Housing Element Comes Back Before Council

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By David M. Greenwald
Executive Editor

Davis, CA – After several go-rounds on the Housing Element, staff has come to the council and asking them to approve the Revised Final Draft Housing Element on Tuesday.

“Staff recommends the City Council adopt the Revised Final Draft Housing Element at the August 31, 2021 meeting as proposed or with City Council supported edits to allow the document to be finalized for submission to the Department of Housing and Community Development (HCD) prior to the September 12, 2021 statutory deadline,” staff writes.

But staff also notes: “Staff supports the Planning Commission having further discussion on a number of these items which could be addressed in standalone policies or grouped as a recommended future amendment to the Revised Final Draft Housing Element.”

The Planning Commission on a 5-1-1 vote recommended approval of the final draft but also “scheduled a meeting on September 22, 2021 for further discussion and consideration of amendments to the Housing Element.”

Staff highlights three specific items that the council “may wish to confirm support for inclusion.”

First, a number of people have registered support for a policy whereby the city would “identify and implement more robust sources of funding for affordable housing to be put into the housing trust fund.”

Second, the inclusion of the Social Services Commission in the participation of the affordable housing ordinance.

“One of the Social Services Commission’s purposes is to evaluate affordable housing proposals. Staff intends to have the Social Services Commission review and make a recommendation to the City Council in the adoption of the updated affordable housing ordinance. Staff is supportive of this clarification and recommends modifying the document accordingly to provide this clarification,” they write.

Finally and perhaps most significant consideration of putting a package of housing policy initiatives on the ballot.

These would include a property transfer tax that “could be used… to support programs to address housing and homelessness through our existing Housing Trust Fund.”  Second, amend language that exempts from public vote “projects that provide affordable housing or facilities needed for City services.”

Finally, “Extend and expand, as long and as much as possible, the legal authority under Article 34 of the State Constitution for the City to develop public housing that would otherwise expire in 2025.”

Among other issues that drew consideration, was a discussion in the Planning Commission that was concerned about counting 105 income-restricted units for the Residential Sites Inventory.

“The concern is that the project’s affordable housing plan states that the income-restricted beds would only be available to students demonstrating financial need,” staff writes.  “Therefore, rental to only students would be a violation of those laws.  Ultimately, the Planning Commission recommended the elimination of the Nishi project affordable housing from the Residential Sites Inventory.”

Staff responds: “Based on the professional experience of staff and the consultant team, the 105 income-restricted units listed under the Nishi project in the Residential Sites Inventory meet HCD’s criteria for inclusion on the inventory.”

Staff concludes: “The City Council certainly has the option of accepting the recommendation of the Planning Commission to remove the Nishi units from the Residential Sites Inventory. However, it is important to understand the impact of doing so, as these units represent approximately 18 percent of the City’s RHNA obligation for Very Low-Income units for 2021-2029.”

The Planning Commission also recommended that the Social Services Commission Housing Trust Fund proposal draft be a, “standalone program and not incorporated into Housing Element Program Action 2.2.1.”

Staff believes, “there is no reason to remove the programs from the Housing Element, as having them documented in the Housing Element would not hinder the Housing Trust Fund in any way.”

Members of the Planning Commission also noted concerns that “the Housing Element does not go far enough or is not aggressive enough to aid in developing affordable housing in Davis.”

There is also the belief that the Housing Element should have been done prior to the Davis Downtown Plan.

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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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37 thoughts on “Housing Element Comes Back Before Council”

  1. Matt Williams

    Second, amend language that exempts from public vote “projects that provide affordable housing or facilities needed for City services.”

    There needs to be a threshold added to this idea.  The concern is that if the affordable housing included in the project is a negligible portion of the project then the project would not be contributing to affordable housing in the City in any meaningful way, and therefore should not qualify for the exemption.  Deciding where the threshold should be in order for the project to qualify as a “meaningful” contributor to affordable housing in the City will be an interesting discussion by the Planning Commission.

    Without the threshold this exemption will simply be an end run around Measure J/R/D.

    The same kind of “meaningful contribution to” threshold should apply to “facilities needed for City services.”

  2. Matt Williams

    On August 17th I sent the following e-mail to the City’s CFO Elena Adair, with copies to the FBC members, City Council, City Manager Mike Webb, Principal Planner Sherri Metzger, and Barbara Archer illuminating significant data integrity problems in the Draft Housing Element report.

    Elena, as follow-up to my May e-mail below, I would like to direct your attention to the Draft Housing Element document (see http://documents.cityofdavis.org/Media/Default/Documents/PDF/CDD/Advance-Planning/Housing%20Element%20Update%202021%20-%202029/Final%20HEU%20Documents/Adoption%20Draft%20City%20of%20Davis%20Housing%20Element%20%2008%2002%202021.pdf), and specifically to:

    Table 16, which shows a total of 32,530 Employed Resident in the City of Davis, and
    Table 17 shows 22,616 workers/jobs in the City of Davis, while
    Table 18 shows 27,810 jobs solely for the Top 10 Employers, which is impossible if Table 17 is correct.  Note: Table 18 contains the same erroneous number of UC Davis Jobs in the City of Davis that is contained in the 2019 CAFR, and
    Table 19 shows a Total Workers value of 15,178 which is less than Table 17 and Less than Table 18.

    This is a significant data integrity problem, as well as a noteworthy failure to proofread the Housing Element document.  However, that falls under a different department from yours, but the fact that the problems in the CAFR data have not been remedied, and have been proliferated into the Housing Element document is indeed the responsibility of the Finance Department.

    So, I renew my request to have the CAFR employment/jobs data corrected.  Since the source of the erroneous data is MuniServices, requesting them to bring their substandard work up to a standard level should not be a burden on either the City of Davis or the Finance Department.

    Thank you for your attention to this alert and request.

    Sincerely,

    Matt Williams

    .
    My original e-mail to CFO Elena Adair and the FBC, with copies to City Council and City Manager Mike Webb, illuminating the data integrity problems with the CAFR was sent to them on May 10th, and read as follows.

    Subject: Substantial Errors in Comprehensive Annual Financial Report

    Please accept this Communication as a simultaneous submission to the Finance Director and a formal communication for Item 3 of the next Finance and Budget Commission meeting.The 2020 Comprehensive Annual Financial Report has been published on the City website, and on page 164 of that document is the latest annual iteration of an ongoing error in the reporting of the Principal Employers in the City of Davis.  Specifically, the number of employees in the City of Davis for UC Davis is reported as 25,227.  The source of the 25,227 employees is not disclosed, but the UCDavis website https://aggiedata.ucdavis.edu/#fac shows 25,228 total UC Davis employees at all locations.

    https://www.davisvanguard.org/wp-content/uploads/2021/08/UC-Davis-Employment.jpg 

    12,122 employees (FTE) at UC Davis Health (the Sacramento campus) and 13,105 employees (FTE) at the Davis campus.  The bulk of those 13,105 employees work outside the City of Davis on the UCD campus.  To get a sense of the number of actual UCD employees located in the City, I contacted Real Estate Services at UCD.  They provided me with the following information: 

    *  There are approximately 500,000 square feet of UCD leased or owned space in the City.  They will get back to me with a more accurate number. 
    *  The 500,000 square feet is a mix of office space, laboratory space, greenhouses and warehouses. 
    *  For office space the UCD parking standard is five parking spaces per 1,000 square feet and 1 parking space per employee.  The requirements are significantly less for laboratory space, greenhouses and warehouses. 
    *  Assuming the 500,000 square feet is 100% office space to calculate an upper limit of employee count, the maximum number of UCD employees in the City of Davis is 2,500 (500,000 divided by 1,000 then times 5).  The actual number is probably less than half of that 2,500 maximum.
    *  The ratio of 25,227 to 2,500 is just over 10:1 
    *  That means the CAFR is overstating UCD jobs by a factor of 10.The US Census On the Map data page (see OnTheMap) shows 15,607 total employees in the City and a Total workforce of 24,520, considerably lower than thew 32,700 shown in the CAFR. 

    In addition to that data disconnect, even if the 32,700 Total City Work Force number is correct, the CAFR does not give any explanation why the Total City Work Force in 2021 has declined by more than 50% from the 2011 Total City Work Force of 65,622 shown in the report.

    https://www.davisvanguard.org/wp-content/uploads/2021/08/Inflow-Outflow-Analysis-of-Davis-jobs.png 

    Please take the necessary steps to correct these substantial errors in the City’s actual employment picture.  I believe that knowing the facts of our employment picture is one of the foundation pieces of any jobs development and economic development efforts the City might undertake.Thank you for your speedy attend to these substantial errors in the 2020 CAFR.

    Sincerely,

    Matt Williams

    1. Tim Keller

      Really interestng what you have pointed out with that data Matt.

      I have had a thought popping around in my head for the last few months, I dont know if I mentioned this to you already… but I think the city should invest in a cell phone data location survey… which could answer a lot of these questions with a surprising amount of accuracy:

      How many people live AND work in davis?
      how many people work in davis ( not on campus ) and have to commute in?
      How many people treat davis as a bedroom community and work in sac or elsewhere?
      The people clogging up the Mace exit – are they leaving town because they work here and live in Sac? or are those people who got off the freeway to get around traffic elswehere?

      The kinds of insights we could attain if we used cell tracking data are immense.  Its a little bit creepy and “big brother” which I acknowledge… so it has to be done right and with some discretion,  but it is clear to me even from debates on the vanguard that people operate with VERY different sets of assumptions about things like whether or not the lack of housing is even a problem…     If we have low quality data like what you have pointed out, how are city officials supposed to make actionable decisions?

      I think we can do a lot better using that cell phone data.   The census is a pretty blunt instrument for these purposes.

      1. Matt Williams

        Tim, as follow-up to my e-mail I received the following from another Davis resident.

        Yes, the entire point behind pointing out of the disparity data is to get the City leadership to focus in on the “actual” data – as researched, vetted and affirmed by a leading economic consulting firm and thereby leaving zero room for dispute of the facts and data.

        But immediately following that affirmation would necessarily follow an “analysis and interpretation” of its implications for future fiscal and economic health of the community and sustainable City finances.

        .
        I can easily see your cell phone data  idea being incorporated into the scope of work of the “researched, vetted and affirmed by a leading economic consulting firm” activity that is called for in the e-mail.

        I believe this is really important as a first step in the City actually having an actual Economic Development Plan that guides its economic development activities, as well as provides a “landscape” for assessing whether development proposals contribute positively to that Economic Development Plan.  Right now the development assessment process is pretty much an ad hoc lick you thumb and put it up in the air to see which way the wind is blowing process.  That breeds a whole lot of distrust in the voting public, as well as producing seriously flawed projects like The Cannery.

    2. Keith Y Echols

      @Matt

      Is the data about UCD employees:

      1.  The total number of UCD employees?

      2.  The total number of employees that UCD employees that live in Davis?

      3.  The total number of employees that work inside the city of Davis for UCD?

      What is the application of the data?  Is what your tracking the same as what the Housing Element Document is trying to track with the UCD Davis employee data?

      If we’re tracking the total number of employees that work inside the city of Davis for UCD; what is that fiscal impact on the city?  Does UCD pay business taxes to the city (or are they exempt as a non-profit entity?) for the in-city work locations?  They pay property tax at least (though once again the meager amount the city gets from the county doesn’t really make this a huge plus).  The workers weather they work at UCD on campus or at UCD city sites….it’s not like the city gets to tax their income either way.

    3. Richard_McCann

      This is interesting. MuniServices is an out of town subsidiary of a larger corporation. It’s pretty clear that they don’t understand the local situation and just started pulling numbers under the assumptions that (1) UCD was inside the city limits and (2) either the medical center is on campus or not even aware of the medical center as a separate operation. Having seen other consultants make mistakes like this in unfamiliar jurisdictions, it wouldn’t surprise me. However, the City staff should be familiar enough with the situation to have noted such a large discrepancy and asked MuniServices to go back and redo their analysis.

  3. Don Shor

    These would include a property transfer tax that “could be used… to support programs to address housing and homelessness through our existing Housing Trust Fund.”  

    I thought that only charter cities could enact property transfer taxes above the current level.

     

  4. Keith Y Echols

    While I’m happy to hear some funding has been set up for future affordable housing and shelter.  I’m disappointed that the solution is a property transfer tax.  Someone correct me if I’m wrong but essentially you’re funding these affordable homes by jacking up the costs (not value) of market rate homes that will be sold to likely new residents looking to move to Davis….or current residents looking to buy a home.  I guess it’s nickel and diming the transaction (how much will the property transfer tax be?).   Is there a projection of how much property transfer tax revenue there will be for the city?  The part I’m cautious about is “COULD be used to support…..”

    I’d much rather support affordable housing through economic expansion.  Increase sales tax revenue, business tax revenue and commercial property tax revenue.

    1. Ron Glick

      Depends on the size of the transfer tax. Most of the homeowners of Davis are sitting on huge unrealized capital gains that have been made even larger through restrictive supply policies. A transfer tax could be a reasonable way to raise money to fund Affordable Housing.

      1. Keith Y Echols

        But you’re not taxing homeowners.  Correct me if I’m wrong…but it’s not a property tax that taxes homeowners.  It’s a property transfer tax; you’re taxing the people buying/receiving the homes.

        1. Richard_McCann

          In general, the sales price is determined by a combination of underlying supply cost and the willingness to pay through demand. The incidence of the tax is determined by the relative elasticity of supply versus demand, so we can’t determine who pays what share of that tax without knowing more about the elasticity of each. We don’t have that information here, so we can’t determine the relative incidence of a property transfer tax a priori.

        2. Keith Y Echols

          The incidence of the tax is determined by the relative elasticity of supply versus demand, so we can’t determine who pays what share of that tax without knowing more about the elasticity of each.

          lol….that’s like asking: “What made the plane crash?”

          You: “Gravity”

    2. Don Shor

      I’m disappointed that the solution is a property transfer tax.

      Davis is a general law city. It can impose a property transfer tax up to .55 per $1000 and presumably already does so. The county can also charge this tax up to $1.10 per $1000. Charter cities can impose whatever rate they want, and you can see what they charge here: http://www.californiacityfinance.com/PropTransfTaxRates.pdf
      So unless Davis changes to a charter city, which has a lot of other complicating issues, this is not even a point of discussion unless something has changed recently.

      1. Keith Y Echols

         this is not even a point of discussion unless something has changed recently.

        Don, my point wasn’t about if and to what degree the transfer tax is imposed.  My question about the transfer tax was more academic (and thank you for answering it) because I was curious.  My point was that I’d prefer that funding for affordable housing and other things for the city come from economic expansion and not taxing perspective home buyers…..thus increasing the cost of market rate housing in Davis.

        1. Matt Williams

          Keith, I believe the tax is paid the home seller rather than the home buyer.  It is netted out of the sale prceeds before the final check is written to the home seller.

          I could be wrong about that though.  I’ll be interested to hear more from sources more informed than I am.

        2. Keith Y Echols

          Thanks Matt,

          But most brokers/sellers are going to look at what they expect net out of the transaction.  So they will adjust their selling price to reflect the extra fees/taxes.  Bottom line is that expenses are going to be passed down to the buyer as much as possible….even when they’re not a line item on the transaction report.  I suppose you could argue that in the end the overall home price (including taxes and fees) are going to be haggled over and the buyer and seller are going to absorb some percentage of those costs.

        3. Ron Glick

          Keith, you recently were arguing that if people can’t afford Davis they shouldn’t buy in Davis. Yet you oppose a marginal tax to help build the Affordable Housing you also support. I would argue that if you can’t afford a marginal one time transfer tax you can’t afford to buy in Davis.

        4. Bill Marshall

          Matt…

          In San Mateo County, at least in 2002, you are absolutely correct… San Mateo is a charter city, so I (actually, the Trust) as seller paid it… some might argue that the price we negotiated, passed it on… that’s stupid and silly… and we had the same broker for both buyer and seller, so I saved 2-3 X the tax on reduced broker fees/commission (talk about a “tax” that adds no value… not based on actual cost [like a fee would be] but a fixed %-age – which smells like a ‘tax’, to a private enterprise).

          Without looking it up in my records, I recall it being ~ 1/4 of San Mateo County Property Transfer tax, or ~ 0.25 %.  Given the value of properties in the City of San Mateo, and turnover, the total collected is not huge but is definitely significant.

          So, Matt, I’m backing your play, from experience.

        5. Keith Y Echols

          Keith, you recently were arguing that if people can’t afford Davis they shouldn’t buy in Davis. Yet you oppose a marginal tax to help build the Affordable Housing you also support. I would argue that if you can’t afford a marginal one time transfer tax you can’t afford to buy in Davis.

          Where did I say I opposed it?  It’s not an onerous tax.  I suppose it’s okay as a incremental step or maybe temporary means of funding affordable housing.   But in principle I believe the way to fund social services, infrastructure…etc…is through economic expansion not further taxing home owners…or even worse slapping fees on perspective homebuyers.  Yes people should live where they can afford to live.  But adding ever increasing taxes on people when there are alternatives is not something I support.  So my two views aren’t mutually exclusive.

        6. Keith Y Echols

          @Bill Marshall

          some might argue that the price we negotiated, passed it on… that’s stupid and silly

          Why is that stupid and silly?  You don’t think a seller would pass on as many expenses and fees as possible?  You’re basing your knowledge on your personal little real estate transaction????

        7. Bill Marshall

          Just checked, City of San Mateo (2021-2022) budget:

          Property Transfer Tax revenue is ~ 8.5 Million, out of ~249 Million dollars total revenue… ~ 3.4%

           

  5. Ron Glick

    I hope they don’t put a tax and a re-write of the Measure D Affordable exemption on the ballot as one item as taxes are hard to pass.

    As to rewriting the Affordable exemption the devil will be in the details. It will be interesting to see what they come up with and if it can withstand the criticism that it will create peripheral ghettos surrounding Davis.

    Davis has a history of distributing Affordable Housing throughout the community. Will another unintended consequence of Measure J and its successors be a concentration of Affordable Housing on the periphery and a change in the spatial landscape of Affordable Housing in the community?

    1. Keith Y Echols

      I previously posted about SB 35 which makes it far easier in terms of politics (but not financial) to build infill affordable housing.  In Davis (and many other non-complying regions with the RHNA), if the project is more than 50% affordable housing and meets city zoning…it basically gets rubber stamped with approval without any other input from council, staff or the unwashed masses.

  6. Don Shor

    The transfer tax proposal needs clarification. Davis is a general law city.

    How Much Are Transfer Taxes in California?

    Property transfer taxes are derived from the selling price of your home. The California Revenue and Taxation Code states that all the counties in California have to pay the same rate.

    The current tax rate is $1.10 per $1000 or $0.55 per $500. So, if your home sells for $600,000, the property transfer tax is $660.

    Keep in mind that many cities and locales in California have the authority to add additional transfer taxes on top of the standard county rates.

    https://listwithclever.com/real-estate-blog/california-real-estate-transfer-taxes-an-in-depth-guide/

    California Real Estate Transfer Taxes: An In-Depth Guide for 2021

    Updated March 3rd, 2021

    In addition to the county rate, cities may impose additional documentary transfer taxes. The amount that the city may impose depends on whether the city is a charter city or a general law city. A charter city is a city in which the governing system is defined by the city’s own charter instead of by California law. Charter cities have supreme authority over their municipal affairs and have broad leeway to impose their own tax rates.

    Many of California’s 121 charter cities have enacted their own tax rates. In Berkeley, for example, the city documentary transfer tax rate is $15.00 for each $1,000 of property value—significantly higher than the county’s rate of $1.10 per $1,000 of property value. When a charter city imposes its own tax rate in excess of the county’s tax rate, the county does not provide a credit for the city tax. This means that the county and city property taxes in charter cities are often cumulative. In Berkeley, property owners pay a total of $16.10 ($1.10 county rate plus $15.00 city rate) on each $1,000.00 of property value transferred.

    https://www.deedclaim.com/california/documentary-transfer-taxes/

    Property Transfer Tax (for Charter Cities)

    Like the county’s documentary transfer tax, cities may tack on an additional “city transfer tax” up to one half of that amount. In Los Angeles County, five cities have imposed an additional tax between $2.20 to $4.50 for every $1,000 of the value of the property transferred. Majority voter approval is necessary to impose or increase this tax.

    https://schorr-law.com/5-types-of-real-property-taxes%EF%BB%BF/#4_Property_Transfer_Tax_for_Charter_Cities

    1. Keith Y Echols

      Don,

      Do you favor the Charter City model or the General City model?  It seems to me that most of the criticism of the Charter City model is that it can place too much power in one area, person or office than it should…which can disrupt the flow/process of governance compared to how it was under the General City model.  I’ve read that often times special interests groups get involved in the creation of the city charter that can further pollute the flow of proper governance (at least compared to the general city model).

      But do you believe the ability to enact a higher property transfer tax is worth it?

      1. Don Shor

        I opposed the Charter City proposal that the city voters considered a decade or so ago, and spoke out against it at that time. I believe it allows the city council to raise taxes too readily on too many things, and has other complications as well. Supporters of choice voting (I’m not a supporter) strongly supported it at the time because it was a necessary step for enacting that.

  7. Bill Marshall

    Some charter cities now have that tax at $12 per $1000.

    Could be… San Mateo County had a PTT of 1%…  add the City’s $2.50 per $1000, and that equals $12.5per $1000.  Would be interesting to know if the Counties the cities you cite are in, have PTT…

    Given current turnover rate of property (particularly “commercial”, where the big bucks are) in Davis, would be surprised if it mattered much either way.  And to pint out the obvious, again, the MF properties and other commercial properties bear the lion’s share of PTT.  Not SFR.

    1. Keith Y Echols

      Given current turnover rate of property (particularly “commercial”, where the big bucks are) in Davis, would be surprised if it mattered much either way.  And to pint out the obvious, again, the MF properties and other commercial properties bear the lion’s share of PTT.  Not SFR.

      This is an interesting point.  Is there high turnover for commercial property in Davis?  It seems like there’s an awful lot of it that goes vacant for periods of time.  Meanwhile single family homes are selling like hotcakes.  I do not know how multi-family is doing.  I’m not disagreeing with the comment about commercial being where the big bucks are for property transfer taxes.  But I’d be interested in learning more in detail about Davis’ real estate market.

  8. David Greenwald Post author

    I was informed by the city that a charter could be created simply for the purpose of the transfer tax and the rest would revert to general law rules.  In other words, it would not necessarily open a door if the city didn’t want it to.

    1. Bill Marshall

      I was informed by the city that a charter could be created simply for the purpose of the transfer tax and the rest would revert to general law rules.

      I know what your answer will be, but will you cite your sources?  Better include the City Attorney…

      As it stands, am not “buying it”… not without verifiable sources, including AG opinions, text of State Law, etc.

      I think you’re ‘reaching’… for what purpose, I cannot fathom…

    2. Don Shor

      I believe that the charter city conditions could then be changed by a simple majority vote of any subsequent city council. But I would have to verify that. I suppose it depends on how it’s worded. I suspect that fervent choice-voting supporters would instantly seize on this opening and seek to push that through.

      1. Bill Marshall

        I believe that the charter city conditions could then be changed by a simple majority vote of any subsequent city council.

        Not unless the Charter is stupidly written.

        Charter City status, must be voted on by the voters… NOT CC!

        By the same token, any substantive changes are also subject to vox populi, NOT CC…

        1. Don Shor

          You’re right, I found my old notes on this. The residents of Berkeley have voted many times to amend their city charter. A great recipe for public engagement and/or civic dysfunction, IMO.

        2. Bill Marshall

          You have it correct, Don, in my experience/opinion.  Charter status can be a two edged sword.  Seems to have, and continue to work pretty well for San Mateo, and, for the most part, Sacramento.

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