Letter to Davis City Council on Revisions to the Affordable Housing Ordinance

By Darryl Rutherford

The Sacramento Housing Alliance is a non-profit organization dedicated to the goal of increasing the supply of safe, accessible, and affordable housing and ending homelessness in the Sacramento region, including the City of Davis. In collaboration with Legal Services of Northern California, the Public Interest Law Project, and other affordable housing experts, we have reviewed staffs proposed changes to the City’s affordable housing ordinance.

While the proposed changes are a good start to address the weaknesses of the current ordinance, we believe additional changes are necessary for this ordinance to accomplish its purpose helping to meet the need for affordable housing in this community, a need that you are aware is impossible to meet without strong programs to facilitate affordable housing production.

We suggest the following additions and changes to strengthen the ordinance:

• Add design requirements for the on-site construction option to ensure the affordable units are of the same quality as market rate units (18.0S.050(b)).
• Make all projects subject to the ordinance with on-site construction, land dedication, and in lieu fees as options for most projects; in lieu fee option is limited to projects of less than 50 units. (18.05.050)(a)(2))
• Establish criteria for the land dedication sites to ensure the funding feasibility of these sites for affordable housing, including a zoning capacity of30 du/ac. (18.0S.050(c) and 18.05.060(c)).
• Revise the in lieu fee provisions and limit their availability to projects of 50 units or less (18.05.050(f). Include the establishment of an Affordable Housing Trust Fund to collect any in lieu fees paid and limit the use of those funds for units affordable to low and very low income households.

Changes to 18.05.020

We agree with staffs elimination of Accessory Dwelling Units (ADU’s) as an option to fulfill the requirements of the ordinance and therefore the elimination of the definition of ADD’s is appropriate. In addition, we suggest removing the definition of exempt condominiums because we suggest removing the exemption for this type of housing product from the ordinance. We also recommend eliminating the definition of Student Housing Cooperative as we recommend eliminating the potential use of dedicated sites by such entities.

Changes to 18.05.040

We recommend adding additional requirements to 18.05.040(g) to require developers of affordable units constructed pursuant to this ordinance to market these units to potential buyers/renters throughout Yolo County. In order to comply with the City’s obligation to affirmatively further fair housing, the City should adopt this marketing requirement.

Changes to 18.05.050

We suggest eliminating any exemption for stacked flat condominiums or vertical mixed use housing. We recommend requiring those types of projects to meet a fifteen (15) percent affordability requirement in 18.05.050(a)(1)(D).

We suggest making several options available to developers in order to meet the requirements of the ordinance, including building affordable units on-site. In addition, we recommend including land dedication and in lieu fees – for projects of less than 50 units – as available options at the developers choice in 18.05.050(a)(2).

We recommend adding design requirements at 18.05.050(b) to ensure that any affordable units are of the same quality as the market rate units and that a variety of affordable units are available with different bedroom sizes.

We recommend adding language to make sure that any sites that are dedicated through the ordinance to be developed for affordable housing are of a size, density, and location to be competitive for the funding sources available for housing affordable to low and very low income households. The requirements should include density on dedicated sites of at least 30 units/acre, sites must be in close proximity to amenities or transportation, and sites must be no less than two acres in size. These changes should be listed in Section 18.0S.050(c). The same changes should also be incorporated into the land dedication option under the rental provisions.

Because land dedication, and in some cases in lieu fees, are now options at the developers’ disposal, we recommend eliminating the options for small developments found at 18.05.050(d). We also recommend adding a requirement to establish an Affordable Housing Trust Fund where in lieu fees would be deposited until sufficient funds are available to develop affordable units for low and very low income households.

Changes to 18.05.060

The existing ordinance has a provision that requires the rental provisions of 18.05.060 to be in effect

If Palmer/Sixth Street Properties is overturned by the courts or legislature. This provision was not included in staff’s proposed changes so we recommend reinstating it at 18.06.060(d).

Another somewhat recent decision, Latinos Unidos Del Valle de Napa Y Solano v. County of Napa, requires additional changes to the rental provisions of the City’s affordable housing ordinance. State law requires a density bonus or other developer concessions to be available if a developer includes affordable unit in his/her proposed development, whether or not those affordable units are a result of an inclusionary ordinance. Latinos Unidos Del Valle de Napa Y Solano v. County of Napa, Cal. App. 4th 1160, 1169 (2013). Developers do not have to build affordable units above and beyond the state’s density bonus law thresholds in order to receive an increase in density. The City’s existing ordinance does not comply with this requirement so we recommend making those changes at 18.05.060 (a)(I) and (2) to reflect the Latinos Unidos decision.

Changes to 18.05 080

The last change we recommend is a modification of the waiver provision. Section 18.05.080 should include a possible waiver if the requirements of the ordinance will result in a taking under the state or federal constitution. We recommend removing the reasonable relationship language from the ordinance as that is not the appropriate test for a taking under either the state or federal constitution.

Potential Option to Address Palmer/Sixth Street Properties

As the Council is aware, the ability to require rental units under the ordinance has been called into question by the Court of Appeal’s decision in Palmer/Sixth Street Properties, L.P. v. City of Los Angeles.

Although we do not agree with the court’s reasoning in this decision and do not believe the court came to the correct conclusion, we understand that jurisdictions are evaluating their affordable housing requirement in light of the decision. Recently, Yolo County responded to the Palmer decision by amending its ordinance to require that a percentage of units be affordable to very low and low income households without requiring rents to be set at a specific amount We recommend the City Council consider adopting a similar provision in Davis’ ordinance.

Conclusion

The proposed changes we recommend differ in many ways from the current ordinance, but these changes are necessary if the ordinance is going to achieve its intended purpose. A strong affordable housing ordinance that can result in affordable housing construction and viable land dedication sites that will support affordable housing production is one of the necessary tools the City needs in order to meet its regional housing needs for all income groups. We will submit a draft ordinance with the above-recommended changes for staff and City Council review shortly.

Thank you for considering our proposed changes to the affordable housing ordinance. Please feel free to contact me with any questions you have regarding our proposals.

This letter was submitted to the Davis City Council dated January 9, 2015. Darryl Rutherford is the Executive Director of the Sacramento Housing Alliance.

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