Sunday Commentary: Why Davis Can’t Rely on Dense Infill to Solve Its Housing Needs

Photo by Kimson Doan on Unsplash

By David M. Greenwald
Executive Editor

Davis, CA – I was reading an insightful piece from UC Davis Law Professor Chris Elmendorf in City Journal.  He notes that the California legislature has “refurbished an old state law that requires local governments to plan for development of the city’s ‘fair share’ of housing needed in a region.”

Here, “Fair-share housing plans are being transformed into ambitious, enforceable contracts between cities and the state.”  And these laws carry a stick: “Cities without a compliant fair-share plan are subject to a ‘builder’s remedy’ that allows developers to bypass local zoning—and some developers have been emboldened to use it.”

Thus those cities that fail to meet these “targets” will “forfeit authority to apply discretionary local standards to qualifying projects.”

While some have argued that the state will simply not be able to compel cities to comply with these rules, Elmendorf sees a much more problematic aspect to this push.

“Though these reforms march under the banner of housing affordability, word and deed haven’t quite matched up,” he argues.

Elmendorf points out, “Whereas the ‘red states’ of the South achieved widespread affordability by allowing unlimited numbers of cheap houses to be built in sprawling suburbs, California favors building up, not out. Such ‘infill’ housing has long been costlier to develop than cookie-cutter tract houses.”

He continues, “Given that fact, one would expect California’s leaders to have done everything in their power to reduce the cost of infill. The reality, however, is the opposite.”

A problem that he sees is: “Almost all the California housing laws that purport to liberalize infill development come with new restrictions that raise the price tag for bringing units online. These include mandates to use union labor or pay ‘prevailing wages’ (a term of art for union-negotiated wages); to set aside a portion of new units as money-losing affordable housing; and to offer any tenant displaced by a development project the right to rent one of the new units at a price that he can afford.”

As he points out, “The state gives with one hand, as it takes with the other.”

This has consequences: “In unconstrained housing markets, the equilibrium price of a house—the point where supply and demand meet—is only a little higher than the construction cost. If California continues to remove zoning restrictions while adding new rules that raise the expense of building, then housing prices and rents will stabilize—but at very high levels.”

This puts additional meat on my concern about how Davis has been approaching housing.  Davis has put the additional restriction on peripheral housing—it has required any housing project to gain a majority vote of the people.

And in this community that means all but two housing projects proposed on the city edge over the last 23 years have been approved—neither of them built, and only one of those will have anything in the way of single-family housing, and that one is a senior housing project.

You want to wonder why schools are feeling the pressure locally?  We have approved just 700 units of single-family housing over the last 15 years.

At its best it seems questionable that the city of Davis can meet its housing needs—which I maintain are far below the mandated number by RHNA—with its current strategy.

Dense infill may sound like the path of least resistance, and it’s true that it would not need a Measure J vote, but that doesn’t mean it will be cost effective or likely to produce the type of housing we actually need—even if we did have the locations to build it.

That’s going to be the first and perhaps most important problem—where are you going to build it?  Already the city has counted 1000 units in the downtown toward its current RHNA—which means the downtown is out.

So where are you going to get what is likely to be similar to the 2000 overall units and 1000 low-income units in the next cycle?

Some have pushed back and say, worry about that when the RHNA comes out, but that’s just the rub.  If the city is going to rely on peripheral rather than dense infill to meet its housing needs, as the city manager and mayor have indicated they will have no choice but to do, then it has to be rezoned for urban uses which requires a Measure J vote—which requires that the voters actually approve it which we know is dicey at best.

Why not dense infill?

Some of our commenters have argued that other cities are going to have to meet their needs through dense infill—so why not us?

The why not us part is what we should focus on.  Aside from the lack of properties or vacant parcels that have not already been rezoned and counted, there are several practical reasons that relate to the points that Elmendorf made in his piece.

We know already that it is difficult to get such infill projects to pencil out.  We did the proforma’s when we did the downtown plan.  We know that the cost of construction and land prices are prohibitive.  We are not going to be able to build 10- to 15-story high rise dense apartments and condo buildings in Davis.

We might be able to streamline some of the expensive and time-consuming process, as we have attempted to do with the form-based code approach, but even then, producing the type of affordable housing (small a this time) along with the big “a” Affordable Housing and to meet the needs of families and kids—we just aren’t going to be able to do with dense infill.

To put it another way, why is a family going to purchase an expensive and relatively small condo in downtown Davis, when they can get a single-family home in Woodland or Natomas or Elk Grove for far less?

I’m not opposed to building dense-infill urban style housing in the downtown.  I think there is a market for it.  But it’s not going to meet a lot of our needs: affordable housing for starters, family housing as well.

The solution some seem to have in mind is that the housing regulations are unrealistic and that the state is not going to be able to enforce those laws, therefore we should not attempt to rezone the land and build the housing we need.

That approach makes no sense because, even without the state mandates, we need more housing or this community is going to vastly change in ways that are detrimental to our current character.

And contrary to the professed fears of some, even building the housing projects that have been proposed are not going to turn Davis into Elk Grove or some other sprawling community.  It’s a limited number of housing units over a long time horizon.

But if we don’t act, Davis is not going to be the community that many of us have loved and enjoyed over the years.  It will be a small, stale, but very expensive community.

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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16 Comments

  1. Walter Shwe

    Zero housing zealots would have Davis frozen in time in perhaps the 1970’s or 1980’s. Times change. People are born and others pass away.  New industries are developed and others wither away. America has been built on progress. Some want progress to be halted dead in its tracks. No progress seems quaint, but completely unrealistic. That’s not simply the identity of United States. No nation has been able to withstand being frozen in time for very long in the past few decades. 🙂

  2. Ron Oertel

    You want to wonder why schools are feeling the pressure locally?

    No – I don’t wonder that.  I DO wonder why some believe it’s a city’s responsibility to continue sprawling for the purpose of satisfying an oversized school district.  Even worse – I wonder why some on the council apparently believe that, as well.

    We have approved just 700 units of single-family housing over the last 15 years.

    I’m confused – is  there some kind of “goal” attached to this?

    Also, how many single-family houses does the city already have?  And how many have turned over (changed hands) in the last 15 years?

    Some of our commenters have argued that other cities are going to have to meet their needs through dense infill – so why not us?

    The why not us part is what we should focus on.

    That’s right, but you have no response to it. In fact, you’ve never had a response to this. And yet, infill is supposedly the state’s goal in the first place.

    The politicians (e.g., Wiener, Newsom) behind this are FROM those dense cities that aren’t expanding outward in the first place. That was supposedly the “justification” – to encourage infill in areas which have pursued a lot of “economic development” in a confined area, without considering the consequences of that. (Of course, they don’t put it exactly that way, because they support the actual cause of the problem.)

    To put another way, why is a family going to purchase an expensive and relatively small condo in downtown Davis, when they can get a single-family home in Woodland or Natomas or Elk Grove for far less?

    Good question, and one I’ve been asking for a long time.

    However, Elmendorf himself states on the top of his Twitter page that he’s a “denizen” of San Francisco (a far more-dense and expensive city than Davis), and is a “patron of Amtrak” (presumably to commute to his job at UCD).  Perhaps because he enjoys rent control in San Francisco?

    https://twitter.com/cselmendorf?lang=en

    1. Ron Oertel

      I do find it strange, however, that David is using Elmendorf’s arguments as a justification for sprawl, given that all of Elmendorf’s arguments cited are a justification for infill.  In other words, Elmendorf advocates for the OPPOSITE of what David advocates for. (So far, I haven’t seen any comments from Elmendorf in which he advocates for sprawl.)

      Also, David routinely conflates “our housing needs” (whatever that means) with RHNA targets – as if they’re the same thing.  According to David (and some others), “our housing needs” apparently means continued sprawl to support an oversized school district.

      All indications are that there will be a housing “bust” in future years, due to changing demographics:

      But the situation will start to reverse over the next decade, as Baby Boomers begin age out of the housing market. Meanwhile, post-Millennial generations will be smaller as population growth slows.

      That could lead to an excess of housing, potentially pushing down prices and sparking a crash in the real estate sector.

      “Plainly put – a generational housing bubble is on the horizon. New housing built now to meet strong demand may sit vacant in a decade. Demand reversal will intensify by the mid-2030s, when the annual number of homes that seniors add back to the market is expected to be 40% higher than current levels,” researchers said.

      https://finance.yahoo.com/news/millennials-fueling-generational-housing-bubble-010504430.html

       

       

  3. David Greenwald

    Ron doesn’t have an answer for how we are going to get housing other than to argue that we can somehow avoid the laws and get away with it.  So there is no point in me diving down the rabbit hole again on this issue.

    1. Ron Oertel

      As noted in the other article, I’d suggest that the city address the current round of RHNA targets – which is exactly what it’s doing.  (Which I understand is still not finalized.)

      But as far as how “we are going to get housing”, are you referring to the fake “need” in regard to an oversized school district?  Or some future, unknown round of RHNA targets – well-after the current round has failed in a massive way (statewide)?

      But again, it’s up to you (not me) to show why you think Davis is “unique” regarding this.  Again, vast population centers along the coast are NOT expanding outward, and are subject to these same targets.  In fact, those population centers are the FOCUS of the state’s targets.

      Explain how Davis would be subject to some “unique” form of “punishment”, in comparison to these vast population centers along the coast. And while you’re at it, explain how the state is going to successfully punish ANY of those vast population centers, in the long run.

      State representatives are FROM those areas in the first place! What do you think the reaction would be, if the state was actually successful in “punishing” those vast population centers? For sure, Davis wouldn’t even be on the radar regarding ANY of this.

      And with Rob Bonta running for governor, I can’t imagine that he’s going to be that aggressive (if he wants to actually win). Again, the state is SETTING UP CITIES FOR FAILURE, right now. This will change, one way or another.

      Ultimately, it will become increasingly-obvious (even well-before the next round of targets). It’s ALREADY obvious – and you’ve acknowledged it yourself.

    2. Ron Oertel

      But to more specifically answer your question regarding future unknown RHNA targets, I’d suggest that Davis pursue whatever the vast population centers along the coast will be pursuing to address those same targets.

      If nothing changes by then the state will approve the plans “on paper”, even though there’s no chance of the plans being implemented.

      https://48hills.org/2022/09/the-states-local-housing-goals-are-nothing-more-than-a-farce/

      In contrast, your “plan” (in which you stated that “all five” proposals would need to be approved) will certainly fail. If the city starts depending upon voters for this type of approval, it will also be setting up the city for failure – even worse than cities along the coast which would actually HAVE a plan – even if it’s just a paper one.

      But again, that’s in the future.

  4. Tim Keller

    We know already that it is difficult to get such infill projects to pencil out.  We did the proforma’s when we did the downtown plan.  We know that the cost of construction and land prices are prohibitive.  We are not going to be able to build 10- to 15-story high rise dense apartments and condo buildings in Davis.

    Can you elaborate or link me to the prior article i obviously missed?   This is an important complication.

    That said, we need to not default to the thought that “density” means 15 stories tall.    We should be expecting for “paris-like density”  5-7 stories tall in our densest places.

    Single family housing is around 4-8 dwelling units per acre, the student housing complexes we have lot of in town are in range of 12-18.    A 5-story complex WITH a central garage structure is more like 80-95 units per acre.     Thats a HUGE improvement.

    To put it another way, why is a family going to purchase an expensive and relatively small condo in downtown Davis, when they can get a single-family home in Woodland or Natomas or Elk Grove for far less?

    Man, I would LOVE a small condo downtown, and im NOT the only one.    No stupid lawn to take care of, (and waste water on) and close to everything… you can get away with being a one-car family when you can bike to work…   so you get home faster, no traffic, and you save ~$10k a year in car expenses for that additional car…

    LOTS of people would love to live in condos downtown.. LOTS.    And commuting to a single family home in natomas or elk grove means spending an hour or more of your life EVERY DAY in your car.. time away from your kids or doing somethign productive….

    Bring on the small “expensive” condos.  seriously.

      1. Tim Keller

        Thanks David,

        Interesting read, and important to this debate.

        The follow up question refers to one of the final recommendations in that article which you state the city should consider:

        (the city should) Allow increased densities, so that developers can achieve greater efficiencies of scale on the limited number of available sites, including better spreading the high cost of site acquisition;

        It seems that this analysis was done using the city’s density limits and parking minimums at the time, which require the expensive development of off-street parking, and effectively capping how much building square footage you can put on a lot of a certain size.

        Both of those city-imposed limitations definitely negatively impact the financial viability of a site for redevelopment, but I don’t think that they support your assertion in this article that 10-15 story buildings aren’t financially feasible.

        Indeed, a taller building with more residential units to rent / sell and NO requirements for provide off-street parking are probably our best way to provide small-a affordable housing in downtown, and the lack of parking provided will ensure that the people who live there are going to be local workforce, which it seems there is some agreement should be our priority…

        The medium lot scenarios in that analysis using older density limits and 30 parking spots off-street ( at a cost of $360k!) came in at a return of 6.5% where the target was 8.5%   Not that far off..

        Now…. all of that said, I 100% agree with the larger point you are making which is that the city cant rely on dense infill… but for two different reasons:

        1) The supply of redevelopment opportunities is going to be low.  Achieving a significantly denser city through redevelopment will take decades.

        2) If you sum up all of the redevelopment and infill opportunities we are likely to have in the next decade, they dont make a dent in our housing shortage, which is on the order of 30,000 residents, if not more.

        So peripheral has to be part of the mix.  The math doesn’t work any other way.  But that also doesnt mean we should give up on densification of the core and arterial neighborhoods…. they are a key component of our long-term solution to the growth we need… even if they cant move the needle in the short term

        1. David Greenwald

          I completely agree with your two reasons. I would add, it also won’t make a dent in the affordable housing shortfall.

          I’m certainly all for infill and dense infill, but like you, don’t see it as solving the housing needs we have.

        2. Ron Oertel

          2) If you sum up all of the redevelopment and infill opportunities we are likely to have in the next decade, they dont make a dent in our housing shortage, which is on the order of 30,000 residents, if not more.

          I’ve decided to “switch sides”, and offer my support.

          I’m going to start claiming that the city is short 40,000 residents.  Does anyone want to “see it, and raise it? ”

          “50,000 more residents – going once, going twice . . . “

        3. Ron Oertel

          Walter:  They don’t need my “support” to achieve that.

          Honestly, it seems to me that you and most of the other commenters on here would “fit right in” with Woodland.  Or should I say, “North, North Davis”?

          What I don’t understand is why some want to turn Davis into Woodland, when they can already find what they envision some 7 miles away.

          Most people who are actually LOOKING for a house already do this, though they compare it with what’s available in Davis, as well. (In my opinion, a “pre-owned” house in Davis is generally the way to go. But really, you can get a “pre-owned” house in Woodland, as well – usually at a much better price than a new one – even in “North, North Davis”.)

          For sure, they’re not on this blog badgering others to “Make Davis Woodland Again” – to borrow/paraphrase a more-famous slogan.

        4. Walter Shwe

          YIMBYs like me are no more badgering zero housing zealots like you Ron than you are badgering people like me. What’s good for the goose is good for the gander. 👍

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