When we last saw the ConAgra proposal back in December, it was looking remarkably like the previous version that even councilmember Stephen Souza dismissed for lacking a “wow” factor.
At 6 pm next week, we will get to see the developers unveil the latest version of the development. Despite the lack of apparent support in the community, the city continues to move all out in its promotion of the site and event. This event will take place at North Davis Elementary School in the Multi-Purpose Room.
For now, the city is keeping any revisions to the design of the property under wraps, with the City’s Community Development Director Ken Hiatt declining to show the Vanguard an advanced look at the project.
ConAgra has thus far declined to meet with the Vanguard about the project. Jeanne Jones, who is apparently playing a much smaller role in the current project, informed the Vanguard in mid-December that our request for a meeting was directed to the ConAgra representative who is responsible for processing of the application.
Now over two months later, we have had no response from ConAgra.
From the standpoint of the project, there are several different levels of problems.
There is a huge 800-pound elephant in the room right now, and that is whether we even need 610 homes built during this slow-down in the real estate market. Right now, that is the single biggest issue. Is the community likely to support any large peripheral development at this time, even on land that currently is not farmland but is zoned for industrial?
While some support its continued use as industrial land and support a high tech business park, ConAgra has shown no support for that concept and instead continues to push for 600 mixed-use units.
George Phillips, at the December outreach meeting, promoted the 20-acre business park as the gateway to the project. He argued since it sits on the road it would have to attract people to live there who have to drive through a business park to get to their neighborhood.
He touted their 260,000 square feet of office and professional buildings along with neighborhood-serving retail, with the opportunity for live-work residential housing units.
However, there were a number of key questions – the lack of specifics regarding the sustainability features and the lack of any sort of focus on either senior housing or universal design.
While issues of poor design, lack of emphasis on sustainability and lack of addressing senior housing needs are all critical issues, even addressing them may not be enough.
Do we need 600 housing units during a time of a huge market slowdown, when there are hundreds of unsold units on the market and UC Davis is undergoing the first phase in the construction of West Village?
As if that were not enough, there is also the byproduct of removing 100 acres of which is the largest site in the city that is still zoned light industrial.
The problem is that most argue that this site is not conducive to a business park. One person that night suggested without a road on the north end out to 113, it makes no sense. But does a housing development make more sense on the congested Covell Blvd/ Pole Line Road corridor?
One potential impact will be to shift designs for a business park to the east and the west. To the east being Mace-Signature Curve and to the west being Northwest Quadrant. These are peripheral sites that would require a Measure J/ R vote.
Moreover, if ConAgra’s 600-unit housing proposal is the 800-pound gorilla, the adjacent property at Covell Village is the 800-ton gorilla. Former City Manager Bill Emlen also saw the need to plan the two properties concurrently.
At this point, there seems little support in the community for more peripheral development, particularly at the Covell site. Moreover, Choices for Healthy Aging’s proposal for senior housing has gone almost nowhere.
It was telling last year that no one took up CHA’s plea for Covell Village, Part Deux, during their own sponsored forum. It may be even more telling that the issue was flat out ignored in the councilmember selection.
The city has emphasized universal design through its own senior housing guidelines, and it is unclear how deep sentiment runs for senior segregated housing.
At the end of the day is the question of ConAgra, which right now has no Measure J/ R vote. But that could change if another bad project is forced upon the residents of this community. The ball is in their court at this point, but at some point that ball might be taken away.
—David M. Greenwald reporting
This updated ConAgra plan is being presented at this meeting at the same time the Senior Citizens Commission is having a joint meeting w the Social Services Commission on Universal Design. CHA has been busy behind the scenes, from what I understand, pushing their model of senior housing to ConAgra/city staff. I and others on the Senior Commission cannot voice our concerns at the second meeting bc we have this commitment to be at the joint meeting of commissions. I don’t know if this was intentional or coincidental. But it is most unfortunate. And as you can see, the Senior and Social Services Commission are more interested in pushing for “aging in place”, so seniors can remain in their own homes, which is their preference by a huge majority (approx. 85% according to study done by AARP).
While I believe the best use for the ConAgra site is for housing, there is no doubt in my mind that [u]no entitlements for housing should be entertained until Con Agra commits to locating one of its research/development facilities somewhere in Davis the way their competitors Monsanto have.[/u]
ConAgra as one of the world’s largest agricultural corporations is in a unique position to leverage a relationship with UC Davis by locating a ConAgra facility in Davis. Such a relationship would be good for ConAgra, good for Davis and good for UC Davis.
The first question on Monday night of ConAgra’s lawyer/representative should be, “What respnse did you get from ConAgra corporate offices when you presented the idea of a permanent collaboration with UC Davis located ideally somewhere in Davis or alternatively in Yolo County?” My suspicions are that that topic hasn’t been even run up the flagpole by the ConAgra team. They need to hear loud and clear that in order to get rid of their “elephant” they need to come to the table with a permanent research presence.
MW: “The first question on Monday night of ConAgra’s lawyer/representative should be, “What respnse did you get from ConAgra corporate offices when you presented the idea of a permanent collaboration with UC Davis located ideally somewhere in Davis or alternatively in Yolo County?” My suspicions are that that topic hasn’t been even run up the flagpole by the ConAgra team. They need to hear loud and clear that in order to get rid of their “elephant” they need to come to the table with a permanent research presence.”
AMEN!
We don’t need more housing at this time or anytime in the near future.
I hope the council realizes this otherwise they’ll further hurt real estate values in Davis. We have fairly well managed to not get hurt as badly as the surrounding areas in Sacramento, but putting this many houses into the mix in my opinion would start a depreciation of Davis home values and put many underwater creating foreclosures and short sales. Once that starts it’s a domino effect and all local real estate takes a tumble.
I’m bound to take some hits for this, but here I go. There can be little doubt that there is an imbalance between housing demand and supply in Davis. The supply is insufficient to meet demand. Many Davis workers and business owners currently living elsewhere wish to purchase and rent in Davis, but not at current price levels. There are a number of reasons preventing prices from reaching a state of equilibrium. To pretend the foregoing is not the case, prevents a healthy debate based on fact and reason. So go ahead and pummel me for stating the obvious.
There is no doubt that there is a demand for housing in Davis – although obviously even that has taken a hit as there are a large number of unsold units on the market. The questions I have always had is whether we can ever really satisfy that market. If we can’t, then we can grow a whole lot and never really bite into housing prices.
DM, good point. Rifkin has made some good points in previous housing discussions as well. The local housing issue is quite complex. Sticking our heads in the sand and pretending that there isn’t a substantial unmet demand doesn’t help solve the problem. There is no doubt in my mind that we would be a healthier, more vibrant, more sustainable community if we could figure out a way to provide more housing for the local workforce without comprismising some of our other community values such as remaining a compact community surrounded by open space. The fact that 45% or so of UCD employees drive home to spend their paychecks in other communities is not in our best interest. A similar statistic is likely to be true of Downtown and City employees.
DT B, one of the significant challenges to providing added lower cost ownership housing is that virtually all the land surrounding Davis is owned by developers, and the price they paid for that land was not cheap. When they add the carrying costs of the ownership of that land since they purchased it (interest on borrowed money, taxes, planning costs), the underlying price of each lot is very high when compared to other communities that the UCD employees, Downtown employees and City employees compare to Davis when making a housing decision.
Look at Willowbank Park. The five homes they built there (which I suspect the Willowbank 9 neighbors feel are not up to the neighborhood standards), are listed for over $700,000. They are far from McMansions . . . very far, but a selling price of over $700,000 is at best a tall order for a substantial portion of the UCD employees, Downtown employees and City employees you are referencing.
How do you propose to address that? Tell the developers that they have to sell the lots at below their investment? That’s an idea that will get very little traction.
One alternative for UCD employees, Downtown employees and City employees is rental housing. How do you feel about that alternative? IMHO, lots of those UCD employees, Downtown employees and City employees would prefer to own their home rather than rent. That’s a perspective that’s easy to understand. Should we tell them that they have to rent in Davis rather than own their home in a nearby community/neighborhood? That to is an idea that will get very little traction.
Bottom-line, demand is really only demand if it is actionable, and between the issues in my first three paragraphs and the issue in my last paragraph, Isuspect that a lot of the housing demand from the UCD employees, Downtown employees and City employees you reference is simply not actionable.
Its a conundrum.
When a developer comes forward with a project including primarily rental units and below-median houses, it might be worth considering. Until then, all we’re being offered is more high-priced housing that won’t address the most pressing need in the Davis housing market. There is not a need for senior-specific housing. There is not a need for high-priced condominiums. There is not a need for high-end housing. But that is all that has been put forward. Nothing that has been proposed will address the pricing imbalance directly.
I don’t think ConAgra is really taking this project that seriously. They’re putting the bare minimum into the design and planning of this project. They seem to just be hoping to get three votes on the council, which would boost the value of their land, which they would then sell off or develop at some very, very slow pace. Anything else would just leave even more unsold homes in this stagnant market (I think 20 homes sold total in January).
There are hundreds of unsold homes and homes in foreclosure in adjoining communities. It would actually be fiscally irresponsible for the council to approve this project at this time, and would just further encumber home-sellers locally by adding to the regional over-supply. Dixon, Woodland, and West Sacramento will be providing the low-cost homes for Davis homebuyers for the next 5 – 10 years at the rate things are going. The housing focus needs to be on the rental market at this time.
I have not advocated for lower cost housing. I was merely debunking the often stated myth that housing supply and demand is in balance, i.e. there is no need for additional housing in Davis. The myth applies to owner-occupied as well as rental units. I’m quite certain that the myth can be proven false at a cost in time and effort. I then went on to state the opinion that it would be in the best interest of the community to bring the supply/demand equation into balance. I’m still mulling over effective ways to do that, but I’m quite certain that repeating myths is not the answer. This much I do know, Rich Rifkin has put his finger on part of the answer. Constructing additional purpose-built rental units will help the balance.
DTB has made an important case. His point is proven out by statistics, if one reviews the data from Davis) and surrounding communities for an extended period of time – Davis prices are higher because we’ve developed fewer houses (relatively) than surrounding communities.
Illogically, DMG argues that Davis is so popular that we can’t possibly build enough housing to reduce home values, but in the next breath he argues that we can’t possibly afford any new developments because…… we have too much supply in Davis now. Regardless, the “Davis premium” continues to increase because the surrounding communities have even more (relatively) houses on the market than does Davis.
Don Shor – I’m interested in your suggestion that we need more rental housing – but aren’t we getting it at west village? How much more do we need to make a difference?
Matt – the rule of thumb for housing developers is that the cost of the lot is about 33% of the total for a house plus lot. Assuming that is the case, halving the price of the land would provide housing in the high 500s – low 600s in Willowbank. The bigger issue is the cost of construction,and the cost of complying with city permits and concessions to the city in order to be approved to build. Those are far more important drivers than the cost of the lot.
West Village, by my rough calculation a year or so ago, will not quite cover the lack of rental housing created by the last decade of enrollment growth. Any further enrollment increase will continue to make the problem worse. And unfortunately, UC Davis has decided to build high-end rental units. So they have only indirectly addressed the problem of inadequate rental housing for lower-income Davis residents; i.e., the people who work in our local businesses, non-student young adults, and students who are paying their own way through college. Not to mention the low-income seniors who rent.
The healthy vacancy rate of 5% in rental units is the best metric we have. We have never been at 5% in my memory.
Constructing additional purpose-built rental units will help the balance.
Yes, and constructing them near the downtown would be better than peripheral development.
AS, my instincts tell me that we need to continue to build purpose-built rentals until students are no longer dwelling in houses designed for families. The current condition is absolutely inefficient, an intolerable situation given the limited amount of land resources at our disposal. The students live in homes designed for families, 2 or 3 students per bedroom, and the families live in Woodland, West Sac, and elsewhere, even though they work in Davis. The workers are communting back and forth to their homes, the exact opposite of sustainable. The UCD and City paychecks are being spent in other communities. Powers of observation indicate that numerous imbalances have developed over time. All the while we keep insisting that the sun rises in the west.
DS, you’ll get no argument from me regarding constructing purpose-built rental units in or near downtown. They can house students, research assistants, faculty, workers, and whoever else wants to live in a vibrant, sustainable, urban community.
“Matt – the rule of thumb for housing developers is that the cost of the lot is about 33% of the total for a house plus lot. Assuming that is the case, halving the price of the land would provide housing in the high 500s – low 600s in Willowbank. The bigger issue is the cost of construction,and the cost of complying with city permits and concessions to the city in order to be approved to build. Those are far more important drivers than the cost of the lot.”
Adam, it would surprise me a great deal if that is the rule of thumb for Davis developers. I think they are more likely to be at 50% or above. Individual lots in Davis in established neighborhoods are frequently selling for virtually the same price as a resale home (in the same neighborhood the lot is in) is selling for.
Matt – the 33% rule is alive and well Davis for developers of multiple unit housing. It is driven in part by building costs and the community’s price point. For example, if someone is willing and able to pay 750K for a house, there is a certain level of expectation about the house. In today’s marketplace, the builder can’t have 400K in the land for that house, and build the type of home that the buyer expects.
The example that you describe happens in almost any market where there are desirable neighborhoods with older homes in need of signficant upgrades. The cost to repair becomes higher than the cost of building, so the house becomes virtually worthless. In Davis, you see that in some of the downtown neighborhoods (especially those with smaller, older homes).
Adam, two thoughts.
1) $750k isn’t by any stretch “affordable.” The lively Measure P discussions here in the Blog came to a consensus that $400,000 was the very upper limit of “affordable.” So by your response you are proving my point that the 33% rule is not in any way alive and well in Davis . . . unless the multiple unit developer is by design making no effort to build “affordable” housing. Said another way, if you reduce the price of the homes built to the $4000,000 range, the lot component will exceed 33% by a huge margin.
2) Some of the lots currently available in Davis have prices that exceed the $750,000 price you mention.
Matt,
I’m sorry, you seem to be changing the subject. You said DT B, one of the significant challenges to providing added lower cost ownership housing is that virtually all the land surrounding Davis is owned by developers, and the price they paid for that land was not cheap. When they add the carrying costs of the ownership of that land since they purchased it (interest on borrowed money, taxes, planning costs), the underlying price of each lot is very high when compared to other communities that the UCD employees, Downtown employees and City employees compare to Davis when making a housing decision.
Look at Willowbank Park. The five homes they built there (which I suspect the Willowbank 9 neighbors feel are not up to the neighborhood standards), are listed for over $700,000. They are far from McMansions . . . very far, but a selling price of over $700,000 is at best a tall order for a substantial portion of the UCD employees, Downtown employees and City employees you are referencing.
My point is that the land costs associated with these lots is no more than 30 – 35% of the total sales price of the house. You can lower the price of the land by 50%, and still have a house that is 550 – 600k in cost. Still not affordable.
My point is isn’t possible to lower land costs enough to make a difference. The only way to make this work to is build really small houses in a very dense fashion, or you have to build enough (whatever that means) to bring the supply/demand back into balance.
What is the point of your #2. I don’t personally know what you state to be a fact, but what is your point? There isn’t a lot of wealth in Davis, but there are a few folks who can and will build a house for 1.5 – 2MM.
Adam, I’m not sure how you believe I’ve changed the subject, but let me quote from the recently completed Yolo County General Plan (page HO-57). “Construction Costs: Construction costs for a 1,700 square-foot single family home are between $144,500 and $153,000, or $85 to $90 per square foot, based on BAE’s recent experience analyzing residential construction costs in the Sacramento region.”
Applying some simple math, the construction costs for the Willowbank Park homes, the construction costs are only 30% of the Asking price. Even if you add a 50% premium to the construction costs for amenities, the Construction costs are still only 45% of the Asking price.
Lot____Asking $___Size_________$/sq. ft.__Const $___% of Asking
Lot 2__$770,000__2496 sq. ft.__$90.00_____$224,640___29%
Lot 3__$770,000__2504 sq. ft.__$90.00_____$225,360___29%
Lot 4__$750,000__2504 sq. ft.__$90.00_____$225,360___30%
Lot 5__$690,000__2285 sq. ft.__$90.00_____$205,650___30%