It was with great interest that I read the letter from Elaine Roberts Musser regarding DACHA (Davis Area Cooperative Housing Association). At a time when the residents of DACHA had no legal assets with which to fight a court battle, Ms. Roberts Musser admirably stepped up to provide assistance.
While Ms. Roberts Musser is no neutral observer in this legal fight, her words are telling and informative to the concerns expressed by the Vanguard.
She highlights a portion of the settlement that states, “To facilitate the settlement and future policy discussions of affordable housing in Davis, the parties agree to resolve this matter amicably and not to disparage each other about DACHA or continue to rehash the issues that led to these lawsuits… However, the parties will remain able to participate in policy discussions related to affordable housing and cooperative housing and to discuss DACHA on a ‘looking forward’ and ‘lessons learned’ policy basis.”
She then writes, “The DACHA debacle has had a long and ugly record of disastrous events. As a lawyer and consumer advocate involved in the case, I would hate to think history might repeat itself.”
Here is the key point, “But if a hard look is not taken at the respective roles played and actions taken primarily by the developers, as well as the city and DACHA members, accompanied by necessary change, we will likely be in for similar catastrophes in the future. This will be inevitable if there are insufficient procedural modifications in how city business is conducted.”
This is precisely the point the Vanguard attempted to make on Friday.
The Vanguard called for an independent investigation into DACHA back in 2009. At that time, we had the oddly matched couple of Don Saylor and Lamar Heystek supporting the call.
The city wanted to protect their assets first, but they forgot that, while assets are a critical interest for the city, their top duty was accountability to the voters and taxpayers.
The city became so focused on being right – a necessity in any legal battle – that they were not able to focus nearly enough on mistakes that they made and that needed to be corrected.
This is the unfortunate nature of our adversarial legal system. Both sides need to prove that they acted appropriately and the other side is the side that has erred. Sometimes the truth works out that way, but far more often the truth is somewhere in between.
The Grand Jury report may point the way toward corrective steps.
They wrote, “The City has incurred losses that may not be recovered and may increase in the future. Better initial oversight of DACHA could have prevented this.”
They added, “The Grand Jury found that greater care should have been taken initially by the City and the Redevelopment Agency when performing legal analysis of documents such as DACHA’s articles of incorporation and bylaws and that better initial oversight of DACHA by the City could have prevented this situation.”
There were problems with the model, or at least the form of the model, of affordable housing from the start. The original terms – the buy-in costs and rate payments – were too burdensome on what were supposed to be low or middle income residents. The purchase price was too high, the carrying charges too steep. This led to risky loans and it led to the city’s attempt to stabilize the finances.
The Grand Jury found that a proper assessment and oversight at the start might have prevented this.
Writes Elaine Roberts Musser: “The emotional and financial toll this case has taken on individual DACHA members has been immense. They will never have much faith in our court system, the city’s affordable housing program or cooperatives again. Many times I was asked by them: ‘How could this happen in America?’ “
This is the side we did not see enough of during the legal battles – the human costs.
At the same time, it is really the last line of her letter that resonates: “Some very profound and honest soul-searching by developers and the city will have to take place, so a repeat of the DACHA debacle never happens again. There has to be a willingness to put the consumer first and foremost. After all, it is the consumer who is the least experienced and most vulnerable in the equation.”
And that is really the question that we must turn to – is the city prepared to finally, now that the legal issue has been settled, do a full evaluation of what went wrong and how to prevent it in the future?
It is not enough to throw out the model – the model might not have been the problem. The same model with safeguards properly put in place may have worked brilliantly, while a different model without the proper safeguards may have failed miserably.
It seems very clear that the city needs to take active steps to make this a “never again” incident, but are they prepared to do that even if it means admitting to mistakes?
—David M. Greenwald reporting
“After all, it is the consumer who is the least experienced and most vulnerable in the equation.”
and I would add taxpayer to this sentence to make it complete.
“While Ms. Roberts Musser is no neutral observer in this legal fight, her words are telling and informative to the concerns expressed by the Vanguard.”
I have heard that you are not a disinterested party to that property. Is that true?
Yes, the taxpayer is also vulnerable and we are at the mercy of the 2 parties actually entering into whatever contractual agreements are being made. I don’t know if these are available for public analysis, but even if they are, who has time to review and analyze these kinds of transactions. So we count on the “experts” (city attorney, city council and others employed by the city to oversee affordable housing) to protect both the consumer and the taxpayer.
“So we count on the “experts” (city attorney, city council and others employed by the city to oversee affordable housing) to protect both the consumer and the taxpayer.”
yes…..and when there is disagreement or worse, I think we taxpayers and the individuals involved deserve facts and analysis as to what went wrong and how to improve….agree?
Certainly. And I think I already know the basic answer in this case. One can not sign contracts, the content of which have not been very very very carefully considered as to feasibility and enforceability. Let me go a little farther; I think where the city came out OK (and would have in court but I’m glad it did not go that far because of cost) is the contract was not enforceable, for a number of reasons I will not elaborate on, but if you know a lot about the situation you may know. Meanwhile the feasibility was poor but NP intended to enforce the contract.
The city took over the DACHA homes at a fraction of the cost of their value. After paying off the lawsuit, the city is sitting on millions of dollars worth of homes. The only losers are the people who lived in those homes & thought they were part of a co-op. They thought if they paid their “carrying charges” on time, their families would be guaranteed a nice home in Davis.