with lower price sensitivity. If I had to sell pruners for $12 and still wanted to sell them, I’d raise the price on the high-end pruning loppers that I also sell to make up the difference.
            If the city tells me that I have to sell a certain percentage of my vegetable plants at a lower price to a certain segment of the population, I would crunch my numbers and figure out how to raise the price of one-gallon perennials to make up the dollar amount needed.
            Matt’s post shows you that they are already factoring in a higher market rate.

            Part of the problem with what you’re claiming is a failure to acknowledge that demand itself is variable, depending upon price.

            Thank you for mansplaining to a retailer how the market works.

        9. Ron Oertel

          If I had to sell pruners for $12 and still wanted to sell them, I’d raise the price on the high-end pruning loppers that I also sell to make up the difference.

          I hate to break the news, but they also sell loppers online.

          I realize there are complexities to all of this, though.  (For example, large, online retailers may not pay the same price as you do for those loppers, in the first place.)

          Just as developers/developments in nearby cities are not subject to the same costs as equivalent developments in Davis.  Resulting in “competition”, with lower seller costs to begin with.

           

          1. Don Shor

            Mansplaining:

            when a man talks condescendingly to someone (especially a woman) about something he has incomplete knowledge of, with the mistaken assumption that he knows more about it than the person he’s talking to does.

            Good example:

            I hate to break the news, but they also sell loppers online.

            I realize there are complexities to all of this, though. (For example, large, online retailers may not pay the same price as you do for those loppers, in the first place.)

        10. Alan Miller

          If the city tells me that I have to sell a certain percentage of my vegetable plants at a lower price to a certain segment of the population,

          What if the city told you that you had to sell your vegetable plants at a lower price to a certain segment of the population by skin color ?

        11. Alan Miller

          Thank you for mansplaining to a retailer how the market works.

          Um . . . I don’t think that’s a proper use of that term; but if it is, telling you that it isn’t would be also be mansplaining.

        12. Keith Olsen

          Um . . . I don’t think that’s a proper use of that term; but if it is, telling you that it isn’t would be also be mansplaining.

          I also doubt it’s the proper use of the term, but Alan makes a good point even if it is.

        13. Ron Oertel

          What if the city told you that you had to sell your vegetable plants at a lower price to a certain segment of the population by skin color ?

          Vegetable skin color, or human skin color?

        14. Keith Echols

          Ron Ortel.  You’re absolutely wrong.  I say this as a former developer and someone who has worked for developers.  Like everything else cost is considered when coming up with projected pricing when figuring how a project “pencils”.  If you reach a point where you can’t squeeze any more and reach a ceiling…you don’t do the project.  So because of those affordable units you have to figure on pricing the for market units at a certain price point to meet your target returns.  Would I charge the max I could without the affordable units?  Yes.  But would they get built at all or would I require more market rate units to make it pencil? The affordable units are just another cost to the project….a cost that has to be account for.  If you keep adding costs to a project developer has no choice but to push for higher priced units.  New market rate units aren’t typically created as value buys for consumers.  You don’t see Levittown’s built with massive numbers of affordable new homes built anymore.   No you have nice new home that are purchased at a considerable premium over other units on the market.  No basic residential units built.  Ones built with amenities and add ons are built for premium pricing.  That premium pricing is not only profit but also must recapture those costs….obviously land and construction but also soft costs…and others like inclusionary affordable housing.

        15. Ron Oertel

          Keith E.:  “If you reach a point where you can’t squeeze any more and reach a ceiling…you don’t do the project.” 

          That’s exactly what I said.

          Keith E.  “Would I charge the max I could without the affordable units?  Yes.”

          Also exactly what I said.

          Not sure what you think I was wrong about.

        16. Keith Echols

          Ron Ortel,

          Again, it will rise to whatever the market will support – regardless of developer cost (or lack, thereof)

          .Let met try to explain it this way.  If you have a patch of land that can only support 10 homes at $5M per unit home because it’s built on a hill, requires seismic support…needs sewer line brought for a couple mile up to it along with a pump.  And that property was in the middle of Stockton.  The costs of that project in it’s market are not going to support the pricing required to make that project work.  Only if I could build 200 homes would that project maybe work.  Inclusionary affordable housing is just another cost to the developer when considering pricing and project viability.

        17. Ron Oertel

          Yes – I understand that.

          So, as long as there’s a market for those 200 units (and they’re allowed by the governing entity), then it would pencil out in that example.

          I also see that requiring Affordable units might require a developer to target a higher-end market, to help offset the cost.

          (But, if that higher-end market doesn’t exist, or the 200 units in that example aren’t allowed, then it simply won’t pencil out.)

          As laymen, we rarely know what pencils out, the rate of return required, etc. And we can’t rely upon a developer to be forthcoming. I’ve seen examples where they claim that something doesn’t “pencil out”, only to find out later that it does. (Including one in Davis, as I recall, involving a proposal in which the developer claimed that they needed a city-owned greenbelt to make it work. Turns out that they were able to build it without getting that greenbelt.)

        18. Ron Oertel

          By “getting that greenbelt”, I’m referring to the elimination of it, and inclusion of it as part of a development.

          That development was ultimately built without including the greenbelt.  I don’t recall if they made any other changes, to make it “pencil out”.

          I suspect that DISC will claim that they need the use of Mace 25, to make it “pencil out”. (AFTER it’s approved, of course.) It’s already planned that way.

          (Some of the finance and budget commissioners don’t think it will “pencil out” beyond the phases which include housing, regardless.)

          In any case, it seems that these developer pencils come with erasers – which are used quite often.

        19. Ron Oertel

          Actually, it might be more accurate (and important) to note that some on the finance and budget commission don’t think that DISC will “pencil out” for the city, when considering long-term capital replacement costs.

          But, some also don’t think it pencils out for the developer (beyond the phases which include housing), either.

          I believe they also analyzed this University Mall proposal, but I’m less-familiar with the results.

          Regardless, one of the finance and budget commissioners noted that the city wouldn’t be facing fiscal challenges, if developments (to date) “penciled out” for the city. (A problem throughout California.)

        20. Keith Echols

          Ron Ortel,

          I was responding to your statement that you believe that it’s a myth that newer tennants subsidize the affordable units.  My point is that the subsidization happens when the units are priced out and planned in the initial stages.

          I also see that requiring Affordable units might require a developer to target a higher-end market, to help offset the cost.

          Higher end development is the tide that raises all ships.   As those units sell their sales are reflected in all home pricing and eventually rents.  This ultimately makes the possibility of affordable market rate housing even worse.

          A developer never shows all his cards.  It seems to me that the council always seems to believe that whatever project they have in their hand is what has to happen because they can’t envision another developer providing an alternative.  So they end up pushing some agenda or another.   But as far as all the costs a developer has or doesn’t have….as I said..affordable housing is just another cost and has to be accounted for one way or another….and it’s not coming out of the profit margin.

        21. Ron Oertel

          I was responding to your statement that you believe that it’s a myth that newer tennants subsidize the affordable units. 

          Except that you also noted the following:

          So because of those affordable units you have to figure on pricing the for market units at a certain price point to meet your target returns.  Would I charge the max I could without the affordable units?  Yes.

          In any case, it seems to me that increasing costs may require a developer to target a higher-end (or more density), to offset costs.  Whether or not there’s a market for those higher-end units (or if the increased density is allowed) is a different matter.

          It also seems to me, however, that they would attempt to build higher-end units (and/or more density), even without the cost of Affordable housing.

          As far as your example is concerned, I’m still wondering where a “hill” is, in the middle of Stockton.  😉

           

           

        22. Keith Echols

          Ron,

          Yeah, I see the DISC project as one big cluster!$^@#$.  I’m quite certain that the developer will come back and ask to repeal many of the restrictions on the business park and the residential component in order to make it work.  He’ll say that he tried his best to jump through all the hoops he had to get voter approval….and then say he tried his hardest but the project just won’t work as it was planned out.  And he’ll be right…because I can’t see the project being successful as it’s planned out.  I mean the housing part could be/will be successful.  But the business park part?  No one has addressed what exactly will make this business park successful compared to it’s competitors.

        23. Keith Echols

          Ron,

          Whether or not there’s a market for those higher-end units (or if the increased density is allowed) is a different matter.

          I’ll say that it’s often not optimal having to build out more units to make something pencil.  It increases risk (more moving piece… stuff can go wrong) and capital commitment.

           

        24. Ron Oertel

          I appreciate your posts, as it provides a knowledgeable, straightforward and somewhat different perspective that isn’t often shared on here. And, you don’t allow yourself to be “bullied” off of here, despite attempts by some to essentially do so.

          Have a good evening.

      2. Edgar Wai

        I agree that subcontracting building/managing affordable housing is better.

        Taxing apartments to fund vouchers ends up costing tenants more, since landlords will simply pass along the added costs. 

        What if the tax is a not a flat tax but a rental income tax? As long as their income go above a certain % based on the waiting list for affordable housing, the landlord gets taxed enough to turn their extra operation into a non-profit operation. The tax collected is reimbursed to the renters.

        The underlying ethics is that “You can make a good living providing housing, but not if your profit margin is high while providing less affordable housing than average.”

        Then, developers would still be building and offering affordable prices because they know that once they have provided enough affordable housing, their profit margin restriction is waived.

      3. Alan Miller

        non-profit organizations can build affordable housing. We have some good models for that locally.

        We have some bad models for that locally, as well.  No joke.

    2. Bill Marshall

      Edgar,

      You ask,

      Could someone inform me why there is a seeming negotiation between the city and the developer?

      Here’s the “real deal”, and it also gets to some commenters talking about ‘why the rush?’

      If a project has a complete application, and fully conforms to existing GP, Zoning, other ordinance requirements, it must be approved… matter of State and arguably constitutional law.

      If a project has a complete application, and doesn’t fully conform to existing GP, Zoning, other ordinance requirements, it must be approved or denied, within certain statutory time limits.

      If a project applicant is given to believe the CC will deny the application, they may waive statutory time limits for an “up/down” determination, and work with staff, CC (and indirectly, public commissions/citizens) to get to approval.  Their (applicant’s) call… and totally legal under State Law…

      Right now, the particular project’s applicants could force an up/down vote… and no one could stop them from that (again, State Law)… the fact is, they apparently want to get to a majority CC vote (approval)… so have partially waived time limits for action… they can revoke that partial waiver, at any time… and say, “approve or deny”, in the next XX days…

      Like ‘gravity’, it’s not just a good idea, it is the law…

      Don S makes good points on the second part…

      Hope that helps inform you, Edgar, and others… I get tired of saying this, but I neither support, nor oppose the proposal… just being a ‘fact-checker’… I could live with either an approval, approval with revisions, or a denial…

  3. Matt Williams

    I strongly support the subcommittee’s proposal.  I also strongly urge the Council to invite a member of the subcommittee to be available to interactively answer questions from Council regarding the affordable housing component of Brixmor’s revised proposal … as a zoom meeting participant rather than simply as a member of the public during public comment.  In a normal meeting in Council Chambers I believe they should answer those questions while sitting at the staff table side-by-side with staff, who may also have good input on Brixmor’s revised affordable housing plan.  That would be an example of staff-commission collaboration.

    The monthly rent for this group is $1,480/month. Given the market rent stated by the developer ($2,229), this equals a subsidy of $749/month/unit,

    The above quote jumped out at me when I read it … most notably the $2,229 “market rent” figure.  It seemed quite high to me, so I did a little bit of “market research” to test my concerns.  Fortunately we have access to a very good “market survey” of apartments here in Davis.  The UC Davis Student Housing Department has conducted a Vacancy and Rental Rate Survey on apartments in Davis every year since Fall quarter 1975.  Page 8 of the 2019 Survey includes the following Table 4

    https://www.davisvanguard.org/wp-content/uploads/2020/08/Screen-Shot-2020-08-16-at-8.11.58-AM.png

    What that table tells us is that the $2,229 monthly rent for a Studio at University Commons is $347 higher than the maximum/highest monthly Studio apartment rent in the survey.  That is a substantial 16% price hike over the current highest Studio apartment rent in Davis , and a 47% price hike over the weighted average monthly Studio rent in the survey.

    Said another way, $2,229 is 89% higher than the weighted average Studio apartment rent in the survey and 18% higher than the maximum Studio apartment rent in the survey

    To draw a parallel to our own personal lives, if you walk into a store and see a sign saying “33 percent off today” are you ever suspicious that the store marked up the prices of the items on sale the night before the 33 percent sale went into effect?  Bottom-line, when I go shopping I know that a 33% discount on a sale item that has been marked up by 89 percent is not a good deal.

     

    1. Ron Glick

      I’m guessing they are using maximum values instead of average values. For new construction in that location they are likely figuring to get premium prices.

      1. Matt Williams

        Ron, it makes sense for new construction to use the maximum values for new construction, but 18% above the maximum values doesn’t make sense if the “Affordable discount” is only gooing to be 33%.

        As the Social Services Commission subcommittee pointed out:

        We note that, given their studio nature, these units are suitable only for couples or a single individual. If inhabited by a single individual, that individual would need to make an hourly wage of $28.46 to attain the 80% AMI income level for a 2-person household, well above the California minimum wage of $12-13/year.

        1. Ron Glick

          It seemed pricey to me too but such are the unintended consequences of restricting supply in a market with growing demand.

          Back before Measure J I rented a two bedroom apartment in Davis for $550. The landlord raised the rent $25 bucks a year. If those conditions persisted that apartment would rent for around $1200 month now. If you rent that is too damn high vote no on Measure D.

        2. Ron Oertel

          Ron G:  Except that this has already been analyzed by a guest commenter (in-depth), who found no evidence that Measure J/R is impacting sales OR rental prices. That commenter is apparently a renter, himself.

          In fact, both sales and rental prices have been rising faster, in other communities.

          And no one (with an ounce of integrity) would suggest approving vast amounts of student housing on an expanded-periphery outside of town in the first place.

          Certainly, University Mall has nothing to do with it.

          You’d think that there’d be more focus on the price of student housing on campus, if that’s actually the concern.

  4. Edgar Wai

    This is an idea of limiting profit instead of limiting price.

    The guiding ethical principle is that a landlord may not make high profit without providing their fair share of affordable housing.

    The implementation can take the form of a cap on rental profit such as “A landlord that does not provide their fair share of affordable housing is only eligible to a profit of 10%.”

    https://drive.google.com/file/d/16SPDt9fcU93lYxzTI7FawbaxAGreM7EU/

    A law like this would give landlords incentive to immediately provide their fair share of affordable housing using their existing properties. Landlords that only have 1 unit of rental property could be exempted, but those with more than 1 rental unit have to meet the quota rounded up.

    (e.g. If you have 2 rental units and the quota is 5%, you would end up having to make 50% of your properties affordable to meet the quota, or subdivide one of them into separate rental rooms.)

  5. Alan Miller

    What’s interesting about the postings from the Facecrook page that RO posted at 11:28am above, is:

    1)  Everyone is looking for “quiet, respectful” people.

    2)  No one mentioned CV-19, the “elephant in the apartment” if you will.

    3)  Everyone seems to want to get out of their lease full at full rent, rather than suggesting a lower price to avoid eating the whole thing — which I’d suggest is what’s going to happen if you don’t meet people half way who have the entirety of vacancies to pick from.

    I’d be looking for “isn’t out mixing it up with everyone like there’s no pandemic” way above “quiet and respectful” in the current environment.  But as we’ve been reminded in the media and through direct observation just about everywhere, many to most young people just don’t see this as a major threat or register the societal implications of spread.

  6. Ron Oertel

    In my opinion, the University Mall developer has put themselves between a “rock-and-a-hard place”, as they’ve already begun the process of discouraging businesses from locating there (e.g., as places like The Graduate leave or close). 

    Similar to what’s occurred at Trackside, though there appears to be a new, small bike/skate shop located at one of those units.  (The one next to it appears to be vacant, however.)

    In any case, the University Mall developer has already committed to “the long haul”, as noted in yesterday’s article.  And, they aren’t going to be able to sell their existing mall easily.

    Seems to me that the city has the upper hand (regarding their goals), if they choose to exercise it.

    And that there’s no particular rush – especially when considering the impacts of Covid, telecommuting, etc.

    1. Bill Marshall

      And that there’s no particular rush….

      That’s not really for the CC, Commissions, commenters to say… it is up to the project applicant(s)…

  7. Ron Glick

    “And that there’s no particular rush – especially when considering the impacts of Covid, telecommuting, etc.”

    As Einstein said when explaining relativity “Talk to a pretty girl for an hour it seems like a minute. Put your hand on a hot stove for a minute it seems like an hour.

     

    1. Alan Miller

      Great quote.

      [Although it’s 2020, so it is probably both mansplaining and sexist in some circles. That Albert! Just didn’t think ahead to 2020 when he spoke. Maybe, therefore, we should cancel relativity? After all, it’s nothing but light-skinned physicx.]

  8. Eileen Samitz

    Much thanks to the members of the Social Services Commission for this excellent article with very important points regarding the University Commons proposal which, clearly needs to be denied by the City Council and go back to the drawing board for many reasons including the grossly inadequate affordable housing “plan” which is not even a legitimate, nor implementable plan.
     
    Also, Ron Oertel raises a very important and interesting point.

    Why is this terrible University Commons project being rushed though the process with such a inappropriate proposal and in such uncertain times? Particularly with the latest Supplemental Staff report on it for this Tuesday’s City Council meeting which exposes:

    1) the unaffordability of the housing in this exclusionary by design mega-dorm project charging $2,229 or a market rate rent of studio apartments which is double the cost of an average studio in Davis. Imagine the cost of the 1-, 2-, 3- and especially 4-bedrooms apartments? NONE of this is affordable at the University Commons project proposal for students or non-students.

    2) the supplementary Staff report also exposes that the University Commons developers are trying to get away with not having a real affordable housing plan. While all the mega-dorms will have 15% affordable beds, the University Commons developers who are proposing an enormous project of 894 beds, are trying to scam the public with only 10% affordable housing (although they are units) with NO mechanism to implement or enforce any affordable housing “plan”! The other mega-dorms need to donate the net difference between of the affordable units rent and market rate beds to the City’s affordable housing fund, if the developers can’t “find” qualified applicants. This is a clear “loophole” for the University Commons developers.

    The odds are that this is a pre-planned scheme for the University Commons to plan to “cave” on this Tuesday at City Council since it is completely unreasonable, and they likely want to appear to “compromise”. If the University Commons developers were honest and sincere with trying to propose a project that would respond to the many concerns of the Davis citizens, they would have already including a legitimate affordable housing plan.

    So, is the Vanguard going to continue to defend and excuse this egregious University Commons proposal? Will the Vanguard continue to be an advocate against the Davis community to advocate for this out-of-scale project? Or will it help to look for a compromise on size where this proposal needing major downsizing and needs to eliminate the unaffordable 45% 4-bedroom group housing apartments.  For more than 2 years the Brixmor developers were asked repeatedly to eliminate this group housing format, but instead the developers increased the number of 4-bedroom apartments an additional 20% to 45%.

    This 4-bedroom group housing factor is particularly important due to health concerns and since there is the serious factor of the COVID-19 pandemic. It is clear that far fewer students coming back to the UCD campus due to COVID-19 and on-line classes likely to continue into the future, so it is clear that far less student housing will be needed in the City.  And the obvious question is, why is this project being rushed though for approval now, particularly given the many contrary factors regarding the University Commons proposal?

    In short, there is no way that the University Commons project should be approved this Tuesday or supported by any City Council member for a plethora of reasons. Any Council member who would vote for the University Commons project is clearly voting against the overall best interests of the UCD students, as well as the rest of the Davis community.

    1. Ron Oertel

      The other mega-dorms need to donate the net difference between of the affordable units rent and market rate beds to the City’s affordable housing fund, if the developers can’t “find” qualified applicants. This is a clear “loophole” for the University Commons developers.

      Meaning, as I understand it, that the University Commons developer/owner can (essentially) raise the Affordable rents to full-market rent levels, if they can’t “find anyone” who qualifies for the Affordable units (and thereby “keep” the difference).

      (Instead of providing the city with the “difference”, as other megadorm owners are apparently required to do.)

        . . . with NO mechanism to implement or enforce any affordable housing “plan”!

       

  9. Todd Edelman

    20 units of below market rate. Forgive me if I am not standing on my seat and applauding.

    How much more housing could be built if we significantly reduced – not eliminated – the amount of space for storing motor vehicles? This has a side benefit of reducing transportation impacts. If most people who live here won’t be using their vehicles regularly, why devote so much space to them? We have a long-term housing crisis, not a vehicle storage in private buildings crisis.

    There needs to be strict rules against building so much parking in the same footprint as where there could be housing. Sterling 5th could have built perhaps 15% more housing in the space used for most of the garage, and perhaps much of this could be BMR. Sterling could have also been taller, at least two more levels… that and replacing the parking structure would provide nearly 100% more housing. With fewer cars there’d be limited transportation impacts. It will be extremely easy to get from Sterling to campus by way of the new connector from Pole Line to East Olive.  The building looks undersized on a wide street. It’s all wrong.

    Similarly, with University Commons – rentals designed for flexibility, and good for students but not only students – it could easily be ten stories at the Russell side, with stepped reductions to the north to not have shadow impacts. This would also block some noise from Russell for both UnCommons and the housing to the north.

    Hundreds of missed opportunities for homes, because our bicycle-symbol’d town insists on minimum parking levels during a perpetual housing pandemic. We need a vaccine for automobilism.

    The City’s automobile storage policy creates homelessness.

  10. Ron Glick

    “Except that this has already been analyzed by a guest commenter (in-depth), who found no evidence that Measure J/R is impacting sales OR rental prices. That commenter is apparently a renter, himself.”

    Sure, right. If you say so.

    Measure D should be called the landlord protection act of 2020 because it restricts supply driving up rents.

    1. Ron Oertel

      Sure, right. If you say so.

      I’m not the one who “said so”.  You participated in the comment section of that article, so I’m pretty sure you know who (and what) I’m referring to, as well as the reason I can’t post a link to it.

      I’m also reasonably sure that you can find it on your own (in the archives of this blog), if you’re so inclined.

      In any case, the “data” said so. It may very well be that part of the reason is due to surrounding communities absorbing demand.

      If you’re concerned about housing shortages in Davis, vote against DISC. I can provide a direct link regarding that predicted outcome, if you want (as described in the EIR).

    2. Ron Oertel

      But truth be told, even surrounding communities have not had many market-rate apartment units come forward, in recent years. I believe that Davis has had far more come forward (and approved).

      Maybe the rent isn’t high enough to justify it, compared to profit from single-family houses in surrounding communities.

      In Davis, part of the demand has been met by “mini-dorms”, which will likely remain cheaper and more flexible for many. And, with free parking, to boot!

      Hopefully, demand will ultimately be addressed via the agreement with UCD. Assuming that demand actually does increase over time, given the trend toward online courses (and the tenuous nature of International student enrollments).

      Across the country, college enrollments are expected to continue dropping.

        1. Ron Oertel

          Bill:  You’re already familiar with the status of those, in Davis.

          Regarding other nearby communities, I believe that very few market-rate apartment buildings have even come forward, despite being “planned” for.  Since they haven’t been built, they certainly aren’t occupied.

          Perhaps this should be examined in a future Vanguard article. But, I wouldn’t hold my breath.

          The reason that there was a “dearth” of proposals in Davis (and elsewhere) had more to do with the recession, than anything else.

          No one should be proposing student housing on an expanded periphery of town, regardless.

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