by Gloria Partida
The balancing act of trying to meet the needs of all the voices in the community can be challenging. It is at once rewarding and frustrating to search for solutions and the best ways to implement those solutions. There is then the wait to see if you got it right. Luckily, I come from a research background where this very process was my life for 30 years. What I learned was that before you got to the trial stage you had to have as much accurate information and observations as possible. Even still sometimes you had to go back to start. Good for science where the petri dishes were not showing up for public comment. Not so good for public policy making where real people’s quality of life is at stake.
This week I received an email, one of many, which asked that we build homes at comparable prices with Woodland, Winters, and Dixon. It further stated that affordable houses in Davis are nonexistent and that they would not support developers building $800,00 homes. Affordable housing has been the biggest challenge of my time on counsel. It requires a multitude of tools and approaches.
This request seems simple enough. We need someone with a plot of land in Davis that they are willing to value at an equal price as a similar plot of land in the surrounding area. Essentially taking less than the land is worth. Let us leave out the fact that the taxes assessed on the land would still be this same as what the taxes are on similar plots in Davis. Once built the person would than again need to be willing to ask for less money than the house was worth in Davis. If this all played out the lucky buyer would be foolish to not turn around and sell that home for what it was really worth and make a tidy bundle.
I have heard people ask over and again “why can’t we force people to not sell homes at the market rate?” It is odd that people never ask why we cannot force people to sell any other private property at a more affordable rate. More importantly I think the real question should be why IS the market rate for housing in Davis so high. So, I will start again. We need someone in Davis with a plot of land. Oh, I forgot to add in the city limits. Yes, I think we all know how supply and demand works. This does not mean I think we cannot do anything about adding affordable housing to our supply. I do think however that we need to stop asking for the same experiments. The number one being to force developers to add more inclusionary units than they can afford. This is one instance when tough love will not yield the result we want. It will just make developers go elsewhere where they can probably build the same project with more inclusionary units than they can build here. Does this mean we should not ask for the most affordable units we can get? Yes, and Maybe.
I strongly believe that a place to put people in is top priority. Inclusionary units are without a doubt the most popular tool in the tool kit. However big A affordable units without a doubt give you the biggest bang for the buck. When we are talking about providing housing security for the most vulnerable, big A affordable delivers. It is without a doubt the sledgehammer of affordable housing solutions and produces just as messy results. Both solutions still require that plot of land and still only address rentals.
Last week Georgina Valencia addressed the question my email commenter asked. How do we, if not produce, at least keep for sale housing below market rate. In essence how do we prevent that buyer in my early example from making that tidy bundle. I appreciated that there were actual suggestions given in her article. Limited equity homes are not new. We have a good example in the Dos Pinos cooperative. Ensuring that equity restrictions remain on the stock of low-income homes we have is important. It is again another tool. It is one, however, that I have mixed feelings about. Home ownership is an important way that fiscal security is passed onto future generations. It is a path that has been by and large blocked for the lowest socioeconomic populations. Most of those populations are people of color. Owning a home and building equity is an important way for families to build wealth. Limiting equity limits the rate at which people can move into middle and upper classes. This is not to say that providing a stock of affordable for sale homes is not important. Again, it is another tool.
Maybe rather than build affordable for sale homes we need to get more people into smaller entry level homes by offering silent loans. This would make homes affordable because homeowners would not pay on a percentage of the purchase price. If the home became a rental, was sold, or was refinanced the City would have the loan repaid. This would solve the problem of trying to keep a limited equity stock and allow people to build equity. This would require a much bigger in lieu pot and less inclusionary units.
We are at a now at a place where we are asking what we have learned and are we using the right tools? We are working on our housing element and have received a $310,000 planning grant from the California Department of Housing and Community Development (HCD) to streamline housing approvals and accelerate housing production. This SB2 money will be used to complete financial modeling for specific development scenarios—to right-size the City’s inclusionary housing requirement for local market conditions as well as for various development types. The analysis will include the financial modeling of specific development scenarios to identify what tools will be the most effective in producing inclusionary units and ultimately ensuring a diverse housing stock. While we wait on this, I welcome questions and suggestions for helping us find solutions.
I have myself asked:
-Why the big A affordable money can not be combined with private projects to get more inclusionary units. It seems that there should be a way to combine those efforts and resources.
-How can we more effectively use in lieu fees? Should we forgo the inclusionary units for larger in lieu fees?
-Is it possible for new projects to satisfy their affordable unit numbers by offering low and very low units at an older development?
-Can we make it easier for single family homes to densify and become smaller more affordable multiunit for sale homes?
I would also welcome a plot of land you happen to have laying around. I did mention to my emailer that it was difficult to pass measures outside of the City limits. To which the response was we didn’t need big tech. I’ll weigh in on this another day but that big tech came with a lot of housing affordable and otherwise.
Gloria Partida is the Mayor of Davis
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