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.
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?
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.
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.