by Georgina Valencia
I serve on the Social Services Commission and have been on the commission for a little over 4 years. The reason I choose to serve on the commission was that my expertise with sales and marketing programs for affordable housing could be helpful to further the city’s commitment to affordable housing. In short I felt I would bring experience and knowledge to strengthen and further the dialogue on affordable housing.
Before and during my time on the Commission, I have represented the sale of new affordable properties in Davis. As part of my work to prepare for the sale of these properties, I reviewed Davis’ affordable housing program and discovered weaknesses in the program. During my term on the commission I have pointed out many of those weaknesses to staff and council members, with no resulting resolution. Specifically, my comments centered on what I saw as a lack of oversight of the affordable housing program, prompting my research that uncovered a Grand Jury report entitled “The City of Davis Affordable Housing Program” released 5.11.17. The report was surprising.
For context, the number of affordable homes in Davis today is approximately *125 plus or minus. This number of 125 seemed a very low number for a town that has approximately 25,000 housing units. I asked myself how could a city like Davis, socially conscious and engaged, have what seemed to be such a low number.
As I read through the Grand Jury Report my question was in part answered. Let me quote from the report: “The city of Davis had 700 affordable housing units and of these 700 only 90 still remained as of May, 2017…The rest (610 units) were sold at market value with significant profit to the sellers…There was considerable public comment as the loss of ownership units from the affordable housing program became apparent. The loss of units from Wildhorse and Simmons Estates in particular aroused significant public debate about whether permitting the sale of affordable units at market value was an appropriate use of land dedicated by the developers to the affordable housing program. Additional questions were raised about the fairness of the selection process for the original low income buyers.“
Reading the summary portion of the Grand Jury Report another statement gave me pause, “In response to public comment about the loss of homes from the program and perceived unfairness in selecting eligible homeowners and developers, the City successfully evolved an affordable housing program that ensures fairness in the selection process and retains homes in the program.” This statement gave me pause because it is my experience that Davis has lived up to this statement. I say this because there continues to be a loss of homes from the affordable housing program, and a lack of oversight of the affordable housing program.
Let me add one more detail. Last Monday, January 25th there was discussion at the SSC meeting regarding the findings from the Grand Jury report. The reason stated for this loss of affordable units was that this was a planned affordable housing policy in 1990 “The city believed any increase in home value should be passed on to the low income homeowners. This meant that the original buyers of the affordable homes could sell the homes at market value to purchasers who had no income restrictions. The sole limitation put on buyers was a requirement they occupy the home for 2 years.” This fact about loss of units aroused significant public debate. The City did respond by creating the Affordable Housing Task Force and amending the 1990 ordinance and further amended the housing policies in 2005. The problem is that there are still problems with the program and continued loss of affordable homes.
I am witness to more than one of these affordable properties being offered for sale by agents that do not list details of the program or misrepresent the program. Who is responsible for correcting these problems?
The 2-year owner occupancy program (see Housing Code 18.04.040) have the following requirements (revised by the city post the Grand Jury Report):
*the owner will occupy the unit for the entire duration of owning the unit.
*when the owner offers the unit for resale there is a notice of the occupancy requirement (notice refers to the signing of a declaration of the owner occupancy).
*there is a buyer selection and screening process (see 18.050.040) that is to be carried out by the owner, city, or by the designated responsible party.
What happens If these requirements are not complied with by the owner of an affordable home? If the homeowner does not comply with the deed restriction, the party who placed the restriction on the deed , the City of Davis, can sue to enforce the obligation. If the homeowner loses, she may have to pay the other party’s attorney’s fees and court costs, in addition to covering the litigation expenses of her attorney. Similar responsibilities apply to the title company, lender and agents involved in these transactions.
I have observed the property I mention above, and other such properties have been put on the market for sale with no city or ***city contractor monitoring the advertising or sale of these properties. I have called and emailed information on more than one occasion pointing this issue out to the city contractor. Often the city or city contractor are unaware the property is even offered for sale. Again, no monitoring of these homes is occurring. Additionally, in my research I have found some of these properties are second homes. Again, has the City of Davis met its responsibilities by, as the Grand Jury Report states, ensuring fairness and retention of affordable homes. It appears not…and therefore I ask who is tending the shop? I offer the following solutions that would help Davis protect its affordable housing stock:
1. List affordable homes on the City Website. Why? When the agent lists a home they can first check the city website and know that the home they are listing is an affordable home. Many of the affordable homes have been listed for sale by agents that have no knowledge the property is a deed restricted affordable home. This public notice would help agents, sellers and the city track what happens with the affordable housing inventory.
2. Hire a consultant or dedicated full-time staff person that is an educated and experienced with affordable housing, housing policy, real estate sales and real estate valuations. That person would oversees the program and the affordable housing listings to protect what is a community asset.
3. Make sure that no home is lost from the program whether due to lack of oversight or foreclosure. The city should always evaluate whether to execute or not execute its First Right of Refusal. The proceeds from such a sale would be placed in the Housing Trust Fund to be used for future affordable housing.
4. Support the following action by The Social Services Commission, at the January 25th meeting, voted 7 – 0 in favor of the following addition to their agenda. A numeric count of current affordable homes and specific definition of the deed restriction for the home, the number of affordable homes at risk of foreclosure and corresponding action to save the property, affordable homes being marketed for sale, affordable homes being added to the current inventory. The idea is to create the oversight needed for the affordable housing program and affordable housing inventory.
*SSC Agenda January 25, 2021
***City Contractor prior to December 2021 was NeighborWorks. The work has been temporarily assigned to Yolo County Housing Authority. City Staff announcement at the 1.25.21 meeting.
Georgina Valencia is a member of the Social Services Commission, a member of the Housing Element Committee for the City of Davis and a Real Estate Professional. Ms. Valencia can be contacted by email at firstname.lastname@example.org
Support our work – to become a sustaining at $5 – $10- $25 per month hit the link: