by Ellen Kolarik
The Housing Trust Fund (HTF) addendum in our Housing Element clearly lays out that our HTF must fund programs for 3 broad groups: The Unhoused (including emergency shelters, transitional housing and permanent supportive housing), Renters and Buyers looking for an affordable home.
Why is this important? This is the first of 3 letters outlining why we should support housing in each of these areas beginning with for-purchase affordable homes.
There is a myriad of reasons for needing more affordable for-purchase homes in Davis.
First and foremost, state law demands it. Our state defines a goal of housing units in its Regional Needs Housing Allocation (RNHA) for every city and county in California. Like many cities, Davis is coming up short. For the housing cycle of 2023-2031, Davis needs 830 units of moderate income housing to comply with the state. If we can’t build these homes for either rent or purchase on our own, the state will apply penalties which can include significant financial consequences (legal suits, attorney fees, and state leveled fines), loss of permitting authority, and utilization of the “Builder’s Remedy” in which developers can seek streamlined approval of applications if they can prove their project will help their jurisdiction reach RHNA compliance.
But this is not just about meeting a quota. Our lack of moderate-income housing for purchase impacts our residents personally, socially and environmentally. Our adult children, even those making a starter professional salary, can’t afford to buy into their hometown. Our majority white community sustains its lack of diversity by locking out lower income people (of which a higher percentage are minorities) creating both economic and racial segregation. And finally, a lack of affordable for purchase housing that is near jobs and public transportation to jobs is one more factor fueling climate change. Many of our blue color workers and young professionals commute from out of town increasing their carbon footprint. Simply allowing workers to live in the town in which they work, reduces carbon emissions.
So how can we help low- and moderate-income individuals to buy in?
First, we must encourage our developers to focus on the production of starter homes: single family homes with small square footage or even better, homes which are less expensive by design (e.g. town homes, duplexes and quadplexes).
Then we need to help first time home buyers buy that home. By funding the HTF with ongoing and significant revenue, our city would have the revenue to approve new programs, such as this example Down Payment Assistance (DPA) program designed specifically for Davis that was presented to the Social Services Commission March 28 2022. The full plan can be found on the City of Davis website, under the Social Service Commission agenda for that same date.
In this DPA plan, the HTF would supply up to 10% of the purchase price or a maximum of $20,000 per prospective or defined first-time home buyer. The recipient would pay 3% simple interest with a 30-year deferred payment. Funds repaid would be returned to the HTF. Repayment of principal and interest or equity share would be due upon the sale of the property, payoff or refinance of the 1st mortgage. Unfortunately, while the Social Services Commission recommended that the city staff present the information to the city council, the council has not yet addressed it.
What can you do to help diversify our community, provide housing opportunities for our workforce and fight climate change?
Tell the Davis City council that you support expanding the supply of for-purchase affordable homes. Urge them to press our developers to radically increase the number of starter homes in their planned developments. Let the council know you support funding the housing trust fund with significant and stable funding from the general tax revenue measure we anticipate the city will propose for the November 2024 ballot. Let them know that you support your tax dollars being used for programs like a city-wide Down Payment Assistance program. And finally, vote YES on the 2024 revenue measure.
Ellen Kolarik, Co-Chair Interfaith Housing Justice Davis