Ironically the council decision to adopt a new interim ordinance on affordable housing requirements may have been more controversial at the end of the day than the decision to go forward with the Nishi project.
While there were legitimate points raised by the opposition, most notably concerning the decision to move forward with an interim ordinance before the council had a consultant report, in the end the council followed state guidelines in going to 15 percent with the rationale given for the need making a lot of sense – the loss of RDA’s revenue stream that could subsidize affordable housing units for developments.
Matt Williams, speaking at public comment asked: “Is there that much of a crisis that we need to move this forward now… what is going to happen in 90 days that requires you to move this forward now?”
Matt Williams would add that, in September, the governor signed SB 35. “How does this ordinance… address the key provisions of Senate Bill 35?” he asked.
Ash Feeney explained that the governor signed a host of bills in September and the thrust was “how do you get housing produced?” He pointed out AB 1505, which said “if you had a local ordinance that 
required beyond 15 percent and you weren’t producing your housing, you’d be subject to state review.”
City Attorney Harriet Steiner pointed out “when the council adopted the 35 percent, that was quite some time ago – in 2009 (it was) held that cities were preempted from requiring affordable multifamily rental housing. Since 2009, the city has not required multifamily affordable housing unless – except through discussions with the developers and if we had money in the project.”
The result was there were times when the developers wanted to provide affordable housing or the council asked them and they provided it, but what the city couldn’t do was mandate developers to do it.
“After AB 1505 was approved, that superseded the Palmer case and basically meant that we could again require exclusionary housing for multifamily rentals,” Ms. Steiner explained.
In the meantime, the city had multiple projects that had been applied for, prior to the change in the law.
However, there was another key thing that occurred, back in 2011, which is that redevelopment agencies were dissolved. The city in the days of RDA got 10 percent of its increment solely for use on affordable housing – we no longer have that funding. “We will never get that funding back,” Ms. Steiner explained.
“In the past, when we set the affordable inclusionary housing ordinance up, what we lacked at that point was land. But we had money because we had the redevelopment money and there was also other housing money available. The inclusionary housing ordinance was tilted towards requiring land because we felt we could build and did build a significant amount of affordable multifamily rental housing.”
Throughout this discussion there were key questions as to why we were able to, prior to the recession, get housing projects that had 35 percent affordable housing attached to them. Now the answer is quite clear – we were relying on developers to provide the land for that housing, but not the financing.
Now what has happened is that a lot of the financing options have dried up and we are hoping for the developer to provide land and find a way to finance it – either publicly in some cases or privately in the case of Nishi and Lincoln40.
So you have comments like the one from Eileen Samitz who points out that “for all the talk there’s been about the need for affordable housing – this really flies in the face of that.” She said that “this is just an excuse to get away with pushing these projects through without forcing them to have enough affordable housing that they clearly can afford.”
But it appears that Ms. Samitz is wrong. The reason why they were able to afford more affordable housing in the past was RDA. With RDA gone, with the city largely lacking in their own ability to fund the affordable housing locally and without clear means to fund it from external sources, the council and the city are in a dilemma.
They clearly are concerned about the lack of affordable housing in town, but clearly lack the means to produce it. So it is all a trade off.
That was a key part of the discussion on affordable housing on the Nishi site in the next item. The affordable housing provided by Nishi will be privately subsidized. As Tim Ruff explained to the Vanguard in December, they have to subsidize the affordable housing with market rate units.
It is a trade off, as John Whitcombe told council on Tuesday. The initial proposal was six percent extremely low income units and six percent very low income units.
Mr. Whitcombe offered to give the council a choice, they could keep the 6 and 6 or they could go 10 and 5. Mind you, the 10 and 5 (five percent extremely low and 10 percent very low) is still better than the new standard adopted by council earlier in the evening of 5-5-5 (with the last five being simply low income).
By going to 10 and 5, the council was able to create nearly 100 additional units of affordable units, but reduce the overall number of extremely low units by a small amount.
Rochelle Swanson, who made the motion, said, “Real affordable housing is so important.” She said, “My only hesitation to change it… I don’t like the 3 to 1 swap out.”
She viewed 6 and 6 as helping “the most compromised and fragile amongst our students.” She added, “You’re looking at a trade off between people who are more at risk than others.”
The numbers go from 132 to 110 in the extremely low category. However, it goes from 132 to 220 on the very low. So the overall total affordable units go from 264 to 330.
“Every one of those units represents a person,” Councilmember Swanson pointed out.
The council asked Aaron Latta to come forward to provide a student perspective. He said, “At the bottom line, any level of affordability for students is a good thing. This is the second project that exists that has it.”
He pointed out, “Every single one of these numbers are people, but if we don’t get this project passed, it’s that many more people without an affordable place to live.”
He said, “I think the students would be willing to take a little fewer of the very very low affordable housing units and take more of the very low affordable housing units.”
Mr. Latta said that the affordable housing plan for Nishi was “beyond my expectations” and he was “amazed by the affordable housing plan for Lincoln40.”
Councilmember Will Arnold took one more shot in the dark, asking Mr. Whitcombe if he could do 6 and 9 instead of 5 and 10. However, he calculated that to be another $100,000 in annual costs, which he felt given their thin margin to begin with was not workable.
Will Arnold commented, “You miss 100 percent of the shots you don’t take.”
But the exchange shows us the tenuous nature of affordable housing without the previous funding mechanisms in place. It is easy to call for more units, it is hard without a funding source to finance them.
Ultimately the council agreed to go the 10-5 route on the affordable housing package for Nishi, increasing the total number at the expense of a small number of extremely low units.
The council is moving forward with its affordable program that targets 15 percent with five percent extremely low, five percent very low and five percent low income. That is better than we have been getting in the last few rounds, but not at the level we got when we had RDA money to help fund these projects.
If the state is keen on fixing the affordable housing programs, they are going to have to really provide funding sources and for many that means finding a way to return to a modification of the old RDA program.
—David M. Greenwald reporting
The answer is not “quite clear” to me, at least.
The first paragraph states that cities were prohibited from requiring affordable multifamily rental housing.
The second paragraph states that developers were (required to?) provide land for that housing.
So, the law required land dedication, but not actual housing? If so, where does it state that?
First paragraph seems to be missing ‘something’… not grammatical… suspect the missing piece is along the lines of ‘… X court… (held)’…
Howard: There is indeed something “missing” with this explanation by the city.
But probably not what you’re thinking…
“in 2009 held that cities were preempted from requiring affordable multifamily rental housing.”
it should be:
“in 2009, the court held…”
Not an answer, regarding the following:
I was addressing the word I left out from Harriet’s quote.
Under Palmer the city could not require affordable multifamily rental housing. Now under 3505, they can.
The second paragraph you cite refers to the fact that under the previous arrangement, the city was requiring the developer to devote land for the purpose of affordable housing. It wasn’t necessarily a formal land dedication. My point was that they were not necessarily requiring the developer to pay for that land, but rather we would subsidize them with RDA money. None of this is formally spelled out, I inferred it from Harriet’s comments.
It is difficult to know what is “workable” for a development, since we are not privy to developers’ calculations. (No, I’m not suggesting that we should be.)
If only there was a consultant (e.g., paid for by the city), who might provide some input in a timely manner. 🙂
As a side note, I wonder what will happen if the consultant states that (for example), 20% is a reasonable number (before Nishi is voted upon)? Also, I wonder if the consultant knows the potential “political consequences” of making such a suggestion at this time?
“It is difficult to know what is “workable” for a development”
I’m surprised by a few things here…
First, the answer as to why they need the reduction is so obvious and yet it was not clearly articulated in the staff report or the Affordable Housing ordinance leading up to the SSC meeting.
Second, why the city hasn’t shared what the breakdown was for funding when they did reach 35% early on, was it 100-0 or did the developer pay for some of it – that would make a huge difference.
Third, even if the consultant report is not completed – doesn’t mean they can’t inform the council on their decision and they were not there to weigh in on Tuesday.
Fourth, I kept asking the city for what other city’s were requiring and have not received an answer.
So even giving the city the benefit of the doubt here, which I do, I find some stuff a bit lacking
Scratch point three…
I forgot about the Plescia memo on Nishi: https://davisvanguard.org/2018/02/initial-development-economic-analysis-proposed-student-housing-project-47-acre-nishi-site/
Conclusion: “Therefore, the requirement of payment for off-site infrastructure and provision of 12 percent of the beds for affordable housing suggests the developer will obtain a lower return on investment than is typically targeted for new development in Davis. Assuming the developer is willing to accept a lower return on investment, the proposed infrastructure and affordable housing requirements are reasonable.”
Love it when folk admit error/omission, when it occurs… and ‘correct’… few do… admitting error/correcting actually bolsters credibility, at least IMHO…
David: It looks like you’re referring to the memo/analysis that the city’s finance and budget commission was not allowed to review (per Matt’s comments, below that referenced article).
No, that’s not what I’m referring to
Well, that’s where your link (above) is taking me.
(Signing off, for now.)
Then you answered your own question
Earlier today, Matt Williams sent Ron and myself an email explaining that and asking Ron to correct the statement. Apparently the memo came out on February 1, and the FBC last met in early January, meaning the commission didn’t have the opportunity to review it. I waited for Ron to correct the record as Matt requested, but it appears he is not going to.
David: Matt did not ask me to correct it.
In any case, this was my response to Matt, with a “cc” to you. (I did not hear from him after this.)
Honestly, I don’t see much difference between the “corrected” wording above, vs. the original. Nevertheless, I apologize for any confusion regarding my post, especially since it involved a reference to another commenter (Matt).
Are you kidding me, his first sentence: “Ron please correct your 100% incorrect statement”
And yes there is a difference between “not allowed to” versus “didn’t have the opportunity to”
“Not providing an opportunity” can have the same meaning as “not allowing”.
In fact, I would say that the council is “not allowing” full analysis regarding the proposal, due to a desire to have it placed on the June ballot.
One implies an intentional act, the other doesn’t. In this case, the time line moved very fast because of the desire to get it on the June ballot. You can argue against that desire, Matt would agree with you, but it wasn’t an act designed to deny their review, rather that was a byproduct. Clearly Matt didn’t want his name associated with an accusation about an intentional act. I don’t blame him.
Understood, regarding Matt’s reaction. He did subsequently provide some information that I wasn’t aware of, as you have noted. And, I apologize for the implication of my initial post. It was not well-written.
I’d still say there ultimately isn’t much difference. They are both “intentional” acts, with the same result.
Also in article, it says “Pamer”… suspect a typo, and it should read “Palmer”… http://nonprofithousing.org/wp-content/uploads/CRA-Journal-Article-on-Palmer-February-2010.pdf
[there is case law on Pamer, but involved a prison issue… Pamer vs. Schwarzenegger… https://www.casemine.com/judgement/us/591464baadd7b0493427e5d6]
Howard, please refresh page, that was corrected before you commented. Thanks. cathy
Sorry… but thought the cite would be useful for the discussion… have a great day!
[see also, City Attorney Harriet Steiner pointed out “when the council adopted the 35 percent, that was quite some time ago, in 2009 held that cities were preempted from requiring affordable multifamily rental housing.’… something seems to be omitted…]
I pondered that for awhile, then decided it was missing a subject to the verb “held” and that that the clauses were two different thoughts (the 35 was some time ago, then in 2009 came the Palmer decision)
c
yeah, we were thinking the same at this end… would have been surprised if Harriet missed that, but “stuff happens”… but, in any event, have a great day Highbeam! [genuine!]
I left out the word, not Harriet
When Rochelle says “She viewed 6 and 6 as helping “the most compromised and fragile amongst our students” I’m wondering if Rochelle knows that few UC students qualify for affordable housing (since unless you are a veteran, are married or have kids your parents need to qualify if you are under 24).
Relatives at Cal have told me that the trend of “fake” marriages is exploding since even if your parents are multi-millionaires that live in Piedmont and are play golf at the Claremont CC you qualify for free UC tuition (aka ~$50K gift from taxpayers for in state kids or ~$150K gift for the out of state kids) if you are “married”.
http://www.dailycal.org/2017/12/03/til-debt-do-us-part-uc-berkeley-students-married-save-thousands-tuition/
Since “married ” kids also qualify for Section 8 and other “affordable” housing I bet we will see more and more students getting “married” in order to graduate debt free (telling a future spouse that you are “technically” a divorcee will be a lot easier when you can also tell her you have a Cal degree and no debt).
“I’m wondering if Rochelle knows that few UC students qualify for affordable housing”
I’m wondering if you’ve followed the fact that Nishi and Lincoln40 are specifically providing private subsidies for students to qualify for the affordable housing there.
I have heard talk about this, but I’m wondering if the city is OK plans to allow low income students in “affordable” housing why they have not done it at the “city owned” Pacifico apartment complex that has been sitting mostly vacant with the exception of a handful of people with issues since GW Bush was in the White House.
https://www.davisenterprise.com/local-news/homicide-or-accidental-death-coroners-report-is-inconclusive/
I’m also wondering if the Nishi Apartments or Lincoln 40 are sold if the city will have any leverage to make the “private” subsidies continue when the properties have new owners.
It appears you’ve missed a few chapters in the book…
The affordable housing plan will be/ is in the development agreement and therefore transferable.
Very interesting cite, Jeff… thank you… I had no clue…
A modest proposal…
To have a credible comment, I believe that folk should read SB 35, AB 1505, and the appeals court decision that I cited earlier.
David
“but it wasn’t an act designed to deny their review, rather that was a byproduct.”
On a more philosophic note, once one becomes of the existence of a “byproduct” of a decision, even if that was not their intent, are they not still responsible for the outcome of their decision. I am not sure how that differs from intent if they proceed.