Today we see an interesting article in the Davis Enterprise, which analyzes the growth issue. You remember the growth issue–the issue that used to be the most important issue facing the city of Davis. That was in the days before the bottom fell out of the housing market and the economy collapsed forcing the city to finally reckon with the issue of the budget and city salaries. Or at least those of us observing the city to try to force them to reckon with it even as they appear to be unusually stubborn.
The most important thing that we learn from the Enterprise article probably has little to do with its primary intent. It shows us the widening gap now between the thinking of Mayor Pro Tem Don Saylor and now even city staff. Already we have seen Mr. Saylor has moved far afield from the of his colleagues on the council. He was the only one to support without qualification the mixed-use project at Cannery Park. He was the only one to express lament at the exit of Cannery. And he was the only one to push for immediately doing a new and/ or updated General Plan.
The article begins by mentioning Lewis Planned Communities and their withdrawal of the application to change the zoning at Cannery Park that would have enabled them to build 610 residential units to go along with 20 acres of business park.
For the Mayor Pro Tem this was catastrophic:
“It was simply the last straw. In the face of seemingly endless analysis, delay, lack of concern for the costs, and an absence of any clear planning direction, the Lewis group decided to withdraw their application. I am deeply disappointed that the Council created an impassible set of hurdles for reasonable consideration of this proposal.”
However for the Community Development Director, it merely represents one project among many.
“Lewis wasn’t the only application in process.”
She went on to list out Simmons, Wild Horse, Grande, New Harmony, Willowbank, and she actually forgot Verona. As we calculated a few weeks back, there are roughly 200 housing units that are on the market and have been so for quite some time and remain unsold, there are additionally 200 units that have been approved at Grande, Verona, and Simmons.
West Village is supposed to break ground. And then you have a prospective project at Wild Horse.
It does not seem we are lacking for housing options right now.
As Hess says:
“That, depending on who you talk to, may be so much that it’s too much.”
Look no further than the housing market which has made it so difficult to build and sell housing that the owners of some of the properties that have already been approved to develop are looking to sell rather than build.
And yet Mr. Saylor continues with his “grow, grow, grow” mantra that he pushed last year as he ran for council and finished with the highest vote total. The world has changed drastically since that point and it appears the rest of the council and city’s planning staff have gotten that memo.
Remember this is essentially the same staff that pushed through Covell Village in 2005. Now we see them working to almost apply the brakes in some cases. It was City Manager Bill Emlen who stepped in with a compromise on Cannery that pushed for an equal weight EIR.
As Hess put it:
“The council doesn’t make the units appear. We can’t make people build.”
sThe question facing the city council in May will be whether the city of Davis is meeting its growth needs. The council majority has argued that the city of Davis has to grow at one percent to meet its internal needs. Critics have suggested a more focused approach that looks more towards the university with regards to student and faculty housing. They argue that the university is better positioned to offer student housing at a lower rate. They have land and available space.
UC Davis has the lowest share of on-campus housing of any UC according to one survey. If UC Davis could meet more of its share it would potentially free up single family homes in Davis and open the market without adding a large amount of growth on the periphery that would eat up farmland.
That was the counter-argument from last year. What has changed this year is the collapse of the housing and credit markets which means nearly a development-sized amount of housing units are actually on the market and unsold.
The real question is what the market will looking like post-economic collapse. Will the housing bubble resume? Will the demand for new housing increase? Or does this mark the beginning of a new and different era?
To some given these uncertainties it makes sense to wait and see with regards to pushing for new development in a city that even the city manager describes as fairly mature and built out. We do not have a lot of undeveloped parcels within the city limits. We do not have a general consensus on the parcels to be built out outside of the city limits.
So when Bob Wolcott cited the two percent per-year growth rate of the 1990s, he failed to put it within the context of the availability of open parcels. Now any additional growth almost is going to have to intrude onto farm land. The residents of Davis have a decision to make in the next decade and it’s whether they see Davis as the city it is at 65,000 people or whether they believe this is going to be 100,000 person city or more.
People like Don Saylor are pushing for us to develop that vision now.
“I am … disappointed that the council recently voted to not proceed with any public planning process to update the 1987-2010 General Plan to craft a shared vision for a truly sustainable local environment and economy. Without such a vision, we are prey to endless debate with no rational resolution, regardless of what any individual member of the council might have to say about jobs, housing, economic development or environmental sustainability.”
But Katherine Hess has a very different take on the issue suggesting that the existing General Plan is far from useless and continues to offer good policy direction and guidance.
“It’s not as if the General Plan falls off the face of the Earth in 2010.”
The budget became a good foil on this issue, but it is probably not the central problem. The central problem is that we are currently in the worst economic downturn in recent history. How can you effectively plan for the future in 2030 or 2050 when we don’t even know what 2011 is going to look like?
For me, we will have plenty of time to debate and disagree over what Davis should look like after we have dealt with the more pressing issues of the budget and have taken care of the longer term issue of fiscal stability and sustainability.
It appears most of the city has gotten this memo. However, one person is operating as though it were still 2005 and unfortunately that person will be Mayor in 2010.
—David M. Greenwald reporting
“Intrude into farmland.” Oh the horror! Of course researchers at UC Davis have contributed more to food productive capacity and nutrition than all of Yolo county could ever produce. Dry land rice and Fe rich wheat alone mitigate any loss in production from development on farmland.
The real question is what should the ratio between the cost of housing in Davis and the surrounding communities be? Currently that ratio is around 2:1 and has been increasing for many years. This has happened because of no growth policies. As Davis has restricted growth it has driven up prices to the point where only the rich and their children can afford to buy here so it appears that Saylor is the only one trying to address the social inequity created by nimby policies in your liberal bastion.
is whether that cost differential is due to available housing or other factors. But you never like to address that point, you just like to hit over and over again on your favorite topic…
When is Saylor up for re-election?; we need to start the process of getting him not re-elected; he will certainly have the developers’ dollars in his coffers, but the rest of the city has to see beyond this guy’s shallow political ambitions and his money-grabbing from developers; he has a Facebook account which he encourages Davis residents to sign up for; I suggest we tell him there how he really think about his pro-developer agenda for the future!
“Currently that ratio is around 2:1 and has been increasing for many years.”
Actually, it has been consistent for many years regardless of the growth policies of Davis and the surrounding communities: about a 10 – 20% price difference for Davis homes. Only very recently, in the current severe downturn, has the price difference changed dramatically, and that is because prices in the surrounding communities hsve plummeted while those in Davis have simply declined somewhat. There are far more homes on the market in Woodland and Dixon, most probably at prices far below what the owners paid for them, and there are far more foreclosed homes in those communities.
What are the other factors? I’ll bet on supply you want to place it on demand or something else please engage in the debate. I am more then willing to read what those other factors are. For me it is also the schools if my wife didn’t want the kids to go to Davis schools we would be out of here in a second. Still, I believe the ratio of prices is an important and valid question that we should be considering.
[b]”If UC Davis could meet more of its share it would potentially free up single family homes in Davis and open the market without adding a large amount of growth on the periphery that would eat up [u]farmland[/u].”[/b]
UCD [i]is[/i] adding housing… on farmland. Of course, UCD and the City of Davis were built on farmland.
[b]Now any additional growth almost is going to have to intrude onto [u]farmland[/u].”[/b]
If we need to add housing in Davis, but don’t permit building due to a no-growth philosophy and a farmland preservation ethic, we might perversely cause the paving over of more farmland elsewhere than the farms we save on our edge.
I’m not suggesting that is what’s happening currently. Given weak demand, our supply (of single family homes) is sufficient and we have, as David says in his piece, a number of approved units not yet built.
In place of keeping all Davis area farms as farms, I think our approach to new housing should first consider these 5 broad questions:
1. Are the costs (in the broadest sense) of the development borne by the developer or by the City?
2. Does the development add to or detract from the quality of life in Davis?
3. Is our infrastructure sufficient to absorb the growth?
4. How will the additional housing (or lack of housing) affect rents and home prices in the rest of Davis?
5. Will the location of the development cause future problems due to that location?
With greater density, less required parking, multi-story buildings and developing housing on already urbanized land, we can limit the intrusion of Davis onto extant farms. But if we have a no-growth policy in the face of growing demand for housing, the end result will be farms near other cities in our region being paved over and those residents driving back and forth to Davis.
But supply is not the only variable (distinct between Davis and other cities). We have a desirable community–low crime, affluent, well educated, good schools. That drives demand. Moveover as Shor suggests, the differential seems constant regardless of the variances of supply from year to year. Put it altogether and the picture looks at least considerably more complex than you suggest.
Rifkin: I think you make good points here. But central to it is some sort of notion of internal demand. After all if people are having to drive from out of Davis to Davis at an increasing rate, it means we are not addressing that internal demand. So the first step is trying to figure out what that demand is and how best to address it.
Actually the ratio has been expanding as this blog showed in a study published last year, although the blog misinterpreted the analysis. While prices are coming down more slowly in Davis because of fewer foreclosures they went up more quickly because Davis didn’t build into the bubble rstricting supply. The historical 10-20 percent premium expanded to 40 percent after Wildhorse, the last major expansion, was built out. It is now around 80-100 percent. As such it should be no surprise that there is development pressure even though the rest of the real estate market is in the tank.
There may be other reasons folks are living elsewhere and working here. Believe it or not, some people may actually like another community better than Davis and choose to live there and work here. Or maybe they already had a home elsewhere and got a job here, and prefer to remain settled where they are for any of a number of reasons. Determining internal “demand” is not easy. You cannot just assume that everyone who lives elsewhere but works here wants to be able to buy a house here. And, once again, it has been shown over and over again that simply building more homes does not necessarily drive housing prices down in Davis. We buid very rapidly in the 90s and housing prices continued to increase.
We have, through careful planning and participation of many dedicated citizens, maintained a very desirable, livable and unique community. I would hate to see us become a “any town USA” just because of the greed of a few.
Doesn’t look like the ratio is increasing:
[img]http://bp0.blogger.com/_9pR-0mkLeic/SCgzHhZYoCI/AAAAAAAADDY/kYmuZnWH_E8/s1600-h/Raw+Housing+Numbers.jpg[/img]
Apparently the image feature doesn’t work. Here’s the link: click ([url]http://bp0.blogger.com/_9pR-0mkLeic/SCgzHhZYoCI/AAAAAAAADDY/kYmuZnWH_E8/s1600-h/Raw+Housing+Numbers.jpg[/url])
Thanks for reposting the info In 95 the ratio was 1.2:1 then works its way up to the 1.4:1 topping out around 1.6:1. Its hard to know if the 1.2:1 value is an outlier or the end of a period of lower ratios. Recently Don Shor posted numbers showing the current ratio is around 1.8:1. I would argue the trend is toward greater disparity over time.
[i]”Actually, it has been consistent for many years regardless of the growth policies of Davis and the surrounding communities: about a 10 – 20% price difference for Davis homes.”[/i]
In that graphic, it appears we are in a normal period, with a 50% premium. That one outlier year likely reflects the large influx of homes in Mace Ranch that had just gone on the market when real estate in general in California was in a slump. Also, if there were a substantial number of starter homes available that year — I don’t know if there were — then that might add to a lower median.
FWIW, I think it makes more sense to look at a median price over a 3-year rolling average, because there just aren’t that many home sales in a single year. Nevertheless, the trend at 150:100 looks rather stable.
I have never compared Davis to Sacramento County, as is shown in that graphic. I have always been comparing it (informally since the mid-1970’s) to Woodland and Dixon. I have no idea what it included in “Sacramento County” — it could include Elverta and Rio Linda for all I know, so there could be a significant disparity.
I consider Woodland and Dixon to be more comparable, and that they are within the same general real estate market; that is, that many people live in one of those communities and work in one of the others.
Quite the contrary, Hess does not sound “slow growth” at all but is setting the stage for reintroducing Covell Village and she eludes to in later in the article. Remember Hess worked hard to railroad Covell Village’s 400 acre proposal through in one year as opposed to creating endless obstacles for the Cannery Park proposal over the past four years which the community had input into designing it and it had much support. The No on Measure X campaign included in all of its literature that it made far more sense to place housing on the Hunt Wesson site rather than Covell Village. Hess goes on to mention in the Enterprise article that we will need to see if we are meeting our “growth needs” and if so do we go into our yellow sites. Well that leaves the Covell Village site if the Hunt Wesson site is not redeveloped into a mixed use.
As far as the General Plan update issue, that was a non-issue for the most part since the city simply does not have the money to pursue updating it right now and they have simply postponed it for now. As far as the 69 apartments approved and the 70 additional units mentioned, the Council wants and average of 325 units per year (which I think is too much) this would not even cover one years growth expectation for them. As far as the number of units on the market, the cost most of these units are priced way out of range for most working class people is the reason why they are available. The Enterprise article today in no way eludes to any slow growth intentions of the city. Quite the contrary it clarifies a departure from a citizen-based planning process.
Housing in University towns is usually considerably more expensive than housing in towns without Universities. Housing in towns with very good school systems is also always more expensive. Put the two together, add a great downtown, parks, greenbelts and vibrant civic culture, and you can see that the higher cost of housing pretty inevitable.
“….And then you have a prospective project at Wild Horse”;
Wait a minute, we haven’t even seen the final EIR yet on this proposed development, much less the vote as a Measure J issue has not been announced yet…It seems to me as if some in the Vanguard (and maybe Catherine Hess also) think this Wildhorse Ranch project has already passed for development, which it clearly hasn’t; don’t go calling Saylor the only pro-development shill around this town, especially if there are others who are buying into pro-Parlin Development Co. influence (via their “community organizers”) also….I wholeheartedly agree that Saylor is a pro-developer whore, but why doesn’t Catherine Hess and the Vanguard both come out on their stances on Wildhorse Ranch project?
anon,
yes but what should the differential be before you have made the town too elite?
I suggested no such thing. Only pointed out there were a number of projects approved and some other pending ones. I don’t have a position on Wild Horse right now.
“yes but what should the differential be before you have made the town too elite?”
LOL — you mean, what would Davis be without the university? Woodland.
No I mean should housing cost as much as Woodland, twice as much or somewhere in between? The policies that have kept Davis from building adequate housing have driven up prices to ridiculous levels. You could build lots of housing without getting rid of the university. This would drive down prices and Davis would not turn into Woodland because the university would still be here and because our downtown is a grid while Woodland has a strip.
If we build lots of housing–will cost go down? Not necessarily. Costs will only go down if you reduce the standard of living in Davis.
And to what end would we build lots of housing–so lots of people can move here? Other than meeting the internal needs of Davis, why do we want a lot of people to move here? Some people moved here not just because of the university but because it’s a small town, a good place to raise kids, etc. If we just build lots of housing we threaten that. What’s the overarching reason to need to do that? And where is the demand coming from right now during the heart of the housing bust?
You’re still talking like it’s 2005. It isn’t. It’s quite possible that once things settle out housing costs will be much more affordable and stay that way. You don’t know. You are still planning like it’s four years ago and we are in the midst of a possible paradigm shift. Why now?
Comparing median housing sale prices is pretty much a fool’s errand. The statistic we should be using is average sales price per square foot. That controls for variations in the physical sizes of the actual houses sold.
Why is this important? Simple. Housing prices won’t come down a penny if all the houses that are built are large. When Willowbank 10 was being discussed by City Council, when asked how much more affordable the houses would be if they were reduced approximately 500 square feet, the developer told the Council, “I don’t know. I don’t build houses that size, and I never will.”
That preference for buliding houses that have higher profit margins is a factor that no on nimbys appears to be ignoring when s/he talks about Davis housing prices.