Monday Morning Thoughts: The Buyer’s Program Quandary

By David M. Greenwald

Davis, CA – When I first sat down and spoke with developer David Taormino, far in advance of the West Davis Active Adult Community (WDAAC) project (now known as Bretton Woods), he explained his concern and the lessons of the Cannery—basically a project that was supposed to supply housing that was affordable (small “a”) to the community ended up way too expensive and got purchased by out-of-town Bay Area residents fleeing a hugely expensive housing market.

Taormino was determined to avoid that pitfall and came up with the concept of the Davis-Based Buyers Program.  I was skeptical at the time (and remain somewhat skeptical) about its legality.

Clearly the city has concerns as well, which is why there is both the indemnity clause and the Fair Housing Clause written into the Development Agreement.

There was also the initial concern that the provision would be discriminatory—limiting who could purchase the project to a much whiter pool of applicants than the general population of the region.

After going over the proposal and running some numbers, I became convinced that it would probably have a negligible impact on racial composition.

First, the pool it is pulling from is amazingly broad—so broad that it probably negates some of its own premise, as the people need to have had a connection to Davis, such as a current resident, previous resident, relative of a current resident, or a graduate of UC Davis.  That’s probably a less diverse base than the overall region, but it’s broad enough that it doesn’t have to be.

Second, I don’t have a lot of statistics on the comparable project at the Cannery, but I can’t imagine that Bretton Woods will end up less diverse than Cannery.

Third, to the extent that the developer’s theory of their project pulling from existing residents is true, it will open up existing housing stock for new families to come to Davis.

Fourth, it will also house about 150 or so affordable units which, looking at that pool, is a good deal more diverse than the typical market rate pool.

Finally and probably most importantly the status quo in Davis—limited housing stock—is itself a form of soft discrimination locking in the existing demographics, and while Davis has become much more diverse over the last 20 years, it is still far less diverse than the rest of the region.  Not building housing exacerbates that trend.

The developers here have also attempted to modify the proposal to ensure that they are not discriminating or violating federal and state fair housing laws.

“This commitment has been and remains critically important to the Applicant,” they write.  “Beyond intent, a vital component of complying with fair housing laws is to ensure that any program will not result in a disparate impact on any member of a ‘protected class.’”

They note: “To address this concern, the marketing program targets several buyer pools that are equivalent to, or more diverse than, the City of Davis’ demographics such as the DJUSD area and UC Davis alumni. The data indicates that, by including these buyer pools within the sphere of targeted buyers, the program will not result in a disparate impact to any protected class.”

They have thus modified the program so that “any member of a protected class is not required to demonstrate a Davis connection when purchasing a home in Bretton Woods.”

The developers note: “It is our sincere hope that this exemption will prevent any unintended disparate effects.”

Former Mayor Brett Lee, along with former Social Services Commissioner Claire Goldstene, have some concerns about these modifications, however.

In an op-ed this weekend, they write: “The developers first proposed eliminating the Davis-Based Buyers Program in its entirety in July 2020, but faced immediate criticism from city residents and accusations of perpetrating a ‘bait-and-switch.’ They withdrew that request.”

Lee and Goldstene continue: “They have now returned with an alternative proposal where prospective buyers would be asked about their Davis connection, but if they are members of a ‘protected class’ they could bypass answering that question and still be eligible to purchase a home in the new development.

“While the developer’s proposed alternative sounds laudable at first, the practical effect would be to end the Davis-Based Buyers Program, as they desired in July of last year,” they argue.  “Understandably and appropriately, the definitions of ‘protected class’ in fair housing law can be construed quite broadly, which means that nearly every prospective home buyer could choose not to answer the question about a Davis connection and still buy a house in Bretton Woods. This likely outcome would violate the promise made to the community when the proposal was placed on the ballot about providing needed senior housing for Davis residents and those with a connection to Davis.”

While I understand Brett Lee’s concern here, I don’t believe this concern is fatal.  I would definitely tighten the definition of protected class to be race or national origin rather than some of the other classes.

I still worry about legality here and I worry about the fact that, because the city is indemnified, they have not done the necessary legal analysis to determine whether these proposals pass muster.

My biggest concern here is to find a way to expeditiously build desperately needed housing stock including 150 or so units of affordable housing that can alleviate some of the housing crunch.  This project will not be a game changer, it will not end the housing crisis locally, but, if done right, it could be a vital piece of the puzzle for this community.

—David M. Greenwald reporting

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