Guest Commentary: Affordable Housing…Who’s Tending the Shop?

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 georginavalencia@sbcglobal.net


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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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56 Comments

    1. Bill Marshall

      Are the affordable unit #’s inclusive of for-sale condos?  Seemed, years ago, that the limited equity “co-op” condos, (Chiquapin, Dos Pinos, Muir Commons) seemed to remain ‘affordable’…

      1. Georgina Valencia

        Bill

        Yes the affordable units include all for sale affordable properties, and condo’s are part of that count.  To my knowledge Co-op condo’s may be considered affordably priced.  But, an affordable designation I refer to are Deed Restricted.

        Thank you,

        Georgina

  1. Ron Oertel

    Seems incredible that the (revised) requirements listed above are reportedly not being followed.  I would think that this exposes a significant probable liability.

     

    1. Georgina Valencia

      Ron

      I agree with your comment.  But, the fact remains that there is much inconsistency and little to no oversight of the program…along with a tremendous amount of confusion on all parties part.

      Thank you,

      Georgina

  2. Don Shor

    Thank you for this article. I’ve been following the affordable housing issue in Davis for a couple of decades and the city’s policies have had, shall we say, their ups and downs. My personal opinion is that it will be very difficult to build an effective affordable housing policy when housing supply is curtailed by the voters. But regardless of where anyone comes down on that issue, this seems really apt just to develop an understanding of what the baseline is:

    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.

     

    1. Georgina Valencia

      Don

      Thank you for you thoughts and I agree that without building there isn’t going to be much added in the way of new affordable housing.  But, if we continue to loose affordable housing because of lack of a program or oversight that would be a shame and a sham.

      Georgina

  3. Dianne C Tobias

    Thank you for this article. These have been problems in our city for a long time and I believe although we have tried to create guidelines, they have not been enforced by the city.

  4. Alan Miller

    So . . . there are tax breaks and subsidies given to developers to build so-called affordable housing, and somehow these properties end up sold on the market and now this so-called affordable housing is lost from inventory.  This is presented here as if its passive and accidental — isn’t it purposeful and criminal?  I have always held that so-called affordable housing is a scam, thought scams are usually immoral but technically legal – or at least unlikely to be prosecuted.  Selling off so-called affordable housing inventory is legal?  The City failing to monitor the program is just a whoopsi?  Shouldn’t heads roll here?

    1. Mark West

      “The City failing to monitor the program is just a whoopsi? Shouldn’t heads roll here?”

      If you believe all the ‘stories’ about the foibles in the affordable housing programs in Davis you might conclude that the City was complicit. It wasn’t that long ago for instance that the City Attorney testified to a failure to file the required deed restrictions, allowing housing stock to be sold at market rates (and significant profit) with no recourse (or rolling heads).

      I believe that for sale affordable housing programs as practiced locally are a failure and should be done away with. The focus of our efforts should be on the access to affordable rental properties, though I might be convinced to support affordable for sale condos with iron-clad deed restrictions.

  5. Georgina Valencia

    Alan,

    Well I don’t believe any of the actions by the city that allows loss of affordable homes is passive or accidental.  But, our city officials will only act if the community feels this is an important issue.  And I don’t feel heads should roll.  What I do believe is that there should be action such as the examples I gave as a solution.  Thank you for your input.

    Georgina

  6. Ron Oertel

    I find it very odd that this issue hasn’t received much more attention, in a town supposedly concerned about Affordable housing.

    And yet, in my (at least) five years or so of reading the Vanguard, this is the first I’ve heard of it. And even so, it took a guest author to bring it up.

    What is the council doing about this, anyway?

    1. David Greenwald

      We actually did have a pretty lengthy piece on it a decade ago.

      You say, “in a town supposedly concerned about Affordable housing.” That’s a pretty recent concern. One of the results of the scandal was that we shifted largely away from for sale affordability.

      1. Ron Oertel

        Concerns regarding housing affordability have been a consistent, claimed concern on here during the entire time I’ve been reading the Vanguard (at least 5 years).

        1. Ron Oertel

          Which (again) I find strange, given your stated concerns regarding Affordable housing. Housing affordability has been the foundation of maybe half of your articles. Usually manifesting itself into “build, baby, build”, rather than Affordable housing programs. (Maybe that’s why you haven’t reported on this in 10 years?)

          And not just your concerns, but some of those on the council (that the Vanguard seems to be rather aligned with) as well.  Where are they, on this?

           

        2. Ron Oertel

          That kind of statement proves the point I was making.

          It is true that you can’t build more housing (of any type), without building more housing. (There’s a name for this kind of nonsensical statement.)

          You can certainly preserve what you have, which you don’t seem all that interested in.

          For that matter, there’s nothing that says that existing housing (and sites) can’t be converted to Affordable housing. I believe this is being done to house homeless individuals, for example.

          1. David Greenwald

            Not sure what point you were making. But the fact remains, the only way for the most part to build affordable housing is leveraged off market rate housing.

        3. Ron Oertel

          I believe that is factually incorrect.

          For example, I recall some state bond measures for Affordable housing.

          I haven’t even seen any evidence that builders provide the bulk of the funds used to build Affordable housing.

          Regarding the type of sprawl that you advocate, the most that market-rate builders do is provide a plot of land. Then, the Affordable housing developer gets government money to build it.

          1. David Greenwald

            Notice I said for the most part. Show me an affordable housing project in town that was not attached to market rate.

        4. Ron Oertel

          Creekside – brand new, on Fifth Street.

          But getting back to the point of my comment, why aren’t you interested in saving what the city has? To me, this is concerning regarding your overall advocacy, based upon your stated concerns. Not the first time, either.

        5. Ron Oertel

          So in the case of Creekside, I guess it only took about 25 years, and used external funding.

          Again, funding for Affordable housing does not appear to be dependent upon sprawl, even if it’s the “easiest route” (to promote a market-rate sprawling development).

          Regardless, I find your lack of interest in maintaining existing stock troubling, given your stated concerns.

          1. David Greenwald

            Regardless I find your professed interest in affordable housing disingenuous at best. Why? Because all of the affordable housing we have added in the last five years – you opposed. Our RHNA allocation is 845 for the next Housing Element. That’s like six projects the size of WDAAC. How is that going to happen under Ron’s rule’s of order?

        6. Ron Oertel

          My interest in Affordable housing primarily revolves around ensuring that folks like you are consistent in their demands for Affordable housing, and don’t use it as an excuse to support a sprawling, market-rate development. And that you don’t lie, regarding the parameters of such funding.

          I find your views inconsistent in a number of ways, as demonstrated by your downplaying of the “Davis-buyer’s” program proposed at WDAAC (in regard to the racial impacts).

          I would also ask how much of the student megadorms are going to count toward the RHNA requirements – especially since that was brought up repeatedly on here, and to the council (prior to approvals).

          But bringing it back to this particular issue, you (and apparently, the city itself) seem strangely silent regarding the apparent loss of Affordable housing described in this article, seemingly due to outright negligence.

           

        7. Ron Oertel

          I got cut-off, but it’s probably better to state that my interest is in ensuring that you provide complete information, rather than just those that align with your advocacy. To clarify, I don’t believe that you would outright “lie” regarding requirements.

          Actually, that would probably be true for just about every issue on this blog.

        8. Ron Oertel

          I do have one related question, though:

          Assuming that these units were “counted” toward previous low-income RHNA requirements, does the loss of them “add” to future requirements (assuming that SACOG even knows about them)?

          Similar to the situation that you focused on, regarding the potential loss of low-income units at Pacifico?

          And how would reclaiming them (for the required income levels) work? And would it then help to meet (past) or (current) RHNA requirements?

          What a potential mess this could be, if any of a number of parties chooses to make a stink about it. (Actually, it already “stinks”.)

        9. Ron Oertel

          So really this is more about me than it is about affordable housing.

          Yes – it’s about your inconsistency, given that “affordability” is the basis of a significant number of your articles.

          Much like racial equality is (while downplaying the impacts of the Davis buyer’s program at WDAAC).

        10. Ron Oertel

          And, the “reason” that your inconsistency is important is because you appear to be someone who is willing to co-opt their own claimed values, in support of development.

          Similar to how I view the “YIMBY” movement, e.g., in regard to displacement of existing populations.

  7. Eric Gelber

    What are other jurisdictions doing to maintain affordability of for-sale affordable housing? Here’s an example: https://www.cjhrc.org/images/Affordable_Housing_Resale_Units_Rules.pdf At a minimum, the following provisions make sense to me:

    – All resales of affordable housing units negotiated during the term of restriction shall be only to a certified, income-eligible household.

    – Affordable housing sale units shall not be resold at a sales price that exceeds the initial sale price for the unit (Base Price) plus a restricted increased based on the percentage of change in the approved median income guide.

     

    1. Bill Marshall

      Those make sense in theory… but what entity is charged with enforcement and how is enforcement funded?

      The concepts appear logical, but, “the devil is in the details”… the Davis city ‘program’ appeared to be logical, but, …

      I admit I have not fully read your cite… the ‘answers’ may be in there…

    1. Ron Oertel

      The article notes that there (apparently) hasn’t been enforcement regarding the three requirements (listed in the article) that the city itself established as a result of the grand jury report.

      Enforcement would likely be even more difficult with a landlord-operated Affordable rental program within the megadorms.  Who is overseeing that?

  8. Ron Oertel

    As a similar question (to that raised in the article), how are the landlord-operated Affordable rental units (within the megadorms) going to be monitored? Who overseas that?

    And do they count toward RHNA requirements?

      1. Ron Oertel

        Not seeing it there (either of those issues) despite this being brought up repeatedly, prior to approvals.

        Regardless, we have an example in this article of documented requirements that the city created in response to a grand jury report.  And, yet, they’re apparently being ignored by the city. Are you claiming that putting it in writing “works” in a city that doesn’t enforce its own requirements?

        Why, exactly are you not concerned about this issue? And more importantly, why isn’t the city?

        1. David Greenwald

          I think largely the city addressed the issue by making for sale-affordable housing permanently deed-restricted after the problem arose nearly two decades ago, they have largely moved away from for-sale affordable, and there has not been any of the documented problems with affordable rentals. So while I was very concerned about this issue in the time from of 2007 to 2009, I haven’t seen any real problems since. The much bigger problem being the end of RDA and the lack of clear path to additional supply. The dates in the report go back to like 2005. They point out only 90 remain affordable, but at least this commentary did not put dates to when the last ones switched over – I think the Grand Jury report itself, which came out almost a decade after I first reported on the problem, was itself a bit dated.

        2. Ron Oertel

          So while I was very concerned about this issue in the time from of 2007 to 2009, I haven’t seen any real problems since.

          Have you not read the article you published above, from a guest author?

  9. Don Shor

    The city’s affordable housing policy has become a Gordian Knot that councilmembers and candidates tug at ineffectually. Most don’t even want to touch the topic. This is just another rather disturbing wrinkle in the whole situation. I appreciate the Social Services Commission weighing in on it. Several other commissions would likely wish to do so as well, and by the time the city council gets around to taking up the topic it will likely seem even more intractable.

    I advocate Alexander the Great’s approach to the problem.

  10. Georgina Valencia

    Ron, Dave, Don, et al

    A lot of comments flying back and forth but let me see if I can add some constructive thoughts to the discussion:

    1.  We have in fact lost affordable homes in the past, as stated in the Grand Jury Report, and in the more present.  Why?  Many reasons.  But, one that is a stand out is that the city does not apply it’s first right of refusal (FRF).  Why?  Because they don’t have the knowledge, bandwidth or resources to do so.  The FRF allows the city to make a decision to buy the home or not.  Well, to buy the home they need to know what they are doing and have the resources to do so.  They have neither the will or the money.

    2.  While it is true that for sale affordable housing (that is all I have directed my comments to) is easier to build when new market rate housing projects are planned.  I would direct your attention to Berry Bridge.  This is a for sale affordable housing project that the city gave the land to Mike Corbet to build the project.  Then the city also awarded him approximately $300K towards building the project.  For Sale Affordable Housing comings in many ways.

    3.  Affordable housing includes rental deed restricted housing (generally multi-family, ie Creekside), and for sale deed restricted (which is what I am referring to).  Generally, cities like rental deed restricted housing because it is easier to manager and to get built.  What I would like everyone to keep in mind is the reason behind Affordable Housing.  Affordable housing is designed to support those that are less fortunate with a leg up to help folks to participate in the economy.

    If the only affordable housing we offer in our community is rental affordable housing how does that help?  What that does is condemn a segment of society to stay in rental with no opportunity to gain some equity to participate in the economy.  A quote from Richard Rothstein,author of The Color of Law, may help put the conversation in a clearer perspective…”The issue of inclusionary and affordable housing affects everyone; there is no one it does not affect. The most major social problems this society faces stem from residential segregation…”  

    4.  Finally, I have talked with City Council members and staff about much of the current Housing Policies that apply directly to for sale or ownership affordables, and again nothing has been done!

    Does it make sense that someone who already owns a home can purchase an affordable home in Davis?  Well, the way our housing policy defines a first time home buyer allows an individual that owns a home, sells it and qualifies within the affordable housing program to make a purchase.  I know that is true because I had to work with several buyers (that were selected through the Lottery process). These buyers owned homes in Davis, Winters and Woodland and were still eligible to buy an affordable home (they did have to sell their current home). But, really is that the intent of affordable housing? Selling affordable homes to people that already own homes?  When I pointed out the issue regarding the poor definition of a first time home buyer I got a shrug of disbelief.  When the buyers that owned homes made the purchase and I said now do you understand?  The answer was yes.  But, the change still has not been made (now some 3 years latter!)

    I could go on and on…the issue really is this…does anyone in this community really care?  Is there the political will to make the change.  That is the real question.  And yes, David, there will need to be some future development.

    Thanks all for letting me rant.  I can’t tell you how disappointed I am with city council and staff.

    Georgina

     

     

     

     

    1. Bill Marshall

      Georgina…

      I think there is pretty strong community will to have affordable housing… the problem for me, and many others, is insistence on affordable “for sale” housing… big diff. compared to good, affordable, rental housing…

      The abuses of the ‘affordable housing program’, and the difficulties in monitoring it, the ‘incentives’, economically, for “cheating” in keeping housing affordable is 10X + more difficult in for sale units.

      We rented in college, and the first 3.5 years afterwards… we were literally ‘on the edge’ when we bought our first home, and that was a ‘fixer-upper’… Davis Manor, where it was obvious it had been a rental for years, and showed it!  The house was 12 years old (in 1980), the oven failed the first year we were in it and we had to re-shingle the entire roof a year later…

      So, am not too sympathetic with providing pristine, for sale housing, to folk where it is not a real ‘stretch’ for them, to assure ‘affordability’…

      I am very sympathetic to providing decent (not luxurious) housing that is affordable to families and individuals… I believe that can be done with rental housing.  I see no need for it to be ‘home-ownership’.

       

      1. Dave Hart

        Home ownership is the way a family or even just a single person can build financial equity and move UP the social ladder.  The fundamental evil of red lining was not just making people feel bad that they were discriminated against because of skin color, but that it cut off yet one more avenue to do what most white people take for granted:  the ability to accumulate enough wealth that it can be passed on to the next generation or, at least, provide a cushion against poverty later in life.

      2. Dave Hart

        Home ownership is the way a family or even just a single person can build financial equity and move UP the ladder.  The fundamental evil of red lining was not just making people feel bad that they were discriminated against because of skin color, but that it cut off yet one more avenue to do what most white people take for granted:  the ability to accumulate enough wealth that it can be passed on to the next generation or, at least, provide a cushion against poverty later in life.

  11. Ron Oertel

    The entire city of Woodland is affordable housing.

    And if you absolutely must live in Davis (as if that’s some kind of local utopia), then save up for it and move there, after starting somewhere else (see Woodland, West Sacramento, etc.). That’s how it works.

    Actually, though – “Affordable” housing is apparently even an issue in places like Texas, Ohio, etc. Which tells me that there’s something deeper going on, than the price of housing. A fundamental disconnect between those at the bottom, vs. what the market can provide. And yeah, they are usually people who make some kind of mistake, I’ve noticed. (That includes having kids when you can’t afford it.)

    By the way, how does that development next to Davis Commons work?  Isn’t that on UCD’s land?  Maybe that’s the model, that should be pursued (e.g., government, or quasi-government agencies own the underlying land – permanently).

     

    1. Ron Oertel

      In any case, I’ve been watching YouTube videos regarding the precarious situation of those in VERY inexpensive areas (in the middle of the country), who are nevertheless desperately counting on the eviction moratoriums to continue.  So, I’m not seeing it necessarily related to the cost of housing, as much as it is lack of adequate income. It’s a large number of people.

      These are places where rent costs around $600/month for a one-bedroom (I think), at the most.

    2. Ron Oertel

      And for that matter, the entire Sacramento region (including Davis) is “affordable housing” for those from the Bay Area.

      And, Yuba City is “affordable housing” for Sacramento. (For those who can’t afford Natomas, Elk Grove, Woodland, West Sacramento, etc.)

      But anyone with any money is going to skip the latter, and move right to El Dorado Hills, etc. They might stop briefly in Davis on the way there.

      Of course, anyone with any real money avoids the entire region. It is viewed as something “in the way” between the Bay Area and Tahoe. 🙂

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