Guest Commentary: Writer Argues Affordable Housing at DiSC does not Comply with City of Davis Municipal Code

by Matt Williams

This is the first in a series of articles responding to the following comment made by Keith Echols in the article Former Mayors Condemn Court Action

Another day, another article whining and complaining about a political guy a bunch of people oppose over an issue. Notice that we haven’t seen an article by the NO campaign in quite a while (the last one was a financial analysis by Matt) that actually focuses on the issue (as someone on the fence, I’d like to see a well researched article by the NO campaign….because I do feel bad for the folks in East Davis).

So each morning for the next two weeks I will provide Vanguard readers and Davis voters with an article on one of the dozen issues that I covered in my presentation on Thursday at University Retirement Community which had Dan Carson presenting for Yes On Measure H. For everyone’s reference, At the end of this article I have listed those dozen issues.

What is the most important reason to vote “No” on Measure H?

On Tuesday I got a telephone call from David Thompson, the president of the Twin Pines Cooperative Foundation and co-principal of Neighborhood Partners LLC, which has developed and has in development over 1,400 units of low-income integrated nonprofit housing valued at over $200 million. His Affordable Housing projects in Davis include:

Creekside
Eleanor Roosevelt Circle
Cesar Chavez Plaza
Tremont Green
Moore Village
Twin Pines
Owendale
Dos Pinos

David has forgotten more about Affordable Housing than I will ever know. So when he asked me if I was interested in understanding how there is considerably less Affordable Housing in the DiSC project than is required by the City of Davis Affordable Housing Ordinance, I was quick to listen.

David started our discussion by asking me whether I had received the recent promotion piece for Measure H, which says, “Measure H enhances and advances more of what we love about Davis by creating affordable housing.”

After I told him that I had indeed seen that statement, he replied “That statement by DiSC is simply not true!”

DISC is purposefully choosing to provide less affordable housing as a percentage of the total than any previously proposed site that has come up for a citizen vote.

The reason is both simple and straightforward. Prior to 2018 all citizen vote proposals provided at least 25-35% of the housing units as permanently affordable under the provisions of Article 18.05 of the City of Davis Municipal Code … the City of Davis Affordable Housing Ordinance … which states.

To the maximum extent feasible, each developer must meet the ownership affordable unit requirement as it pertains to the project, as set forth below:

(a) Standard ownership affordable housing requirements. Any development that is comprised in whole or in part of ownership units shall comply with the following requirements, which shall be included in the development’s affordable housing plan.

(1) Affordable Housing Requirements, by Residential Product Type.

(A) For projects comprised of market rate single-family detached ownership units on lots larger than five thousand square feet in area, the developer must provide for a number of affordable housing units equivalent to twenty-five percent of the total units being developed, including the affordable units, by means of one of the methods set forth in this section.

[…]

General plan implementing policies also require that, to the extent feasible and subject to existing law, rental housing developments with five to nineteen units shall provide fifteen percent of the units to low income households and ten percent to very low income households; and in rental housing developments with twenty or more units that twenty-five percent of the units be affordable to low income households and ten percent of the units be affordable to very low income households. General plan policies also require that affordable rental units remain affordable in perpetuity. (Ord. 2418 § 1, 2013)

David went on to explain that DISC is applying under the “Interim Affordable Housing Ordinance” which substantially reduced the requirement to 15%. The interim Affordable Housing Ordinance was passed by City Council in February 2018 with the stated plan that it would sunset on December 31, 2018. That sunset never happened, and its interim policy is still in effect.

However, that interim policy with its lowered 15% was written specifically to apply to land already in the city, and was/is based on the December 11, 2015 Economic Report prepared for the City by A Plescia & Co entitled Preliminary Project Economic Analysis For City of Davis Affordable Housing Ordinance.  That Plescia report begins as follows:

The primary purpose of this summary report is to present preliminary information related to the projected economic implications of potential affordable housing ordinance requirements on certain urban scale residential ownership and rental development prototypes. The project economic analysis summarized in this report addresses the estimated financial feasibility (including profitability) information for certain identified residential ownership and rental development prototypes.

The preliminary project economic information presented in this report can be used by the City of Davis to inform the process being undertaken by the City of Davis in regard to its consideration of amending its existing Affordable Housing Ordinance as it relates to the identified residential ownership and rental development prototypes addressed in this memorandum.

[…]

For purposes of this preliminary project economic analysis, the identified residential and mixed-use prototype alternatives are assumed to each be developed on a hypothetical 2.0 acre infill development site within the current urbanized area of the City of Davis.

Why within the current urbanized area of the City?

Because land costs in the City had risen to the level of  hundreds of thousands of dollars per acre.

Land that is outside the urbanized area, like the DISC site, does not suffer from high land costs. It resides on agricultural land outside the City Limits that was purchased for considerably less than $10,000 per acre … NOT hundreds of thousands of dollars per acre. That economic reality, and the clear words of the Plescia report mean the affordable housing requirement for DiSC should remain at the 25-35% threshold contained in Article 18.05 of the Municipal Code

In November 2019 hundreds of Davis residents applauded Richard Rothstein’s talk on the “Color of Law,” which critiqued the role of government in reducing housing for people of color. Many of us want a future Davis to be more inclusive and expansive of housing for low income residents and racial minorities.

DISC does the opposite by providing considerably less housing for low income residents and racial minorities.

David is unequivocal in his opinion that the interim Affordable Housing Ordinance simply does not apply to DiSC, and until and unless the DiSC project changes its Affordable Housing Plan to comply with the provisions Article 18.05 of the City of Davis Municipal Code, the only choice is to vote “NO” on Measure H.  David Thompson has clearly stated that it is the most important reason to vote “No.”  None of us should want to live in a Davis that accepts fewer homes for those most in need and people of color.

—————————-

As noted at the beginning of this article, each morning for the next two weeks I will provide Vanguard readers and Davis voters with an article on one of the dozen issues listed below that I covered in my presentation on Thursday at University Retirement Community.

Reasons to Vote “NO” on Measure H

• Massive Traffic Problems
• No Firm Plans to Mitigate Traffic
• Unmitigated Greenhouse Gas Emissions
• DISC will Cannibalize Existing Downtown and Local Businesses in Davis that are Still Hurting from the Pandemic
• Projected Financial Projections to the City are Questionable or Misleading
• We Cannot Trust our City Staff and Council to Protect Us from Rapacious and Predatory Developers
• Critical Farmland, Habitat, and our Last Views of the Sierra and Sacramento Skyline will be Lost Forever
• A Yes Vote Gives the Developer Lucrative Entitlements with No Guaranteed Baseline Features in Many Critical Areas
• The Project Will Exacerbate the Housing Shortage in the Davis Area
• The Scale of the DiSC Business Park is Much Too Large for a Small College Town Like Davis
• An industrial-research development while we are in a serious drought?

About The Author

Matt Williams has been a resident of Davis/El Macero since 1998. Matt is a past member of the City's Utilities Commission, as well as a former Chair of the Finance and Budget Commission (FBC), former member of the Downtown Plan Advisory Committee (DPAC), former member of the Broadband Advisory Task Force (BATF), as well as Treasurer of Davis Community Network (DCN). He is a past Treasurer of the Senior Citizens of Davis, and past member of the Finance Committee of the Davis Art Center, the Editorial Board of the Davis Vanguard, Yolo County's South Davis General Plan Citizens Advisory Committee, the Davis School District's 7-11 Committee for Nugget Fields, the Yolo County Health Council and the City of Davis Water Advisory Committee and Natural Resources Commission. His undergraduate degree is from Cornell University and his MBA is from the Wharton School of the University of Pennsylvania. He spent over 30 years planning, developing, delivering and leading bottom-line focused strategies in the management of healthcare practice, healthcare finance, and healthcare technology, as well municipal finance.

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11 Comments

  1. David Greenwald

    Since this has been published several people (five so far) have written to me illustrating a number of factual problems with this piece.

    1. Matt Williams

      David, I have created a fact check document that steps through the article one paragraph or subparagraph at a time.  I have sent you that fact check Word document for your review.  It is in an easy to read and annotate table format, with each paragraph or subparagraph having its own row with the article language in the left column and the fact check status in the right column.  I find no factual errors in the article, but look forward to hearing back from you.  Reasonable people can agree to disagree reasonably.

      To the Vanguard readers, once David has had a chance to weigh in, I will post the mutually-reviewed fact check document here as a comment reply to David’s 8:58 comment.

      Thank you.

    2. Bill Marshall

      As I may well do (citing factual issues)[, privately with the author, as we understand each other pretty well, differ on some things, congruent on others, but, “at the end of the day”, we can agree to disagree, respect one another, and be friends…

      That latter thought might be a good model for the VG, its posters, and the community at large…

      [Caveat/disclosure:  when an engineer waxes philosophic, might just mean the ‘end of the world’… but as an engineer, ‘wired that way’ I mean what I say… it is also based on professionalism, and ethics, and I stand by what I have said]

  2. Don Shor

    David started our discussion by asking me whether I had received the recent promotion piece for Measure H, which says, “Measure H enhances and advances more of what we love about Davis by creating affordable housing.”

    After I told him that I had indeed seen that statement, he replied “That statement by DiSC is simply not true!”

    DISC is purposefully choosing to provide less affordable housing as a percentage of the total than any previously proposed site that has come up for a citizen vote.

    Actually I believe the DISC proposal does “create affordable housing,” just not as much as the still-existing-but-superceded affordable housing requirement would require. They’re providing 15% (I assume, I haven’t looked at the plans) rather than 25%. It seems that the council has the authority to continue extending the variance and can be considered to have done so in putting this before the voters.

    Obviously if one disagrees with the council’s implicit extension of the interim ordinance, and wishes to have more affordable housing on site, then a ‘No’ vote would be appropriate. I’ll be very surprised if any project comes forward that has 25% affordable housing. My opinion is the city would be better off finding sites and empowering David Thompson and his associates to build affordable housing, rather than trying to get developers to shoe-horn it into their projects. IMO the results would be better.

    1. Matt Williams

      Superb comment Don.  I agree wholeheartedly.

      In the fact check document I sent to David Greenwald for review that statement was clearly labeled as David Thompson’s opinion.

  3. Keith Y Echols

    I do not consider affordable housing to be part of the DISC issue.  I do not believe that for profit housing should be part of the solution for affordable housing.  That shift which happened in the 70’s has led to underwhelming results in affordable housing supply and options.  It also jacks up the price of market rate homes and makes them less affordable.  So what happens is that it’s the new home buyers that subsidize a small amount of affordable housing.  You end up with market rate housing that only upper middle or higher socio-economic class can afford and some homes that those that are lucky enough to qualify and be selected get subsidized affordable housing.  That leaves a large middle class and lower middle class unable to afford homes (rental or purchase).

    As for DISC and affordable housing.  In my experience things that can be negotiated or alternatives available for developers that change the affordable housing requirements are in lieu fees (money paid into an affordable housing fund instead of actually building new affordable housing), off site options (finding another location to build affordable homes….usually this option forces the builder to build more affordable homes than onsite affordable homes) and more workforce housing instead of affordable housing (so more homes that are priced to be sold to those with 80%-120% of the median household incomes as opposed to affordable homes at 30% or lower of the median household income).

    1. Matt Williams

      I do not consider affordable housing to be part of the DISC issue.  I do not believe that for profit housing should be part of the solution for affordable housing.

      .
      In principle Keith may be right that for profit housing should not be part of the solution for affordable housing.  I have argued hard and often that Governor Newsom should be using the huge budget surpluses … $97.5 billion this year and $xx billion in 2021 … to provide the necessary dollars that Affordable Housing developers need to actually build the needed housing.  Builders and local communities have very limited fiscal resources.  Clearly the State does not have limited resources … at least for now.

      However, for the immediate present the ordinances on the books apply to DiSC.  There is no way to get around that.

    2. Matt Williams

      In my experience things that can be negotiated or alternatives available for developers that change the affordable housing requirements are in lieu fees (money paid into an affordable housing fund instead of actually building new affordable housing)

      .
      Here too the principle that Keith is putting forward is a good one.  However the history in the City of Davis of the mismanagement/squandering of the local equivalent of “housing trust fund dollars” and allowing units Affordable Housing to revert to market rate housing is an issue that needs to be dealt with before the average citizen in Davis will believe that in-lieu fees can be effectively part of the community’s approach to affordable housing.

  4. Keith Y Echols

    Matt,

    Why are all of your articles in opposition to DISC?  This is what you said about your previous article:

     I was trying to be like Joe Friday and present the information and let each reader come to their own conclusion. 

    If you’re trying to be neutral and simply provide information, then why is it all negative information to the DISC campaign?  All of your articles point in one direction.  To use your analogy, it’s like Joe Friday only looking for and finding evidence that points at a predetermined suspect.

    IMO the only true issues with DISC are the revenue it supposedly generates for the city and the traffic problems it supposedly will create for East Davis.

    To me the NO Camp has to be able to convince me that there is a viable alternative to improving the city’s fiscal situation.  Will DISC solve all the city’s fiscal problems?  No.  But it should help (and hopefully kick off more solutions in the future).  Infill by itself isn’t the answer.  The NO Campaign keeps trumpeting it as the end all be all solution.  But as the only solution, it’s too limited (in terms of actual financial viability) to actually work.  No, you’re going to require some peripheral development (and I am no fan of peripheral development).

    The YES Camp has to convince me that they’re not going to completely muck up Mace Blvd.  They’re going to have to do better than we hope the state gets around to fixing 80 in the distant future.

    Neither camp is probably going to answer my questions to my satisfaction so as usual, I’ll probably have to vote on the lesser of two evils.

    1. Ron Oertel

      Infill by itself isn’t the answer

      Nearly every city within 30 miles or so of the coast (including every city in the economically-powerful Silicon Valley, as well as San Francisco itself) have pursued “infill” successfully, and are no longer pursuing sprawl. This is where the vast majority of the population of the state already lives, as well.

      Some of those cities have no choice (as they’ve already “bumped up” against neighboring cities), while others choose to preserve the land around them.

      The YES Camp has to convince me that they’re not going to completely muck up Mace Blvd.  They’re going to have to do better than we hope the state gets around to fixing 80 in the distant future.

      You mean they haven’t convinced you yet?

      Good luck with that.

      This is the first in a series of articles responding to the following comment made by Keith Echols in the article Former Mayors Condemn Court Action

      And good luck with that, as well. 

      (Sounds like you’re going to continue being busy, responding to Matt).  🙂

    2. Matt Williams

      Why are all of your articles in opposition to DISC?

      That is a very reasonable question.  There are two pretty straightforward reasons.  On has to do with the Vanguard and the other has to do with DiSC itself.

      Let’s deal with the Vanguard first.  Here’s a variation of your question to me … “Why are all of the Vanguard’s articles in support of DISC?”  The one-sidedness of the Vanguard is very, very clear.  Let’s be clear, I personally do not have the kind of problem with that that lots of Davis residents, homeowners, and businesses have.  I may disagree with David, but I also know his opinions are heartfelt … and well considered.  However, they only represent a fraction of the opinions of the “unwashed masses” as you have  called the voters.  So, I don’t beat a drum loudly, but I do find myself often expressing opinions or presenting facts that do not appear in the Vanguard’s own writings.

      Regarding DiSC itself, my problem is that close to 100% of what I hear about the project is hype and/or spin.  Perhaps that is the nature of “spec” development, but I personally am looking for more “there there.”  It is ironic that the Yes on Measure H campaign team filed a lawsuit about “misleading” statements when so many of their own statements are misleading.  Here is a litany of those misleading statements:

      — In writing to all the various DJUSD PTAs they characterized the $2.3 million of Development Impact Fees for DJUSD as ” negotiating with the school district and have agreed to a one time donation of $2.3 million”

      — In writing to all the various DJUSD PTAs they characterized the annual bond, parcel tax and CFD payments as “negotiating” “a yearly donation of $700,000 every single year there after”

      — Never in writing or in verbal communication has the Yes on Measure H campaign team informed the voting public that the $2.3 million in Impact Fees is an offset of the same amount of Impact Expenses.  They have characterized it as free cash (Monopoly money if you will)

      — Although the City-County MOU has fixed this problem, the Yes on Measure H campaign team has never acknowledged that the $2 million for a possible South Davis Library was a conditional pledge that only had to be paid if and when the County came up with the other $6-8 million of construction money needed to build the Library AND money to pay the annual operating expenses of that proposed Library.

      I could go on and on with similar examples, but let me turn the question around.  What are the compelling facts in evidence about DiSC that are worth talking about?

      There is an alternative solution.  And it is fiscally easy to explain to the voters.  However, none of our leaders are willing to touch it with a ten-foot pole.  They are more interested in getting reelected than in truly leading.

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